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Question

I am in London for 3 months. By chance I saw an item in the Herald Tribune about today's deadline for oversea accounts. If I have a tiny amount in a UK account, because 35 years ago I lived in the UK and I receive a minute £19 per month pension there, do I need to act on today's deadline? If so, how do I do it from London? I had no wish to avoid taxes. It was a mistake. Either Schedule B used to have wording at the bottom of the page about not reporting an oversea account if less than $10,000 or I misread it. I saw recently that it now says something about reporting but not having to pay on it (I don't have a schedule here so can't check). But I didn't know how to put it right. Five years ago, the amount had climbed above $10,000, due to the injection of some still very small amount of money which came due. The peak amount, in about 2004, was about £14,000 (I don't have documents here and don't think I can get the exact figure today). Can you reply today? Thanks! A.K.

Submitted: 37 days and 19 hours ago.
Category: Tax
Value: $40
Status: CLOSED
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Optional Information

State/Country relating to question: North Carolina

Already Tried:
Only just aware today is a deadline, so nothing. Question is VERY URGENT.

Posted by LEV 37 days and 19 hours ago.

Info Request

Are you US citizen or US resident?

37 days and 19 hours ago.

Reply

I am a naturalized US citizen, since some 30 years ago.

Accepted Answer

Yes - you might need to act today.

 

Taxpayers with unreported income relating to offshore transactions who wish to voluntarily disclose the information to the IRS can find information on the process.

IRS Extends Deadline for Disclosing Hidden Offshore Accounts until Oct. 15, 2009 - http://www.irs.gov/newsroom/article/0,,id=213463,00.html

 

Please do not mix two requirements:

-- to report income regardless if it is received in the US or abroad according to the tax rules - amnesty doesn't cover that requirement.

-- to report foreign accounts under Title 31 (not under any provision of the Internal Revenue Code) - regardless in such account generated taxable income or not. - amnesty covers this requirement.

 

As a US citizen - you is required to report all taxable income worldwide. Regardless if the money are transfered to the US or left abroad - interest income should be reported.


Foreign accounts should be reported if the value of the account exceeds $10,000 at any time during the calendar year - you would check the box on the schedule B, and fill the Form TD F 90-22.1 - http://www.irs.gov/pub/irs-pdf/f90221.pdf

see details here -- http://www.irs.gov/businesses/small/article/0,,id=148849,00.html

Please find here exact wording from the reference above...

If you own or have authority over a foreign financial account, including a bank account, brokerage account, mutual fund, unit trust, or other types of financial accounts, then you may be required to report the account yearly to the Internal Revenue Service. Under the Bank Secrecy Act, each United States person must file a Report of Foreign Bank and Financial Accounts (FBAR), if

  1. The person has financial interest in, signature authority (or other authority that is comparable to signature authority) over one or more accounts in a foreign country, and
  2. The value of the account exceeds $10,000 at any time during the calendar year.

If you already filed tax return - form 1040X should be filed - include any interest on your account and attach schedule B.

Form TD F 90-22.1 - if needed - should be sent separately.

 

Let me know if you need any help.

 

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Expert: LEV
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Answered: 10/15/2009

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