Before that extended break I took, I was blogging about U.S. government reporting requirements related to offshore safe deposit boxes.
A recap would probably be helpful at this point.
On April 14, I asked the question- do offshore safe deposit boxes have to be reported? I concluded:
From what I take away from all this, the offshore safe deposit box itself does not have to be reported.
However, since overseas bank safe deposit boxes are generally associated with a bank account, reporting requirements may come into play.
Plus there’s the matter of the assets being stored in the boxes.
On April 15, I talked about one of the possible reporting requirements- Report of Foreign Bank and Financial Accounts, or FBAR. What exactly is FBAR? From the Internal Revenue Service website:
If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing electronically a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR)…
And who must file it? The IRS says:
United States persons are required to file an FBAR if:
1. The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.
On April 16, I discussed the other potential U.S. government reporting requirement for offshore safe deposit boxes- Form 8938. From the IRS website:
Taxpayers with specified foreign financial assets that exceed certain thresholds must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets, which is filed with an income tax return. The new Form 8938 filing requirement is in addition to the FBAR filing requirement. A chart providing a comparison of Form 8938 and FBAR requirements may be accessed on the IRS Foreign Account Tax Compliance Act web page.
I also looked into FATCA. According to the IRS:
Foreign Account Tax Compliance Act
The provisions commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010.
FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts
FATCA focuses on reporting:
-By U.S. taxpayers about certain foreign financial accounts and offshore assets
-By foreign financial institutions about financial accounts held by U.S. taxpayers or foreign entities in which
-U.S. taxpayers hold a substantial ownership interest
-The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting.
And that’s where I stand right now in my ongoing investigation into possible U.S. government reporting requirements for overseas safe deposit boxes. As I mentioned in that April 16 post:
FBAR? Form 8938? FATCA? A lot to digest, right? Not to worry. All of this should be clearer for readers by the time I’m done blogging on the subject of U.S. government reporting requirements as it relates to offshore safe deposit boxes.
I still believe this holds true. The next time I take up this topic, I plan on picking apart FBAR and Form 8938.
In the meantime, due to Memorial Day Weekend, I will not be publishing any new material Monday- except for a short holiday message.
By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)
(Editor’s note: A qualified professional should be consulted regarding this subject. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/editor of this site is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)