New US Federal Reporting on Foreign Bank Accounts

[osirissail]

Another thread has peaked my interest in the many ways the US Federal Government and IRS - and by extension any State Law Enforcement and Legal system (lawsuits) - has total access to all your financial records and transactions both here in the USA and abroad in other countries.

- - For cruisers who are US citizens or Legal Residents living in the USA and/or either cruise the world or end up living in another country - another layer of reporting on your financial matters has been added effective March 28, 2011. It is called the "FBAR" and has a new form TF F 90-22.1 which must be filed separate and apart from your usual IRS 1040 forms.

"Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (the
“FBAR”), is used to report a financial interest in or signature authority
over a foreign financial account. The FBAR must be received by the
Department of the Treasury on or before June 30th of the year
immediately following the calendar year being reported. The June 30th
filing date may not be extended.
Who Must File an FBAR. A United States person that has a financial
interest in or signature authority over foreign financial accounts must file
an FBAR if the aggregate value of the foreign financial accounts
exceeds $10,000 at any time during the calendar year. See General
Definitions, to determine who is a United States person."

- - For cruisers with wives who are citizens of other countries but who have US Legal Resident status - this form must be filled out and submitted if any of their financial assets (bank accounts, savings accounts, etc.) add up to more than US$10K at anytime during a calendar year. Of course there is also the IRS Form 1040 requirements.
- - For cruisers with foreign wives and the US citizen cruiser has signature or beneficiary status in their wife's home financial institutions, then it seems this new form is needed. And Of course there is also the IRS Form 1040 requirements.
- - For cruisers using a foreign bank and the money is "outside" the USA this new requirement would also most probably be effective. If the Foreign bank - like maybe HSBC - has a USA location where you do transactions, this might be a "gray" area as to the requirement to file this new form. That would need some additional research.

[Hud3]

That's been a requirement for some time now. I've been filing Form TD F 90-22.1 for the five years we've lived on Nevis. Never heard diddly from them, but probably would if I skipped a year.

BTW, FBAR reminds me of an acronym we used in the Army, except we called it FUBAR...

F#^%ed-up Beyond All Recognition.

[MarkSF]

Originally Posted by osirissail

Another thread has peaked my interest in the many ways the US Federal Government and IRS - and by extension any State Law Enforcement and Legal system (lawsuits) - has total access to all your financial records and transactions both here in the USA and abroad in other countries.

- - For cruisers who are US citizens or Legal Residents living in the USA and/or either cruise the world or end up living in another country - another layer of reporting on your financial matters has been added effective March 28, 2011. It is called the "FBAR" and has a new form TF F 90-22.1 which must be filed separate and apart from your usual IRS 1040 forms.

"Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (the
“FBAR”), is used to report a financial interest in or signature authority
over a foreign financial account. The FBAR must be received by the
Department of the Treasury on or before June 30th of the year
immediately following the calendar year being reported. The June 30th
filing date may not be extended.
Who Must File an FBAR. A United States person that has a financial
interest in or signature authority over foreign financial accounts must file
an FBAR if the aggregate value of the foreign financial accounts
exceeds $10,000 at any time during the calendar year. See General
Definitions, to determine who is a United States person."

- - For cruisers with wives who are citizens of other countries but who have US Legal Resident status - this form must be filled out and submitted if any of their FOREIGN financial assets (bank accounts, savings accounts, etc.) add up to more than US$10K at anytime during a calendar year. Of course there is also the IRS Form 1040 requirements.
- - For cruisers with foreign wives and the US citizen cruiser has signature or beneficiary status in their wife's home financial institutions, AND HER ACCOUNTS EXCEED $10,000, then it seems this new form is needed. And Of course there is also the IRS Form 1040 requirements.
- - For cruisers using a foreign bank and the money is "outside" the USA this new requirement would also most probably be effective. If the Foreign bank - like maybe HSBC - has a USA location where you do transactions, this might be a "gray" area as to the requirement to file this new form. That would need some additional research. THERE'S NO GRAY AREA AS A BANK ACCOUNT WITH US BRANCHES WILL JUST GO ON THE ORDINARY PART OF YOUR TAX RETURN

My comments in capitals. It's not a new requirement, and it's not a new form. Essentially, when you fill out a US tax return as a citizen or resident, you have to include your foreign accounts if more than $10,000.

How does stating that you have earned interest on a foreign account equate to "total access to all your financial records and transactions both here in the USA and abroad in other countries"?

[zeehag]

research the new law about healthcare--- gives involuntary access of all bank accounts to feds. big brother is ....... you-----

[osirissail]

Here is the link to the "new" - Report of Foreign Bank and Financial Accounts (FBAR)
which contains the following:
"Recent FBAR Guidance
On February 24, 2011, the Treasury Department published final regulations amending the FBAR regulations. These regulations became effective March 28, 2011, and apply to FBARs required to be filed with respect to foreign financial accounts maintained in calendar year 2010 and for FBARs required to be filed with respect to all subsequent calendar years. The FBAR form and instructions (PDF) have been revised to reflect the amendments made by the final regulations."
- - The form may not be "new" but something has changed that is "new." The existence of the form and requirements to file - which are separate and apart from the IRS Form 1040 requirements is "new" to me. Probably since I have never had any "foreign interests" in foreign banks before now.

As to MarkSF - "How does stating that you have earned interest on a foreign account equate to "total access to all your financial records and transactions both here in the USA and abroad in other countries"?"
- - If you follow the financial news worldwide, the US Fed's/IRS have managed to gain access to formerly "secret" or confidential bank accounts like the Swiss accounts, and others around the world.
- - Having "access" doesn't mean that "they will" access your accounts. It just means that they now "can" access if they want to do it.
- - All the reporting requirements by financial institutions and by individuals are obviously designed to allow "officials" to catch or track criminal activity - which is fine - but unfortunately, ordinary law-abiding citizens/residents have to "give up" or have had their expectation of "privacy" in financial matters removed/terminated. Such is life . . . . . .