Sorry i know this has been asked multiple time but i am one of those unfortunate people who just found out about the FBAR requirement a few days back.
I have been in the US for 6 years and have a 3k in interest from Canadian bank that i never showed on my tax return here.
I know in the past QD(amending tax return) was recommended i am wondering if i can still do a Quiet Disclousure . Amend 3 years of returns and 6 years of FBAr
I have called a few attorneys some of them have advised that i should join the OVDP others have said just do a QD and one have said do a GF.
I am really confused, i don't really mind joining and paying the 27.5% penalty but i would like to know if i should really join or not?
Can anyone also recommend a good CPA or attorney?
Thanks in advance for all your help.
ovdp or QD
Moderator: Mark T Serbinski CA CPA
I am in the same boat. I just found out about FBAR AND 8891 AND 3520a - I have never filed them (nor did my accountants at the time) I am a USC living in CND as a permanent resident since 2004. Most of my accounts are small (under 2K) chqing and savings, but I have an RESP since 2007 (my 7 yr old as the beneficiary) and RRSP since 2006 with both account balances now around $25K each . I have not received any distribution from either RESP or RRSP ever (not even a loan against the accounts). Thus I have never claimed any income from these accounts. I would like to know what the US/IRS considers as "income" from these accounts - both have grown with contributions and grants and market fluctuations. I my paid accountants in the past to do my 1040 US returns and I always claimed all my Canadian wages but they did not check the Yes box on sched B and I signed those US returns blindly (even though they knew I had foreign accounts as they did my canadian taxes too). ODV or QD?
I have hired new accountants, but I keep hearing different opinions on the QD and ODV. Nothing willful here - just stupid. By the way I am small potatoes - Canadian wages are no more than $33K per year. OD or ODV? and should I hire an attorney??
I have hired new accountants, but I keep hearing different opinions on the QD and ODV. Nothing willful here - just stupid. By the way I am small potatoes - Canadian wages are no more than $33K per year. OD or ODV? and should I hire an attorney??
I just realized after reading many other posts and documents that the RESP is considered a Grantor Trust - and since I am the owner, I will owe taxes on any and all income - which is defined as the income that was reinvested over the past 5 years and the government grants received every year (pretty big surprise) . So no I don't think I can do the streamlined process. ODV is probably my only option. If I had known the tax implications of the RESP, I would have NEVER opened the account. I will be spending my savings account to pay the taxes, penalties, interest and anything else they decide to the IRS and then huge fees to an accountant to figure out income calculations on this RESP over 5 years and refile/amend returns for the past 5 years - this is all not including the $10K fine for not filing the 3520 which will bankrupt me. I cannot even fathom the penalties for the lack of FBARs.
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CdnAmerican
- Posts: 245
- Joined: Tue Aug 30, 2011 12:15 am
You may have already decided, but OVDP seems like big penalties for such small potatoes. The benefit of OVDP is clarity about the penalty, I suppose, but I wonder about backfiling, claiming (accurately) ignorance, and taking your chances? My suspicion is that would go better in the long run, but that depends on whether your heart can take that stress. Good luck with your decision. You may want to survey this and other sites to see if others in your situation are getting big penalties with refiling; that is certainly a risk, of course, but I don't see it happening on this thread (but I hope someone jumps in if they have experienced such a penalty that I'm not aware of).
Not a professional opinion.
For those who are having trouble using the link above, below are what I consider the most important points made by the new IRS Commissioner. I don't think it is an overstatement to say that they may have extreme significance for many posters or readers of this part of the forum.
Note particularly that he says that "we will soon put forward modifications to the programs currently in place." Ordinarily, that wouldn't necessarily mean imminent, but in this case, it may well be since he apparently wants FATCA (which takes effect July 1, 2014) to be optimally successful and that will likely mean dealing with all the 'non-willful' cases so that the IRS and various international banks can more easily focus on the true evil-doers. :)
In any event, anyone thinking of entering the OVDP should perhaps reconsider for the moment.
"Now, while the 2012 OVDP and its predecessors have operated successfully, we are currently considering making further program modifications to accomplish even more. We are considering whether our voluntary programs have been too focused on those willfully evading their tax obligations and are not accommodating enough to others who don’t necessarily need protection from criminal prosecution because their compliance failures have been of the non-willful variety.
For example, we are well aware that there are many U.S. citizens who have resided abroad for many years, perhaps even the vast majority of their lives. We have been considering whether these individuals should have an opportunity to come into compliance that doesn’t involve the type of penalties that are appropriate for U.S.-resident taxpayers who were willfully hiding their investments overseas.
We are also aware that there may be U.S.-resident taxpayers with unreported offshore accounts whose prior non-compliance clearly did not constitute willful tax evasion but who, to date, have not had a clear way of coming into compliance that doesn’t involve the threat of substantial penalties.
We are close to completing our deliberations on these respects and expect that we will soon put forward modifications to the programs currently in place. Our goal is to ensure we have struck the right balance between emphasis on aggressive enforcement and focus on the law-abiding instincts of most U.S. citizens who, given the proper chance, will voluntarily come into compliance and willingly remedy past mistakes. We believe that re-striking this balance between enforcement and voluntary compliance is particularly important at this point in time, given that we are nearing July 1, the effective date of FATCA. We expect we will have much more to say on these program enhancements in the very near future. So stay tuned."
Note particularly that he says that "we will soon put forward modifications to the programs currently in place." Ordinarily, that wouldn't necessarily mean imminent, but in this case, it may well be since he apparently wants FATCA (which takes effect July 1, 2014) to be optimally successful and that will likely mean dealing with all the 'non-willful' cases so that the IRS and various international banks can more easily focus on the true evil-doers. :)
In any event, anyone thinking of entering the OVDP should perhaps reconsider for the moment.
"Now, while the 2012 OVDP and its predecessors have operated successfully, we are currently considering making further program modifications to accomplish even more. We are considering whether our voluntary programs have been too focused on those willfully evading their tax obligations and are not accommodating enough to others who don’t necessarily need protection from criminal prosecution because their compliance failures have been of the non-willful variety.
For example, we are well aware that there are many U.S. citizens who have resided abroad for many years, perhaps even the vast majority of their lives. We have been considering whether these individuals should have an opportunity to come into compliance that doesn’t involve the type of penalties that are appropriate for U.S.-resident taxpayers who were willfully hiding their investments overseas.
We are also aware that there may be U.S.-resident taxpayers with unreported offshore accounts whose prior non-compliance clearly did not constitute willful tax evasion but who, to date, have not had a clear way of coming into compliance that doesn’t involve the threat of substantial penalties.
We are close to completing our deliberations on these respects and expect that we will soon put forward modifications to the programs currently in place. Our goal is to ensure we have struck the right balance between emphasis on aggressive enforcement and focus on the law-abiding instincts of most U.S. citizens who, given the proper chance, will voluntarily come into compliance and willingly remedy past mistakes. We believe that re-striking this balance between enforcement and voluntary compliance is particularly important at this point in time, given that we are nearing July 1, the effective date of FATCA. We expect we will have much more to say on these program enhancements in the very near future. So stay tuned."