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The recession was hard on me. In 2009 the banks foreclosed a few of my rental properties, than issuing me 1099C's to make the situation even worse. This made my tax liability enormous, as a result I didn't file taxes for a couple of years. I started receiving letters about my unpaid taxes from the government and my job. The accountant I hired in the past really didn't know much about 1099C,,s. That's when I searched the web and found Gary a life saver to say the least, he knew exactly what to do. If I would not have waited three years to file I would not have lost thousands for filing late. I wish I would have found him sooner, the fact that he does taxes in any state is a plus. I truly cant say enough positive things about my experience doing business with Gary. Thanks Again.

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Wilmington NC CPA opines on what the IRS does with Form TD F 90-22.1 | FBAR

CPA Wilmington NC discusses the IRS use of Form TD F 90-22.1 | FBAR

Gary Bode, CPA: it is obvious what the IRS wants to do with the info on FBAR. For a free initial phone consult on any tax or accounting issue, please call 399-2705.

I’ve been asked about Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR) numerous times now. But the questions aren’t on Form TD F 90-22.1, FBAR, itself. Folks want to know what the IRS will do with the information on it.  The short version?  To levy back taxes on un-reported income hidden in foreign banks.

Background on Form TD F 90-22.1 | FBAR


FATCA, the Foreign Account Tax Compliance Act, is a US Department of Treasury initiative to obtain information from foreign banks on American accounts. Up to now, the IRS could only get piece data on specific taxpayers. But now they want foreign banks to essentially issue a Form 1099-INT, like American banks do. Here’s our post on FATCA.

IRS Amnesty

The IRS offered amnesty to Americans who self-revealed foreign bank accounts to them. This was under the assumption the era of secret bank accounts was over, via FATCA, and it was time to fess up or face severe consequences.

The Revised Form TD F 90-22.1 | FBAR

Here’s our past post on Form TD F 90-22.1 | FBAR, and on some reporting quirks with FBAR.

What Will the IRS Use Form TD F 90-22.1 | FBAR for?

Just What they Use Form 1099-INT for!

The IRS is extremely effective, but to some degree, at other folk’s expense. American banks have to send both you and the IRS a Form 1099-INT in January stating the interest you earned during the previous year. This is expensive for the banks, even though it is just a typical accounting function. The IRS then cross correlates your Form 1040 to check that you reported it. This might lead to an IRS audit.

Eventually, that’s what FATCA will do with most foreign banks. So, FATCA just expands an existing IRS procedure.

Of course, the IRS is interested in how you came by that money originally. Note that you can have money that was never taxed to you, i.e. from gifts. But the IRS has lifestyle audits. This imputes how much money your lifestyle costs. And then you have to explain how the money was obtained. They got Wesley Snipes this way.

What Folks are Scared of…

The IRS will find out about income that never had American taxes paid on it. Naughty, naughty. And the IRS commissioner is explicitly threatening jail time for offenders who don’t come clean under the current amnesty program. So folks are scared of back taxes, penalties, interest and criminal charges on un-reported income stashed in secret foreign bank accounts.

While I work for a CPA firm in Wilmington NC, I field calls nationally from the free initial phone consult offer. (910) 399-2705. Check out other CPA posts to gauge our expertise and proactive attitude.

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