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heads up make sure you check the box i have a bank account and if over 10,000 file FBAR also new name fin cin 114


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Just took a refresher course for IRS on FBAR.s  reminded  me, IRS getting smarter and finding offshore accounts, please check on your schedule B on 1040 I have a foreign bank account.

its willful intent if you do not check that box, be prudent and file properly.

its a no brainer for the IRS to prove willful intent if you do not check that box on schedule b, i have a foreign bank account

 

A willful violation of the FBAR requirements is a felony, punishable by five years in prison, a fine of $250,000, or both. Willfully failing to file an FBAR is a violation that is subject to criminal penalty under 31 U.S.C. § 5322. In all cases, the IRS has the burden of proving willfulness.

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Many expats erroneously think they do not need to file Sch. B if their foreign account is under 10K USD equivalent.  Or that they do not need to file Sch. B because their interest/dividends are less than 1500 USD (the normal threshold for Sch. B filings).  But the IRS requires a Sch. B from anyone who is required to file a tax form, if they have a foreign bank account in any amount.

If you are not required to file a 1040, you do not need to file Sch. B.  

From: https://www.goldinglawyers.com/file-schedule-b-foreign-accounts-but-no-foreign-income/

Minimum Foreign Account Balance Threshold
There is no threshold requirement such as with an FBAR or form 8938 (although, a person does not have to file a schedule B if they’re not otherwise required to file a tax return).

Notwithstanding the $1,500 threshold requirement, if a person has a foreign account (even if they have no interest or dividend income in the U.S. or abroad) they are also required to file a form Schedule B. 

As provided by the IRS in its instructions: Use this schedule if any of the following applies…“You had a financial interest in, or signature authority over, a financial account in a foreign country or you received a distribution from, or were a grantor of, or transferor to, a foreign trust. Part III of the schedule has questions about foreign accounts and trusts.”

As you can see, for this portion of the form, it does not require $1,500 requirement in order to meet the qualifications to file the form. Rather, it is just asking whether you had a financial interest in, or signature authority over…

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traderspoc and Bisbee Gal -- Thank you for providing this important information.  

Can you perhaps comment as well about reporting requirements related to U.S. citizens who might be, say, the treasurer of a Mexico nonprofit or who collect and disperse funds from a bank account owned by a Mexican charity?  There are so many ex-pats here who devote time to charitable causes. Thanks again.  
 

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Just Google FBAR and FATCA. This is from the IRS website regarding FBAR. Note the filing threshold is $10,000us or more at "any point in the calendar year.

 

Every year, under the law known as the Bank Secrecy Act, you must report certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department and keep certain records of those accounts. You report the accounts by filing a Report of Foreign Bank and Financial Accounts (FBAR) on FinCEN Form 114.

Who Must File

A United States person, including a citizen, resident, corporation, partnership, limited liability company, trust and estate, must file an FBAR to report:

  1. a financial interest in or signature or other authority over at least one financial account located outside the United States if
  2. the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

Generally, an account at a financial institution located outside the United States is a foreign financial account. Whether the account produced taxable income has no effect on whether the account is a “foreign financial account” for FBAR purposes.

But, you don’t need to report foreign financial accounts that are:

  • Correspondent/Nostro accounts,
  • Owned by a governmental entity,
  • Owned by an international financial institution,
  • Maintained on a United States military banking facility, 
  • Held in an individual retirement account (IRA) you own or are beneficiary of,
  • Held in a retirement plan of which you’re a participant or beneficiary, or
  • Part of a trust of which you’re a beneficiary, if a U.S. person (trust, trustee of the trust or agent of the trust) files an FBAR reporting these accounts.

You don’t need to file an FBAR for the calendar year if: 

  • All your foreign financial accounts are reported on a consolidated FBAR. 
  • All your foreign financial accounts are jointly-owned with your spouse and:
    • You completed and signed FinCEN Form 114a authorizing your spouse to file on your behalf, and your spouse reports the jointly-owned accounts on a timely-filed, signed FBAR. 

Note: Income tax filing status, such as married-filing-jointly and married-filing-separately has no effect on your qualification for this exception.

The FBAR Reference Guide PDF) and FBAR instructions PDF  provide more detailed information. The FBAR webinar explains how to calculate the aggregate value of your accounts to figure if you need to file an FBAR. 

When to File

The FBAR is an annual report, due April 15 following the calendar year reported. 

You’re allowed an automatic extension to October 15 if you fail to meet the FBAR annual due date of April 15. You don’t need to request an extension to file the FBAR.

If you are affected by a natural disaster, the government may further extend your FBAR due date. It’s important that you review relevant FBAR Relief Notices for complete information.

For certain employees or officers with signature or other authority over, but no financial interest in certain foreign financial accounts, the 2018 FBAR due date is deferred to April 15, 2020. See Notice 2018-1 PDF.

How to File

You must file the FBAR electronically through the Financial Crimes Enforcement Network’s BSA E-Filing System. You don’t file the FBAR with your federal tax return. 

If you want to paper-file your FBAR, you must call FinCEN’s Regulatory Helpline to request an exemption from e-filing. See Contact Us below to reach this Helpline. If FinCEN approves your request, FinCEN will send you the paper FBAR form to complete and mail to the IRS at the address in the form’s instructions. IRS will not accept paper-filings on TD F 90-22.1 (obsolete) or a printed FinCEN Form 114 (for e-filing only). 

If you want someone to file your FBAR on your behalf, use FinCEN Report 114a PDF, Record of Authorization to Electronically File FBARs, to authorize that person to do so. You don’t submit FinCEN Report 114a when filing the FBAR; just keep it for your records and make it available to FinCEN or IRS upon request.

Keeping Records

You must keep records for each account you must report on an FBAR that establish: 

  • Name on the account, 
  • Account number,
  • Name and address of the foreign bank, 
  • Type of account, and 
  • Maximum value during the year. 

The law doesn’t specify the type of document to keep with this information; it can be bank statements or a copy of a filed FBAR, for example, if they have all the information. 

You must keep these records for five years from the due date of the FBAR. 

Exception: An officer or employee who files an FBAR to report signature authority over an employer's foreign financial account doesn’t need to personally keep records on these accounts. The employer must keep the records for these accounts.

Penalties

You may be subject to civil monetary penalties and/or criminal penalties for FBAR reporting and/or recordkeeping violations.  Assertion of penalties depends on facts and circumstances. Civil penalty maximums must be adjusted annually for inflation.  Current maximums are as follows:

U.S. Code citation Civil Monetary Penalty Description Current Maximum
31 U.S.C. 5321(a)(5)(B)(i) Foreign Financial Agency Transaction - Non-Willful Violation of Transaction $12,921
31 U.S.C. 5321(a)(5)(C) Foreign Financial Agency Transaction - Willful Violation of Transaction Greater of $129,210, or 50% of the amount per 31 U.S.C.5321(a)(5)(D)
31 U.S.C. 5321(a)(6)(A) Negligent Violation by Financial Institution or Non-Financial Trade or Business $1,118
31 U.S.C. 5321(a)(6)(B) Pattern of Negligent Activity by Financial Institution or Non-Financial Trade or Business $86,976

 

 

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Tomgates -- Google is a wonderful resource but knowledgeable people, rather than computer systems, often provide superior information. In the posting you provided above, I didn't find any references about record keeping and disclosure requirements imposed upon USA citizens that help manage charitable funds held in foreign nonprofit bank accounts.

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What I posted is from the IRS's website. I recall some issues in the past concerning managing a non-profits funds. In the US, the organization would get a taxpayer identification number and use that in opening an account to hold funds. In Mexico that isn't so easy. 

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On 2/25/2021 at 9:34 AM, Brian Dalziel said:

traderspoc and Bisbee Gal -- Thank you for providing this important information.  

Can you perhaps comment as well about reporting requirements related to U.S. citizens who might be, say, the treasurer of a Mexico nonprofit or who collect and disperse funds from a bank account owned by a Mexican charity?  There are so many ex-pats here who devote time to charitable causes. Thanks again.  
 

Yes they must file and say they have signature authority on a account over 10000 dollars or 214600 pesos in 2020. Otherwise they put the charity bank account in jeopardy.  You will find most treasurers are Canadians because they do have that requirement 

 

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Turbotax makes sure you report this correctly and then all you have to do is go to the on line FBAR reporting site and fill out that form, about a 10 minute job once you've done it a couple of times.

 

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