# Signature authority on employers account



## KristenJune (Oct 8, 2016)

Hi.

My husband has started a new job as a manager of quite a large business. The MD wants him to be a co signature on company bank checks (two signatures required).

Will this mean he has to report this account to comply with FATCA?

Thanks


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## KristenJune (Oct 8, 2016)

Just to clarify. Any company check would require two signatures (my husband and one other), he has no other financial interest in the account and this question relates to FBAR and FATCA reporting/

Thanks.


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## iota2014 (Jul 30, 2015)

It seems it does have to be reported, but whether on FBAR or FATCA or both is not very clear, for a change.

The IRS FBAR/FATCA comparison table (https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements) says:



> Foreign financial account for which you have signature authority:
> 
> FBAR - No, unless you otherwise have an interest in the account as described above
> 
> FATCA - Yes, subject to exceptions


Which would lead one to believe that your husband, if he is a USC, should report the account on 8938 (unless it is one of the unexplained "exceptions"), but not FBAR, since he has no financial interest in the account.

But the web page at https://www.irs.gov/businesses/corporations/summary-of-fatca-reporting-for-u-s-taxpayers says:



> If you have a financial interest in *or*signatory authority over an offshore financial account, you must report the account on an FBAR (Form 114 (formerly TD F 90-22.1)), regardless of your obligation to file Form 8938.


Which effectively says he must report the account on FBAR even though he doesn't have a financial interest in it.

Might be best to report it on both (if the company is OK with that) or neither (if the company decides it would be better to choose a non-USC to co-sign).


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## Moulard (Feb 3, 2017)

With a few limited exceptions FBAR is used to report a financial interest in *or *signature authority over a foreign financial account.

From the filing instructions... those exceptions are:


1. An officer or employee of a bank that is examined by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, or the National Credit Union Administration is not required to report signature authority over a foreign financial account owned or maintained by the bank.

2. An officer or employee of a financial institution that is registered with and examined by the Securities and Exchange Commission or Commodity Futures Trading Commission is not required to report signature authority over a foreign financial account owned or maintained by the financial institution.

3. An officer or employee of an Authorized Service Provider is not required to report
signature authority over a foreign financial account that is owned or maintained by an investment company that is registered with the Securities and Exchange Commission. Authorized Service Provider means an entity that is registered with and examined by the Securities and Exchange Commission and provides services to an investment company registered under the Investment Company Act of 1940.

4. An officer or employee of an entity that has a class of equity securities listed (or
American depository receipts listed) on any United States national securities exchange is not required to report signature authority over a foreign financial account of such entity.

5. An officer or employee of a United States subsidiary is not required to report signature
authority over a foreign financial account of the subsidiary if its United States parent has a class of equity securities listed on any United States national securities exchange and the subsidiary is included in a consolidated FBAR report of the United States parent.

6. An officer or employee of an entity that has a class of equity securities registered (or
American depository receipts in respect of equity securities registered) under section
12(g) of the Securities Exchange Act is not required to report signature authority over a
foreign financial account of such entity.


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## iota2014 (Jul 30, 2015)

> With a few limited exceptions FBAR is used to report a financial interest in or signature authority over a foreign financial account.


It's the 8938 exceptions that are unexplained.

The FBAR inconsistency arises because the comparison page says he doesn't have to report the account on FBAR *unless* he has a financial interest, but the 8938 summary page says he must report it on FBAR if he has signature authority *or* a financial interest.

But clearly it's supposed to be reported on one if not both. Reporting it at all is the thing which might understandably be a concern to the company.


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## KristenJune (Oct 8, 2016)

Thank you for your replies. My husband holds dual US/UK citizenship. Not only is it confusing but an embarrassment to him to have to explain his reporting obligations to the company (I don't think they know he holds dual citizenship).



iota2014 said:


> Reporting it at all is the thing which might understandably be a concern to the company.


Exactly, Why should the company accounts have to be disclosed to a foreign government.

He now has to approach the MD to explain the situation and hope its does not have an adverse effect on his position and employment! Utterly ridiculous to have to be put in this situation


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## iota2014 (Jul 30, 2015)

KristenJune said:


> Thank you for your replies. My husband holds dual US/UK citizenship. Not only is it confusing but an embarrassment to him to have to explain his reporting obligations to the company (I don't think they know he holds dual citizenship).
> 
> 
> 
> ...


Yes, I completely agree.


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## Bevdeforges (Nov 16, 2007)

Unless something has changed this year, someone with signature authority over an account belonging to their employer does have to report the account on their FBAR filing. If you read the instructions it says that such accounts go into the section on "signature authority but no financial interest" (i.e. the section of the form after the one for joint accounts) and it also says that you only need to fill out the section identifying the employer, not the specifics about account numbers and balances and such.

As far as I know, the same applies to someone who is, for instance, treasurer for their local club or volunteer association - they need to report that they are signature authorized but not necessarily the details of the account. Just the identity of the employer/club/association.
Cheers,
Bev


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## iota2014 (Jul 30, 2015)

So it's the "comparison" page that's wrong, and the 8938 "summary" page is correct.


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## Bevdeforges (Nov 16, 2007)

iota2014 said:


> So it's the "comparison" page that's wrong, and the 8938 "summary" page is correct.


It's hard to tell, because this year's forms on the FinCEN site had everything in the "signature authority but no financial interest" section marked as being obligatory, despite the instructions saying only to fill out the owner (i.e. employer) identification portion.

The real risk here is that there are further (very onerous) reporting requirements for "certain foreign corporations" if a US citizen is a "director" or "officer" of the corporation or owns 10% or more of the corporation stock. See form 5471. Unfortunately, they don't really define what they mean by "certain foreign corporations."
Cheers,
Bev


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## iota2014 (Jul 30, 2015)

Yes they seem fond of the word "certain" and the immense uncertainty it conveys.

The troubling thing about the IRS's approach to tax enforcement is that in sprinkling these gotcha's through their documentation as traps for the unwary, they seem to never spare a thought for the pain and anxiety and problems they create for ordinary law-abiding taxpayers.


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## KristenJune (Oct 8, 2016)

Bevdeforges said:


> Unless something has changed this year, someone with signature authority over an account belonging to their employer does have to report the account on their FBAR filing. If you read the instructions it says that such accounts go into the section on "signature authority but no financial interest" (i.e. the section of the form after the one for joint accounts) and it also says that you only need to fill out the section identifying the employer, not the specifics about account numbers and balances and such.


Checking this years FinCEN From 114, it asks for account value and type of account.

It doesn't ask for account number.

I don't see how my husband has any business to ask his new company what the max account value was during the year (and ask for paper confirmation for his records that would include the full years bank statements to prove where the figures came from!). 
Would the 'maximum account value unknown' be acceptable in these circumstances?

Can I clarify if such an account would need to be reported on a 8983 as its not his asset. 

Although he had to report 8983 this year (2016) because he was over the threshold, for 2017 he will be under the reporting threshold on his personal accounts (due to being resident overseas for entire tax year) so was anticipating that there would be no requirement to report any more future 8983's.


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## Bevdeforges (Nov 16, 2007)

If there's a check box for "balance unknown" then it's there to be used. (I used it this year for the first time and have yet to hear anything back from the FinCEN folks.) 

As far as I know, there is no reason to declare the accounts on the 8983 form if they don't constitute part of "his" assets. What the forum 8983 is looking for is a listing of financial assets belonging to the taxpayer - and his employer's accounts are definitely NOT his in that sense.
Cheers,
Bev


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## Moulard (Feb 3, 2017)

> ... they seem to never spare a thought for the pain and anxiety and problems they create for ordinary law-abiding taxpayers.


Stories abound of people being refused promotions, or job opportunities because of these filing requirements.


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## iota2014 (Jul 30, 2015)

It seems he can either not report it, in which case the IRS is probably never even going to know the account exists; or he can choose to have the awkward discussion with his employer and be guided accordingly (i.e. if they say no, and remove him as signatory, there would then be no need for him to report it); or the other, more drastic option would be to renounce.


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## KristenJune (Oct 8, 2016)

iota2014 said:


> It seems he can either not report it, in which case the IRS is probably never even going to know the account exists; or he can choose to have the awkward discussion with his employer and be guided accordingly (i.e. if they say no, and remove him as signatory, there would then be no need for him to report it); or the other, more drastic option would be to renounce.


The company uses the same bank my husband does and so they have a record that he is a US person, besides, he would not omit to report something he knows he should.
Renouncing is not an option at this time but is definitely something we would consider in the future :fingerscrossed:

Guess he is going to have the awkward discussion with his employer hwell:


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## iota2014 (Jul 30, 2015)

KristenJune said:


> The company uses the same bank my husband does and so they have a record that he is a US person, besides, he would not omit to report something he knows he should.


We all see these things from our own perspective. It's not at all clear to me that UK-resident USCs "should" report to the IRS UK business accounts that don't belong to them.



> Guess he is going to have the awkward discussion with his employer hwell:


Just as well, perhaps, from the employer's point of view. Post-FATCA, unfortunately, US citizenship has become one of those things employers need to know.


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## Vangrrl (Aug 23, 2011)

I have completed FBARs for about 10 years now and for the "Signatory with no Financial Interest", I've only listed the name of the Organization, and my role as book keeper. I've never included any other information.


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## iota2014 (Jul 30, 2015)

Vangrrl said:


> I have completed FBARs for about 10 years now and for the "Signatory with no Financial Interest", I've only listed the name of the Organization, and my role as book keeper. I've never included any other information.


Out of interest - did you discuss it with your employer?


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## Costa55 (Apr 13, 2016)

The accountants were trying to tag me with cheque signature duty last year, told them I can't unless they want Uncle Sam knowing all their business  My role in the company is not financially based at all so it was just something they were trying to add to my repertoire to give themselves a break


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