
How to Fight the IRS - robg
http://online.wsj.com/article/SB10001424052748704100604575145760963439650.html?mod=WSJ_hp_mostpop_read
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matrix
Oh boy, does the first paragraph ever press one of my hot button issues. The
US Treasury FBAR (foreign bank account reporting) rules represent very bad
law. The rule requires that all foreign accounts be disclosed. The penalty for
non-compliance is $100,000 per year or 20% of the amount of undisclosed funds,
whichever is greater. It was intended to catch people who have large off-shore
tax shelters. That's a good idea in principle, but they severely botched the
implementation of this law.

The threshold for reporting is $10K. This means that if someone is not aware
of the requirement as has $11K overseas, they can be hit with a $100,000 fine.
The penalty is grossly inappropriate. Worse, the definition of "account" is so
vague that it is very easy to accidentally be in non-compliance.

I inadvertently ran into this problem myself and now I need to find a tax
lawyer to help me, even though the cost of the lawyer will probably be at
least half the almost-nominal value of the assets involved.

PS: Can anyone recommend a good tax lawyer experienced in handling FBAR
issues?

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timcederman
IANAL but spent a long time researching FBAR. It's pretty straightforward. If
you didn't declare in the past, declare ASAP. Make sure you post two copies -
one with your 1040 and one to whatever the other address is.

If you've been hit with a penalty on the other hand, not much advice I can
give you sorry.

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timcederman
Actually I was doing this last night and forgot that it was just the
information box on Schedule B with your 1040 - you definitely don't send the
actual form to the IRS. Just send the FBAR itself to the treasury.

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jrockway
They forgot my favorite strategy: burn your house to the ground and fly your
plane into their building. You certainly won't have to pay your taxes anymore.

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rortian
Bummer this was downvoted; I laughed. Perhaps you could use Wesley Snipes
jokes here to greater effect.

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thaumaturgy
Or, emigrate to a country with a more reasonable tax system, especially one
that doesn't spend ~25% of its budget on the military.

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quant18
No, emigrating doesn't help. U.S. citizens and green card holders living
overseas still have to pay U.S. taxes on all their investment income, as well
as on wages over $91,400.

Giving up your U.S. citizenship doesn't help either, they make you continue to
pay U.S. taxes for the next 10 years or bar you from the U.S. for life.

(And the banks overseas aren't in the habit of helping you generate all those
IRS forms, the way banks in the U.S. will do when you earn interest on your
savings account or whatever).

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jbooth
Great, more conspiracy minded "fight the power" crap from people who watched
the Bush administration trample our rights for 8 years and called us traitors
if we said anything.

At least they're not advocating firing shotguns at census workers, yet.

