tag:blogger.com,1999:blog-1519969502186924526.post1306975995967522498..comments2023-10-24T08:00:53.865-05:00Comments on Federal Tax Crimes: Adventures with the New Form 8938 / Section 6038D (3/7/12)Jack Townsendhttp://www.blogger.com/profile/14469823736335455874noreply@blogger.comBlogger65125tag:blogger.com,1999:blog-1519969502186924526.post-28530579002559495222013-01-18T04:46:33.269-06:002013-01-18T04:46:33.269-06:00I've just encountered an interesting scenario ...I've just encountered an interesting scenario with form 8938 that I have not been able to resolve and wonder if someone might be able to advise? The scenario is: taxpayer is to lodge a dual status return for 2012, non resident at the end of the year . Taxpayer lives abroad, tax home overseas, physically present abroad for more than 330 days, below applicable filing thresholds, so seemingly does not need to file form 8938. <br /><br />However, for the physical presence test (same one as for foreign earned income exclusion), form 8938 says: "A US citizen or resident who is present in a foreign country... at least 330 full days". In this case the taxpayer was physically outside the US for the appropriate time, BUT was not a resident during the full 330 day period - part way through the taxpayer became a non resident. Does that suggest then that the taxpayer DOES have a 8938 filing requirement? <br /><br /><br />If yes, thist seems to go against the idea of greater flexibility to taxpayers abroad (ie with higher thresholds etc), and although the taxpayer is not required to report information for the period of non-residency, the taxpayer is obligated to file? In all the documentation I have seen thus far, the language refers to a 'resident who is present'. Perhaps a sharp legal mind (e.g. Jack?!!) or someone with experience in situations where something similar occurs with the FEIE might be able to advise? Thanks!disqus_FzlsVdySzrnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-39553812243832549862012-04-08T19:15:52.758-05:002012-04-08T19:15:52.758-05:00If one holds shares of a foreign Mutual Fund, is i...If one holds shares of a foreign Mutual Fund, is it reported in Form 8938 Part II line 7 or line 8? Line 7 is for an asset that "is stock of a foreign entity or an interest in a foreign entity" and Line 8 is for an asset that "is NOT stock of a foreign entity or an interest in a foreign entity"...<br /><br />Also, at the risk of sounding naive, Is there a definition of an 'entity' for IRS purposes?<br /><br />Any comments would be greatly appreciated.<br /><br />Thanks,<br />HBHBnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-82521002705414553232012-03-26T12:05:26.631-05:002012-03-26T12:05:26.631-05:00Hi Jack, I have wire transferred post tax $11K to ...Hi Jack, I have wire transferred post tax $11K to my savings account in India couple of times. Most or all of that amount was then transferred over to investment account. Most of it was then used to buy stocks. Of course 22K I transferred in 2011 does not reach the threshold for 8938, but total value of stocks held is over the threshold. How does one report this on 8938? I didn't find anything in IRS FAQ related to internal transfer between accounts. Thanks!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-30437700648480961472012-03-23T22:31:42.406-05:002012-03-23T22:31:42.406-05:00Part III is for financial interest, regardless if ...Part III is for financial interest, regardless if the name is on the account or not. Part III can be used for nominee type accounts where ownership (financial interest) belongs to US persons. If the person above claims that funds belong to parents then he has no financial interest but has an authority over the account (move funds) that needs to be reported. Best advice is write an email to FBARQuestions@IRS.gov with a detailed description and they will guide you.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-27540257153892287182012-03-23T21:03:20.525-05:002012-03-23T21:03:20.525-05:00I am not sure that the answer is right. It might ...I am not sure that the answer is right. It might go on Part III. But, if you report the account in good faith uncertainly as to which Part it applies to, I don't think the IRS / Treasury will quibble. Keep in mind that the ultimate issue in a good faith arrangement of this sort is whether the U.S. taxpayer(s) involved correctly report the income from the account. (I don't include in good faith arrangement drug dealers and that lot.)<br /><br />Best,<br /><br />Jack TownsendJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-78231279349982070712012-03-23T20:56:59.368-05:002012-03-23T20:56:59.368-05:00if your name is on the account you have to file pa...if your name is on the account you have to file part IV of FBAR, signature authority but no financial interest.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-61932499163797920612012-03-23T20:39:35.434-05:002012-03-23T20:39:35.434-05:00I just came back to this because I know you think ...I just came back to this because I know you think it is an easy question as to which there should be an easy answer. The question is easy. The answer is not because it requires nuance that just can't be developed in a blog medium. The risk is that you get an answer not tailored to the specific facts and therefore take an action that will end up causing you great harm. That can only be developed with probing interaction with a professional who is sensitive the potential landmines that you could encounter.<br /><br />Best,<br /><br />Jack TownsendJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-40386196548186559822012-03-23T20:25:02.743-05:002012-03-23T20:25:02.743-05:00You should seek professional advice on this becaus...You should seek professional advice on this because it requires nuance beyond what we could develop here.<br /><br />Best,<br /><br />Jack TownsendJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-9017267679128976552012-03-23T20:20:56.408-05:002012-03-23T20:20:56.408-05:00Jack,
In what type of situations can a US person ...Jack,<br /><br />In what type of situations can a US person say that he does not have financial interest in a foreign bank account? <br /><br />Can a US person who has a joint account with his parent not claim that he does not have financial interest in the account if the money belongs to his parents? <br /><br />Thank you.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-85317622170948449992012-03-23T17:13:19.490-05:002012-03-23T17:13:19.490-05:00My understanding is that you do have a financial i...My understanding is that you do have a financial interest in the account and thus have an FBAR reporting requirement and an 8938 reporting requirement. Keep in mind that these are information forms only. You need to properly report your income tax consequences from the account, which I presume would be only a proportionate share of the earnings in the account. You might want to attach a statement to the return explaining why your share of the income is less than all in the account.<br /><br />Jack TownsendJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-27907034037886717822012-03-23T16:29:14.058-05:002012-03-23T16:29:14.058-05:00Am I considered to have financial interest in a fo...Am I considered to have financial interest in a foreign bank account that I am joint on with my elderly father (non US citizen) if he is the principal owner of the account and pays taxes on the account in his home country? I know this is to be reported on the FBAR form but also on the 8938?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-70177375311090060932012-03-23T09:35:06.704-05:002012-03-23T09:35:06.704-05:00Sally, and Jack;
I too am interested in this ques...Sally, and Jack;<br /><br />I too am interested in this question - for scenario that jointly held 'personal'/'household' accounts, outside of US, in country (not a 'tax haven') of longterm permanent residence - co-owned with a spouse who has no US tax obligation, is not a US citizen/'person', and strongly objects to the disclosure of account#s and contents on the grounds that it breaches her/his financial information, and runs the risk of identity theft since FBARs (and FATCA?) information is not protected from sharing more widely as are tax returns. The country in which the accounts are held is where the couple live, work and they are just ordinary accounts. Any account interest is duly reported to the country of residence directly from the bank, for income tax purposes.<br /><br />As well, in the case of completely non-personal non-US accounts belonging to: (a) an employer (with no personal interest or gain), or (b) voluntary/professional/charitable organization's accounts (ex. if us person holds role of treasurer or board member with co-signatory powers - again, no personal interest or gain) - how to solve the dilemma of reporting on 'foreign' accounts where the real owner (ex. non-US employer) has no tax or reporting obligation to the US, and objects to the reporting on these accounts? Disclosing the information over the objections of the legal owner of the accounts would be a privacy law issue, and also opens a board member treasurer up to breach of fiduciary duties. <br /><br />This continues to be a real and vexing problem - is the only answer for US'persons' living outside the US, to avoid any joint spousal (or other familial accounts with non-US persons), any non-US employment where the duties include holding co-signatory powers, and any voluntary, charitable, community and professional roles involving the same?<br />Anonymous-vexedAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-57318944549857719732012-03-20T00:06:56.908-05:002012-03-20T00:06:56.908-05:00I wasn't thinking about tax havens. I was thin...I wasn't thinking about tax havens. I was thinking about joint accounts with one's spouse a regular country. (One for which the US would be a tax haven, what with its low tax rates.)<br /><br />The solution to the dilemma is not to have a joint account with one's spouse. But one needs to know about the problem first. One also has to hope that said spouse does not have an accident or become seriously ill.Sallynoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-20468224073389047132012-03-19T17:26:08.603-05:002012-03-19T17:26:08.603-05:00I think it would depend upon whether the non-US p...I think it would depend upon whether the non-US person is a real party in interest or just a name joint account holder. And, even then, if the U.S. person is also a real party in interest and not just a name joint account holder, I doubt that the tax haven jurisdiction with the so-called secrecy law could prosecute a person with a real interest for disclosing information about his or her account.<br /><br />Just my view, but the truth is -- known to all -- that these secrecy laws are intended to thwart legitimate governments from getting information they are entitled to get. So you will find no sympathy in the U.S. for subjecting yourself to any risk of prosecution in a foreign government for supplying the U.S. information it is entitled to to enforce the tax laws.<br /><br />Best,<br /><br />Jack TownsendJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-82827042603605256432012-03-19T16:41:28.489-05:002012-03-19T16:41:28.489-05:00What about joint accounts with non-US persons, whe...What about joint accounts with non-US persons, where the non-US person does not agree to a disclosure to a a foreign government? Disclosure without agreement of all account holders could breach privacy laws.<br /><br />(Just curious.)Sallynoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-9059989667167619002012-03-19T10:49:44.880-05:002012-03-19T10:49:44.880-05:00There are two questions (and two answers.) One qu...There are two questions (and two answers.) One question is, what is the law. The other question is, what is likely to happen in practice.<br />My take is that there is a strong likelihood that in practice they would be valued at bullion value, and you would have to fight this in court.<br /><br />The rare stamp would be treated differently IMHO since it is not a monetary instrument and you would have a hard time convincing anyone that it is worth its face value.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-50597124594471747502012-03-19T10:45:27.167-05:002012-03-19T10:45:27.167-05:00Because of the huge penalties to the bank for NOT ...Because of the huge penalties to the bank for NOT filing a SAR when warranted, banks will generally err on the side of caution and file an SAR anyway.<br /><br />Banks are specifically prohibited from informing a customer that an SAR has beeen or will be filed, and inquiring into whether an SAR will be filed could generate enough suspicion to cause one to be filed.<br /><br />Because banks often file SARs when in doubt, there is a huge number of SARs filed so just the filing of one may not be enough to generate a lot of attention.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-14243040766953074612012-03-18T11:26:26.433-05:002012-03-18T11:26:26.433-05:00Those supposed foreign jurisdiction laws prohibiti...Those supposed foreign jurisdiction laws prohibiting a foreign depositor from disclosing information about his own account are shams, serving no other purpose that giving the foreign depositor (in this case a U.S. depositor) a way to claim that he or she is legally prohibited from disclosing account information. Foreign countries have no legitimate interest in prohibiting depositors in their banks from disclosing information about the accounts to whomever they choose.<br /><br />For example, if a U.S. depositor tells his children about the account, has he violated foreign law or, if he has technically done so, would the foreign country ever prosecute? The answer is no. If the U.S. depositor tells his Government about the account, has he violated foreign law or, if he has technically done so, would the foreign country ever prosecute the depositor. The answer is, of course, no.<br /><br />Would these tax haven countries seeking deposits from others (including U.S. persons) get any deposits if they required absolute secrecy so that only the depositor and the bank would ever knew about the account? I am sure the Swiss would like a rule like that because it would permit them to steal the money when the depositor died or became incapacitated (because no one would know about the account), but I am equally sure that no non-Swiss person would deposit into a Swiss account if the Swiss would prosecute the disclosure of the account to whomever the depositor chose to make the disclosure.<br /><br />Jack TownsendJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-61822244712799385412012-03-18T09:34:30.664-05:002012-03-18T09:34:30.664-05:00"Effect of foreign jurisdiction laws. The fac..."Effect of foreign jurisdiction laws. The fact that a foreign jurisdiction would impose a civil or criminal penalty on you if you disclose the required information is not reasonable cause."<br /><br />I love it. The IRS says you have to break the law.Sallynoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-48629886397040572232012-03-17T10:28:13.504-05:002012-03-17T10:28:13.504-05:00FBAR data seems better - it can be shared and trad...FBAR data seems better - it can be shared and traded. What's so great about 8938 data? I see nothing except its the latest way to ramp up the penalties. Everybody will be spending all their time filling out forms. Don't they have enough bludgeons? <br /><br />The IRS talks like police do about their war on drugs. Shulman says he's collected "x" billions from whoever under the successful OVDI. I'm not hearing him say what he thinks the big picture is. <br /><br />The whole effort would look more credible and intelligent to me if they lived up to what they were claiming they'd do about education ten years ago.John Doenoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-31359497662450706832012-03-15T07:50:30.093-05:002012-03-15T07:50:30.093-05:00"fully specified payee, amount, signature, da..."fully specified payee, amount, signature, date etc."<br /><br />It is common to send a/c payee crossed check to India where you have the name of the person.<br />A crossed a/c payee check in the indian bank means that the check can be deposited only in the <br />bank account of the person in whose name the check is issued. <br />If it is a blank check or a check that says self pay cash then you will have to declare. if you have sent a crossed cheque to your father/mother or relatives who has an account in India or other foreign country then i do not think you will have to file the FinCen 105. However to be on the very safe side, it does not hurt to file one. I think you need to file one within a month of sending the check. Too many rules and regulations in this area that i would err on the cautious side by filing the Form.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-2187846554539021642012-03-15T06:01:28.714-05:002012-03-15T06:01:28.714-05:00Forfeited or Confiscated is there really a differe...Forfeited or Confiscated is there really a difference? The government had him over a barrel and used this position to take all his offshore funds. Kind of like what they are doing in their voluntary disclosure programs except they they only take 20% - 27.5% plus all the other gobbly gook in the programs unless you have a decent opt out result like Moby, Sally and hopefully many other to come. Its a legal blackmail system where the blackmailer is a powerful and broke organization desperately trying to increase collection of funds from a very vulnerable and confused target group. Namely immigrants and expats. Dr. Silva was neither of these but he did inherit the funds and probably should have made a disclosure prior to trying to sneak the funds back home and hide the past.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-19046343278820534592012-03-14T23:06:08.940-05:002012-03-14T23:06:08.940-05:00By the way, this anonymous posting a comment above...By the way, this anonymous posting a comment above form 105 is not I with 4 bank a/cs! I just wanted to clarify. How to use a better identifier than just anonymous, so as to avoid indistinguishable anonymous, I may be a novice using these blogs I have to admit.....anonymous-z.Znoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-91062924929212055092012-03-14T21:57:09.175-05:002012-03-14T21:57:09.175-05:00I don't understand your obsession with avoidin...I don't understand your obsession with avoiding the wire transfer. I think you need individualized counsel (and pay for it) before you try to rely upon comments on this blog that are made without all the nuance that is inevitably involved and that you do not give here.<br /><br />Get a lawyer and deal with the nuance.<br /><br />Jack TownsendJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-37512021540290072012-03-14T21:26:41.054-05:002012-03-14T21:26:41.054-05:00If it is a personal check (not a bearer check) the...If it is a personal check (not a bearer check) then you do not have to file the FinCen 105.Anonymousnoreply@blogger.com