FBAR issues

Hey,
So as we moved abroad to work for the corporation we worked for in the States, our company hired a tax prep firm to do both our US and UK taxes for us.
They filed an extension for us and we recently filed and paid everything we owed on our 2008 US taxes before our 15 August deadline.

Unfortunately, we also realized we never actually filed our FBAR, notifying the IRS of our foreign bank account. We just had no idea about this, and when we received a copy of it we thought that it was something our tax firm had already sent in. Not so good.

I found this article on irs.gov, and I am hoping this extended deadline would apply to us:
http://www.irs.gov/newsroom/article/0,,id=210174,00.html

We're sending it in today with a cover letter, but I am totally freaked out we're headed for prison and a $10k fine. I was just curious if anyone else has had much experience with FBARs...I am so mad at our tax firm for not telling us to send it in immediately, and I feel so dumb for not realizing this earlier.

Does our situation sound like something that would be covered under the extended deadline in the article above? We have only had this bank account since Nov 2008, so it's not like we've been ducking out for years or years. Just a real big mistake. 

I was just looking at some of the stuff posted on the IRS site.  It seems like they will understand if you miss a filing as long as you explain the reasons why, which it seems you are doing in your cover letter.  I have never filed one because my accounts here have never reached a balance of $10k or over.

Although, now I am wondering if it is about balance or about that amount moving through the account. 

I was just looking at some of the stuff posted on the IRS site.  It seems like they will understand if you miss a filing as long as you explain the reasons why, which it seems you are doing in your cover letter.  I have never filed one because my accounts here have never reached a balance of $10k or over.

Although, now I am wondering if it is about balance or about that amount moving through the account.  

I agree that the OP should be fine filing by the new deadline with a reason (and 'I didn't know I had to file this form' counts as a reason).

My understanding is that if on any given moment during the year if there was more than $10,000  in your account (or aggregate in your accounts) you have to file. So I think moving money through does count. I could be wrong.

I am not sure, but I think it must be filed if the total balance exceeded $10,000 at any point. When I look at exchange rates, ours exceeded that at a certain point due to some relocation money our company put in. All of it is massively confusing, and despite attempts to educate myself, I am pretty green when it comes to all of this stuff.

Given the gravity of the penalties they can impose, I might just file it anyway. Though I am really hoping the penalties are really more for gangstas who are doing hardcore money laundering than just a simple filing mistake.

My understanding is that if on any given moment during the year if there was more than $10,000  in your account (or aggregate in your accounts) you have to file. So I think moving money through does count. I could be wrong.

I think it is only if your balance goes to 10K or more at any one time (or if combined accounts would hit that amount) as you stated.  If not, it would mean people on a £15K salary would have to file this form because the amount being deposited into the account over the year would equal over $10K, which seems really silly.  I have never had a balance near $10K in my joint accounts here (combined or otherwise). 

Katylux, this stuff is confusing.  Perhaps a brilliant tax person will post soon.

Here is a thread from earlier this year that may help: http://talk.uk-yankee.com/index.php?topic=51315.0.

I think it is only if your balance goes to 10K or more at any one time (or if combined accounts would hit that amount) as you stated.  If not, it would mean people on a £15K salary would have to file this form because the amount being deposited into the account over the year would equal over $10K, which seems really silly.  I have never had a balance near $10K in my joint accounts here (combined or otherwise).  

Katylux, this stuff is confusing.  Perhaps a brilliant tax person will post soon.

Ahhh. I think I'm just misunderstanding what you meant by balance and money moving through your account, and in that case, I agree with you.

By money moving through, I thought you meant if (for instance) you moved 10,000 pounds into your checking account so that you could pay a bill, but it was only there very briefly. I see that you meant money moving through your account throughout the year.

Here is a thread from earlier this year that may help: http://talk.uk-yankee.com/index.php?topic=51315.0.

Thanks, WebyJ!  Does anyone know how you report an employer managed pension?  Apparently, it isn't on this particular form; but, I think that it would have to be reported somewhere.  I will have this to report next year and need to know what form is required.

Thanks, WebyJ!  Does anyone know how you report an employer managed pension?  Apparently, it isn't on this particular form; but, I think that it would have to be reported somewhere.  I will have this to report next year and need to know what form is required.

You might want to ask guya.

What happens when you do file FBAR? Do they just use it for record purposes or do they tax you on it? 

I believe it's just record purposes. You don't have to list the balance of the account or anything. It's more for disclosure to ensure you aren't doing anything illegal, I think.

An FBAR is required under the Bank Secrecy Act.  One of its purposes is to establish a multiagency and multinational database financial crimes database to ensure that money is not hidden outside of the United States.

The current version of the FBR requires exact financial balances to be reported annually for all foreign bank and financial accounts.

Once you file an FBAR, do you have to continue filing it annually?  Due to a house purchase and relocation money coming from my new company, I will need to file next year; but, I won't have massive balances of $10K in all of my combined accounts after this year.

Can I file for 2009 and then not file for subsequent years?

Once you file an FBAR, do you have to continue filing it annually?  Due to a house purchase and relocation money coming from my new company, I will need to file next year; but, I won't have massive balances of $10K in all of my combined accounts after this year.

Can I file for 2009 and then not file for subsequent years?

I would think you don't have to file if you don't meet the requirements for a certain year. That said, I'm not sure if that would just arouse suspicion. I'd be interested to hear what others have to say.

I have the same situation for this past year. We ended up having to file it this past year, but shouldn't have to file for next year, but am thinking it might be a good idea to just voluntarily do it.

Can I file for 2009 and then not file for subsequent years?

It is a year on year requirement.