Valuing Accounts for FBAR

This IRS article provides some clarity to threshold reporting, (amongst other things). There are varying opinions as to whether you should include bank account moves, the "on paper" amount, or just the physical cash total when it comes to the aggregate value. Example one and two provides some clarity, Question two will now give certainty to CD accounts that mature during the tax year, yet change account numbers

http://taxes.about.com/library/IRS_FBAR_Webinar.pdf

Hi Barcrest,

I'm not having any luck with your link, and the examples you are referring to. Perhaps you could check the link.

At the risk of speaking before I know the exact content, I would offer my understanding.

CDs (certificates of deposit) as they are known in the US do not exist in the UK. But, there are similar products available in very limited numbers. These take the form of a fixed rate, interest bearing account for 90 or 180 days. There are many fixed rate, interest bearing accounts available for 1, or more, years.

I have come across other discussions on this subject where differing opinions were put forth. IMHO, the critical factor is the institution and account number. For a 90 day or more fixed rate, interest bearing account within the same institution, with unbroken continuity and the exact same account number both pre and post maturity (in continuation where you reinvest in the same product at maturity), it would count only as one account for FBAR, with the highest balance during the tax year being reported.

If we are talking of an amount in the same institution, but at maturity it is reinvested in an account with a different account number, (again IMHO), or continuity is broken (goes to current account before being reinvested), especially if it is a different product, then all accounts (according to their identifiers/numbers) must be considered for FBAR, and the aggregate maximum of all accounts for the tax year is reported. It's here that I've found differing opinions, and your link could add clarity to this. I have no problems with being proved wrong in this circumstance, but see my final paragraph.

With different account numbers and different institutions, even if it is the same money, IMHO, the aggregate maximum of all accounts for the tax year would be reported.

As I've mentioned in other threads, it's the account identifiers (account numbers) themselves that are critical. With FATCA, (if the institution is compliant) a foreign institution will be reporting each different account and the maximum in the account during the tax year. This, I believe, will be the criteria by which the Treasury (or IRS) will gauge compliance. It may be the same funds with a very traceable paper trail confirming the tansactions, but why go through the hassle of interacting with the Treasury/IRS to confirm this, even if you're proved correct? Would it not be simpler just to declare all separate accounts and their maximums?   

 

Wow, where did it go, it did work! Anyway, I've tracked down the source at irsvideos.gov. It's better then the initial link, as its an actual webinar that you can view, along with the .PDF of the presentation that you may download.

http://www.irsvideos.gov/ReportingForeignFinancialAccountsOnTheFBAR/player/frame-wm.htm

A CD is just a TD, or term deposit in the U.K. It's a money market account. You will find some 6 month TD's in the U.K, Lloyds TSB I believe offer such a product.

Happy viewing! 

Wow, thanks for the link. This now goes into the 'keeper' folder.

Does this IRS video constitute a legal position as to how I file my FBARs?

I like the:

"The information contained in this presentation is current as of the date it was presented. It should not be considered official guidance."

On the .PDF

I did notice that. I also noticed the 3rd bullet point on page 18. You and I know what that means, but......

This video has no substantial authority.

It is of course interesting though!

There are other more recent developments to be accounted for along with FiNCEN guidance that might well need to be reviewed.