FBAR Deadline & Foreign Financial Asset Reporting Form 8938 Update Blog June 12, 2012. By Robert A. Green, CPA U.S. tax residents, don't miss the FBAR (TDF 90-22.1) filing deadline of June 29, 2012 for 2011 FBAR reports TDF90-22.1. Otherwise, you may be subject to very large penalties. Non-resident aliens are not subject to these filing requirements if they do not have a green card. There's also another foreign tax form for 2011 tax returns, Form 8938 Statement of Foreign Financial Assets. In prior years, many taxpayers overlooked or conveniently did not report their foreign financial accounts. Unfortunately, the IRS lumps all taxpayers into the category of tax cheat, assuming they are hiding money in offshore bank accounts. The IRS famously busted several Swiss banks and extended the busts to banking by Americans in India, Israel, Asia, and many tax havens throughout the world. In our opinion, IRS penalties should be designed for penalizing blatant tax cheats and not taxpayers who inadvertently overlooked quirky filings and did report their foreign income. The law differentiates between negligence and reasonable cause. Inadvertent overlooking is unfortunately usually subject to negligence penalties. .........The worst thing to do is to ignore this matter and wait for the IRS to bust you and then lower the boom with full penalties and perhaps even criminal charges. Side note. Per the IRS website, "If you are a U.S. citizen or resident alien residing overseas, or are in the military on duty outside the U.S., on the regular due date of your return, you are allowed an automatic 2-month extension to file your return and pay any amount due without requesting an extension. For a calendar year return, the automatic 2-month extension is to June 15." Like other taxpayers, you can request an automatic extension until October 15 (see our Mar 29 blog). Read the full blog and attend our Webinar on June 13th if you have questions. We don't post our own links since we are not a sponsor, so access from our home page at greentradertax, thanks
From what I've read on Elite over the years, it seems that many people have offshore bank accounts, assets and corporations that they hide from the IRS. Your time is numbered. The IRS is busting these taxpayers left and right and finding them through all sorts of ways. Busting banks and getting lists. Busting credit card companies and getting lists of people with offshore bank accounts where they use credit cards like ATM machines. One guy said his friend went to renew his passport and they asked why he wasn't in the US tax system. He lived in Saudi Arabia for years and figured he was under the Section 911 exclusion. Maybe, you can figure why you don't owe taxes, but that is not good enough. You need to file tax returns reporting worldwide income and loss, and report all foreign bank accounts if the combined balance at any time of the year are over $10,000. If you hide the income too, then huge penalties apply. Some forex traders have foreign accounts for over 50:1 leverage and skirting CFTC/NFA forex trading rules, including FIFO. Some think they are working through a US account and it's not foreign, but it is foreign and they need to report that foreign account. New for 2011, there is also the Form 8938 Statement of Foreign Financial Assets. Read about it on our blog and at irs.gov. Some Americans in Canada and other countries have foreign pensions that the US doesn't respect as pension plans. It's taxable in the US and it's to be reported on FBAR reports, too. Some can file an election to treat it as a retirement account, so don't miss that. Some taxpayers have family members abroad and they are listed as joint account holders and may have to file FBAR. Don't skip this reality and play it cute. It will catch up with you and huge penalties can apply. Even criminal. Speak with a tax attorney with FBAR and foreign expertise and maintain attorney-client privilege. The attorney can arrange for the CPA to do work with that same privilege.
He is correct. A friend of mine had an account with a Swiss bank -- Wegman & Co. -- for over 20 years. They have closed the entire bank due to criminal charges being filed by the US against the bank and he is already in for close to six figures in legal and accounting as preparation for dealing with the IRS later this year. His professional fees will total $300,000 + and that's before he absorbs taxes, interest and significant penalties. Worst case he gets indicted. Not likely but possible. This shit just ain't worth the risk -- file!!
Free Download of Webinar Recording on FBAR Wed, Jun 13, 2012 1:30 PM - 3:00 PM EDT FBAR deadline is June 29th: FBAR covered in-depth (Feldman JD). Plus, short updates on Cost-Basis Reporting Crisis & Bush-era Tax Cuts (Green CPA) Hot Topics and Recent Changes for Investment Management (Gillett JD) http://www.greencompany.com/EducationCenter/InteractiveSeminars.shtml
If I trade Forex with a foreign broker, would I have to pay taxes to that foreign country as well as my country of residence on Forex profits? Thanks.