AARO Survey on FBAR e-filing

AARO Survey on e-filing of FinCEN Form 114 (the Foreign Bank Account Report)
Survey conducted from June to October, 2014

The purpose of the survey was to see how filers faired with the newly-mandatory e-filing process and, if applicable, to identify any specific problems that could be resolved. Not only will AARO use the results to better inform future filers in hopes of smoothing the process but it will forward these results to those responsible for drafting future changes to the on-line form, in hopes that some minor “fixes’ might be possible.

This article presents the results of the survey together with some concrete recommendations, both from respondents and from AARO itself.  While the survey sample was small, the result coincide with those of other studies and point to some much-needed changes.


AARO survey on Denial of Financial Services

AARO Survey on Denial of Financial Services
Survey conducted between July and October, 2014

In recent months, reports have been rife in the press concerning closure by both foreign and domestic financial institutions of accounts held by Americans living abroad. Following conversations in Washington DC in March 2014 with representatives of the American Bankers Association and the House Joint Committee on Taxation, AARO conducted a survey of its members to gather information on the types of financial services that were being denied to American citizens. The AARO survey was limited in both scope and number of responses but not surprisingly coincides with the results of two much larger surveys conducted in 2012 and 2014 by Democrats Abroad. Virtually no demographic data was requested in the AARO survey, contrary to those of Democrats Abroad, though the AARO survey did find that 18% of the respondents had lived overseas for less than 10 years and 30% over 35 years; the breakdown was even between US citizen and dual national respondents.

Fifty-nine responses were received to the AARO survey but in many cases, respondents gave more than one answer.


FATCA no longer alone...

51 countries, including such interesting "partners" as Jersey, China, Canada, the Cayman Islands, Vanuatu and the European Union, signed the Multilateral Competent Authority Agreement on October 29, with an intent to "build a collective exchange of bank accounts, taxes, assets, and income held outside local tax jurisdictions."

Among other things, the Agreement extends to corporations the kind of mandatory banking transparency called for under FATCA.

For more about the Agreement, with a link to the first 51 member countries (another 30 have pledged to join by 2018), click here

For the OECD announcement, click here and, for a KPMG analysis of the implications, including a warning to those who may have "tax irregularities", here.

The United States is not currently a signatory but U.S. financial institutions with branches in member countries will have to comply with the corresponding Common Reporting Standard in those countries, posing a potential problem for many.  Note that the CRS is based on the InterGovernmental Agreements signed with many countries under FATCA.

New Fee Schedule for Consular Services – including one big surprise!

On August 28, the State Department issued its new schedule for fees for consular services. Some of the changes are of particular interest to the “AARO population’ of overseas U.S. citizens. Below is an edited version of the official document followed by a link to the complete document and a list of those changes of particular interest. The most noteworthy and significant of these is the increase in the charge for processing applications to renounce U.S. citizenship by 422%, from $450 to $2,350, effective September 6, 2014.


IRS: Penalties for non-willful non-filing waived for US residents overseas

Recognizing, as announced on June 3, that there is a large population of Americans residing abroad who have been afraid to become “compliant’ and honor mandatory tax and financial asset reporting requirements imposed by the US Internal Revenue Service, the IRS announced on June 18 “major changes in its offshore voluntary compliance programs, providing new options to help (…) taxpayers residing overseas (…). The changes are anticipated to provide thousands of people a new avenue to come into compliance with their U.S. tax obligations.’ These changes apply to “US tax persons’ whose failure to comply with these obligations is non-willful.

This is the case for great numbers of Americans and other “US persons’ abroad who 1) have been unaware of their filing obligations, in large part because information has been difficult to access overseas, or 2) have actually been unaware that the obligations applied to them (e.g. children born abroad to US citizens who have lived most or all of their lives abroad; foreign nationals born in the United States, having acquired US nationality at birth), or 3) have been terrified in the face of the daunting financial penalties imposed on non-filers.

The AARO Tax Committee will soon release an analysis of the full repercussions of this announcement but, in the meantime, readers will be delighted and reassured to know that all penalties for non-willful late- or non-filing will be waived for US residents overseas providing the specific procedures outlined by the IRS program are followed properly.

AARO which, with its traditional partners, has long advocated on behalf of the law-abiding citizens residing abroad who have been unfairly amalgamated with tax cheats in the United States, once again salutes the efforts of Nina E. Olson, United States Taxpayer Advocate, who has also eloquently spoken in their behalf. We consider this to be an important step forward in encouraging tax and reporting compliance on the part of the 7+ million Americans living and working around the globe.

For the complete statement from the IRS, click here.

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