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Re: FATCAHi and thanks in advance.I have a spouse who

Re: FATCA Hi and...
Re: FATCA Hi and thanks in advance. I have a spouse who immigrated upon marriage and is now a permanent resident. Recently, an elderly relative of advised my spouse that he has been investing in the spouse's name for some time (since childhood). This includes stocks (unclear if in a brokerage account or directly bought from the company, apparently these are large publicly traded corporation stocks, some supposedly have been directly bought), cash in bank accounts, and real estate properties. At first we thought he was earmarking portions of his own assets for when he passes away to be given to her. Turns out everything is in her name via accounts established when she was a minor. The exact details are still forthcoming. The reason for not telling us was that the intent was to turn over the accounts at age 40 when the spouse actually 'knows something' and will be less likely to 'just spend it.' The value of the stock alone is estimated to be over 500K US. The relative is elderly, and is refusing to give us more information about the assets 'because the US IRS will just want to tax it until they own all of it.' Which won't help us if we get hit with $10K+ penalties that we can't afford on our limited income and assets. I'm not familiar with the laws overseas (Korea), there must have been some sort of power of attorney, trust, or something I imagine set up to enable this person to do this. At any rate, we were curious as to what our responsibilities and penalties are. As for the 40% penalty I read about, does that mean 40% of the worth of these assets, or 40% of the taxable gains, and since when? The spouse has been here for 5 years. Thanks in advance!
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Answered in 8 minutes by:
8/2/2012
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,875
Experience: 15years with H & R Block. Divisional leader, Instructor
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Robin D :

Hello and thank you for using Just Answer,
I believe waiting is the worse possible thing you could do. The 5 years your spouse has been here is what is important. She really needs to file the disclosures and if you have been filing joint returns thne any interest or income from these investments will need to be shown on those past year returns.

Robin D :

I think you are going to need to have your spouse file the forms. Of course without knowing the specifics it is going to be tough.

Robin D :

File on what you know. There are more and more countries that are in alliance for the reporting and the last thing your spouse wants is to have the IRS disclose the info to her.

Robin D :

The filing of Form 8938 does not relieve you of the separate requirement to file the FBAR if you are otherwise required to do so, and vice-versa.

Robin D :

The 40% penalty is on the value of the account not any gain from it. Your spouse is going to need to apply some pressure her on this. The past 5 years with no disclosure places you both in jeopardy.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,875
Experience: 15years with H & R Block. Divisional leader, Instructor
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