FBAR Story #4 – just learned of requirements

by Phil Hodgen on October 19, 2010

Here, with permission, is Cindy’s email to me.  We’ve never met, I don’t know her full name, and she is not a client of the firm.

I’ve been in total shock for the past month as I stumbled upon this requirement by total chance.
I’ve lost countless nights of sleep, all of my weekends and evenings to gathering past information in order to file taxes (I’m not taxable), so that I can then submit the FBAR. I’m petrified to do so. I’ll probably have everything I need to do so in the next couple weeks.

This has affected my life in every way – I think it’s sinful that I’m crying myself to sleep, because of the IRS – while I am an honest tax-paying citizen.

My story is probably boring, but I could discuss over the phone if you like if this interests you or might bring something to your article.

I’m 33 and single, I’ve been living in France for 13 years, am naturalized French (and born American).
I had NO idea about these reports until I started searching on tax information for stock options I need to cash due to leaving a company.

The worst part is I’m seriously considering revoking my American citizenship over it (it being thousands of dollars) – and as a proud American, it’s breaking my heart.

Cindy’s reaction is — in my experience — typical, except with less profanity.  I would guess that the vast, vast majority of Americans living abroad are unaware of the paperwork requirements that the IRS Commissioner blithely assumes all taxpayers know backwards and forwards. Heh.  As if.

The country’s in the very best of hands.

Perverse incentives, Mr. Shulman.

Reader comments (5)

  • This FBAR situation is crazy. My situation is that I’ve lived abroad in Europe for many years.

    I’ve made under the exclusion so there’s no way there are taxes owed.

    It’s resentful that the US thinks it’s accepts for overseas Americans to be held “accountable” to two different tax systems.

    I for one plan on not filing any FBARs or 1040s for that matter as all my US assests have been ex-patrioted already.

    Quite frankly it’s none of the US’ business what I do abroad or what I have. End Of.

    Will the US wake up and go residency based taxation like other sane countries.

    Don

  • Marta Ruth says Jun 10, 2011 5:42 pm

    Cindy’s story sounds not unlike mine. I discovered the FBAR requirement this morning. I was born in Zurich and have lived in Europe for 22 of the past 24 years. I have dual citizenship (Italian). I’m 53 years old with 2 children in college and have been trying to live frugally – I have no car, I don’t go to the cinema or eat out – to have some kind of retirement. I do own my appartment where I live (75% is the mortgage) and I have roughly $100000 in savings (incl retirment account). I just filed the past 6 years of tax returns and discovered I owe $30000 (penalty and interest still to be applied) on gains made during the stock market bubble in 2008, despite ultimately losing $20000 which I found out is not tax deductible due to lack of US income. Now I hear that I may have to pay $10000 per year for all the unfiled FBAR’s. Is there any help for me? I feel as though I’ve been punched in the gut and have already been sleepless for weeks over the $30000 bill. I feel as though my biggest mistake was in saving money in the first place. Any advice on how to proceed would be appreciated. Marta