"quiet disclosure" - what if I filed FBAR?

rohitkn@gmail.com · Post by **rohitkn@gmail.com** » Tue Apr 01, 2014 3:08 pm

Well this isn't going to help but it does shed light on the OVDP program.

Pay close attention to questions 15 and 16 on the link below.

What I am telling you I am doing amounts to quiet disclosure which is the title of your post.

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

gpancio · Post by **gpancio** » Tue Apr 01, 2014 3:17 pm

Yep, so I guess in your case, the hope is that it is such a small amount and the fact that you were proactive about fixing it would prevent "enforcement action" from being taken, as stated:

"The IRS has identified, and will continue to identify, amended tax returns reporting increases in income. The IRS will closely review these returns to determine whether enforcement action is appropriate"

So yeah that's what I would be doing too.

gpancio · Post by **gpancio** » Tue Apr 01, 2014 3:25 pm

Oh, but part of my question was: if you file an FBAR for an offshore account, but fail to report the income on the 1040, does that mean it is "undisclosed"?

I can't find a real definition of "undisclosed" anywhere. The various FAQ's have so many cases- no FBAR; no filing 1040 at all; both.

I did those things, so i'm not really at the worst end of the spectrum. But I think I "kind of" disclosed all my accounts. I don't know if they would treat my amended returns as "quiet disclosure" since the FBAR was filed.

Maybe i'll ask them?

nelsona · Post by **nelsona** » Tue Apr 01, 2014 3:41 pm

"disclosure" refers to the existence of an account. That would be FBAR, 8891, 3520, etc.
"reporting" refers to income. That would be 1040.

gpancio · Post by **gpancio** » Tue Apr 01, 2014 3:45 pm

[quote="nelsona"]"disclosure" refers to the existence of an account. That would be FBAR, 8891, 3520, etc.
"reporting" refers to income. That would be 1040.[/quote]

so for me I would think that "disclosure" is not my problem, and OVDP wouldn't really apply.
I would just have to fix the "reporting" issue by amending my returns.

rohitkn@gmail.com · Post by **rohitkn@gmail.com** » Tue Apr 01, 2014 3:45 pm

I am a Canadian citizen who is living in the US.

I paid 7000$ in taxes in Canada over and above what I owed the IRS for the year 2012.

Reading all of this and its potential consequences, I am thinking about just leaving the US altogether and telling my employer either to hire me in Canada or quit my job.

But I will file a quiet disclosure. I filed taxes in Canada as a resident of the country for 2012 even though I only spent about 20-30 days there. I am late on one FBAR and on year of 8891, 8938.

I don't know if the 7000$ i paid in canada would count towards the 90-100 bucks I owe to the IRS for my 2012 TFSA.

gpancio · Post by **gpancio** » Tue Apr 01, 2014 3:46 pm

[quote="gpancio"][quote="nelsona"]"disclosure" refers to the existence of an account. That would be FBAR, 8891, 3520, etc.
"reporting" refers to income. That would be 1040.[/quote]

so for me I would think that "disclosure" is not my problem, and OVDP wouldn't really apply.
I would just have to fix the "reporting" issue by amending my returns.[/quote]

wait. Unless to be "disclosed" means *all* forms were filed: FBAR, 8891, 3520, etc.

See what I mean? I have disclosed using FBAR, but not 3520....

nelsona · Post by **nelsona** » Tue Apr 01, 2014 4:23 pm

Please do not use the "quote" feature. It does not work, clutters your posts, and we know what we posted without having it repeated back.

Failure to discloise means failure of ANY required report. So including RRSP on FBAR but not 8891 is failure to disclose (and failure to report income, since you did not make the election to defer).

You also have the foreign assets from.

Missing any one of these that you should have filed, is a failure.

gpancio · Post by **gpancio** » Tue Apr 01, 2014 4:27 pm

I see. Thanks, that answers my question. I would be doing "quiet disclosure " then.

Sorry about the quotes, won't do it anymore.

nelsona · Post by **nelsona** » Tue Apr 01, 2014 4:40 pm

Fine, but you cannot do quiet disclosure for 8891.

rohitkn@gmail.com · Post by **rohitkn@gmail.com** » Tue Apr 01, 2014 4:47 pm

nelsona:

Are you saying that one can not file 1040X with 8938 attached for a prior year along with 8891 and / or 3520/a forms?

Will it be rejected? Or are you saying that for all prior years, if you have thus far not made the election to defer, you must pay back taxes?

gpancio · Post by **gpancio** » Tue Apr 01, 2014 5:13 pm

In 2011, I realized that I needed to file 8891's for 2006-2010. I called irs to ask what to do, and they told me to just file amended returns and attach the 8891s. So I did.

I don't know if what they told me to do was correct, but I have yet to hear back from them about a problem with it.

However for 2011-12, I didn't file because I thought once you elected to defer, you don't have to file it again. But now I think that was wrong. I think I have to file 8891 for 2011-12. The streamlined process covers it ; I guess I have to make sure I qualify considering all the other mistakes I have to fix also. (3520 etc)

gpancio · Post by **gpancio** » Tue Apr 01, 2014 5:16 pm

Btw I filed 8891 for all those years because I had different accounts, not just one the whole time.

nelsona · Post by **nelsona** » Tue Apr 01, 2014 5:16 pm

Read what I said. You cannot make a quiet disclosure of form 8891. I said nothing about any other form. This has been since Jan 2013.

Specifically, you cannot back-file a late election to defer taxation. This means that without getting IRS permission to defer, you automatically have under-reported your RRSP income on your 1040. So, this means you cannot quietly disclose 8891, since you have both under-reported, and failed to disclose the existence of a trust.

That is why, effectively, for Cdns living in US and having previously filed 1040's, quiet disclosure is a thing of the past: if they did not file 8891, they have ALL failed to report income.

gpancio · Post by **gpancio** » Tue Apr 01, 2014 5:21 pm

Ah, so when I back filed it was OK bc it was before Jan. 2013.

But back then I elected to defer. I still have that same account but didn't file 8891 in 2011,2012- because I thought once I elected deferral, I was all set.
Do I need to file 8891 for 2011, 2012? I think so......
But the income has been elected to be deferred. Or did I break that by failing to file that forms annually?