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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15610
Experience:  15years with H & R Block. Divisional leader, Instructor
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I live in the USA recently i visited ***** ***** and opened

Customer Question

Customer: i live in the USA recently i visited ***** ***** and opened a non interest bank account. later i started wiring money to that account from the tax paid earnings from the USA. ithe question is do i have to report my bank account to the IRS
JA: Thanks. Can you give me any more details about your issue?
Customer: and what if i didnt
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Customer: my name is not ***** *****
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Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  Robin D. replied 1 year ago.

Hello

Even if the account in another country does not earn interest, it is the amount in the account that dictates reporting about the account.

U.S. individual taxpayers must report information about certain foreign financial accounts and offshore assets on Form 8938 and FinCEN Form 114, and attach it to their income tax return, if the total asset value exceeds the appropriate reporting threshold.

The reporting requirement for Form 8938 is separate from the reporting requirement for the FinCEN Form 114 which could mean both are required.

This is reporting about the account not paying tax.

If the total value is at or below $50,000 at the end of the tax year, there is no reporting requirement for the year on 8938, unless the total value was more than $75,000 at any time during the tax year.

The amount is $10,000 for Fincin 114.

After you view my response, please post if you need more information or if you need no further clarification a positive rating is appreciated.
I know rating takes an additional step and I truly appreciate it when you take the extra time!

Expert:  Robin D. replied 1 year ago.

If you have not filed the form or forms required then you need to do that to report.

Foreign financial institutions may provide to the IRS third-party information reporting about financial accounts, including the identity and certain financial information associated with the account, which they maintain offshore on behalf of U.S. individual account holders. So it could be that the IRS already knows and would be expecting the proper reporting from you.

Customer: replied 1 year ago.
what is the fix. is there anything i can do to prevent penalties and other issues. i honestly wasnt aware of such a law
Expert:  Robin D. replied 1 year ago.

The IRS will accept that as long as you have not earned interest and avoided tax.

How many years have you missed?

Customer: replied 1 year ago.
the original amount exceeds 75000.00. it has been 2 years
Expert:  Robin D. replied 1 year ago.

That is no so long so I would advise you file the required forms (both the 8938 and the 114) with the explanation about no income earned on the account.

You will need to file a 1040X for the years you missed and attach the 8938. That will be your only change so in the 1040X explanation section you enter your statement.

Customer: replied 1 year ago.
any penalties and such?
Expert:  Robin D. replied 1 year ago.

They could but the penalty is generally added if you avoided being taxed on the account.

A person who willfully fails to report an account or account identifying information may be subject to a civil monetary penalty equal to the greater of $100,000 or 50 percent of the balance in the account at the time of the violation. See 31 U.S.C. section 5321(a)(5).

You were not willful and corrected your filing as soon as you found out.

Expert:  Robin D. replied 1 year ago.

Mention that in your statement too and add your compliance record (ie: always followed correct filing in past.......)

I hope this information has been helpful. If my answer addressed your question please rate below or above (let me know if you have difficulty as I believe the system changed), if you need more information reply below.
I really enjoyed working with you – please feel free to request me again when you come back to ask another question.
Rating lets Just Answer know you were assisted and credits me for my time.
Expert:  Robin D. replied 1 year ago.
Edited by Moderator)
Expert:  Robin D. replied 1 year ago.
Edited by Moderator)
Expert:  Robin D. replied 1 year ago.
Edited by Moderator)
Customer: replied 1 year ago.
you think they will believe my story. i am a hard working business owner that doesnt cheat customers or governments. i pay my taxes fully and on time. i pay on an average 25k-40k a year in federal income tax alone. to be honest if i want to use logic this law should never exist because of the fact that it is in a foreign bank but i guess logic is never good enough when it comes to law making.
to summarize
i basically need to fire my CPA (just kidding) i need to file this year for the prior years along with the reason why it wasnt done and i should be OK. and you said there shouldnt be any penalties because i was not willful based on what i told you?
can you also please define willful. thank you
Expert:  Robin D. replied 1 year ago.

Willful means you knew (or had reason to know) and purposely disobeyed the requirement.

If you have a CPA and you told them about the account then they should have advised you about the requirement to disclose the account. If you did not tell them then they would not know.

Yes you should be fine based on the fact that the account did not earn income and you did not avoid tax.

My goal is to provide you with excellent service today. It’s been a pleasure working with you and I hope to assist you again soon!
Expert:  Robin D. replied 1 year ago.
Edited by Moderator)
Expert:  Robin D. replied 1 year ago.

Please advise if you need more information