I R S Wants Your Money From Foreign Assets!

[Art2ro]

Here is what the latest update is from Turbo Tax I just received from Mr. Lee to share to all on this forum, if it isn't anymore complicated than it already is! About Foreign Financial AssetsThere are two types of foreign financial assets: 1) foreign financial accounts; and 2) what the IRS calls "other foreign financial assets."A foreign financial account is any depository, custodial or securities account (bank account, savings account, mutual funds, etc.) maintained by a foreign financial institution, including institutions organized under the laws of a U.S. possession.Other foreign financial assets include any of the following that are held for investment and not held in an account maintained by a financial institution:- Stock or securities issued by someone other than a U.S. person- Any interest in a foreign entity, including foreign pension plans, trusts, estates, corporations, partnerships, options and other derivative instruments, debt instruments, interest rate and other swaps or similar agreements- Any financial instrument or contract that has an issuer or counterparty that is other than a U.S. personNote: Real estate located in a foreign country is not considered a foreign financial asset.Who needs to report foreign financial assets?Due to a new IRS requirement, this info gets reported on Form 8938 (Statement of Specific Foreign Financial Assets), which is required only when the value of specified foreign financial assets is over a certain amount.You'll need to report these assets and file Form 8938 if any of the following are true:- If you are living in the U.S. and are not married filing a joint return, you should file Form 8938 if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.- If you are living in the U.S. and are married filing a joint return, you should file Form 8938 if the total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year.- If you are living abroad and are not married filing a joint return, you should file Form 8938 if the total value of your specified foreign financial assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year.- If you are living abroad and are married filing a joint return, you should file Form 8938 if the total value of your specified foreign financial assets is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year.If you are required to file Form 8938 but do not file a complete and correct Form 8938 by the due date of your federal income tax return (including extensions), you may be subject to a penalty of $10,000. Continuing failure to file Form 8938 could result in additional penalties up to $50,000.See the instructions for Form 8938 for more information.

[Fatcat]

Hope you guys don't mind me hijacking a little portion of your thread here but If you do I'll be glad to start my ownThis (2011) will be the last year that I will need to ..... according to the IRS website ...... to file income tax ..... I will not be receiving any more income other than my SS .... and as everyone knows that for two people it is way under the amount requiring you to pay the IRS ......My question is will I be subject to being red flagged because I don't file a return (even though the IRS says you don't) and will the IRS notify the SS that I am most likely dead as I filed no return and the SS will stop my payments ....... stupid yea ..... but do you have any idea what it takes to get your SS started again once you have been declared dead ...... it takes months if not years and they are not libel to pay you ANY back pay ..... you just lost that ..... well as far as receiving it that isI tried filing with H&R Block on-line 2 years ago when I had no income to report and they wouldn't e-file my form telling me I had no income to report and as I wouldn't be paying in or receiving any refund I could not use the e-file ..... they said I didn't need to file but if I wanted to file anyway send it in by mail ....Thanks for letting me jump in here but it is about the IRS

You are right to worry about it. Give the government a chance to screw things up and they will. I would handle it this way: Send them a signed return this year with your lower than threshold income noted on it. Use the white spaces on the form, to write in the margins that : 1. You know you don't have to file. 2. You don't anticipate having to file next year because you'll be under the threshold.

The form will be photocopied by them and saved for X years, serving as proof that you informed them of your situation.