A new reporting form that may have direct tax consequences for many US citizens living abroad is in the works at the IRS. The proposed form would also impose additional record-keeping and reporting obligations on Americans filing tax returns from overseas. Ask the IRS for a copy of the draft form and to send them your comments by January 3.
Although it's important to request a copy of the new draft Form 8938 from the IRS in order to demonstrate how many Americans overseas are concerned by this problem, there are also quicker ways to get a copy: just click on either of these two websites, and don't forget to send in your comments.
The Internal Revenue Service has called for comments on the draft of a new tax form destined to be filed as part of the individual income tax return of certain US tax filers.
Form 8938 - STATEMENT OF FOREIGN FINANCIAL ASSETS - will be required of everyone filing a US income tax return who has $50,000, or the foreign currency equivalent, held or invested in foreign banks, financial institutions, foreign stocks, securities, contracts or other foreign financial instruments.
The 1 November 2010 US Federal Register estimates that 350,000 persons will respond to the form. For the five million overseas Americans directly affected by the form, this provides two excellent opportunities to correct this gross underestimation.
First, immediately request a copy of Draft Form 8938 from Mr. Terry.
The US Federal Register further states that:
“The collection of information in the new Form 8938 will be the means by which taxpayers will comply with self-reporting obligations imposed under section 6038D with respect to foreign financial assets. The IRS will use the information to determine whether to audit this taxpayer or transaction, including whether to impose penalties.”
- Estimated Time per Respondent (to complete the form): 1 hour, 05 minutes
- Estimated Total Annual Burden Hours: 378,000
Written comments submitted on the form will be used by the IRS to seek Office of Management and Budget (OMB) approval for the form. Those writing are invited to comment on various topics including:
- whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility,
- the accuracy of the agency”’s estimate of the burden of collection of information,
- ways to enhance the quality, utility and clarity of the information to be collected, and
- ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments on the draft form must be sent before 3 January 2011 to:
Gerald Shields, IRS, Room 6129, 1111 Constitution Avenue, NW, Washington DC 20224.
The comments are invited by the US Treasury “as part of its continuing effort to reduce paperwork and respondents burden”.
Second, write Mr. Shields with your thoughts about the new form.
Feel free to give this message the widest possible dissemination.
John C. Fredenberger
AARO Tax Committee