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Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Tax
Satisfied Customers: 1503
Experience:  22 years of tax preparation experience, including individual, trust, and estate returns.
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I read the online references; i just want to make sure I understand

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I read the online references; i just want to make sure I understand things. You've refered to having 'assets' of >$200k (or >$300k at some some point during). Does that definitely refer to assets and not income?

Arthur Rubin :

That's assets. I can no longer find the IRS web page where the numbers were given, but they are in the form 8938 instructions.

Arthur Rubin :

See also http://www.irs.gov/Businesses/Comparison-of-Form-8938-and-FBAR-Requirements , as you probably already knew of the FBAR requirements (also regarding assets) with a much lower threshold ($10,000), and covering accounts on which you have signature authority, rather than accounts related to taxable income.

Customer:

That IRS site is http://tinyurl.com/9aag3w9

Arthur Rubin :

The form 8938 instructions have a little more detail, but that's the one I found before.

Customer:

If it's assets, $200k strikes me as a a rather low threshold, especially for people who've lived abroad for 20+ years.

Customer:

Is that why people are so concerned?

Arthur Rubin :

I think more people are concerned about the requirement that their financial institutions report to the IRS, than about the individual reporting requirements. But, I really couldn't say.

Arthur Rubin :

Remember the FBAR reporting threshold is only $10K; there the Treasury Department (not the IRS) is looking for money laundering, rather than unreported incom

Customer:

Well, that's a good point. How does a financial institution know if an individual is Us citizen?

Customer:

a US citizen

Arthur Rubin :

Interesting question. I have no idea, unless the customer tells them.

Customer:

As a dual citizen, i've always conducted by financial affairs as a Brit, with a UK national insurrance number, etc.

Customer:

In principle, I suppose the rules apply to all US citizens, whether or not they're a dual citizen of the country in which they live.

Arthur Rubin :

If you deal with any financial institutions which are branches of a US financial institution, I suppose they would have to ask, because you do not have to report those under FATCA.

Arthur Rubin :

As you may already know, the US is one of only two countries which applies income tax to non-resident citizens on foreign (non-US) assets.

Customer:

Just learning this stuff now, never paid attention to it.

Customer:

Seems like there are three options:
(1) report all matters to the IRS;
(2) keep quite and hope to stay off the radar; or
(3) give up US citizenship.

Arthur Rubin :

Pretty much, yes. As a tax preparer, I could not advise you to select option 2.

Arthur Rubin :

I've had some prospective US clients who wanted to keep some transactions "off the radar", and I would not prepare their returns.

Customer:

Understood. As a tax preparer you cannot recommend any other course of action. Correct?

Arthur Rubin :

I cannot think of any other course of action which would be legal, and I cannot recommend illegal actions.

Customer:

Exactly, I understand.

Arthur Rubin :

I should remind you of the disclaimer, though. "Posts are for general information, and are not intended to substitute for informed professional advice (..., financial, etc.) and do not establish a professional-client relationship."

Customer:

I know. Thanks for your help. This has has been very useful.

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