Monday, October 12, 2009

FBAR: The Final Lap

So why have I hardly blogged lately? Sukkot, Family, Work...but the biggest vacuum of free time known to mankind...the FBAR.

I'm in the process of finishing to my FBAR reports for 2003-2007 so I can mail them in before the October 15th absolutely final deadline.

That's right, postmarked by the 15th isn't good enough. Frankly, the FBAR people might even throw away all FBAR's received by the due date, and then decide to process/prosecute those that arrive late ($10K per received late form)...who knows? Nobody knows. The FBAR reports have never been a big deal till now, so the uncertainty is the killer.

OK, leaving the blog so I can finish my reports tonight. Wish me luck. Once these are done I'll reclaim the blog from JoeSettler.

Jameel.


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13 comments:

NormanF said...

FBAR? Is that the Israeli vesion of FUBAR? F*cked Up Beyond All Recognition.

Heh

Jameel @ The Muqata said...

Norman: Actually, the FBAR is 100% pure American.

Its a newly enforced filing regulation for all US citizens around the planet to disclose all foreign holdings.

That means...if you're a US citizen who moved to Israel, you must file disclosure of all bank accounts, stocks, securities, etc owned in that foreign country.

Filing deadline for the past 7 years is October 15th

Unfortunately, it takes hours and hours to complete...penalty for not filing; $10K a year (plus a portion of the money you should have reported, criminal liability, etc).

The FBAR has nothing to do with the IRS and taxes (which I file annually) -- this is a Treasury Department requirement, looking for money launderers.

The stupid form claims "should take about 20 minutes to fill out..."

It closer to 10 hours per form -- including finding all the data for it.

Anonymous said...

10 hours to fill out the form?! Let this be a lesson: always file away your bank statements. All you have to do to fill out the form is flip through the statements for a balance and convert it to dollars (which takes about a minute to get the conversion rate from the Bank of Israel's website).

Jameel @ The Muqata said...

Anonymous: Silly person!

Its not simply the "balance" -- its the highest amount your account was, on any single day of the year. Each account is a separate block of 15 fields to fill out, each stock is 15 fields to fill out. End of year statements are not enough. Every fund, stock, or account needs to have a mailing address of the bank that issued or manages it.

If you think you can do this in a few minutes, you're sadly mistaken. Most CPA's I know are extremely frustrated with this form as well - and they're professional form people!

BTW - all my bank statements ARE filed away, by year and bank.

Anonymous said...

Not silly- just not as invested apparently. Life is simpler when all you've got is one checking account :) (And, yeah, I know it's the highest account balance of any day of the year).

Jameel @ The Muqata said...

Anonymous: You dont have a keren hishtalmut? Or put aside money for kids? Or invest in anything?

NormanF said...

Jameel, unless you have business interests or income in America and are no longer a US citizen, my understanding is your US tax obligations cease when you move to a new country. Or are you a dual national?

Lurker said...

NormanF:

To quote Jameel: The FBAR has nothing to do with the IRS and taxes (which I file annually) -- this is a Treasury Department requirement...

The FBAR is not about tax obligations. It's about disclosure of foreign holdings.

NormanF said...

Foreign holdings by an Israeli national in the US? Or foreign holdings by a US national living abroad?

Jameel @ The Muqata said...

NormanF: foreign holdings by a US national living abroad.

(A Dual national, living in Israel has to disclose everything in Israel, or is in direct violation of US Federal law...punishable by jail time and a $10K fine per year of not filing)

Lurker said...

Jameel: foreign holdings by a US national living abroad.
(A Dual national, living in Israel has to disclose everything in Israel...


Actually, to be more precise: Foreign holdings by a US national, period. It doesn't matter whether the US national is living in the US or abroad. Nor does it matter whether the holdings are in the same country in which he resides.

Anonymous said...

are you sure that as long as the form is post-marked by the 15th, then that is not sufficient?

Jameel @ The Muqata said...

FBAR reporting is not like an IRS tax return -- it should arrive by the 15th, not simply be postmarked.

I personally drove to Ben Gurion Airport last night to UPS -- to ensure it would arrive on October 15th.

http://www.hodgen.com/tax-return-on-extension-how-to-do-fbar/

The current amnesty extends the window for late filed 2008 FBARs to October 15, 2009. If he is currently on extension, you can get him out with no penalties. The procedure is as follows:

1. FBAR (original) to Detroit on or before October 15, 2009. That is the arrival date. Not the postmarked date. I would suggest a cover letter explaining that the tax returns are being filed on extension.
2. Tax returns go where they are supposed to go, on or before October 15, 2009. That’s the postmarked date, not the arrival date.
3. Suggested: follow the FAQ #9 procedure from the IRS and send a copy of the 2008 FBAR and a copy of the tax return as filed to Philadelphia to arrive on or before October 15, 2009. Can’t hurt, may help. Bombard the IRS with paper. :-) FAQ #9 is found here: http://www.irs.gov/newsroom/article/0,,id=210027,00.html

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