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Author Topic: Fbar tax question  (Read 415 times)

Offline LogoNano

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Fbar tax question
« on: February 10, 2018, 08:40:57 PM »
This is a question about the FBAR. I was wondering if there is any penalties for not doing it correctly? For example, not putting the required information in. Personally, it's confusing on what field is required to be filled in. I've been reading that the IRS is very unforgiving if you made a little mistake. Since I didn't know my maximum amount (the correct number), I just clicked the check box that says that I'm not sure, can that lead to a red flag?

Offline CliffK

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Re: Fbar tax question
« Reply #1 on: February 11, 2018, 08:19:47 AM »
Checking the box "maximum account value unknown" is only for those accounts where one has no idea AND no way of finding out how much money was in that account. If it is a personal checking, debit, and/or savings account, then the individual should be able to go to their bank, receive their statements for the previous year, and then determine the largest amount that was ever in there. For me, I went through all of my transactions over the last twelve months using online banking, and then determined what was the maximum amount in that account.

After determining the maximum amount, I then went here (https://www.fiscal.treasury.gov/fsreports/rpt/treasRptRateExch/itin-12-31-17.pdf). This is the exchange rate for won to US dollar, as of December 31, 2017. I converted the maximum amount of won into dollars using the rate, and then put that information onto the form.

According to the FBAR filing instructions, using periodic financial statements to calculate the maximum account value is acceptable, even if that value is slightly different from the maximum value.
--> "Step 1. Determine the maximum value of each account (in the currency of that account) during
the calendar year being reported. The maximum value of an account is a reasonable
approximation of the greatest value of currency or non-monetary assets in the account during
the calendar year. Periodic account statements may be relied on to determine the maximum
value of the account, provided that the statements fairly reflect the maximum account value
during the calendar year. For Item 15, if the filer had a financial interest in more than one
account, each account must be valued separately. For an account denominated in U.S. Dollars,
the maximum value of the account is the largest U.S. Dollar value of the account during the
report year."
(https://www.fincen.gov/sites/default/files/shared/FBAR%20Line%20Item%20Filing%20Instructions.pdf)

The instructions further state, "A person who is required to file an FBAR and fails to properly file may be subject to a civil penalty not to exceed $10,000 per violation."

I'm not sure if the IRS would come after you, although I would imagine it would make the risk of an audit higher down the line. I know that in the past few years the IRS has been cracking down on expats, including cross-referencing with the Department of Homeland Security in determining violations of the 330 day Physical Presence Test.

If it was me, I would go to the bank, get the statements, and then file an amended FBAR.
--> "Amended reports: If you filed your FBAR through the BSA E-Filing website and you need to
amend your FBAR to correct any information, please fill out a new FBAR completely and check
the Amend box in Item 1. You will need to provide your Prior Report BSA Identifier after
selecting the Amend box. Your Prior Report BSA Identifier was provided to you either through
email or via the BSA E-Filing System’s secure messaging feature. If your Prior Report BSA
Identifier is not known, please enter 00000000000000 in the Prior Report BSA Identifier field.
If your FBAR was filed using batch mode, an amended report must be filed whenever errors are
discovered in a previously-filed FBAR. Please refer to the BSA Electronic Filing Requirements
Attachment B – Error Correction Instructions
(http://bsaefiling.fincen.treas.gov/docs/FinCENFBARElectronicFilingRequirements.pdf) for
information regarding filing amended FBARs."

Online gideonvasquez

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Re: Fbar tax question
« Reply #2 on: April 16, 2018, 01:36:58 PM »
I'm not sure if this should be a new thread or not but it seemed like the best place to put it. A reminder to Americans living outside the US. If you had financial assets of more than $10,000 during 2017 then the filing deadline for the FBAR is Tuesday April 17th, 2018. The $10,000 figure is the aggregate of all accounts (so if you have $2,000 in NongHyup and $8,000 in KEB/Hana your total is $10,000).

I don't think the same automatic filing extension that applies to tax returns applies here.

Offline vicarious

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Re: Fbar tax question
« Reply #3 on: April 16, 2018, 02:16:12 PM »
Also, don't forget to include the value of your money in the government pension if you work for the government.  I believe that should be included in your aggregate total.