# FBAR streamline omitted accounts



## madeamistake (Jan 16, 2018)

Hello

I am going to enter the streamline process shortly. I am a UK citizen and tax resident with the bad luck to have a US passport too. A few years ago I realised I needed to be filing my US tax returns so quickly filed delinquent returns and FBARs to try and become compliant. However I now realise I made a lot of mistakes (though my tax liability is still likely to be $0) because it is all so flipping complicated! I am now spending a small fortune on professional tax advice to put it all right. 

As part of the process I will need to amend my FBARs to include a UK stocks and shares ISA (value approx €10,000 that I did not realise counted as a 'bank account' and I am of course happy and willing to do this. 

However my husband (a non resident alien who really has nothing to do with the US!) and I have just been chatting and he has reminded me that I had a debit card for a bank account he had while posted in South Africa from 2012 - 2015. I filed my deliquent FBARs in 2015 and included bank accounts in the UK that were in my name. I considered the South African bank account to be my husband's (also he was a diplomat posted to South Africa at the time) and the money it was his, the whole account was his responsibility and so on, though of course I was able to spend money on the account. Again, I am of course happy to declare this account (though it is now closed) though I am worried it will look REALLY bad that I am only just adding it now. Every bone in my body says that honesty is the best policy, but I really do worry that the US Government will consider this to be a willful non-disclosure because I honestly probably should have known better at the time. We have no access to statements from this account anymore but estimate the highest value per year was approx €7000. 

Thoughts on how to proceed? Shall I continue with streamline with confidence and simply be honest about this oversight, even though it was clearly idiotic.


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## Bevdeforges (Nov 16, 2007)

Don't sweat the small stuff. Seriously. 

A credit or debit card is NOT considered a financial account. At this point, in fact, I'd just let it all go. The banks only started reporting information on accounts held by "US persons" in about 2014 - and unless something "odd" crops up in your tax filings, the odds are that they'll never actually check your FBAR filings against your tax returns - or information received from the banks. 
Cheers,
Bev


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## madeamistake (Jan 16, 2018)

Thank you. Gosh, it's so helpful to have another perspective. I actually had a full blown panic attack about this earlier and you seem so calm about it! My tax adviser seemed very relaxed about it all but it is hard not to worry. I want to renounce this year so I feel it is important to get things right and will still proceed with the streamline process probably so I can be confident saying that all my tax affairs are all in order, but it's good to know I shouldn't worry unduly.


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## Nononymous (Jul 12, 2011)

madeamistake said:


> Every bone in my body says that honesty is the best policy...


Quite the reverse, in fact. The more honest you are with the US government, the more it will cost you and the worse off you will be. Complete dishonesty with respect to US taxation of non-residents goes regularly unpunished, because the IRS generally has no way of knowing otherwise, and no ability to punish if there are no US assets or income.


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## JustLurking (Mar 25, 2015)

madeamistake said:


> ... so I can be confident saying that all my tax affairs are all in order, ...


In addition to the good advice above, it is also worth noting that the wretched FinCEN 114 FBAR is _not_ actually part of your *tax* affairs. You could in fact _file no FBARs whatsoever_ and yet still validly certify you are fully up-to-date with your US taxes.


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## pirad13 (Jan 17, 2018)

I would like to add my contribution because I have gone through the streamline process myself the last two years (yes it is quite long). I definitely can relate to the "full blown panic attack " as it did happen to me too.

The Streamline Procedure is indeed a stressfull process to go through but being honest is the best thing to do in my mind. Be truthfull to your tax attorney (or who ever prepares the Streamline Process for you) when you explain your situation so that the narrative in your case looks solid.

I would not worry much about the Debit Card in South Africa but again the best is to tell your attorney, (s)he can tell you the best course of action.


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## Moulard (Feb 3, 2017)

Bevdeforges said:


> A credit or debit card is NOT considered a financial account.


A credit card is not a financial account, however debit cards are usually linked to a financial account and when used the money is drawn from that account. So while the card itself is not an account, where the money is debited from generally would be. 

Typically it is a linked cheque or savings account. Now if the account was entirely in his name and you had no signatory rights on the account (as defined in the FBAR instructions), then it wouldn't be a reportable account.

But apart from that minor quibble, I basically agree with everything that has been said.


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## madeamistake (Jan 16, 2018)

Thank you. The thing is, we honestly can't remember if I had signatory authority and as I say, my husband retains no records of the account. We can remember that he was the one who closed down the account - so I assume that had I been a joint holder or had any signatory authority then I would have been required to sign something also in order to close it?


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## Bevdeforges (Nov 16, 2007)

If you can't remember, then just skip it. Seriously, they don't check the FBAR things all that carefully unless you've got something really "bizarre" on your tax returns for that year. 
Cheers,
Bev


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## Moulard (Feb 3, 2017)

From the language of the FBAR instructions...



> Signature authority is the authority of an individual to control the disposition of assets held in a foreign financial account


If you were able to spend money from the account, then you had signatory authority...

But setting that aside. for the moment. 

If the account is closed I too probably wouldn't loose sleep over it. 

FBAR is managed a Financial Crimes Unit form. They aren't really interested in it unless there are significant sums in the accounts. I seem to recall reading somewhere that they don't even look at them unless you are of active interest .. suspect transactions, transactions over thresholds that require reporting to them by the financial institution and the like.

The IRS is only interested in it because the Department of Treasury has delegated responsibilities for penalties etc to the IRS. They see this as a revenue source and are interested, but remember it costs them to pursue it, so again unless you get flagged for an audit its not going to get picked up. Consider... it would likely cost them more than €7000 to find that the account had €7000. 

Its worth noting too.. in respect to FBAR penalties, that there has been a tax court case that that recently found that FBAR penalty statute of limitations is 3 years not 6 years. 

Still loosing sleep? You shouldn't be....


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## Bevdeforges (Nov 16, 2007)

Just to throw in yet another little note of hope here - have been reading up on this impending shutdown of the government, and if you take the last shutdown in 2013 as a guide, the IRS will basically all go on furlough for whatever period of time it takes to resolve the current "crisis."

As they are already limiting their attention to filings most likely to yield large returns (in terms of back taxes and penalties) I think you can expect that minor omissions that won't result in thousands (or more) of dollars of net return are pretty much likely to be ignored.
Cheers,
Bev


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