Foriegn bank and financial account declaration to IRS

Hi All,

Has anyone pursued the FBAR declaration with the IRS? Sometime ago, i did see a post here on KV but could not find it. I think the deadline is pretty close. Not sure what the consequence of not reporting will be. Any pointer/experience will be appreciated.

5 Comments:

  1. Heard about it on the Radio where a CPA was an invited guest speaker. I believe the deadline may have already passed.

  2. You have to report this if you have more than $10k holding in any Bank India and if you have money in Citi bank then you might received 1099 in Jan.

    Deadline to report this was June 30th

  3. thanks. I heard it on the radio too, i guess it too late. But rashmi do you know if i could do it myself or will need help from a professional?

  4. Since its too late its better if you get professional help.

  5. A compiled list of responses on the issue from our Mailing List

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    Yes, Turbo tax gave a print out and I posted it.

    Are we seeing these information using a microscope instead of bare eyes ? I think these are for BIG fish, at least for few years to come ?
    There are always written laws and laws practiced by common man though ?
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    I did file. But if you had less than 10,000$ in the account during the previous years, you’re still ok..
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    If you haven’t filed it, close all the existing bank accounts and open new ones. Start reporting this from next year.
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    http://www.irs.gov/newsroom/article/0,,id=234900,00.html mentioned about Aug 31. Where is the 6/30 come from? any idea?

    The IRS is offering people with undisclosed income from offshore accounts an opportunity to participate in a new, voluntary disclosure initiative in order to get current on their tax returns. The 2011 Offshore Voluntary Disclosure Initiative (OVDI) will be available only through Aug. 31, 2011. However, taxpayers who made a good faith effort to comply may be eligible for an extension, detailed in Q&A 25.1 in the revised questions and answers.
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    Two things are being talked about here. There is an annual requirement to file TDF 90-22.1 to report foreign accounts or accounts with foreign interest (Commonly Known as ‘FBAR’), if the aggregate total of these accounts is $10,000 or more. The deadline for reporting these accounts is 6/30 for last year and cannot be extended. More details can be found by looking at the Form.

    However, if you have not been filing this form and not been reporting the income from these foreign accounts on your taxes, you have the option of enrolling into the OVDI initiative by August 31, 2011. I have been scratching my head around this as we all seem to have received letters from our foreign banks that the IRS is asking the banks for information regarding these bank accounts.

    A prudent approach would be to enroll in the OVDI program and pay the back taxes and penalties. If anybody has been working with the OVDI initiative, it would be nice to know their experience thus far.
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    No intention of scaring anyone but the news is timely:

    http://timesofindia.indiatimes.com/nri/us-canada-news/Indian-American-indicted-for-not-reporting-HSBC-India-account/articleshow/9036994.cms
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    FYI. Just saw this news item:

    http://www.samachar.com/Indian-American-indicted-for-not-reporting-India-HSBC-account-lg3uNGeifaf.html

    If you read the fbar document it detail, it lists all accounts (bank, securities..) where you have a signing authority. But, it not clear if you need to include something like retirement accounts (PF/others).
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    “All it takes is one disgruntled employee in Indian bank to get data of all NRI accounts and report to IRS.”. I don’t think it has to be this way. Couple of months ago, I received a letter from one of the bank in India asking about my recent PP pic and some basic information. The original letter indicated that if I dont send the info in a reasonable time, they’ll have to close my accounts. As per the branch manager, he received instruction from their head office to collect the updated data from all NRI A/c. I dont remember he talked about IRS or anything like that. Banks in India had already automated their system and if required, they can send the information instantly to IRS or any govt authorized org.

    I spoke to couple of accountants / tax consultants here and all of them advised me to declare the TDF90 form. They mentioned to me that regular income people like us ( w2’s) wouldn’t have to worry about it.

    just my 2 cents..
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    This is an exception case as millions of dollars involved. Anyway better to be careful and may be good idea to close accounts or start disclosing them.

    Please note that IRS has a incentive program for people who inform about tax evaders. It is actually 30% of money recovered (not sure exact %, saw something like this in FBI files on TV). In this doctor case if someone had reported this that informant will make 500k to million based on amount of money recovered.

    All it takes is one disgruntled employee in Indian bank to get data of all NRI accounts and report to IRS. May be that informant will come under witness protection program and will be living in some house in Hawaii overlooking the ocean 🙂

    > FYI. Just saw this news item:
    >
    > http://www.samachar.com/Indian-American-indicted-for-not-reporting-India-HSBC-account-lg3uNGeifaf.html
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    On 6/28/2011 4:25 PM,wrote:
    Hi,

    Have you filed? If so, can you please share your experience particularly about the penalty and if IRS has files any case.

    This FBAR is like a 2-edge knife:

    1) If you voluntarily disclose for previous years, there is a possibility of penalty and these penalties are way too high

    2) If you don’t disclose and the IRS find it, then on top of the high penalty there is a possibility of criminal charges. Looks like IRS is going against a lot of banks to get NRI customer data !

    Ref:
    http://www.irs.gov/businesses/small/article/0,,id=159757,00.html#penalties
    http://www.irs.gov/newsroom/article/0,,id=234900,00.html

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