# FATCA bits and pieces



## Guest

I have been in correspondence with an RBC 'higher' management type who is in a strategic position of the Royal Bank of Canada's FATCA committee to discuss the implementation, ramifications, and financial burdens of FATCA and how it relates to RBC and the impact on it's client base.

Although I do not feel it necessary to devulge the contact, nor the content of our communication...suffice to say an initial email outlining my concerns as a "customer" in association with how ill-equip'd there staff has been to deal with Q and As was responded with an hour long phone call asking me to outline, in detail, how we as expats feel about this entire situation.

I also expressed my concerns about account closures and demanded some information to allow me to prepare myself to move my accounts out of there institution.

Basically, i tried to make them understand our perspective in relation to the burden of IRS forms, the cost of becoming compliant, and the perceived threat of losing our rights and privacy due to FATCA.

Yesterday, I was asked if I would give said individual permission to have my written concerns forwarded to there FATCA team in order to look at this from a "client" perspective rather than an IRS compliance perspective. It seems to me that a lot of these people do not realize the depths and the information we have already given up south of the border.

He also stated that, although we feel FATCA is a done deal, there is still much dialoge that needs to be done, and many question that need to me addressed before any talk of implementation is to be made...regardless of the IRS deadline.

Without a solid outline to work with, and the timline they have been given to "sign on" he feels that the FATCA of today will not be the FATCA of tomorrow. In other words FATCA is still coming for dinner, but it might not be open buffet that everyone thinks it will be.

Will keep you posted.

Happy New Year everyone!

Anyway, I applaude RBC to voicing our concerns.


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## Ladyhawk

Thank you, Mach 7. It is encouraging to hear the perspective of the banks. They will be profoundly affected by FATCA, which threatens to change significantly their relationship with the IRS and with their customers, in addition to costing them time and money, and they also will suffer serious consequences if they do not dance precisely to the IRS's tune. The fact that they want the customer perspective may mean that they would be able to use it as leverage with the IRS to back off the most extreme measures of FATCA because they will be counterproductive, both to the IRS and to the banking system in Canada. The banks may be effective allies in this process.


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## rivka88

*FATCA due diligence*

The file below list the due diligence process for determining the status of pre-existing accounts. If you have a US birthplace, you will need to prove non-US status -- 

CTI - FATCA - IRS Releases Notice 2011-34 ? Second FATCA Notice


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## pwdunn

rivka88 said:


> The file below list the due diligence process for determining the status of pre-existing accounts. If you have a US birthplace, you will need to prove non-US status --
> 
> CTI - FATCA - IRS Releases Notice 2011-34 ? Second FATCA Notice


Did I put down my birth place for the bank? How do they plan to get that info from me?


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## justbrowsing

I was at my local BMO branch last week and asked how they were coming along with fatca. The assistance manager didn't have a clue what I was talking about.


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## johnpg

Scotia McLeod, the investment wing of Bank of Nova Scotia sent out a year end newsletter (arrived today) and half of the newsletter is devoted to FATCA and the situation of Dual citizens or US citizens living in Canada.

Online version is here: http://www.scotiabank.com/ca/common/pdf/scotiamcleod/Exchange_2011_year_end.pdf


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## Guest

justbrowsing said:


> I was at my local BMO branch last week and asked how they were coming along with fatca. The assistance manager didn't have a clue what I was talking about.


Looking at what Scotia has already sent to its customers (next post), it seems negligent that a BMO assistant manager does not know anything about FATCA or that he or she gives that impression to a client.


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## Guest

Ladyhawk said:


> Thank you, Mach 7. It is encouraging to hear the perspective of the banks. They will be profoundly affected by FATCA, which threatens to change significantly their relationship with the IRS and with their customers, in addition to costing them time and money, and they also will suffer serious consequences if they do not dance precisely to the IRS's tune. The fact that they want the customer perspective may mean that they would be able to use it as leverage with the IRS to back off the most extreme measures of FATCA because they will be counterproductive, both to the IRS and to the banking system in Canada. The banks may be effective allies in this process.


Should we be asking our major Canadian banks about their preparatons with FATCA, etc., especially if we know that they know we are US persons, or should we stay off the radar as much as we can? A dilema. (Thanks, Mach7 for sticking your neck out and interesting what you learned.)


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## Guest

Calgary411 said:


> Looking at what Scotia has already sent to its customers (next post), it seems negligent that a BMO assistant manager does not know anything about FATCA or that he or she gives that impression to a client.


Not below, above, but at any rate:


johnpg said:


> Scotia McLeod, the investment wing of Bank of Nova Scotia sent out a year end newsletter (arrived today) and half of the newsletter is devoted to FATCA and the situation of Dual citizens or US citizens living in Canada.
> 
> Online version is here: http://www.scotiabank.com/ca/common/pdf/scotiamcleod/Exchange_2011_year_end.pdf


calgary411
The Isaac Brock Society | Liberty and justice for all United States persons in Canada and abroad


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## Guest

My whole opinion on this is as follows. I would really like to test the system and not sign the waiver, if one is put in front of me. In fact, I think we should slow down the whole process and not facilitate any extra paperwork the banks put in front of us.

Above all....do..not...sign..away your rights to privacy. Let them try and close your account.


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## Bevdeforges

Did anyone here actually read (or attempt to read - it's pretty "thick" with jargon) the notice posted? 

First of all, it's an interpretation of the actual IRS notice (which would probably be even worse to try and comprehend). But a couple of things struck me about what's said here.

They only talk about actively "identifying" potential US accounts when it comes to "private banking" and/or "wealth management" accounts. And even there, the emphasis is in finding accounts with US mailing addresses:



> standing instructions to transfer funds to an account maintained in the United States or directions regularly received from a U.S. address; an "in care of" address or hold mail as the only address on file; and a power of attorney or signatory authority granted to a person who has a U.S. address. A non-U.S. post office box as the sole address on the account file is not considered indicia of U.S. status as was the case initially under Notice 2010-60.


Then cruise on down to the section headed up "Deemed-Compliant Status for Certain FFIs" where it seems to indicate that a small bank that doesn't get into investment stuff and that does not encourage or (in some cases) even allow non-residents to open accounts will be "deemed compliant" without having to go through all the search for possible US citizens. It doesn't sound to me like they're going to bother folks with plain old vanilla checking and savings accounts.

This memo makes it look as though they are primarily concerned about US residents with foreign accounts that may be receiving US payments (dividends, interest, etc.). 

Now, I haven't read the original IRS notice (and I'm not really keen to do so, but perhaps if I'm having trouble falling asleep some night...) but this may not wind up being nearly as onerous as some of you seem to think it will. At least not for those who don't have "private banking" or "wealth management"accounts outside the US. 
Cheers,
Bev


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## Guest

*Possible GREAT news re: Credit Unions and FATCA*



Calgary411 said:


> Looking at what Scotia has already sent to its customers (next post), it seems negligent that a BMO assistant manager does not know anything about FATCA or that he or she gives that impression to a client.


(I didn't want to start a new thread about this as it seems it does generally belong here: since I bank with BNS and have previously posted about a converation I had with a bank official there about this issue, I decided to reply to this post, hope no one minds.....).

Interestingly enough, I was in contact with a credit union this morning, on other matters and I decided to ask about FATCA. I know they do _*not*_ have US accounts or invest our $$$ in US bonds, securities, mutual funds, etc. I have been concerned about the fact that credit unions are associated with brokerages who do invest $$$ that way. I remember posting a link some time ago to a comment by the organization that regulates CU's where this issue was noted....anyways, she assured me that they are *not financially tied *to the brokerage (Credential) in any way and if shareholders want to invest in mutual funds and such, they are referred to the brokerage; i.e., there is no possibility of having such an account with the CU! So the CU does not in any way handle US funds, accounts etc. I am going to check back with her within the month as she is now interested in knowing more will talk to bosses, etc etc...She was absolutely horrifed to hear what we are all going thru.

So it _may_ be that *some* credit unions *ARE *completely safe (and boy, am I glad I have my $$$ in three of them....). Anyone who may want more info about this particular CU, feel free to pm me. :clap2: :happy: :happy: :clap2:

ps-these type CU's consistently have the best rates in the country


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## Guest

*Fatca reporting for 2011*

I've been doing as much reading, researching, thinking about the impending FATCA reporting that each of us as individuals may or may not need to do for 2011 and beyond. I hope this is the right thread for this post. These are some observations, concerns, and comments regarding that process, especially as it relates to the reporting that our banks and financial institutions will be doing. 

1) As far as I can see, if we are NOT living in the U.S., our assets need to exceed $200,000 (single/other) or $400,000 (joint) on the last day of the year. The asset valuation DOES NOT include our principle residence (in other words, the home we live in and are not using as an investment tool). This will exempt some of us with fewer assets from reporting on Form 8938 (but not, of course, FBAR, or any of the myriad other reporting forms, some not even yet known to the IRS). 

2) Now, even if some of us are not required to report on the new forms because we fall under the thresholds, it would appear that our banks and financial institutions will be reporting us anyway because they must report accounts of $50,000 or more. I can not discover if they will report this as an aggregate or as individual accounts. 

3) This scares the bejeebers out of me because I do not have to report given the threshold. However, if the bank reports my sole account that exceeds $50,000, I fear it will appear that I am not reporting (even though I am not required to do so). I do not want to be in the position of attempting to explain this simple fact to the IRS since I do not believe for one instant that the person I might end up dealing with will be intelligent enough to understand the simple problem this reporting has created. Honestly, this is yet another new type (or 'form' if you get the entendre) of terrorism inflicted upon us. Do we risk not reporting even when we do not need to, or do we try to pre-empt a serious potential problem by reporting when we don't need to.

4) I read an article regarding the financial industry's continued frustration over the U.S.'s refusal to meet their own deadlines for promised information. However, it seems that these financial institutions are taking a very passive approach, kind of a "oh, please U.S. Master of the Universe, tell us peons what to do so we can please you properly" rather than a "get real, get lost." Sad, but expected: Delayed Fatca regulations look set to ignore 'passthru' payments - Risk.net

I just wanted to post these comments. I guess I'm no different in my passive approach of trying to comply while waiting to be led to the slaughter.


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## Guest

Sorry - one last comment on something that came up for my spouse and myself. 

We have been trying to get ourselves in order, so to speak, and were preparing to go to an attorney to draw up our wills, power of attorneys, and health care proxies. In putting this in the context of IRS/Dept. of Treasury reporting issues, privacy issues, especially in the reporting of accounts over which one spouse might have signing authority (even based on an unexercised POA), we had to make a decision to NOT give each other any type of authority over each other's accounts or decision-making. Indeed, me, as the U.S. person resident in Canada (but soon to be a full-on Canadian), cannot give this to anyone without exposing them to the onerous reporting obligations. Also, I cannot have any type of authority over my spouse's accounts because I then have to report all those accounts, insurance policies, etc. to the U.S. 

We are left in an extremely vulnerable state, without a safety net, unless we choose to expose what little we have. Where do we all go from here?


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## Arlington

CanadianAtHeart said:


> I guess I'm no different in my passive approach of trying to comply while waiting to be led to the slaughter.


That's how I feel. And wondering if my children should be led to the slaughter as well.


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## Guest

Arlington said:


> That's how I feel. And wondering if my children should be led to the slaughter as well.


I guess if there is one thing that might keep us going, though we are weary, it is the thought of figuring a way through for the vulnerable people, like children and the disabled, caught in this and for those who people who should never have been caught in this to begin with, for example, those who born to a U.S. parent but who never set foot in the U.S. 

I have far less sympathy for myself, for not relinquishing sooner, for thinking it wasn't a big deal to live as I was living (lawabiding, legally, normally). Of course, I include in my sympathies, also those who went through actions that they believed LEGALLY AND FINALLY exempted them, only to be blindsided and told that wasn't the case. There just isn't any silver lining in any of these clouds, that's for sure.


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## Guest

CanadianAtHeart said:


> I guess if there is one thing that might keep us going, though we are weary, it is the thought of figuring a way through for the vulnerable people, like children and the disabled, caught in this and for those who people who should never have been caught in this to begin with, for example, those who born to a U.S. parent but who never set foot in the U.S.
> 
> I have far less sympathy for myself, for not relinquishing sooner, for thinking it wasn't a big deal to live as I was living (lawabiding, legally, normally). Of course, I include in my sympathies, also those who went through actions that they believed LEGALLY AND FINALLY exempted them, only to be blindsided and told that wasn't the case. There just isn't any silver lining in any of these clouds, that's for sure.


I agree. I know I will get through this one way or the other. I am glad that my born-in CANADA son, who happens to have a disability, has me to "try to" figure out things for him. I am confident that we will make it through this horrendous unjust maze. What it has done to me is quite frightening and I am weary and I'm afraid has taken joy out of my life with worry and anger. 

But, I know and want to keep advocating for the many, many who know nothing about this -- just hard-working, trying to get by/ to provide for their families Canadians, not criminal tax evaders. No one I have brought this subject up with has known anything about it, the last one being a Registry clerk at the Alberta Motor Association when I was applying for a complete Alberta birth certificate for my son in case I will subject him to the idiocy of filing for a SSN, doing back taxes, FBARs so he will have the right to renounce -- that is should he have the perceptual capacity to make that decision, which he does not. This young woman told me that she happened to be born in the US but has lived her life in Canada, etc. I told her that she really needed to look into this and find out how it would affect her. She said she would, but I think she thought I was somewhat kooky! Makes one want to retreat in isolation -- except for the conversations going on the internet -- thank goodness!

I cannot comprehend the absurdity of the concept of "Accidental Americans" -- why were they not given the right to make a choice?? I know, I know to protect their birthright of being one of those exceptional Americans. The right to make a choice, as we should have the right to make a choice, in hindsight, would have been the better "protection." 

I also don't look forward to subjecting myself to two appointments at the US Consulate and dragging this cruel and unusual punishment out even longer!


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## Lovecheese

Bevdeforges said:


> Did anyone here actually read (or attempt to read - it's pretty "thick" with jargon) the notice posted?
> 
> First of all, it's an interpretation of the actual IRS notice (which would probably be even worse to try and comprehend). But a couple of things struck me about what's said here.
> 
> They only talk about actively "identifying" potential US accounts when it comes to "private banking" and/or "wealth management" accounts. And even there, the emphasis is in finding accounts with US mailing addresses:
> 
> Then cruise on down to the section headed up "Deemed-Compliant Status for Certain FFIs" where it seems to indicate that a small bank that doesn't get into investment stuff and that does not encourage or (in some cases) even allow non-residents to open accounts will be "deemed compliant" without having to go through all the search for possible US citizens. It doesn't sound to me like they're going to bother folks with plain old vanilla checking and savings accounts.
> 
> This memo makes it look as though they are primarily concerned about US residents with foreign accounts that may be receiving US payments (dividends, interest, etc.).
> 
> Now, I haven't read the original IRS notice (and I'm not really keen to do so, but perhaps if I'm having trouble falling asleep some night...) but this may not wind up being nearly as onerous as some of you seem to think it will. At least not for those who don't have "private banking" or "wealth management"accounts outside the US.
> Cheers,
> Bev


Thanks ...that does sound more p


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## Lovecheese

Bevdeforges said:


> Did anyone here actually read (or attempt to read - it's pretty "thick" with jargon) the notice posted?
> 
> First of all, it's an interpretation of the actual IRS notice (which would probably be even worse to try and comprehend). But a couple of things struck me about what's said here.
> 
> They only talk about actively "identifying" potential US accounts when it comes to "private banking" and/or "wealth management" accounts. And even there, the emphasis is in finding accounts with US mailing addresses:
> 
> Then cruise on down to the section headed up "Deemed-Compliant Status for Certain FFIs" where it seems to indicate that a small bank that doesn't get into investment stuff and that does not encourage or (in some cases) even allow non-residents to open accounts will be "deemed compliant" without having to go through all the search for possible US citizens. It doesn't sound to me like they're going to bother folks with plain old vanilla checking and savings accounts.
> 
> This memo makes it look as though they are primarily concerned about US residents with foreign accounts that may be receiving US payments (dividends, interest, etc.).
> 
> Now, I haven't read the original IRS notice (and I'm not really keen to do so, but perhaps if I'm having trouble falling asleep some night...) but this may not wind up being nearly as onerous as some of you seem to think it will. At least not for those who don't have "private banking" or "wealth management"accounts outside the US.
> Cheers,
> Bev


I didn't get to finish my last post  I just wanted to say thanks bev for that info...sounds much more promising!


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## greyowl

I really appreciate the postings on this Thread--very helpful.


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## jimmyjam

*you are right we have to inform everyone!!*



Mach7 said:


> Yesterday, I was asked if I would give said individual permission to have my written concerns forwarded to there FATCA team in order to look at this from a "client" perspective rather than an IRS compliance perspective. It seems to me that a lot of these people do not realize the depths and the information we have already given up south of the border.
> Anyway, I applaude RBC to voicing our concerns.


You are 100% right, the bankers think that this is only about the 30% withholding.

They have absolutely no clue to the extent of discrimination imposed on the daily lives of US expats; they have not yet linked up FATCA to FBAR problem, or even to the fact that a US citizen (dual national) is liable for following the entire US tax code from abroad.

Getting the information out is absolutely critical.

Contact the FATCA teams at your bank. Go to the FATCA teams, not your bank teller or commercial officer. Give them your testimonial and insights into how far reaching the issue is.

I also provided my insight to the FATCA team of my bank and they were very receptive. I outlined about 8 areas of discrimination that dual citizens are facing, from higher taxes, impossibility to plan for retirement, unreasonable compliance costs and penalties, inability to take advantage of any tax incentive in their home country, inability to plan for succession to their children, and of course I discussed the exit barriers that keep people trapped in the situation; regularization, penalties for adults and impossibility to renounce for minor children.

Many banks think it is just about the 30% withholding AND they think that "all you have to do" is go to the embassy and renounce, to be free of this.

When the FATCA teams start to fully understand the problem only then can they bring it to the attention of banking organisations and government


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## jimmyjam

*just report everything even if below the limit*



CanadianAtHeart said:


> 2) Now, even if some of us are not required to report on the new forms because we fall under the thresholds, it would appear that our banks and financial institutions will be reporting us anyway because they must report accounts of $50,000 or more. I can not discover if they will report this as an aggregate or as individual accounts.
> 
> 3) This scares the bejeebers out of me because I do not have to report given the threshold. However, if the bank reports my sole account that exceeds $50,000, I fear it will appear that I am not reporting (even though I am not required to do so).


First of all, anyone with more than 10,000$ in any account should be using a professional CPA to file for you, at the expense of 500 to 2000$ per year in most cases; tax returns coming in from a professional CPA are, I believe, deemed "credible" by the authorities more so than self filing. Also, it provides a great cover; if there is some new killer form to file your CPA will know more about it than you might and in the case your CPA did not know about it and did not file, you are totally protected as you can claim good faith and reasonable cause. Saying "my CPA didn't tell me about that" is considered a valid reason as long as you were not hiding info from him.

Secondly if I were you I would NOT look at the lower limits and I would just file everything as if those limits don't exist

Look what happened to the people who thought they didn't have to file 1040s because their income was under 3000$. They are in the sh.. due to FBARS. Just file everything you will never get a penalty for filing when you shouldn't have!!


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## Mona Lisa76

I thought I had it bad having to budget around three thoudand dollars for my accounting bill for my filings for 2011; but with having to file numerous 8938s, my overall bill is probably going to be two or even three times thst amount becsuse I only lesrned yesterday thst they are going to be chargong around $250 per 8938. They will have to file a separate 8938 for each separate account, even for matured savings bonds which only had a couple pence in them which I had forgotten to technically close. They will nonetheless still have to be reported both on the fbars and 8938s.

But I will have to stick with them this filing season due to requiring their expertise in calculating my final year of my UK mutual funds. My 2010 return was close to 200 pages long due to all the obscure forms so I will probably have to switch to someone less expensive after this year though. I had originally been hoping for the continuity but have concluded that I honestly can't afford more than $3000 in annual accounting fees going forward.

And once I finally get through my statutes of limitations, I will probably go ahead and renounce.

To say I am flabbergasted is an understatement. . My 2011 return with all the 8621s and 8938s is going to be around 250 pages so will probably wind up with a $10,000 accounting bill!!


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## Guest

Mona Lisa76 said:


> I thought I had it bad having to budget around three thoudand dollars for my accounting bill for my filings for 2011; but with having to file numerous 8938s, my overall bill is probably going to be two or even three times thst amount becsuse I only lesrned yesterday thst they are going to be chargong around $250 per 8938. They will have to file a separate 8938 for each separate account, even for matured savings bonds which only had a couple pence in them which I had forgotten to technically close. They will nonetheless still have to be reported both on the fbars and 8938s.
> 
> But I will have to stick with them this filing season due to requiring their expertise in calculating my final year of my UK mutual funds. My 2010 return was close to 200 pages long due to all the obscure forms so I will probably have to switch to someone less expensive after this year though. I had originally been hoping for the continuity but have concluded that I honestly can't afford more than $3000 in annual accounting fees going forward.
> 
> And once I finally get through my statutes of limitations, I will probably go ahead and renounce.
> 
> To say I am flabbergasted is an understatement. . My 2011 return with all the 8621s and 8938s is going to be around 250 pages so will probably wind up with a $10,000 accounting bill!!


I do think you are finally making wiser decisions for yourself and your future. 

Good luck to us all in what we have to do to get our lives back! The bloody b*****ds!


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## Mona Lisa76

Calgary411 said:


> I do think you are finally making wiser decisions for yourself and your future.
> 
> Good luck to us all in what we have to do to get our lives back! The bloody b*****ds!


Yes, it's almost as though these professionals use our vulnerability to their advantage. I realise though that I will still have saved money through this firm because a cheaper one would have probably put me through the ovdi. I thought most of my expences with them were behind me but due to the 8938s may well have to spend a similar amount on accounting fees just for this year alone.

To be fair, they probably hadn't anticipated on the 8938 coming into effect so soon...I believe that most of the specialists had assumed it wouldn't be realeased till 2013 at the very least. They're understandably having to have their liability insurance premiums covered in case they screw up.

It's unprecedented times.

I will always regret that I had opened so many accounts and also wish I had just kept things completely simple instead of doing investments and even pensions.

What's so exasperating is how obscure the 8938's instructions are. It thus forces me to rely on my accountant.


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## Guest

Mona Lisa76 said:


> I thought I had it bad having to budget around three thoudand dollars for my accounting bill for my filings for 2011; but with having to file numerous 8938s, my overall bill is probably going to be two or even three times thst amount becsuse I only lesrned yesterday thst they are going to be chargong around $250 per 8938. They will have to file a separate 8938 for each separate account, even for matured savings bonds which only had a couple pence in them which I had forgotten to technically close. They will nonetheless still have to be reported both on the fbars and 8938s.
> 
> But I will have to stick with them this filing season due to requiring their expertise in calculating my final year of my UK mutual funds. My 2010 return was close to 200 pages long due to all the obscure forms so I will probably have to switch to someone less expensive after this year though. I had originally been hoping for the continuity but have concluded that I honestly can't afford more than $3000 in annual accounting fees going forward.
> 
> And once I finally get through my statutes of limitations, I will probably go ahead and renounce.
> 
> To say I am flabbergasted is an understatement. . My 2011 return with all the 8621s and 8938s is going to be around 250 pages so will probably wind up with a $10,000 accounting bill!!


Wow, this is soooooooo depressing. 250 pages...I am surprised to hear you talk about renouncing. I was hoping at least some of us would be able to avoid that.


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## Bevdeforges

jimmyjam said:


> First of all, anyone with more than 10,000$ in any account should be using a professional CPA to file for you, at the expense of 500 to 2000$ per year in most cases; tax returns coming in from a professional CPA are, I believe, deemed "credible" by the authorities more so than self filing. Also, it provides a great cover; if there is some new killer form to file your CPA will know more about it than you might and in the case your CPA did not know about it and did not file, you are totally protected as you can claim good faith and reasonable cause. Saying "my CPA didn't tell me about that" is considered a valid reason as long as you were not hiding info from him.


Spoken like a true tax accountant! It's not the amount in your accounts, but rather the nature and complexity of your financial affairs that determines whether or not you "should" have a CPA (or other tax advisor) doing your taxes for you.

In some cases, it may even draw attention to the return if your situation is simple yet you're paying a pro to fill it out for you. (Used to be that way, but these days I think almost everyone in the US seems to hire someone to do their returns.) I know when I was working for one of the big accounting firms, we were told never to list our profession on our tax returns as "accountant" because that would draw attention and a higher probability of an audit.

Blaming your CPA or tax preparer for problems with your return doesn't generally work. Responsibility for the final return - accuracy and payment of taxes due - always remains with the taxpayer and the tax preparers know this and count on it.
Cheers,
Bev


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## Mona Lisa76

nobledreamer said:


> Wow, this is soooooooo depressing. 250 pages...I am surprised to hear you talk about renouncing. I was hoping at least some of us would be able to avoid that.


It breaks my heart to have to consider it but I don't think I'm going to be able to afford the ongoing professional costs going forward....was annoyed but felt resigned about, say $3000 in annual accounting fees; but to probably pay annual bills of more like $7000 is more than I can afford.

It's an accountants' racket. They're lovin' it


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## jimmyjam

*american spouses - huge issue for women*



CanadianAtHeart said:


> we had to make a decision to NOT give each other any type of authority over each other's accounts or decision-making. Indeed, me, as the U.S. person resident in Canada (but soon to be a full-on Canadian), cannot give this to anyone without exposing them to the onerous reporting obligations. Also, I cannot have any type of authority over my spouse's accounts because I then have to report all those accounts, insurance policies, etc. to the U.S.
> 
> We are left in an extremely vulnerable state, without a safety net, unless we choose to expose what little we have. Where do we all go from here?


You are absolutely right and thousands and thousands of American women abroad are in this situation.

Many have given up careers to be stat-at-home Moms and now their spouse has no choice but to remove everything from their names.

They may get by on a daily basis but if anything should happen to their husband, or if he should run off with someone else, they will now be destitute thanks to being born in the USA. Many countries have death taxes between spouses or laws about where the husbands money should go (especially if the wife has no signing power over anything in many cases there is little chance she can inherit). Some countries do not let you leave your estate to your spouse, it has to go to children and other relatives, etc.

If you are in this situation you can contact Jackie Bugnion at the American Citizens Abroad organization in Geneva and she can put you in contact with American Womens groups who are starting to look into these cases.


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## jimmyjam

Bevdeforges said:


> Spoken like a true tax accountant! It's not the amount in your accounts, but rather the nature and complexity of your financial affairs that determines whether or not you "should" have a CPA (or other tax advisor) doing your taxes for you.
> ...
> Blaming your CPA or tax preparer for problems with your return doesn't generally work. Responsibility for the final return - accuracy and payment of taxes due - always remains with the taxpayer and the tax preparers know this and count on it.
> Cheers,
> Bev


I beg to differ. Since the penalties and fines start at 10,000 and can reach 300% of the amount of your assets, regardless of how much money you have, if you want to keep any of it, you should be getting professional help.

What about the housewives who were below filing limits for 1040 income taxes but now are facing the dread and fear of a 60,000 penalty because they had signing authority over husbands account.

And I did not say "blame your accountant" if you return is wrong. I said the fact that if your PAID PROFESSIONAL CPA did not know about a form you have less chance of being held responsible than if you were filing alone. That is why people pay CPAs, because the whole process requires a professional for being able to understand it. 

I realize that you also have to sign your return saying it is accurate, but if you hire a CPA it is for a reason and I believe the authorities prefer dealing with clean, accurate CPA prepared files than with DIY filers.


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## Bevdeforges

jimmyjam said:


> I beg to differ. Since the penalties and fines start at 10,000 and can reach 300% of the amount of your assets, regardless of how much money you have, if you want to keep any of it, you should be getting professional help.
> 
> What about the housewives who were below filing limits for 1040 income taxes but now are facing the dread and fear of a 60,000 penalty because they had signing authority over husbands account.
> 
> And I did not say "blame your accountant" if you return is wrong. I said the fact that if your PAID PROFESSIONAL CPA did not know about a form you have less chance of being held responsible than if you were filing alone. That is why people pay CPAs, because the whole process requires a professional for being able to understand it.
> 
> I realize that you also have to sign your return saying it is accurate, but if you hire a CPA it is for a reason and I believe the authorities prefer dealing with clean, accurate CPA prepared files than with DIY filers.


We'll have to agree to disagree here. If you file the forms and make a good faith stab at reporting your bank accounts, there is very little chance of being fined or penalized. There is no tax on the bank balances - and actually, no tax on the balances in any account. It's the *income* they're looking for that may not have been reported on the income tax returns.
Cheers,
Bev


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## jimmyjam

*form*



Bevdeforges said:


> We'll have to agree to disagree here. If you file the forms and make a good faith stab at reporting your bank accounts, there is very little chance of being fined or penalized. There is no tax on the bank balances - and actually, no tax on the balances in any account. It's the *income* they're looking for that may not have been reported on the income tax returns.
> Cheers,
> Bev


All right, let's agree to disagree.

Will you take a "good faith" stab at filling in form 8938 too?

The penalties on that form have nothing to do with earnings and the rules are quite complex. Do you feel comfortable taking a good faith stab at something that carries such heavy and scary penalties, that have absolutely no relationship to your earnings?


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## Bevdeforges

jimmyjam said:


> All right, let's agree to disagree.
> 
> Will you take a "good faith" stab at filling in form 8938 too?
> 
> The penalties on that form have nothing to do with earnings and the rules are quite complex. Do you feel comfortable taking a good faith stab at something that carries such heavy and scary penalties, that have absolutely no relationship to your earnings?


I won't be filing a form 8938 because I don't meet the threshold requirements. But I do declare the income from every account I declare on my FBAR (i.e. Treasury) form. I've had a query before from the Treasury dept. on my FBAR filing. Answered it and never heard anything further.
Cheers,
Bev


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## Mona Lisa76

Bevdeforges said:


> I won't be filing a form 8938 because I don't meet the threshold requirements. But I do declare the income from every account I declare on my FBAR (i.e. Treasury) form. I've had a query before from the Treasury dept. on my FBAR filing. Answered it and never heard anything further.
> Cheers,
> Bev


I realise, Bev, that you will not want to go into a lot of detail here but did you have to mail them specific records as in an audit or did they just make a general survey about the types of accounts you hold?


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## Bevdeforges

Mona Lisa76 said:


> I realise, Bev, that you will not want to go into a lot of detail here but did you have to mail them specific records as in an audit or did they just make a general survey about the types of accounts you hold?


They sent a letter asking for one specific piece of information they thought I had "omitted" from the form. I explained that the piece of information was not applicable - they had asked for the ITIN for the company for which I am a check signer (i.e. my employer). I replied that, as my employer is not a US company, it does not have an ITIN. Since then I put "N/A" in the space asking for the ITIN rather than leaving it blank.

But the point is that they won't jump on you for any little "error" or "omission" on the forms as long as you are disclosing the relevant information.
Cheers,
Bev


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## Mona Lisa76

Bevdeforges said:


> They sent a letter asking for one specific piece of information they thought I had "omitted" from the form. I explained that the piece of information was not applicable - they had asked for the ITIN for the company for which I am a check signer (i.e. my employer). I replied that, as my employer is not a US company, it does not have an ITIN. Since then I put "N/A" in the space asking for the ITIN rather than leaving it blank.
> 
> But the point is that they won't jump on you for any little "error" or "omission" on the forms as long as you are disclosing the relevant information.
> Cheers,
> Bev


That's a relief! Because I had over 25 accounts, I wouldn't be surprised if they came back with questions (since this meant I only have to send the form listing the number of accounts and sign it). However, I believe the 8938 will supply enough relevant information so they won't have to.


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## jimmyjam

*how long*



Bevdeforges said:


> They sent a letter asking for one specific piece of information they thought I had "omitted" from the form. I explained that the piece of information was not applicable - they had asked for the ITIN for the company for which I am a check signer (i.e. my employer)...
> Bev


How long did it take for them to send you the question?

I'm thinking, perhaps they review for admin consistency quickly? Or did the question come years after filing?


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## Bevdeforges

jimmyjam said:


> How long did it take for them to send you the question?
> 
> I'm thinking, perhaps they review for admin consistency quickly? Or did the question come years after filing?


It definitely came before it was time to file the next round of forms.
Cheers,
Bev


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## Mona Lisa76

Bevdeforges said:


> It definitely came before it was time to file the next round of forms.
> Cheers,
> Bev


That's reassuring. I filed six years of fbars last June and haven't heard from them. I realize it's still esrly days but would have thought I'd have heard back by now if they were planning to hit me with penalties. 

I also have since heard from my accountant and she is thankfully going to only add approximately another $500 to the accounting costs for the 8938 so am feeling so relieved!

In spite of all the hassles, I really would rather keep my US citizenship if I can; I believe that Bev is correct that we're not their main target, and are mainly interested in good faith compliance.

It has been such a stressful time and have been up and down like a yo yo. Lol


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