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Welcome to FBAR & Form 8938

Prof Daniel N Erasmus, EA & USTCP, International Tax Attorney

TRM Daniel Erasmus Tax Court Practitioners

Prof Daniel N Erasmus, EA, USTCP & Int’l Tax Attorney 561 568 7115

Where? FBAR IRS - http://www.irs.gov

/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-FBAR

Regulations - Feb 24, 2011 http://edocket.access.gpo.gov/2011/pdf/2011-4048.pdf

Checkpoint (RIA) – Tax - SEARCH TOOLS – Federal Tax Legislation Search - Select All – “fbar” search FBAR client reminder letter

Prof Daniel N Erasmus, EA & USTCP 561 568 7115

BVI Trust

Lichtenstein Trust

SavingsAccount

CreditCard

New ZealandTrading Company

PFICNew Zealand Retirement Fund

$100K cash value policy

Non-USS.AfricanAunt is Settlor

Non-USGrand-Father is Settlor

Non-USMotherS. African

Offshore USASignatorySignatory

40% vesting beneficiary

60% discretion-ary beneficiary

What? Form TD F 90-22.1 Report of Foreign Bank & Foreign

Accounts COPY & INSTRUCTIONS - http://www.irs.gov/pub/irs-pdf/f9022

1.pdf

Foreign bank account Foreign securities account Signature Authority Financial Interest in Financial Account 30 June each

year Non-compliance penalties:

Non-willful civil $10,000 per violation Willful civil $100,000 or 50% amount in account Criminal penalties $250,000 fine or5 years or both Civil & criminal may be imposed together

Prof Daniel N Erasmus, EA & USTCP 561 568 7115

Form 8938? Statement of Specified Foreign Financial Assets Code Sec. 6038D individuals with an interest in a “specified foreign financial asset” during

the tax year must attach a disclosure statement to their income tax return for any year in which the aggregate value of all such assets is greater than $50,000 (or a dollar amount higher than $50,000 as IRS may prescribe). ( Code Sec. 6038D(a) )

In addition, to the extent provided by IRS in regs or other guidance, Code Sec. 6038D applies to any domestic entity formed or availed of for purposes of holding, directly or indirectly, specified foreign financial assets, in the same manner as if the entity were an individual. ( Code Sec. 6038D(f) )

“Specified foreign financial assets” are: (1) depository or custodial accounts at foreign financial institutions, and (2) to the extent not held in an account at a financial institution, (a) stocks or securities issued by foreign persons, (b) any other financial instrument or contract held for investment that is issued by or has a counterparty that is not a U.S. person, and (c) any interest in a foreign entity. ( Code Sec. 6038D(b) )

FORM 8938 http://www.irs.gov/pub/irs-pdf/f8938.pdf INSTRUCTIONS FORM 8938 http://www.irs.gov/pub/irs-pdf/i8938.pdf

Prof Daniel N Erasmus, EA & USTCP 561 568 7115

Form 8938? Failure-to-file penalty The Instructions explain that if an individual fails to file a

correct and complete Form 8938, he or she may be subject to a penalty of $10,000. If this failure continues for more than 90 days after the day on which IRS mails a notice of the failure to the individual, he or she will be penalized $10,000 for each 30-day period (or fraction of the 30-day period) during which the failure continues after the expiration of the 90-day period. The penalty imposed for any failure can't exceed $50,000. For married taxpayers filing a joint return, the failure-to-file penalty applies as if the taxpayer and his or her spouse were a single person. However, the taxpayer's and spouse's liability for all penalties remains joint and several

 

Prof Daniel N Erasmus, EA & USTCP 561 568 7115

Late filing? File delinquent reports Attach statement why late due to “reasonable

cause” then no penalty asserted if satisfied What is “reasonable cause” for late

FBAR/Form 8938 filing? Estate of Morton Liftin v. US, 108 AFTR 2d relied in

good faith on expert advice concerning substantive question of law

Estate of Eugene La Meres v. CIR, 98 T.C. 294 distinguished from US v. Boyle, 469 U.S. 241 (1985) where La Meres representative not relied on agent for actual filing, but instead on advice of counsel that an extension to file was available

Prof Daniel N Erasmus, EA & USTCP 561 568 7115

OVDP and Streamlined disclosure process File delinquent Expats OVDP? Streamlined disclosure? Discussion of problems and possibilities Case studies

Prof Daniel N Erasmus, EA & USTCP 561 568 7115

Thank you Prof Daniel N. Erasmus daniel@TaxRiskManagement.com 561-568-7115 www.ErasmusOnTax.com www.TaxRiskManagement.com

Prof Daniel N Erasmus, EA & USTCP 561 568 7115