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FBAR United States Definition | FBAR Lawyer & Attorney Minneapolis MN

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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, 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

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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

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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

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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

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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.