Am I screwed regarding non submission of FBAR / 8891 / 3520

ChromiumDioxide · Post by **ChromiumDioxide** » Mon Apr 07, 2014 6:58 pm

Hello

I'm a Canadian Citizen who moved to the US in 2011. For the 2011 return I was a non resident alien and filed a 1040EZ, then I became a resident alien and filed a 1040 for 2012.

I (and my wife) have Canadian Bank Accounts and also TFSAs and RRSPs but didn't declare these in an FBAR (I never know such a thing existed, I only came across it literally this morning while browsing). Nor did I declare the interest from these accounts (I was under the impression it wasn't necessary if the total in the accounts was less than $100,000, which I thought it was, but I had forgotten about the RRSP and TFSAs).

So I was thinking of getting things in order as the interest earned on these over the last couple of years isn't that much and thus the tax on the interest wouldn't be too much and so I started looking at the OVDP but then was horrified by the %27.5 penalty rate.
Such an amount of penalty would represent a huge amount for me, in 2011/2012 there was just less than $100,000 in bank savings accounts and about the same in RRSPs and TFSA). So that represents will over $50,000 in a penalty.

Am I screwed?

DonMurphyCanada · Post by **DonMurphyCanada** » Mon Apr 07, 2014 7:31 pm

Get software like TaxAxt figure out if you owe or how much you owe. once you do that you will have the info to file the necessary other forms. FBAR, 3520, 3520a etc. and what process you will use to get complaint.

ChromiumDioxide · Post by **ChromiumDioxide** » Mon Apr 07, 2014 7:32 pm

After having read question 35 of here I'm potentially worried:

http://www.irs.gov/Individuals/Internat ... nd-Answers

I owned real estate in Canada up until 2012, does that mean it could be subject o the penalty?

It however didn't generate any income.

ChromiumDioxide · Post by **ChromiumDioxide** » Mon Apr 07, 2014 8:04 pm

DonMurphy, I'm not worried about retrospectively filing an amendment and having to pay any extra taxes owning.

I'm specifically worried about the fact that its a requirement to file an FBAR, and if you own up that you didn't file it then it seems the max penalty is % 27.5.

Its my understanding thats not %27.5 of unpaid tax amounts, that %27.5 of the total of the foreign assets.