quick FBAR question

Yes, this is the exchange rate I believe to be correct.  Take it for what it's worth.

Thanks, Sara!

What is this figure used for, that it has to be EXACT? I can see how in theory, the IRS would want an exact amount; but does it really affect anything in practice?

Just wondering if reporting a balance of $10,100 versus $10,200 because of the exchange rate you use is really that big a deal.

Mostly I'd just like to understand what the IRS does with this figure.

So what do the IRS do with it:  The purpose of the FBAR :http://www.irs.gov/businesses/small/article/0,,id=159757,00.html#purpose:

"The FBAR rules were established because of the utility of the information required in criminal, tax, and other regulatory matters and in the conduct of intelligence or counterintelligence activities including analysis to protect against international terrorism.
The reports filed as a result of this regulation provide leads to investigators that facilitate the identification and tracking of illicit funds or unreported income, as well as providing additional prosecutorial tools to combat money laundering and other crimes."

The information you provide will go to the FBI, CIA, DoJ, Interpol & Homeland Security as well as to other law enforcement agencies & tax authorities worldwide.  Most of the "rules" are questionable although US Courts have held IRS instructions under Title 31 to be binding.

There are no black & white answers, but many folks still have an extension while we wait for more guidance expected sometime this year.

So is the link I posted the correct one?

So is the link I posted the correct one?

No-one knows.

This is a Title 31 obligation, not a tax return under Title 26.  The IRS instructions are entirely unclear although some Court rulings treat IRS guidance as if it was the law. This would not work for Title 26 but may be the case for Title 31.

Ask your Congress person for guidance if you do not know, because it is the government that needs to be able to create rules that can actually be complied with.

Don't forget that you need to report all foreign financial accounts here - so M & S giftcards, debit cards, Oyster cards, some personal pensions, accounts for the kids pocket money (allowance) ---everything needs to go down.  Clue here:  Nearly everyone I speak to has over 25 of the things.

Now therein lies the makings of a great interesting novel: an international money laundering and terrorist scheme using Oyster and M&S gift cards.

Now odd and strange that life is...gift cards are often used these days to launder criminal proceeds because stores are not required to disclose purchasers to financial regulators.

So no saving up of those naughty Tesco clubcard points and abolish any thought of hiding money in the Morrison's Xmas savings club.  The FBAR police are all eyes, everywhere...

[And no I don't make up the rules - Oyster card reporting is indeed IRS Counsel's exact advice that I have in writing.]

And of course, it's not only the Royal Mail employees, the U.S. Postal System employees, and the Treasury office employees in (bankrupt) Detroit that handle, or have access to all of our names, addresses, account names, account location, account numbers, account values, Social Security numbers, and signatures. Please, I cast no aspersions, but I don't like to dwell on that for too long at a time. 

Don't forget that you need to report all foreign financial accounts here - so M & S giftcards, debit cards, Oyster cards, some personal pensions, accounts for the kids pocket money (allowance) ---everything needs to go down.  Clue here:  Nearly everyone I speak to has over 25 of the things.

Not sure I agree with all of this and this isn't in line with guidance I have received on this (though I appreciate this can widely vary).

Reading the instructions directly, foreign accounts are held with financial institutions. 

This term includes any bank, securities,
securities derivatives or other financial instruments accounts.
Such accounts generally also encompass any accounts in
which the assets are held in a commingled fund, and the
account owner holds an equity interest in the fund (including
mutual funds). The term also means any savings, demand,
checking, deposit, time deposit, or any other account
(including debit card and prepaid credit card accounts)
maintained with a financial institution or other person
engaged in the business of a financial institution. Individual
bonds, notes, or stock certificates held by the filer are not a
financial account nor is an unsecured loan to a foreign trade
or business that is not a financial institution.

How are M&S and London Underground financial institutions?

Completely agree with personal pensions, debit cards and kids accounts held in the parent's name though.

So is the link I posted the correct one?

Depends on if you read the instructions to mean the rate on December 31 or the average rate for the entire year.  Your link is for the average rate.

In a related question, does my UKC partner (we're not married) who I (a USC) share one joint account with in the UK need to sign the form?  It seems that she might have to, but she is not a US Person by any stretch. When listing the account details, it asks for the name of the principal joint holder, which I consider me, as most of the money going in is from my wages.  The instructions also say that if the joint holder is a spouse they need to sign Section III, although I see no place to sign on Section III.  Anyway, she's not my spouse so does she not have to sign?

Frankly, I greatly distrust governments in general, and I'd rather not give them any more information than is required by law, even the name and signature of my partner.  As far as I'm concerned, it's none of their business as she has no ties whatsoever to the US (besides me and our dual citizen baby girl). 

Thanks in advance for any advice.
Sam

In a related question, does my UKC partner (we're not married) who I (a USC) share one joint account with in the UK need to sign the form?  It seems that she might have to, but she is not a US Person by any stretch. When listing the account details, it asks for the name of the principal joint holder, which I consider me, as most of the money going in is from my wages.  The instructions also say that if the joint holder is a spouse they need to sign Section III, although I see no place to sign on Section III.  Anyway, she's not my spouse so does she not have to sign?

Frankly, I greatly distrust governments in general, and I'd rather not give them any more information than is required by law, even the name and signature of my partner.  As far as I'm concerned, it's none of their business as she has no ties whatsoever to the US (besides me and our dual citizen baby girl). 

Thanks in advance for any advice.
Sam

Leaving aside your particular issue (that you are not married to your partner with whom you hold a joint account) the instructions are rather poorly written when it comes to figuring out how a spouse is supposed to sign the form.

In the instructions for Part III, Items 25-33, It is stated; "If the accounts are owned jointly by both spouses, the filer's spouse should also sign the report.  See the instructions for Item 44."

In fact, there are no instructions for Item 44.. However there is a section at the end of the instructions headed "Signatures" so that is probably what they mean.  This section states; "A spouse included as a joint owner, who elects not to file a separate report in accordance with the instructions in Part III, must also sign this report.  See the instructions for Part III."

So these are circular references...there is really no specific guidance as to where the spouse should sign, but we assumed last year that we both should sign in Line 44 since there is no place in Part III to sign.

In your case, since your partner is not your spouse, the instructions for Part III seem to imply that her details need to be in Part III lines 26-33, but she's not required to sign. 

If anyone has a different insight on this area of the form, I hope they'll post....

I phoned the FBAR helpline yesterday, and one of the few things that were clear from the advice I was given, was that both spouses should sign in the space in Line 44.

DrSuper - your link is the same one that the helpline advisor gave me.

Now, does anyone understand what is meant by "principal owner" of a joint account?

Chanah

The IRS email address for FBAR questions does typically answer quickly if you ask them.  [I expect them to slow down next week however because of the large number of new questions they will be sent next week.]

Much of what they say is frequently nonsense; but if you do not know you should ask in writing so that you have evidence if you are later penalised.

Chanah

The IRS email address for FBAR questions does typically answer quickly if you ask them.  [I expect them to slow down next week however because of the large number of new questions they will be sent next week.]

Much of what they say is frequently nonsense; but if you do not know you should ask in writing so that you have evidence if you are later penalised.

Why next week; the 2009 returns are not due till June??