PSA for US expats: FinCEN is taking feedback on FBAR Regulations; Deadline to comment is Jan 15

[greekorthodox123456]

I hope this allowed in this sub; apologies if goes against the rules.

FinCEN, the U.S. Treasury Department bureau that's responsible for overseeing the receipt of Foreign Bank Account Reports, is inviting comments "on the proposed renewal, without change, of existing information collection requirements concerning reports of foreign financial accounts and... Report of Foreign Bank and Financial Accounts (FBAR)". The full article is below:

Are the FBAR regulations fit for purpose? FinCEN wants to Know by Jan 15th

To file a comment with FinCEN online, go to the Federal "E-rulemaking Portal" located at http://www.regulations.gov There are instructions there for submitting comments, you'll need to make reference to Docket No. FINCEN-2020-0013 and the specific Office of Management and Budget (OMB) control number 1506-0009 (I searched for the docket and opened up a comment on it). You may be able to go direct to the document here: https://beta.regulations.gov/document/FINCEN-2020-0013-0001

 

[mpebv]

@greekorthodox123456 Interesting. I'm not sure I could really answer that question - ARE they fit for purpose? That seems more up to the IRS to answer. For me, they're mostly straightforward except for overseas pension funds which i have no idea how to include (e.g. where there is no account number).

 

[pioneer1]

@mpebv Actually, I was surprised to learn recently that the FBAR is actually not related to the IRS at all, nor is it overseen by them. It's actually FinCEN (https://www.fincen.gov), which investigates money laundering, etc., and the FBAR requirement is seen by most financial crimes investigators as a totally ridiculous and ineffective way to actually find and prosecute these types of crimes. (Mostly because the criminal groups involved in international money laundering don't use personal accounts, and obviously won't report their money laundering activities to the US Government).

 

[greekorthodox123456]

@pioneer1 Yep, basically they assume you’re a criminal if you have a pension in the country where you live, or if you want to have a checking account local to you so you can, you know, pay your bills and stuff.

 

[greekorthodox123456]

@mpebv The pension thing confuses me too.

I object to the huge fines that can be levied if you make a mistake - such as reporting your pension account, or forgetting the pension account from that job you left 10 years ago, and the fact that these fines are based on the maximum value of the account, rather than the amount of tax owed on the account. I’m aware of the argument that these fines are rarely levied against those who “acted unwillfully”, but I don’t trust the Treasury to define this. Does “I forgot to file” count? What if a currency fluctuation puts you over the threshold for a few days? Is it my fault if I didn’t check XE.com every day?

I personally feel that FBARs shouldn’t be required for ANY US person living overseas. If their main purpose is to catch money launderers and tax evaders, they should only apply to US residents. My UK current account, which I need for my UK-earned salary to be paid into, is based in a bank a 5 minute walk away. It’s very local and is not a “foreign account” to me. US residents don’t need to report their local bank accounts. /rant

 

[titillating]

@greekorthodox123456 FBAR is annoying but you dont need to convert anything, they use a yearly average currency conversion published by irs every year.