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Monday, June 16, 2014

Frustrated by the FBAR? Send Your Comments to SAMS

From the mail I'm getting, and the comments and questions I see on the on-line conversations I follow, many of you are assiduously working on your U.S. Foreign Bank Accounts Reports. June 30th is the due date for these to be submitted electronically to the U.S. Treasury Department.

The good news is that more people seem to be aware of the filing requirement.  The bad news is all the frustration people are feeling as they try to comply.  I had my own moment this morning when I tried to download the form and got this on my screen instead, "If this message is not eventually replaced by the proper contents of the document, your PDF viewer may not be able to display this type of document" and then told me to upgrade to the latest version of Adobe Acrobat Reader.

Dropped straight into version hell and my first reaction was "Well, that does not bode well..."

U.S. citizens and Green Card holders have been told that this form is very VERY important and they must do their duty and comply forthwith lest they be subject to criminal prosecution and draconian penalties (10,000 USD).  People (especially first-time filers) are approaching this exercise with a great deal of trepidation.   If they encounter a problem at the very beginning of the process, they are not going to find that reassuring.

Does it get better once the filer has access to the form?  Not really.

There are 19 pages of instructions for how to fill it out with language like this:
"Throughout these instructions the phrase “check box” and similar wording is used to
denote checking an appropriate box in certain data items on the electronic discrete FBAR. This is deemed equivalent to instructions in the Electronic Filing Requirements to enter appropriate codes in the same data items in transmission files. For example, the requirement to check a box in Item 2 “Type of Filer” in the discrete FBAR is the equivalent of entering one of the codes A through E in “Type of Filer” in the Electronic Filing Requirements Filer Information (2A) Record. "
Furthermore people are reporting that help is hard to come by.  A Flophouse reader left this comment:
"Two days before the deadline, we are still lost in the maze of FBARs, 3520s, and 8938s. We have visited the local IRS office, phoned the "help" lines, and not one IRS representative will help. Never mind "can" help--they will not answer questions, will not let us speak to a supervisor, and direct us to call phone numbers we've already tried."
What a mess this all is and what in heaven's name can we do about it?  Well, here's one idea.

Start by documenting every glitch, every error, every incomprensible paragraph in the instructions, every request for help that went unanswered by the bureaucrats.

And then complain as loudly and as forcefully as you can to the Taxpayer Advocate Service.  This is Nina Olson's shop (she's the National Taxpayer Advocate and a goddess). FBAR problems are looking a lot like a systemic issue, one that "impacts a segment of the taxpayer population. It involves systems, processes, policies, procedures, or legislation; and requires study, analysis, recommendation(s), and action to effect a positive resolution."

The TAS wants to know and has an on-line Systemic Advocacy Management System (SAMS) to capture your comments and problems so they can bring them to the attention of the IRS Commissioner and Congress.   You have 2000 characters to tell them what a cluster f#$%# this is.

So let them know already.

17 comments:

Anonymous said...

I have now spent a couple hours each day over a period five days trying to understand the 19 pages of instructions. I keep thinking if I return with fresh eyes tomorrow I'll get it.

Then, there is recurring question:
Do they have the right to require that every expat--even nonagenarian widows--buy a computer and learn to use it? Yeah, yeah, I know their response. .
Just use your paltry pension to pay an accountant. And go without food this month.

As for the other F form, the June 16 edition of the New York Times, now little more than scribes for the Obama administration, has an op-ed vaunting the wonderfulness of FATCA. Pls. leave them a comment if you have access.

Anonymous said...

FBAR is actually no different than any other form from the IRS... It's complicated, confusing, and a joke. FBAR and 8938 still confuse me, my CPA has assured me I only need FBAR, but who knows? Really, who knows for sure.. I am going to not only complain about the form, but also complain that actually we should not even have to fill it out. It's a joke, it took me more than 10 hours of total time over the last few months to fill out this piece of work. It is a time consuming waste of time. What right do they have to know my private financial data anyway? I demand people in the US with domestic accounts fill out a DBAR (Domestic Bank Account Report) every year. Maybe then they would get it! Maybe then it would be repealed as locals would not put up with that for a second. Why are we scrutinized so tightly. Does CERN think that no one in the US commits money laundering?

I have never even bothered to read the FBAR instructions, When I get stuck I look up something, but honestly don't know until now if I am filling it out right or not. It's confusing as ever, and of course this year IT has to be filed electronically, so that means last years I cannot use, so it is retyping the same banks, the same account numbers, and all that BS again and again and again, wasting more time!

FBAR cannot be extended, but it can be amended, what? Yep!

Don't do it and get penalized to death! One piece of paper, 100,000 penalty? Is this reasonable?

There are many problems with FBAR that are not just cosmetic!

2000 characters seem awfully little for what I have to say!

Anonymous said...

Two things worry me about all of the IRS/BSA Stasi-like «Amtsschimmel»

1) There is no authentication control on the BSA front-end. US's national ID problem is its Achilles heel (and probably the last straw before it becomes a total police-state on the other hand)

2)The 'Signature' process of the NFFBAR is a charade. Like much of the US it's all Hollywood - Masters of 'Security Theater'

Anyone anywhere can upload a false FBAR on anyone with not so hilarious results. Change the filing year on a random individual, jack up the number of zeroes and 'KABOOM'.

//Mr. Archibald Buttle meet Mr. Archibald Tuttle

Anonymous said...

Good point. I also wonder how much other things off my computer were attached to that signature that I don't know about...

Submitting a false FBAR would be a dangerous thing. If someone doesn't like you all they have to do is submit all kinds of garbage. IRS advocate's bill of rights down the drain there...

Anonymous said...

I filed the fbar online a few months ago. It went smoothly and I received an immediate confirmation that it was received and then a few days later a confirmation that it was processed. I made a copy of these emails as physical proof of having filed fbars and since then have heard nothing further. All I had was simple bank accounts individually and jointly owned. Altogether it took about 15 minutes to fill out and file the fbars online.

Anonymous said...

> It went smoothly and I received an immediate confirmation that it was received and then a few days later a confirmation that it was processed.

They improved... The last year I filed mine through snail mail (in the US, I sent it with receipt notification. I received the notice that they got it maybe 4 months after I sent it.

Anonymous said...

My advice to any other users of Linux filing FBARS is that the receipts are difficult to manage. The use of Adobe software is mandatory for submitting FBARs. Why does Treasury rely on such a proprietary solution? There are many Free and Open Source Software (FOSS) solutions that permit users to fill out PDFs. Especially the receipts are tricky because they are unreadable without Adobe software running under Microsoft Windows. They show instead a mere notice that other software is required to read the receipt. Linux users may be a minority in the face of a more widespread ad hoc standard, but why should they be required to make outlays for proprietary software?

Anonymous said...

As much as I hate the whole idea of having to submit to the FBAR exercise, I think the electronic version is actually an improvement. I may be naive, but I'm hoping that next year, all I'll have to do is change the date, correct the account balances and send it in. However that may be expecting a lot from the FinCen folks. By the way, I file a French tax return as well, and although there is a similar requirement to report foreign accounts, for some reason it is far simpler and their E-filing works quite smoothly.
Warning to future filers, here is a gotcha: when they say to use Acrobat, and only the latest version, they mean it. I usually use an Acrobat compatible reader. After having filled out the whole form (more than 10 accounts), saving it and later reloading it, I found out that all the fields were jumbled and nothing worked anymore. I had to start over from scratch.

Victoria FERAUGE said...
This comment has been removed by the author.
Victoria FERAUGE said...

I imagine that people's experiences vary according to their personal circumstances. If you are a short-term expat you might conceivably only have a savings and a checking account. I suspect it's the long-term residents that are in the worst position. Someone who works in France, for example, for 5 years probably has some combination of:

"Participation" (employee profit-sharing) account.
"Assurance vie" A typical investment for a low to middle income person
PEA - like a US IRA (retirement account)
Joint checking/savings with a spouse who may be making more money than the US citizen spouse.
Savings accounts for minor children (livret A)
PEL - a savings plan to buy a house

and so much more. Each account has to be scritunized to find the highest yearly balance. That takes time.

A lot of the questions I'm seeing have to do with what needs to be reported and what doesn't. It really isn't clear to a lot fo people. Is "participation" (employee savings plan) a "bank account"?

And to be fair how is the IRS supposed to answer some of these questions? How many Americans in the US know what PEA or a PEL is? I imagine that someone at the IRS trying to answer a question about particular account types in 192 different countries would have to spend some time to understand what the American equivalent would be and if it does indeed need to be reported.

And yet if they want compliance then they are going to have to be prepared to answer those questions. So if they want international taxpayers to do what is expected of them then they need an international IRS staff that understands the local conditions and can "translate." I understand they have some but if they want 7 million people to get with the program then they will have to add more people who will spend more time per person to answer all the complex questions that can arise when attempting to compare the US tax/finance environment to another halfway across the world (apples and oranges).

Anonymous said...

Anon. above wrote: "It went smoothly and I received an immediate confirmation that it was received and then a few days later a confirmation that it was processed."

If I received no confirmation that it was received should I worry that it was not? Is there some way to check? Should i re-do it?

This is all so scary.....

P. Moore said...

Victoria, you describe the various types of accounts in France that may or may not have to be reported. Then you pose the question regarding multiplying that problem by say 192 countries. You suggest the IRS should be able to answer the questions on all or most of these types of accounts if they legitimately expect compliance, yet they don't even bother to try. You are correct on all counts, but the larger message I see here is that the FBARs have no value whatsoever to the USG other than perhaps a source of penalty income. In fact if they are not serious about getting the reporting correct, the reporting program is completely illegitimate on its face. As far as it appears, they have virtually no way of ensuring accuracy and nearly no way to ensure compliance. It is a horrible waste of resources on all sides and a shameful abuse of government authority by the USG. Maybe that is the point that should be made to Nina Olsen.

Echoing said...

The nitty gritty on how French banks will be reproting US persons' accounts to the IRS through the French DGI

http://www.impots.gouv.fr/portal/deploiement/p1/fichedescriptive_7015/fichedescriptive_7015.pdf

A facinating reading!

FBAR 8938 DIY said...

Hi Victoria,
Thank you for taking time to start the discussion about FBAR and 8938, and yes, through your blog and comments by Anonymous & etc, I know I am not alone going through this. I am now trying to put together information for my super-late FBARs and 8938...many questions on my mind (a lot of time spend reading the 8938 instructions and finding out info about ...eg, Year end exhchange rate etc) and wishing that I could find answers to all questions via a single source. So, in the process, I will be sharing my experience and hope that helps those of your who are going through the same thing (and wishing that information comes more easily). Here is my personal blog http://fbar8938.blogspot.com/ and I hope you don't mind that I included a link to your blog here (because it had been of great help to me):- http://fbar8938.blogspot.com/2014/12/blogs-that-i-read.html

Joel's Blog Site said...

Is there a place or avenue in which the idiots in Congress who permitted the FBAR and then insisted that it must be e-filed can complain? Not only is the staff at the FBAR help center unhelpful, they handled whether I need to file a FBAR is a manner similar to the way the Mafia would have handled it.

Anonymous said...

First time I filed the FBAR, and tried to figure out how to do it myself, I called the FBAR hotline and was given incorrect information about whether I had to report an account held jointly with a non-US spouse who was not a US taxable person - I asked for help to interpret something on the IRS FBAR webpage. The person I spoke to was virtually reading word for word off the same page, but could offer no real help. Their example only described the case of two spouses holding a joint account where both were "US taxable persons". That didn't help my situation, and I asked what to do if my non-US spouse did not agree to elect to file jointly, and did not have any reporting obligation to the IRS re the FBAR and reporting their personal and financial info about the account they owned joint with me was against the privacy laws of our country of residence, and my spouse's country of citizenship. The IRS FBAR helpline person was short with me from the get go, then got sarcastic. When I protested, they hung up.

Anonymous said...

I sleep so much better since I relinquished. I have regained most of the peace of mind I was robbed of by the US. But I'll never regain the years I lost and the damage to my non-US family and our local savings gone to accountants and lawyers. Not only did I owe nothing, but the US paid me two years worth of Making Work Pay stimulus money. Barely made a dent in my compliance costs for professional help, couriers, etc.

No more FATCA and FBAR and 3520 forms to agonize over ever again.
Even figuring out how and where to send the various forms is unclear if you want the peace of mind and delivery receipt from a courier rather than trusting to snail mail from another country to the US. How can we use the US postal system if we don't live in the US?

They obviously don't really want compliance. They want us to make mistakes and be penalized. That is the only explanation for why they work so very hard to make it almost impossible to understand, to comply, to successfully deliver it, etc. The 800 numbers don't work outside the US, they don't answer the phone in any reasonable amount of time, they closed any tax assistance at sites outside the US. Some of the people who are supposed to help don't even know about US extraterritorial tax forms.

It is penalty revenue and punishment that they want. They certainly didn't get any tax revenue from me. And then there was the auto issuance of lien notices and threats - even though the return was clear that I was under the taxable threshold. Several calls and faxes later, even the IRS couldn't figure out why the erroneous notices. Took months and expensive phone calls and hours on hold to straighten out.

No goodwill ambassador for the US here. Now I am just the opposite.