Foreign bank accounts and form TDF 90-22.1

OttawaSenators · Post by **OttawaSenators** » Thu Feb 17, 2011 1:47 pm

I've been in the US on H1-B and TN for over 7 years and I file 1040 every year. What is this form TDF 90-22.1? and do I have to file it for my bank accounts in Canada?

nelsona · Post by **nelsona** » Thu Feb 17, 2011 2:54 pm

Wow.

Do you have RRSPs?

Have you been filing 8891?

Even tax software automatically genrates these if you bother to answer the interview questions.

Read up on the forms yourself.

You've been on the internet before, so you should be able to figure this out.

nelsona · Post by **nelsona** » Thu Feb 17, 2011 2:55 pm

You even joined this forum over TWO YEARS ago....

OttawaSenators · Post by **OttawaSenators** » Thu Feb 17, 2011 3:07 pm

I've been using esmattax all these years and it never asked me if I had accounts outside the US. This year I switched to TurboTax and was surprised!

Also, for my first year in the US, 2004, I hired an accountant who does both US & Canada but he never even metioned this form and he was quite aware of my bank accounts.

I got no RRSP. I do not file taxes in Canada because I've ceased to be a resident of Canada.

All I have is two bank accounts, one in Canada and one in Germany. Any starting point or IRS publication?

Thanks

nelsona · Post by **nelsona** » Thu Feb 17, 2011 4:21 pm

Just read the instructions for the form. It takes about 1 minute to determine if you need to file, and 5 minutes per account to fill in.

OttawaSenators · Post by **OttawaSenators** » Thu Feb 17, 2011 5:15 pm

It is not clear to me what they mean by a "United States Person". If you pass the substantial presence test, will tha make you a US person?

OttawaSenators · Post by **OttawaSenators** » Thu Feb 17, 2011 5:29 pm

I am so mad at the accountant I hired back in 2004 for not telling me about this :x . The good news is I had less than $10K in my Canadian account back then.

nelsona · Post by **nelsona** » Thu Feb 17, 2011 6:00 pm

If you file a 1040 you are a US person. You passed SPT years ago, that doesn't apply to you anymore until the year after you leave US.

It is the combination value of ALL account values that matters.

OttawaSenators · Post by **OttawaSenators** » Thu Feb 17, 2011 7:14 pm

Thanks nelsona!
The combined amount went over $10K in 2009. So I should've reported the accounts in 2009. Thnx to esmarttax for screwing me! esmarttax sucks!
Is there any corrective action I need to take to avoid any penalties?

rlb · Post by **rlb** » Thu Feb 17, 2011 9:00 pm

You should file immediately for 2009 and include an explanation as to why you are filing late. For example, include a letter indicating that your tax software did not ask you about foreign bank accounts and that you only just became aware of the requirement to file. As long as you file voluntarily as soon as possible, it is almost certain that they will not impose any penalty. My wife did this when she became aware that she should have been filing for her elderly mother's accounts once she was given power of attorney (my wife had only been filing for her own accounts).

Then file for 2010 as well (due June 30, 2011, but no need to wait).

You must include all bank and investment accounts (Canada and Germany), even those less that are $10K, once the total of all accounts goes over $10K. If this was the case for years prior to 2009, do them as well.

OttawaSenators · Post by **OttawaSenators** » Mon Feb 28, 2011 6:25 pm

Thank you all for your advice.
What's the worst penalty I could expect for failing to file this in 2009 even after filing it late?

rlb · Post by **rlb** » Mon Feb 28, 2011 6:54 pm

The maximum penalties are enormous, but would not be assessed against someone such as yourself. The maximum penalties for willful failure to file or retain records of the account is a civil penalty of the greater of $100,000 or 50% of the value of the account, with a possible criminal penalty of an additional $250,000 plus 5 years imprisonment. These would probably be considered only in the case of serious criminal activity. The IRS site has a table of potential penalties at the following link: http://www.irs.gov/businesses/small/art ... 57,00.html.

Again, I do not know of any penalty given for filing late with a reasonable excuse. However, if you knowingly and willfully fail to file at all, you might be assessed a penalty of whatever size they feel like handing out.