For Us Citizens/ Irs Amnesty Program

[Mr Lee]

Some may get a break here, or some may decide to keep hiding their accounts, it is up to each person to weigh the risks verses the benefits. Are there any US citizen who was not aware of this law? US Expats: Do you have foreign bank accounts that you haven’t told the IRS about? Now Is a Good Time to Fess UpIf you have failed to report your foreign bank accounts, the IRS has initiated a second amnesty period for 2011 in which you can report these accounts, pay a fine and avoid criminal prosecution.Over the last several years, the IRS has been getting more and more aggressive in their efforts to ensure compliance amongst Americans living abroad. Although there has been no doubt about how seriously the US government takes this mission, since the end of the 2009 amnesty the IRS has been a bit unclear as to the implications and penalties for failing to do so.On Feb 8^th 2011, the IRS announced an initiative that will be welcomed by many Americans living abroad who have failed to file taxes or report their foreign bank accounts (many times, inadvertently). This initiative will give those who are out of compliance an opportunity to voluntarily disclose their foreign bank accounts, pay the penalty upfront and avoid criminal prosecution. This article will tell you a bit more about your requirements as an American expat, the 2011 Offshore Voluntary Disclosure Initiative (OVDI) terms, and answer a few common questions about this program.Before getting into the terms of the IRS Voluntary Disclosure Program, what are the foreign bank account reporting requirements (FBAR)?Essentially, if you have over $10,000 or the foreign equivalent in overseas bank accounts you must report this money to the Treasury by June 30^th each and every year. This is cumulative across all of your foreign-owned or controlled accounts for personal or business purposes. For example: if you have $2,000 in 5 accounts you need to report all 5 accounts. You need to report these bank accounts regardless of whether you held over $10,000 for the whole year or just one day.This is of course in addition to your requirement to file a US income tax return. All US Citizens and Green Card holders are required to file a US Federal Income Tax return each year if their income is over the minimum threshold. It doesn’t matter where you earn your income or whether you have filed in your country of residence as well; you are required to file in the US if your income is above these levels. The thresholds are currently:

• Single with income over $9,350
• Married filing jointly with income over $18,700
• Married filing separately with income over $3,650

Read the complete text HERE

[Art2ro]

Foreign bank account reporting requirements (FBAR) For example: if you have $2,000 in 5 accounts you need to report all 5 accounts. You need to report these bank accounts regardless of whether you held over $10,000 for the whole year or just one day. Just for one day? Ops! I better start withdrawing my dollars from my local bank and keep it under $10,000 or I will have to report it to the IRS next income tax filing! Anyway, I've been doing that all along, because I know that is one of the question asked when I did my income tax on-line. Anyway, it's good to have a stash of dollar bills for just in case of an emergency.

[Mr Lee]

Foreign bank account reporting requirements (FBAR) For example: if you have $2,000 in 5 accounts you need to report all 5 accounts. You need to report these bank accounts regardless of whether you held over $10,000 for the whole year or just one day. Just for one day? Ops! I better start withdrawing my dollars from my local bank and keep it under $10,000 or I will have to report it to the IRS next income tax filing! Anyway, I've been doing that all along, because I know that is one of the question asked when I did my income tax on-line. Anyway, it's good to have a stash of dollar bills for just in case of an emergency.

Everyone should remember that it is $10,000 or its equivalent in any type of currency, so the peso equivalent of $10,000 also counts, or any part of it added to dollars in a dollar account in any foreign country. Most people would not have to worry about that except those of us who brought over cash to buy homes, since not that many people I know keep large sums of money in Philippine banks.

[Art2ro]

Foreign bank account reporting requirements (FBAR) For example: if you have $2,000 in 5 accounts you need to report all 5 accounts. You need to report these bank accounts regardless of whether you held over $10,000 for the whole year or just one day. Just for one day? Ops! I better start withdrawing my dollars from my local bank and keep it under $10,000 or I will have to report it to the IRS next income tax filing! Anyway, I've been doing that all along, because I know that is one of the question asked when I did my income tax on-line. Anyway, it's good to have a stash of dollar bills for just in case of an emergency.

Everyone should remember that it is $10,000 or its equivalent in any type of currency, so the peso equivalent of $10,000 also counts, or any part of it added to dollars in a dollar account in any foreign country. Most people would not have to worry about that except those of us who brought over cash to buy homes, since not that many people I know keep large sums of money in Philippine banks.

Prior to purchasing our home here in the Philippines, I wrote out a $50,000 U.S. Check and deposited it into my Philippine dollar account and withdrew the total cash amount when the check cleared and posted and converted the $50,000 into pesos, the exchange rate at that time in 2000 was around I believe P55 or more to the dollar! I didn't hear anything from the Philippines BIR or U.S. IRS! When I paid the total selling price of our home, BIR and the real estates agents were quick to get their commission and BIR their sales tax! We have no plans in selling our home anytime soon for obvious reasons, agent's commission all over again and capital gains tax to BIR and whatever else!

[Mr Lee]

Foreign bank account reporting requirements (FBAR) For example: if you have $2,000 in 5 accounts you need to report all 5 accounts. You need to report these bank accounts regardless of whether you held over $10,000 for the whole year or just one day. Just for one day? Ops! I better start withdrawing my dollars from my local bank and keep it under $10,000 or I will have to report it to the IRS next income tax filing! Anyway, I've been doing that all along, because I know that is one of the question asked when I did my income tax on-line. Anyway, it's good to have a stash of dollar bills for just in case of an emergency.

Everyone should remember that it is $10,000 or its equivalent in any type of currency, so the peso equivalent of $10,000 also counts, or any part of it added to dollars in a dollar account in any foreign country. Most people would not have to worry about that except those of us who brought over cash to buy homes, since not that many people I know keep large sums of money in Philippine banks.

Prior to purchasing our home here in the Philippines, I wrote out a $50,000 U.S. Check and deposited it into my Philippine dollar account and withdrew the total cash amount when the check cleared and posted and converted the $50,000 into pesos, the exchange rate at that time in 2000 was around I believe P55 or more to the dollar! I didn't hear anything from the Philippines BIR or U.S. IRS! When I paid the total selling price of our home, BIR and the real estates agents were quick to get their commission and BIR their sales tax! We have no plans in selling our home anytime soon for obvious reasons, agent's commission all over again and capital gains tax to BIR and whatever else!

The law was not on the books back then and started after 9/11, so I would say you are OK.. USA Patriot Act The USA PATRIOT Act (commonly known as the "Patriot Act") is an Act of the U.S. Congress that was signed into law byPresident George W. Bush on October 26, 2001.

[Art2ro]

That's good to know! Lee, your "the answer man"!

[nejammer]

I have a question. If any one can answer it I would be appreciative. I plan on building a house there. I'll be in the Philippines on a 13g visa. I plan on building a house there. It will probably cost me between 2 and 4 million pesos. I was planning on writing checks from my American bank account to a Philippine bank account for materials and other costs. Am I required to report this as income to the IRS? Or am I required only to report the interest that this money accrues?

[Mr Lee]

I have a question. If any one can answer it I would be appreciative. I plan on building a house there. I'll be in the Philippines on a 13g visa. I plan on building a house there. It will probably cost me between 2 and 4 million pesos. I was planning on writing checks from my American bank account to a Philippine bank account for materials and other costs. Am I required to report this as income to the IRS? Or am I required only to report the interest that this money accrues?

If the money comes from existing money you have in the US then no income tax is to be paid to the US since it is already your money. If you get any interest in the Philippine banks, then you are required to report that to the US on your US income tax. You must also file a report as in the original post in this topic, anytime you have over $10,000 US in any bank accounts in the world outside the US, so if you keep it below $10,000 and withdraw it before you send more over, then you could be exempt from the reporting, yet the US govt gets a report of all money sent over, so be careful to comply with the law which says a total of $10,000 in any currency at anytime in all your foreign accounts. Probably best to read the actual law word for word so you can be sure to not break it because I am just paraphrasing. As for income tax in the Philippines, any money earned outside the Philippines is not taxable, but interest would be and they usually take theirs right off as soon as any interest is posted to any of your accounts. Then there is also Value Added Tax which we all pay on things we buy, but no filing of Philippine income tax if you do not earn income within the Philippines, as far as I understand the law.