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Welcome to the blog of inTAXicating.ca! Since 2008 we've been writing posts to help Canadians solve their tax issues with the Canada Revenue Agency. If you have any questions, or if you need assistance with any CRA matters including, but not limited to; Collections, Enforcement, Audits, Liens, Back-Filing, Assessments, Director's Liability, s160/325, Taxpayer Relief or the Voluntary Disclosure Program. If you have debt and are considering Bankruptcy or a Consumer Proposal, speak with us first. With over 10-years of CRA experience in the Collections division, our expertise is in the diagnosing and solving of the most complex tax problems.

Tag: FUBAR

What is FBAR? I know what FUBAR means, but not FBAR.

I knew what FBAR was, but I didn’t know what it really was, if you know what I mean and I realized that when one of my staff asked me what it meant. 

So off to research I went and I came up with this;

FBAR stands for “Foreign Bank Account Reporting” and it has been around since before I was born (1970 to be exact) and there is a requirement for US citizens, residents and persons doing business in the US to file a Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts) with the US Treasury if they have a financial interest in, or a signatory authority over, a financial account in a foreign country – if the aggregate value of the financial account exceeds $10,000 at any time during the year.

Until recently this area has not been heavily enforced, but that was before FATCA and the IRS has offered multiple voluntary disclosure programs in an effort to obtain taxpayer compliance before cracking down in effort to allow time for people to come forward and declare their interests. 

Who qualifies as a US citizsen?  In this context, a citizen or resident of the United States, a domestic partnership, a domestic corporation or a domestic estate or trust.

The types of accounts deemed to be financial accounts subject to FBAR generally are any type of account that holds liquid assets or marketable securities. Thus, everything from a cash account to a foreign mutual fund, such as an exchange traded fund, is classified as a financial account.  In addition, only accounts located in a foreign jurisdiction are subject to FBAR reporting.

Having the power of signature or other authority over a foreign financial account has the ability to subject unsuspecting taxpayers to the reporting requirement. If an individual can order the distribution or disbursement of funds or other property from the institution where the funds or property are maintained, by signing a document providing such direction (or in conjunction with one other person signing the document), that individual has signature authority over the financial account.

Individuals serving as shareholders, partners, and trustees also may be deemed to hold a financial interest in an account if the account is owned by or the individual with legal title is any of the following:

(1) A person acting as an agent, nominee, attorney, or in some other capacity on behalf of the U.S. person
(2) A corporation in which the U.S. person owns more than 50% of the total stock either directly or indirectly
(3) A partnership in which the U.S. person owns an interest in more than 50% of the profits

The problem here is that it it is not so simple to determine out if there is a filing requirement or not.  Sometimes people provide information to the government which they feel covers all the government’s requirements but may actually fall very far short.  You don’t know what you don’t know. 

If there is a filing responsibility, the form, TD F 90-22.1, is due to the IRS by June 30th and there are no extensions provided for.  Oddly, the filing of this form has no income tax implications so it goes in seperate from the personal tax return, but the civil and criminal penalties for not filing are severe and potentially very costly.

Oh, and FUBAR? Fucked Up Beyond All Recognition, that is what penalties and interest for missing any of the IRS’ filing deadlines will do to you…

Related articles
  • IRS Provides Updated Guidance re FBAR Voluntary Disclosure Program (forbes.com)
  • FBAR, 8398, FATCA, And Capital Controls – The Trail That Leads To The Forced Repatriation Of Your Foreign Assets (dollarvigilante.com)
  • FBAR Form TD F 90-22.1 to report foreign financial accounts is due June 30 (dontmesswithtaxes.typepad.com)
  • Greenback Expat Tax Services Tells US Expats: Another Opportunity to Come Clean with the IRS (prweb.com)

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Author Warren OrlansPosted on July 10, 2012July 10, 2012Categories IRS, taxationTags Bank Secrecy Act, Capital account, FATCA, FBAR, foreign, FUBAR, Internal Revenue Service, IRS, tax, United States, United States person5 Comments on What is FBAR? I know what FUBAR means, but not FBAR.

What is inTAXicating?

inTAXicating is the name chosen in 2008 by Warren Orlans, a Canadian Tax Consultant and former Canada Revenue Agency (CRA) Employee of the Year who worked in the CRA for almost 11-years in their Collections Department.

inTAXicating provides expertise in the area of Tax Liability Solutions and assists Canadians to understand how the CRA operates.

inTAXicating helps Canadians from coast-to-coast with; Collections, Enforcement, Compliance, Non-Compliance, Audits, Liens, Back-Filing, Assessments, Director’s Liability, s160 assessments, Taxpayer Relief, T2, T4, Payroll, and so much more.

inTAXicating offers a free consultation and after one paid meeting, clients are provided with a solution for their tax issue(s).  From there, if you need more assistance, it is available, or you can now handle it yourself.

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