Tax qn:Form 8938, FBAR TDF 90-22.1 for non resident aliens ?

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Tax qn:Form 8938, FBAR TDF 90-22.1 for non resident aliens ?

Postby bluejeansman » Mon Jul 01, 2013 5:07 pm

I am a British citizen and live and work in the U.K. From US standpoint, I am a non-resident alien. I am not a US citizen. I do not have a US green card. I still have money in the U.S, from the days I used to work there. These are in bank accounts, taxable brokerage (Etrade/Vanguard) accounts, and my old 401k. I have various bank accounts and brokerage accounts in the UK of course.

I file a US Form 1040-NR every year. I go thru an excellent tax accountant in the US to do this. This accountant has advised me that I need to file an FBAR Form TDF 90-22.1 by June 30. An FBAR is declaration of all "foreign assets". I thought it applied only to US citizens or green card holders. Even if I declared my non-US assets (UK bank accounts etc), I would not be paying tax to the IRS on these, so I always assumed it does not apply to me.

In any case, I filed it last year but mailed the form on 30 June 2012. I am disorganized and almost always procrastinate. Apparently mailing the form by June 30 does not count. It must reach the IRS before June 30. I continued the same habit this year as well, and mailed it on June 29. It will be 3 to 4 business days to reach them. The penalties are pretty draconian. It is something like $10,000 per account per day late filing fine so I am losing sleep over it today. tried to reach my accountant but he is quite busy and I am unable to get thru to him. Plus, I have not filed Form 8938 yet. I only mailed the TDF 90-22.1.

Questions
*) Does Form 8938, FBAR TDF 90-22.1 apply for non resident aliens ?
*) Whats the best I can do now ?
*) Has anyone ever been fined (especially non resident alien who would not pay US tax on non US assets anyway, even if they declared) this $10,000 per day stuff ?

I hope to change my habits and be more organized and timely next year, but we are where we are, and I wonder what I can do now to avoid 6 digit fines. I did not get fined last year, even tho I mailed it only on 30 June so I am hoping it is fine this year too.

Look forward to hearing from you. Thanks !
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Re: Tax qn:Form 8938, FBAR TDF 90-22.1 for non resident alie

Postby Cuzz35 » Mon Jul 01, 2013 9:16 pm

I would start by reading the instructions. For the FBAR, near the beginning it says explicitly who must file. It says a United States person who has a financial interest or signature authority over a foreign financial account whose value exceeds $10k at any time during the year. It also gives definitions explaining who is considered a U.S. person. Its my understanding based the definition and your description of your situation that you don't have to file. Please read it yourself and see if you agree. Maybe ask your accountant to explain why he thinks you should file.

Form 8938 instructions say you must file if your a "specified individual." It gives descriptions of what that means. Again, doesn't sound like you need to file it based on my understanding but read it yourself and have your CPA explain.

Hope this is somewhat helpful.

Note: I am not a CPA at the current time.
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Re: Tax qn:Form 8938, FBAR TDF 90-22.1 for non resident alie

Postby MarkNYC » Mon Jul 01, 2013 10:26 pm

Based on your statements, I agree with Cuzz that you don't appear to meet the definition of "US Person" or "specified individual" for the purpose of being required to file the TD F form or Form 8938. With regards to tax compliance, when procrastination gets to the point of filing late, there can be unpleasant consequences. There is a chance you may receive a late-filing penalty, but I doubt it. If you do, I think you have a good chance of successfully arguing that a late-filing penalty should not apply to the late-filing of a form that your later realized you were not required to file. Keep your fingers crossed, and ask your accountant to explain why he/she believes you were required to file.
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Re: Tax qn:Form 8938, FBAR TDF 90-22.1 for non resident alie

Postby TedSwippet » Tue Jul 02, 2013 4:27 am

bluejeansman wrote:I am a British citizen and live and work in the U.K. From US standpoint, I am a non-resident alien. I am not a US citizen. I do not have a US green card. ... I go thru an excellent tax accountant in the US to do this. This accountant has advised me that I need to file an FBAR Form TDF 90-22.1 by June 30.

From what you have described about your US connections they are wrong.

Unless your accountant can come up with a cast-iron explanation for why they think you should file this form, fire them immediately and consider filing a complaint for incompetence with the relevant state board.
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