8891 and 8938 form confusion

Mach7 · Post by **Mach7** » Fri May 25, 2012 6:55 pm

I hired a different Accountant for 2011 IRS due to the complexity of this years filing obligations...namely the 8938 form.

In reviewing the draft they sent me, in noticed the 8891 form filled out as "annuitant' as opposed to 'beneficiary'.

They also checked 'yes' for line 6a and then entered '2010' as the first year the election came into effect. And sent me a 'letter' to fill out the rest of the form.

Now...i have successfully filed 6 years of back returns beginning with year 2005...and my previous accountant filed them as 'beneficiary' stating '2005' as my first year of election and placed that year on line 6b on the remainder of my 8891s up to and including 2010.

He also filled in line 8, 'plan balance at the end of the year'

I feel strongly that i should be filling this form out as i did in the past as beneficiary and not as annuitant as this new Firm is telling me to.

Now...has something changed for 2011?? because everything i read about the 8891 is that it should be filed as beneficiary.....

Also....this new firm decided to send me a blank 8938 form with a website to go to on how to fill it out!!!

This is what i paid $1100 dollars for?

Hopefully someone (nelsona) can clarify i am on the right track with the 8891, and i have one final quesiton;

is it too late for me to apply for an extension with the IRS..because whether i try to find another firm, or try and fill out these forms myself, i dont think i will have enough time between work and IRS to meet the deadline now :(

Why did i leave my first Accountant? because i wanted to go with someone that had a PTIN#...big mistake and a life lesson for me :(

help!

NickH · Post by **NickH** » Fri May 25, 2012 7:34 pm

The best argument against filing Form 8891 as an "annuitant" is that according to the instructions that choice makes you ineligible for the election on line 6 to defer tax!

Here's an IRS website with a fairly easy to use (as far as US tax law goes) comparison table of the requirements for filing Form 8938 and the FBAR: http://www.irs.gov/businesses/article/0 ... 86,00.html

Mach7 · Post by **Mach7** » Fri May 25, 2012 8:33 pm

thanks for that information NickH.

I have always realized that you file the 8891 as beneficiary....but you know what...i shouldn't have to know if i hire a professional to do this for me.

The 8938 form is my main concern as i can muddle through the 8891 with no problem...

I read thru the instructions but not sure if I have to include my house as a foreign asset or not.....

nelsona · Post by **nelsona** » Fri May 25, 2012 9:35 pm

To hire a professional to do personal income tax more than one year is, as you can attest, a compete waste of money.

I would charge 4 figures to do one year, and then a simple maintenance fee every year that my client would insist on comeing back to me. I guess I wouldn't be that great a businessman. ;o)

Mach7 · Post by **Mach7** » Fri May 25, 2012 9:39 pm

Nelsona, i would gladly pay the fee as long as the work is done. Do you feel that completing the 1040 and then having me do the 8891 and 8938 to be fair and professional?

Mach7 · Post by **Mach7** » Fri May 25, 2012 9:43 pm

Let me clarify my previous statement.....i have no problem paying 1000 or even 2000 dollars to ensure my 2011 tax is done properly and accurately. What i do not expect is to pay over 1000 dollars for 331/3 of completion. If i wan't to spend time doing the 8891 and 8938, i would have just paid for a program and did it myself.

As you can see i am slightly p...sed off. It is not directed at you or anyone on this forum....i am just getting fed up from these life lessons that pull the cash from my wallet.

nelsona · Post by **nelsona** » Fri May 25, 2012 10:13 pm

There are only six CA's that I know of that can correctly file both US and Cdn tax returns. The rest all charge for their mistakes.

Filo · Post by **Filo** » Sat May 26, 2012 1:05 am

Oh please, can you tell us who those six CA's are?

nelsona · Post by **nelsona** » Sat May 26, 2012 8:54 am

Of course... not.

Filo · Post by **Filo** » Sat May 26, 2012 3:08 pm

No, of course not. But then it's no wonder that Americans abroad are as wary of "professional assistance" as we are of the IRS itself.

primo · Post by **primo** » Sat May 26, 2012 3:46 pm

Mach 7, you don't need to include your house.

nelsona · Post by **nelsona** » Sat May 26, 2012 3:58 pm

Quite frankly, the CA's that have jumped into the cross-border game this year due to the IRS scarmenongering are not to be trusted.

Unfortunately, it also exposed some of the others, showuing they were just "mailing it in" when it came to understanding anything related to cross-border.

nelsona · Post by **nelsona** » Sat May 26, 2012 3:59 pm

Rememebr, when I sign my name "non-pro" I mean it.

Filo · Post by **Filo** » Sat May 26, 2012 6:40 pm

'. . . just "mailing it in" when it came to understanding anything related to cross-border'

I came across an accounting site that presented a Client Information Form for the 8938. It consisted of the client's stating, line by line, *all* the information to be put onto the 8938 for each account and asset. Why would anyone pay for that kind of "help"?