Taxes query - FBAR and Streamline or not?

Hello all,

I've been lurking around the tax forums for awhile, and now it seems I could use some assistance and was hoping you all might be able to help. I'll try to keep this as succinct as possible.

I moved to the UK in 2012 to take on a Master's course. At the time, I needed to pay for my tuition fees, as well as an advanced 6 months rental payment. As a result, I transferred quite   a bit of money over from my US account in order to cover these costs. I did this twice. Once in September 2012, which was the equivalent of just over 10K, and once in September 2013, which was just over 12K. Both times, the transferred money did not stay long in my UK account, and the funds were used to pay off tuition and rent within the same banking month. This is Issue #1, which I'll come back to.

Issue #2

Whilst I was in school from the end of 2012 until January 2014, I worked in the UK, but didn't make enough to file a 2013 Tax return. However, I did file a 2012 Tax return, as I worked the majority of the year in US and was owed a refund. In March 2014, I got a job in the UK, and have been in the job ever since. I haven't been great when it comes to filing, but since I don't owe tax, I didn't think it would be an issue to file late. However, I did file my 2014 tax return to get into some sort of compliance, but have yet to file 2015 and 2016.

Although I filed 2014, for whatever reason, I don't think I filed a schedule B to indicate that I had a foreign bank account. I used an online software, but I can't seem to pull out if, in fact, I did file that Schedule B. I also notice that my income total on my 1040 showed as a negative. Though I haven't filed my 2015 return yet, I have rectified the issue that gives me a negative income instead of a "0" on my 1040 with credits factored in.

Throughout all of this scrambling to get up to date on my recent tax returns, I've just learned what an FBAR is, and what the threshold for filing entails. This is Issue #3.Aside from the two times in 2012 and 2013, I have not gone over the $10K threshold again, as it's taken me quite awhile to save up money since being here. Last year, I came close, but the dip in exchange rate kept me below $10K. Recently, this year, I did surpass the threshold and had been planning on filing my first FBAR in the next tax deadline. However, throughout this whole process of learning about FBAR filing, I was looking at old statements and found Issue #1, and began worrying about what to do next.

That being said, I'm looking for advice because this has become a huge worry for me. I want to comply, and I honestly did not know about the FBAR requirements, but can understand why they are in place. I just want to get back up to speed and compliance now that my situation in the UK is a bit more stable than it has been over the past few years.

So, here are my questions:

1. What are my options? Should I get my 2015 and 2016 returns up to date with the Schedule B filled out properly? Answering Yes, I do have a Foreign Account, but No, I did not surpass the threshold? And then for my 2017 return, file my first FBAR as planned?

2. Should I file my 2013 tax return, solely for the purpose of filing a 2013 FBAR for that one instance that I went over the threshold?

3. Should I amend my 2012 tax return to include the late FBAR for the period in September 2012 that I surpassed the threshold?

4. Should I amend my 2014 tax return to reflect proper income as "0" in lieu of a negative amount?

5. Should I look into the Streamlined Process which would include an amended 2014, and  new 2015 and 2016 tax returns, as well as two FBARS for 2012 and 2013? Could I also include my unfixed 2013 tax return even though I had little to no income? Or, should I wait until next year when I was planning to file my first FBAR.

I apologize for the long winded message, but I wanted to be as thorough and detailed as possible. This whole situation is starting to stress me out, and I would just rectify it as best as possible. As much as it was hard work to start a life anew in the UK, it frustrates me that there were many tax issues to contend with in the US. Honestly, had I not randomly come across the FBAR requirement, I would have probably continued unaware for a good, long while. Just seems crazy that the penalties for not filing would essentially wipe me out financially.

Thanks for taking the time to read this. Be well, everyone.

Try not to stress too much about your situation. There are millions of people that knew nothing about Fbar, and millions that found themselves in your situation or variations of your situation. I myself went through it a few years ago. You won't be the last either.

I am not an accountant so my advice is just what I would do as a taxpayer in your situation. I would get your 2015, 2016 tax returns up to date. and then start filing fbars from 2017 or whenever you reach the threshold. remember it is aggravate value across all accounts. Also make sure to include any interest or income earned from your foreign non-US financial accounts on your tax returns.

I would not amend any past returns unless you have unreported income from the foreign accounts and meet the filing threshold. You indicate some years you don't meet the threshold but you need to consider worldwide income in your calculations.

I would not amend the 2014 return either again unless you have unreported income from foreign non-US financial accounts.

If you want to report Fbar for the years 2012, 2013. you can just report them outside the streamlined under the delinquent Fbar submission procedure if you have no unreported income from those years or don't meet the filing threshold. You can just choose the option "did not know". Fbar is not a tax form, it is informational reporting. One can be in a position to file an Fbar but not a tax return.

This is my take on your situation, others may come along with a different perspective.

Hey,

A few of us have been there, myself included. If you don't owe any additional tax from the years where you didn't file an Fbar, you can just file them and no need for the streamlined process. PM me if you want to talk further.

https://www.forbes.com/sites/stephendunn/2014/07/20/all-you-need-to-do-is-file-your-delinquent-fbars/#1041797a169a

The author of this article is very friendly and will respond to your questions. I was in a much worse situation than you and didn't do streamlined and even got a refund for one year I re-filed.

So don't panic - easier said than done and I wasted 3 months of my life over all this…


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