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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 15588
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Hello, We followed some bad advice a few years ago and want

Resolved Question:

Hello,
We followed some bad advice a few years ago and want to sort out the fallout.

I live in Japan and have not filed for several years. I want to catch up and make things right. I did not make enough money in any of the years to owe taxes in the US. Which is why we were advised not to file. But have since found out this "expert" advice was wrong.

Second I just today heard about FBAR. Living here for years I have not kept up on these issues. But I have had accounts in excess for probably 5-6 years. And am now terrified by the potential penalties.

Should I hire a consultant to help with all of this. Keeping in mind we don't have a lot of cash for that as I am the sole income for our family.

Or should I just file everything with a letter explaining our issues and hope for the best?

Does this mean financial ruin for my family?

KW
Submitted: 1 year ago.
Category: Finance
Expert:  Megan C replied 1 year ago.

MyVirtualCPA :

Thank you for your question, and thanks for using JustAnswer.com

MyVirtualCPA :

Are you considered a US citizen or resident?

Customer:

US citizen

MyVirtualCPA :

And when you say that you did not make enough to owe taxes, and did not need to file, could you explain that?

Customer:

There is an exemption for expats working abroad. Was $83K or so, now up to $90k or so according to the sites I checked today. So we would not have had to pay taxes. Just file.

MyVirtualCPA :

Yes, but you would still need to file. This is the foreign earned income exclusion

MyVirtualCPA :

If you earned less than the exclusion and don't owe tax, then it's not going to be a big deal. You will just file your return

Customer:

my real concern is the FBAR. we did not know about his until this email broadcast today. My average account has varied as we use it for our whole family savings. So it has ranged from $7K (not reportable) to briefly at a max of $30K a couple years.

Customer:

reporting threshold is $10 apparently

Customer:

$10K

MyVirtualCPA :

Yes, I know. And you will need to file these, as filing late is better than not filing at all

MyVirtualCPA :

I would hire an international tax accountant and have them get you caught up

MyVirtualCPA :

They will probably do quiet compliance, where you simply file and say nothing until the IRS inquires further

Customer:

I had read that quiet compliance has resulted in serious issues. while full disclosure seems equally harsh. I am guessing there is no certain way to ameliorate this?

Customer:

also not sure if the US has full access to Japan's banking records or not. They are not currently listed. But could be in the future.

MyVirtualCPA :

No, there's no magic bullet. That's why I would hire a professional. It would be worth the cost.

Customer:

Are you aware of any case examples?

MyVirtualCPA :

I do not have any case citations to share, no

Customer:

Ok. Thanks. Do you recommend any provider who can assist? The web is full of adds but cannot tell which ones are competent. GIven the bad advice we had from the one here in Japan, I am worried to find one randomly.

MyVirtualCPA :

I would look for a firm that specializes in international tax. We are prohibited from giving direct referrals.

Customer:

Ok. Thank you.

MyVirtualCPA :

However, I would focus on Los Angeles or New York and find a firm that specializes in international tax

MyVirtualCPA :

Look in LA or New York, though

Customer:

Thank you I will.

MyVirtualCPA :

Thank you for your positive rating. Please come back and and ask another question soon! Please come back and ask MyVirtualCPA any of your questions. Thanks again for using JustAnswer.com

Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 15588
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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