Filing The Report Of Foreign Banks And Financial Accounts

By: Pete
Date posted: 04.23.2012 (5:00 am) | Write a Comment  (0 Comments)

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I know that this blog is mostly about tax and more specifically IRS tax requirements for US citizens living abroad, usually better known as expats. Initially, that was also the extent of what I believed was expected. It does turn out that one other US government agency requires an annual filing that I am late on.

The US Treasury requires all US persons to file a statement to inform the treasury of their financial assets. I’m not exactly certain when this started or how it is used although I guess reporting huge assets to the treasury but little income to the IRS could help trigger further investigation. Maybe not. I’m really not certain how this info is used but since I have nothing to hide and want to be in good standing with all US agencies, I started preparing to file.

I got both the form and explanations here:

Here are some conclusions from my readings!

Who Must Report?

United States citizens or residents that hold over $10,000 in accounts held outside the United States at any time during the year.

What Should Be Included?

Very broadly, this includes securities, brokerage, savings, demand, checking, deposit, time deposit, insurance policy with a cash value, annuity with a cash value, etc.

Determining The Amount To Report

Basically, you must use a reasonable way to determine the maximum amount that you had during the year (using monthly statements seems to usually be ok) then when necessary, convert back to $USD using the year end rate of the US Treasury.

When It Needs To Be Filed?

At the latest on June 30th for the previous year. The penalties for not filing can be up to $10,000 per year and penalties for intentionally misreporting can go up to $100,000…

My Next Steps

I will be preparing this form for the past 6 years and will then send them over to the US Treasury.. As usual, I will keep you posted on how things go. I do not expect to get a bad surprise as I did with the IRS (still working on that) but better file earlier than later to deal with any issues.

Let me know if you have questions, comments or anything to add:)

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