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FBAR United States Definition | FBAR Lawyer & Attorney Minneapolis MN

The United States is defined differently with respect to different parts (and, sometimes even within the same part) of the United States Code. There is a specific definition of the United States for FBAR Purposes. In this brief essay, I would like to discuss the FBAR United States Definition and explain its importance to FBAR compliance.

Importance of FBAR United States Definition to FinCEN Form 114

Before we discuss the FBAR United States Definition, we need to the context in which it is used and why it is important for US international tax purposes. FBAR is a common acronym for the Report of Foreign Bank and Financial Accounts, FinCEN Form 114. It used to be known under a different name – TD F 90-22.1.

FBAR is part of Title 31, Bank Secrecy Act, but the IRS has administered FBAR since 2001. The IRS primarily uses FBAR not to fight financial crimes (which was its original purpose), but for tax enforcement. In particular, the IRS found that FBAR is an extremely useful tool for combating tax evasion associated with a strategy of hiding money in secret foreign bank accounts.

FBAR’s draconian penalties is what makes this form the favorite with the IRS, but much hated by US taxpayers. The penalties range from a jail sentence to civil willful penalties and even civil non-willful penalties which may exceed a taxpayer’s net worth.

It is precisely these penalties which make it absolutely necessary for US taxpayers to understand when they need to file FBARs. One of the aspects of this understanding is the FBAR United States Definition, which allows one to determine two things. First, the FBAR United States Definition is used to define the United States for the purposes of the Substantial Presence Test. Second, the FBAR United States Definition allows one to classify bank accounts as foreign or domestic for FBAR compliance purposes.

FBAR United States Definition

31 CFR 1010.100(hhh) contains the FBAR United States Definition. Under this provision, the United States is defined as: the States of the United States, the District of Columbia, the Indian Lands (as defined in the Indian Gaming Regulatory Act) and the territories and insular possessions of the United States. As of February 3, 2019, the US territories and insular possessions refer to: Puerto Rico, Guam, American Samoa, US Virgin Islands and Northern Mariana Islands.

Contact Sherayzen Law Office for Professional FBAR Help

If you have undisclosed foreign accounts, you should contact Sherayzen Law Office for professional help. We have successfully helped hundreds of US taxpayers around the world with their FBAR issues, and We can help You! Contact Us Today to Schedule Your Confidential Consultation!

2018 FBAR Currency Conversion Rates | FBAR Tax Lawyer & Attorney

2018 FBAR and 2018 Form 8938 instructions both require that 2018 FBAR Currency Conversion Rates be used to report the required highest balances of foreign financial assets on these forms. In the case of 2018 Form 8938, the 2018 FBAR Currency Conversion Rates is the default choice, not an exclusive one.

The U.S. Department of Treasury  already published the 2018 FBAR Currency Conversion Rates online (they are called “Treasury’s Financial Management Service rates” or the “FMS rates”).

Since the 2018 FBAR Currency Conversion Rates are very important to US taxpayers, international tax lawyers and international tax accountants, Sherayzen Law Office provides the table below listing the official 2018 FBAR Currency Conversion Rates (note that the readers still need to refer to the official website for any updates).

 

Country – Currency

Foreign Currency to $1.00

AFGHANISTAN – AFGHANI

74.576

ALBANIA – LEK

107.05

ALGERIA – DINAR

117.898

ANGOLA – KWANZA

310.0000

ANTIGUA – BARBUDA – E. CARIBBEAN DOLLAR

2.7000

ARGENTINA – PESO

37.642

ARMENIA – DRAM

485.0000

AUSTRALIA – DOLLAR

1.4160

AUSTRIA – EURO

0.8720

AZERBAIJAN – NEW MANAT

1.7000

BAHAMAS – DOLLAR

1.0000

BAHRAIN – DINAR

0.3770

BANGLADESH – TAKA

84.0000

BARBADOS – DOLLAR

2.0200

BELARUS – NEW RUBLE

2.1600

BELGIUM – EURO

0.8720

BELIZE – DOLLAR

2.0000

BENIN – CFA FRANC

568.6500

BERMUDA – DOLLAR

1.0000

BOLIVIA – BOLIVIANO

6.8500

BOSNIA – MARKA

1.7060

BOTSWANA – PULA

10.6610

BRAZIL – REAL

3.8800

BRUNEI – DOLLAR

1.3610

BULGARIA – LEV

1.7070

BURKINA FASO – CFA FRANC

568.6500

BURUNDI – FRANC

1790.0000

CAMBODIA (KHMER) – RIEL

4103.0000

CAMEROON – CFA FRANC

603.8700

CANADA – DOLLAR

1.3620

CAPE VERDE – ESCUDO

94.8800

CAYMAN ISLANDS – DOLLAR

0.8200

CENTRAL AFRICAN REPUBLIC – CFA FRANC

603.8700

CHAD – CFA FRANC

603.8700

CHILE – PESO

693.0800

CHINA – RENMINBI

6.8760

COLOMBIA – PESO

3245.8000

COMOROS – FRANC

428.1400

CONGO, DEM. REP – CONGOLESE FRANC

1630.0000

COSTA RICA – COLON

603.5000

COTE D’IVOIRE – CFA FRANC

568.6500

CROATIA – KUNA

6.3100

CUBA – PESO

1.0000

CYPRUS – EURO

0.8720

CZECH REPUBLIC – KORUNA

21.9410

DENMARK – KRONE

6.5170

DJIBOUTI – FRANC

177.0000

DOMINICAN REPUBLIC – PESO

49.9400

ECUADOR – DOLARES

1.0000

EGYPT – POUND

17.8900

EL SALVADOR – DOLARES

1.0000

EQUATORIAL GUINEA – CFA FRANC

603.8700

ERITREA – NAKFA

15.0000

ESTONIA – EURO

0.8720

ETHIOPIA – BIRR

28.0400

EURO ZONE – EURO

0.8720

FIJI – DOLLAR

2.1080

FINLAND – EURO

0.8720

FRANCE – EURO

0.8720

GABON – CFA FRANC

603.8700

GAMBIA – DALASI

50.0000

GEORGIA – LARI

2.6700

GERMANY – EURO

0.8720

GHANA – CEDI

4.8250

GREECE – EURO

0.8720

GRENADA – EAST CARIBBEAN DOLLAR

2.7000

GUATEMALA – QUENTZAL

7.7150

GUINEA – FRANC

9076.0000

GUINEA BISSAU – CFA FRANC

568.6500

GUYANA – DOLLAR

215.0000

HAITI – GOURDE

77.1180

HONDURAS – LEMPIRA

25.0000

HONG KONG – DOLLAR

7.8320

HUNGARY – FORINT

280.1700

ICELAND – KRONA

116.1100

INDIA – RUPEE

69.8000

INDONESIA – RUPIAH

14440.0000

IRAN – RIAL

42000.0000

IRAQ – DINAR

1138.0000

IRELAND – EURO

0.8720

ISRAEL – SHEKEL

3.7490

ITALY – EURO

0.8720

JAMAICA – DOLLAR

126.0000

JAPAN – YEN

109.8500

JERUSALEM – SHEKEL

3.7490

JORDAN – DINAR

0.7080

KAZAKHSTAN – TENGE

375.1500

KENYA – SHILLING

101.8000

KOREA – WON

1114.4900

KOSOVO – EURO

0.8720

KUWAIT – DINAR

0.3030

KYRGYZSTAN – SOM

69.8000

LAOS – KIP

8535.0000

LATVIA – EURO

0.8720

LEBANON – POUND

1500.0000

LESOTHO – SOUTH AFRICAN RAND

14.3500

LIBERIA – DOLLAR

156.7100

LIBYA – DINAR

1.3860

LITHUANIA – EURO

0.8720

LUXEMBOURG – EURO

0.8720

MACAO – MOP

no listing

MACEDONIA FYROM – DENAR

53.5000

MADAGASCAR – ARIARY

3470.2000

MALAWI – KWACHA

733.0000

MALAYSIA – RINGGIT

4.1300

MALI – CFA FRANC

568.6500

MALTA – EURO

0.8720

MARSHALL ISLANDS – DOLLAR

1.0000

MARTINIQUE – EURO

0.8720

MAURITANIA – OUGUIYA

36.0000

MAURITIUS – RUPEE

34.1500

MEXICO – PESO

19.6540

MICRONESIA – DOLLAR

1.0000

MOLDOVA – LEU

16.9930

MONGOLIA – TUGRIK

2642.9200

MONTENEGRO – EURO

0.8720

MOROCCO – DIRHAM

9.5300

MOZAMBIQUE – METICAL

61.5300

MYANMAR – KYAT

1535.0000

NAMIBIA – DOLLAR

14.3500

NEPAL – RUPEE

111.6000

NETHERLANDS – EURO

0.8720

NETHERLANDS ANTILLES – GUILDER

1.7800

NEW ZEALAND – DOLLAR

1.4900

NICARAGUA – CORDOBA

32.3000

NIGER – CFA FRANC

568.6500

NIGERIA – NAIRA

361.0000

NORWAY – KRONE

8.6800

OMAN – RIAL

0.3850

PAKISTAN – RUPEE

138.6000

PALAU – DOLLAR

1.0000

PANAMA – BALBOA

1.0000

PAPUA NEW GUINEA – KINA

3.2840

PARAGUAY – GUARANI

5956.0000

PERU – NUEVO SOL

3.3750

PHILIPPINES – PESO

52.4900

POLAND – ZLOTY

3.7530

PORTUGAL – EURO

0.8720

QATAR – RIYAL

3.6400

ROMANIA – NEW LEU

4.0690

RUSSIA – RUBLE

69.6800

RWANDA – FRANC

890.0000

SAO TOME & PRINCIPE – NEW DOBRAS

21.5350

SAO TOME & PRINCIPE – DOBRAS

20941.0080

SAUDI ARABIA – RIYAL

3.7500

SENEGAL – CFA FRANC

568.6500

SERBIA – DINAR

103.3900

SEYCHELLES – RUPEE

13.5500

SIERRA LEONE – LEONE

8620.0000

SINGAPORE – DOLLAR

1.3610

SLOVAK REPUBLIC – EURO

0.8720

SLOVENIA – EURO

0.8720

SOLOMON ISLANDS – DOLLAR

7.7520

SOMALI – SHILLING

575.0000

SOUTH AFRICA – RAND

14.3500

SOUTH SUDANESE – POUND

153.7000

SPAIN – EURO

0.8720

SRI LANKA – RUPEE

182.6000

ST LUCIA – EC DOLLAR

2.7000

SUDAN – SUDANESE POUND

47.0000

SURINAME – GUILDER

7.5200

SWAZILAND – LILANGENI

14.3500

SWEDEN – KRONA

8.9380

SWITZERLAND – FRANC

0.9840

SYRIA – POUND

515.0000

TAIWAN – DOLLAR

30.5880

TAJIKISTAN – SOMONI

9.3500

TANZANIA – SHILLING

2295.0000

THAILAND – BAHT

32.3500

TIMOR – LESTE DILI

1.0000

TOGO – CFA FRANC

568.6500

TONGA – PA’ANGA

2.1730

TRINIDAD & TOBAGO – DOLLAR

6.7700

TUNISIA – DINAR

3.0090

TURKEY – LIRA

5.2830

TURKMENISTAN – NEW MANAT

3.4910

UGANDA – SHILLING

3705.0000

UKRAINE – HRYVNIA

27.7000

UNITED ARAB EMIRATES – DIRHAM

3.6730

UNITED KINGDOM – POUND STERLING

0.7810

URUGUAY – PESO

32.3200

UZBEKISTAN – SOM

8310.0000

VANUATU – VATU

111.6900

VENEZUELA – BOLIVAR – SOBERANO

563.9800

VENEZUELA – BOLIVAR – FUERTE

248832.0000

VIETNAM – DONG

23190.0000

WESTERN SAMOA – TALA

2.5350

YEMEN – RIAL

480.0000

ZAMBIA – NEW KWACHA

11.9000

ZIMBABWE – DOLLAR

1.0000

FinCEN Form 114 and FBAR Are the Same Form | FBAR Tax Lawyers

In my practice, I often receive phone calls from prospective clients who treat FinCEN Form 114 and FBAR as two different forms. Of course, these are the same forms, but I have asked myself: why do so many taxpayers believe that FinCEN Form 114 and FBAR are two different forms?

The simplest answer, of course, would be that taxpayers are simply so unfamiliar with US international tax law that they do not know the form with which both titles, FinCEN Form 114 and FBAR, should be associated. There is definitely a lot of truth to this conclusion, but it does not tell the whole story.

Upon more profound exploration, I found that a significant amount of potential clients believed that either FBAR or FinCEN Form 114 was a tax form while the other form was something else. In other words, some of the taxpayers think that FinCEN Form 114 is a tax form while FBAR is not a tax form while other taxpayers believe that FBAR is a tax form while FinCEN Form 114 is something else.

After making this discovery, I realized that the very nature of FBAR is at the heart of the problem, because FBAR is not a tax form and has nothing to do with Title 26 (i.e. the Internal Revenue Code) of the United States Code. Rather, the Report of Foreign Bank and Financial Accounts, FinCEN Form 114, commonly known as FBAR, was created by the Bank Secrecy Act of 1970. The Bank Secrecy Act forms part of Title 31 of the United States Code. In fact, prior to September 11, 2001, the IRS had almost nothing to do with FBAR.

It was only after the 9/11 terrorist attacks in the United States when the Congress decided to turn over the enforcement of FBAR to the IRS. Initially, the official purpose was to facilitate the Treasury Department’s fight against terrorism. Within a year, though, it became clear that the IRS would use FBAR in its fight against offshore tax evasion and other noncompliance with US international tax laws.

Using the draconian FBAR penalty structure (at that time, the form was still called TD F 90-22.1) against noncompliant US taxpayers turned out to be a highly effective intimidation tool for the IRS – a tool which works very well even today. Once the Treasury Department mandated the e-filing of FBARs, the name of FBAR was changed from TD F 90-22.1 to FinCEN Form 114.

Thus, the confusion over the relationship between FinCEN Form 114 and FBAR stems from FBAR’s peculiar legal history. Most of US taxpayers do not know any of it; they are simply confused by the fact that the IRS is enforcing a form that has two names and which has nothing to do with the Internal Revenue Code.

Mizrahi-Tefahot Bank Rejects DOJ Settlement Offer | FATCA Tax Lawyer

On August 8, 2018, Mizrahi-Tefahot Bank (“Mizrahi-Tefahot”) informed the Tel Aviv Stock Exchange that its Board of Directors rejected a settlement offer from the US Department of Justice (“DOJ”).

It appears that the DOJ offer was received by the bank on August 7, 2018. The DOJ proposed that Mizrahi-Tefahot pay $342 million to settle the DOJ investigation into whether the bank helped US taxpayers evade US federal taxes.

Mizrahi-Tefahot felt that this was an unreasonably high amount to pay. In its financial statements for the quarter that ended on March 31, 2018, the bank reserved just $46.1 million to settle the DOJ investigation.

The official and primary reason for the rejection of the DOJ offer, however, was the fact that the DOJ’s letter was not accompanied by any details of how DOJ arrived at such a high sum of money. The letter did not contain even any references to any calculation principles. Mizrahi-Tefahot’s lawyer felt that any reasonable calculation of potential settlement amount would lead to a much lower settlement offer.

The most likely reason why Mizrahi-Tefahot felt so confident in rejecting the DOJ offer was its knowledge of the settlements paid by the Swiss banks. NPB Neue Privat AG, for example, only paid $5 million. Basler Kantonalbank believes it can settle for $100 million. In other words, it appears that the negotiation process with the DOJ has matured to the point where Mizrahi-Tefahot can reasonably predict the amount for which the DOJ would agree to settle the case.

Mizrahi-Tefahot is not the only bank in Israel under the IRS investigation. Bank Leumi settled its DOJ investigation for a fine of $270 million and entered into a deferred prosecution agreement. Bank Hapoalim is still in settlement negotiation with the DOJ; in fact, last May, it further increased the funds set aside for a possible DOJ settlement to a total of $365 million.

Contact Sherayzen Law Office for Help With the Voluntary Disclosure of your Mizrahi-Tefahot and Other Israeli Bank Accounts

As part of their settlement agreements, foreign banks agree to supply to the DOJ full information concerning bank accounts owned by US persons. Mizrahi-Tefahot settlement will very likely follow the same path; so will Bank Hapoalim and any other Israeli bank investigated by the DOJ.

This means that if you have undisclosed foreign bank accounts in Israel, you are at a high risk of IRS detection and potentially disastrous FBAR penalties. This is why you need to contact Sherayzen Law Office for professional help with the voluntary disclosure of your Israeli bank accounts. Our law firm specializes in offshore voluntary disclosures of foreign accounts and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

2017 FBAR Deadline | FinCEN Form 114 FBAR Lawyer & Attorney

FinCEN recently confirmed the 2017 FBAR deadline and the automatic extension option.

2017 FBAR Deadline: FBAR Background

FinCEN Form 114, the Report of Foreign Bank and Financial Accounts, is commonly known as FBAR.  US taxpayers should use this form to report their financial interest in or signatory authority over foreign financial accounts. Failure to timely file the FBAR may result in the imposition of draconian FBAR penalties.

2017 FBAR Deadline: Traditional FBAR Deadline

Prior to 2016 FBAR, the taxpayers had to file their FBARs for each relevant calendar year by June 30 of the following year. No filings extensions were allowed. The last FBAR that followed this deadline was 2015 FBAR (its due date was June 30, 2016).

2017 FBAR Deadline: Changes to FBAR Deadline Starting 2016 FBAR

The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (the “Act”) changed the FBAR deadline starting with 2016 FBAR.  Section 2006(b)(11) of the Act requires the FBARs to be filed by the due date of that year’s tax return (i.e. usually April 15), not June 30.

Furthermore, during the transition period, the IRS granted to US taxpayers an automatic extension of the FBAR filing deadline to October 15. The taxpayers do not need to make any specific requests in order for extension to be granted.

In other words, starting 2016 FBAR, the Act adjusted the FBAR due date to coincide with the federal income tax filing deadlines. Moreover, the new FBAR filing deadline will follow to the letter the federal income tax due date guidance. The federal income tax due date guidance states that, in situations where the tax return due date falls on a Saturday, Sunday, or legal holiday, the IRS must delay the due date until the next business day.

2017 FBAR Deadline

Based on the new law, the 2017 FBAR deadline will be April 17, 2018 (same as 2017 income tax return due date). If a taxpayer does not file his 2017 FBAR by April 17, 2018, then the IRS will automatically grant an extension until October 15, 2018. Failure to file 2017 FBAR by October 15, 2018, may result in the imposition of FBAR civil and criminal penalties.