Late and un-filed 8891's

rasman · Post by **rasman** » Wed Sep 26, 2012 2:33 pm

A good friend is a U.S. citizen living in Canada with two RRSP's that have under $100.0 in them. She files her U.S. taxes. Her tax advisor recommended to become compliant that she not backfile her 8891's but start reporting in 2011 tax year because she would not owe tax in any year (going back six years) and IRS wouldn't bother with such a small amount. She claims she filed FBAR's but forgot those accounts. Any advice I can pass on...?

Thanks all and GREAT forum BTW!

nelsona · Post by **nelsona** » Wed Sep 26, 2012 3:10 pm

She should file 8891 for each account for the past 6 years, and ammend her FBARs as well.

There will be no penalty or fines.

nelsona · Post by **nelsona** » Wed Sep 26, 2012 3:11 pm

She can do these herself. The accountant is merely saying that it would not be worth paying him for her to do this, but she should be compliant.

tsanaha · Post by **tsanaha** » Wed Sep 26, 2012 3:30 pm

Nelsona is absolutely right.

Just do the amending would save her time/money, and IRS paper work as well.

rasman · Post by **rasman** » Thu Sep 27, 2012 1:32 am

[quote="nelsona"]She can do these herself. The accountant is merely saying that it would not be worth paying him for her to do this, but she should be compliant.[/quote]

The accountant actually told her not to worry about backfiling because the amounts were so little.

rasman · Post by **rasman** » Thu Sep 27, 2012 1:41 am

Would she need to send a letter of explanation with her amended FBARs explaining why the accounts weren't reported?

nelsona · Post by **nelsona** » Thu Sep 27, 2012 6:31 am

I know what the acct said, which was the fine and penalty that she wuld pay (becasue the account was so little) was not worth paying him to do the amendments.

Of course you would send explanation. and you would send 1040-X for each 8891.

CdnAmerican · Post by **CdnAmerican** » Thu Sep 27, 2012 8:34 am

I had a personal experience similar to this one. I backfiled several years of 8891's and attached the corresponding 1040-X for each year. I had no problems with the submission - no audits or penalties. My explanation was basically that I had not heard of these forms previously, and presumably that was sufficient.

I sent these in during the amnesty period last year, but I think that officially amnesty is still going on under a different IRS program (nelsona may know more than I do).

The forms are really not too hard to complete, if you've got the records & can compute the change in value at the end of each year. Good luck to your friend!

rasman · Post by **rasman** » Sun Sep 30, 2012 3:13 pm

[quote="CdnAmerican"]I had a personal experience similar to this one. I backfiled several years of 8891's and attached the corresponding 1040-X for each year. I had no problems with the submission - no audits or penalties. My explanation was basically that I had not heard of these forms previously, and presumably that was sufficient.

I sent these in during the amnesty period last year, but I think that officially amnesty is still going on under a different IRS program (nelsona may know more than I do).

The forms are really not too hard to complete, if you've got the records & can compute the change in value at the end of each year. Good luck to your friend![/quote]

Thanks all. I will advise her to backfile.