As of: 1/19/21 2:50 PM
Received: January 15, 2021
Status: Non_Public
Tracking No. kjz-5rg9-va1p
Comments Due: January 15, 2021
Submission Type: Web

Docket: FINCEN-2020-0013
Agency Information Collection Activities; Proposed Renewal; Comment Request; Renewal Without Change of Reports of Foreign Financial Accounts Regulations and FinCEN Report 114, Report of Foreign Bank And Financial Accounts

Comment On: FINCEN-2020-0013-0001
Agency Information Collection Activities; Proposals, Submissions, and Approvals: Renewal Without Change of Reports of Foreign Financial Accounts Regulations and FinCEN Report 114, Report of Foreign Bank and Financial Accounts

Document: FINCEN-2020-0013-DRAFT-0092
Comment on FR Doc # 2020-25216

Submitter Information

Name: Jonathan Morgan
Address: Australia, 

General Comment

The current FBAR reporting system is burdensome for individual US citizens living/working long-term outside of the US. They are required to report bank accounts, investment accounts, and retirement accounts in their country of normal residence every year even though they may have little or no connection to the US other than the fact that they hold US citizenship. These accounts are normally held for everyday purposes such as personal banking, retirement plans, and basic investing with no intention of evading US tax. I am an individual earning under $60,000 year who is living overseas long-term and have been required to file FBARs for over 10 years. I am also a signatory on my organization's bank accounts but have no control or say over how the money is used. It generally takes 3-5 hours to gather the necessary information and complete this form for myself and my wife, which is longer than it takes to file my US tax return. The time to complete the form and its complexity are disproportionate to my income and the amount of assets held. I can understand the importance of the US Treasury department obtaining information from those who might be trying to hide assets overseas but many individuals legitimately holding accounts in their country of residence are being required to complete this form. If they fail to file then the penalties for failing to do so are punitive. As I have a background in finance I feel confident enough to complete this form myself. However, many expat friends and colleagues do not and are having to pay hundreds of dollars to have a tax professional complete what is purely an informational form which has no bearing on their tax liability.

My recommendation is to consider one or more of the following:
- Increase the threshold significantly so that fewer individuals are required to file. It is unlikely that an individual with only $10,000 of combined value in their accounts is avoiding tax in any significant way. The thresholds used for form 8938 are much more appropriate.
- Exclude accounts in the taxpayer's normal country of residence from the reporting requirement. The test in s911 can be used to determine if someone is a bona fide foreign resident.
- Exclude foreign employer retirement funds from reporting. In most countries employees have little control over these funds but after working for just a few years they can easily put them over the threshold.
- Have penalties which are proportionate to the income of the tax payer or the tax avoided. For lower income taxpayers having penalties for failing to file starting in excess of $10,000 per account per year are punitive and do not encourage coming into compliance. The Streamlined Foreign Offshore Procedures can assist with compliance but it often involves paying a tax professional thousands of dollars to prepare the filing due to its complexity and the large financial penalties for an incorrect filing.
- Avoid duplication of information which is reported on form 8938.