FBAR Filing In the Year of Expatriation

This week’s question comes from someone who was flummoxed by ambiguity and the IRS’s inability to answer questions. I will quote the whole email because it make me happy.

Dear Phil H,

Thank you for helping me navigate through the murky waters of expatriation. Your writings have been both a ray of illumination and a catalyst for the fight or flight response. You have been infinitely clearer than the folks at the IRS, helplines, Embassies, etc.

Thinking that I was at last free from the unreasonable demands of a country I have not lived in for many decades, and relieved that my financial accounts/career/financial security/etc. have been saved from FATCA inspired oblivion, I was propelled into another few hours of frenzy by something you wrote in this week’s newsletter… about a FinCen 114 being due for the year of expatriation. To confirm your information, I sent an email to this IRS recommended address: FBARquestions@irs.gov. Here follows the reply I received. Its beauty might appeal to you. It is a record of incomprehension and increasing anxiety from both parties. I am being told that the FinCen 114 is not needed in the year of expatriation.

I’ve been left with the impression that my command of English is inadequate, and that I have seen ambiguity where none exists. Alas, it is the only language I speak with fluency. Perhaps, as a lawyer, you will be able to clearly see what I could not.

The question is whether, in the year of expatriation, you must file the dreaded FBAR, now named FinCen Form 114.

The Buckets and Pipes Theory of Tax Planning

Saturday morning in Singapore I will be talking to about 30 entrepreneurs about tax stuff – a bit for themselves, but mostly about their businesses. And that means talking about cross-border tax strategies. “Can I do what Apple does?”

The answer is yes. It’s just not cost-effective until you are operating at scale. For younger companies, the better strategy is to optimize for simplicity. Spend less money on tax brains and pay a bit more in tax. Stay away from the shiny.

Simplicity will make your business nimble, and your time and attention will be directed toward what really matters: creating customers. An entrepreneur’s time and attention is worth far more than taxes saved.

You don’t get wealthy by paying less tax. You get wealthy by creating customers. Look at Apple. Of course Apple is saving tax with clever international tax strategies. But first, painfully and over a long time, they created customers.

Form 8854 Balance Sheet Math for Married Expatriates

I get a lot of questions. (Please keep them coming!) Some of them I answer in my weekly Expatriation Only email, but this one seemed to be ripe for a quick blog post.


Hi Phil, I have a question about the filing out the 8854. In the balance sheet section, since all my assets are joint assets with my wife, does that mean I input half of the value of the assets I have?

Basically I have cash and stocks. So can I just put in half the amount? For example I have 500k usd in cash. Then I would put 250k in the balance sheet section.

Filing Form 8854 by FedEx–A Success Story

I received a comment from a reader — she successfully used FedEx to file her Form 8854. I have edited the email slightly to anonymize it.

Hi Phil,

I expatriated in 2013 and faced this issue in June of 2014 when I was ready to submit my final 2013 return plus send a copy of 8854 to Philadelphia. I was sending both at the last minute but, mindful of the instruction that 8854 had to be received by June 15, planned to FedEx to both Austin & Philadelphia to ensure a timely delivery. Well, of course, I ran into the problem of no street address for the 8854 office in Philadelphia.

You can’t file Form 8854 via FedEx or UPS

This Week’s Expatriation Question:

This week’s question is postal. It came in a comment to a blog post on the site.

Hi, does anyone know the STREET address to file form 8854? The instructions only listed a generic US mail address. I need a street address for FEDEX to deliver it. Please advise.

Singapore for a Weekend Mastermind

I’m headed to a weekend mastermind group sponsored by Dynamite Circle (I am a member), which is a service provided by Ian and Dan of Tropical MBA.

It’s worth your while reading the TMBA blog and listening to the podcast. Even if you do not fit the “location independent lifestyle” or “digital nomad” profile, there are useful things to learn.

Dan and Ian have done something impressive. They transformed themselves from from two random guys standing around in a parking lot in North San Diego County to the owners of very real and profitable businesses. The best part? These are businesses that they can operate from anywhere on the planet that they want to be (Ian = Austin and Dan = Philippines right now).

Attending the mastermind will be a group of 30 entrepreneurs who have reached a certain level of success.

I’m showing up. I have something to share, and something to learn.

Pack light, go fast – LAX-CAN-SIN

One week in Singapore. Goruck SK40. Almost used my SK20 but that would have been a gratuitous display of self-indulgent minimalist travel egotism. From the KAL lounge in the Tom Bradley terminal at LAX.

Wherein I Violate the First Rule of Fight Club

Let’s imagine a future risk. Five years from now you will be sued. Extremely generic business litigation. Nothing special, except if you lose the lawsuit your company will be wiped out. High stakes, normal risk.

You will be considerably less stressed as you go through the lawsuit if you know that a few million dollars sits in a bunker, safe, waiting for you after the dust has settled – even if you lose the lawsuit.

How do you go from cocktail party conversation to done? Today I am going to cover the first hurdle. You can’t move forward until you solve this hurdle.

Step-By-Step Tax Filings For a Noncovered Expatriate

This week’s question is from reader P. Let’s pretend his name is Phil, because that would be confusing. His question:

I am going for my interview to renounce on Feb 13/15. I don’t have any US income and I am not a “cover expatriate”. I have my 5 previous tax returns and FBAR’s filed. I will have to file another tax return for 2014 within the next 2 months. Do I file my 8854 with this return and then I am finished with the US? Or what else do I have to do? What is a 1040NR? Do I need to file 2 tax returns for 2015 too? ( Jan 1/15 – Feb 13/15 and then Feb 14/15 – Dec 31/15?

I will sure be glad when I am done with all this!