US citizens who have authority over foreign financial accounts whose cumulative balances exceed $10,000 USD at any one point in the tax year must file a Report of Foreign Bank and Financial Accounts (FBAR),
for example if you have a checking or savings acct overseas and u have never had 10k in one month at a time, but you had a few thousands, do they add up the total amounts from month to month to get to the 10K? thank you in advance...
What is meant by the word "cumulative" is whether the total value of all the accounts exceeded $10,000. For example, if you had three foreign accounts with $4,000 each, you still would have an FBAR filing requirement because the cumulative value is more than $10,000.
This answer is not intended to constitute a legal opinion, to provide legal advice, or to establish an attorney-client relationship. Holtz, Slavett & Drabkin is a law firm consisting of former IRS attorneys, and our practice is devoted to tax litigation and tax controversy matters. We can be reached at www.hsdtaxlaw.com or (310) 550-6200.
The FBAR requires that you add together the balances for all of your foreign accounts, accounts you own as well as accounts you have authority over, for each month, to determine whether or not the total aggregate sum of those balances exceeds $10,000. If the total sum exceeds $10,000 for just one month in a given year, then you are required to file the FBAR form, Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, for that year.
If you have met this threshhold for any of the past 6 years (i.e., back to 2005, or to 2006 as of July 1, 2012), and you haven't filed the FBARs for those years, then I would very, very strongly advise you to seek immediate assistance from a competent tax attorney or CPA who has experience with FBARs because if you do not, you could be exposed to extremely high penalties.
Cumulative is for all accounts at a given time.
Also, check 6038D requirements. They were new in 2011 and first filing requirement was in regular tax filing for 2012
Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.
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