Would your firm be able to assist in advising me?
david ingram replies
What you are looking for is what we do. I have actually been sitting at the same desk in this house for 40 years and 3 days and at the same desk for about 45 years doing US / Canadian Income Tax Returns.
If you have been doing your own returns, I trust that you have been filling in your TDF 90-22.1 forms to report your Canadian Financial Accounts to the US Treasury (see question 7 on schedule B which has a $10,000 penalty for not answering yes OR no) And that you have been filing form 3520 or the preferred 8891 as required if you have a Foreign Trust (an RRSP) as asked about in question 8).
If you have not been filing these forms, it is easy at this time to make a voluntary disclosure and catch up the next 6 years without penalty. If you have been filing these, good going.
You can call (604) 980-0321 M to Friday from about 10:10 AM to 3:30 PM to make an appointment by phone or in person.
Read the following to see what I mean about the foreign account reporting rules. People do not always 'hear' what they are told. <grin>
Dave, This kept being rejected by centa.com when I sent it from my account , so I asked a friend to send it from his account. Here it is: Yes, the general requirements for a person to use Schedule B are listed at the top of the instructions, but, as with most tax rules, there are exceptions. This exception is shown at the BOTTOM of the instruction page (http://www.irs.gov/pub/irs-pdf/i1040sa.pdf below the final TIP box) and it says to answer NO to the question of whether the filer has a foreign bank account if "the combined value of the accounts was $10,000 or less during the whole year." I think what you have written is that, in effect, a person who has only $10 in a Canadian bank would have to file Form B and answer yes to question 7a, but that is contrary to the IRS instructions. The H&R Block "Tax Cut" program does not select Schedule B or check the YES box unless the $10,000 threshold is reached. (I tried it out to see, by answering YES to foreign account, but NO to $10,000 or more.) Doing a Google search on "SCHEDULE B" "FOREIGN ACCOUNT" "7a", I find many articles stating that 7a only applies to accounts of $10,000 or more. Examples: http://bankrate.com: "Line 7a is straightforward. Basically, if you had a foreign account, check "Yes" here. Even if you did have such an account, the IRS says you can check "No" if the average balance in the account was less than $10,000 during the whole year."I NEVER EVER SAID THAT!
"...the answer to question 7a only applies where the total of all foreign accounts exceeds $10,000 at any time in the taxable year." Do you still say that ALL persons who have to file U.S. taxes and have a Canadian account have to file Schedule B and check YES to question 7a? Regards, Fxxxxxxx -------------------------------------------------------------------------------- david ingram replies:
Date: Mon, 11 Feb 2008 00:44:49 -0800 From: [email protected] Subject: Schedule B if you have a foreign account To: fxxxxxxxxxxxxxxx XXXXXXX wrote: [email protected]> David, In case you find this amongst the spam, I have a comment about reporting interest on Schedule B. You state: "AND, they also made the point that everyone with foreign accounts MUST file schedule B, even if there is no earnings form the accounts." But...the Schedule B instructions state that it is not necessary to answer YES on Schedule B if an account is less than $10,000. So, when you tell people to file Schedule B, shouldn't you add "if any of your accounts have been worth at least $10,000 anytime during the year"? Schedule B, part III instructions are here: http://www.irs.gov/pub/irs-pdf/i1040sa.pdf ----------------------------------- david ingram replies: The instructions for who must file a Schedule B (top right hand side of page B-1) that you sent clearly state that Schedule B must be filed if you have a foreign account. • You had over $1,500 of taxable interest. • Any of the Special Rules listed in the instructions for line 1 apply to you. • You are claiming the exclusion of interest from series EE or I U.S. savings bonds issued after 1989. • You had over $1,500 of ordinary dividends. • You received ordinary dividends as a nominee. • You had a foreign account or you received a
distribution from, or were a grantor of, or transferor
to, a foreign trust. Part III of the schedule has questions about foreign accounts and trusts. -
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