foreign bank accounts
Joseph Krebs, CPA
American taxpayers living abroad often fail to report their “foreign
country” financial accounts. Nevertheless, all taxpayers are required to
complete and file Form TD F 90-22.1 if the aggregate value of such financial
accounts exceeded $10,000 anytime during a calendar year no matter where
they reside worldwide. Although there is no separate tax for having one or
more foreign accounts, the Treasury Department requires that taxpayers
report such relationships annually by filing this Form on or before June
30th of the succeeding year. The report, normally a simple half-page Form,
is sent to a Department of the Treasury address in Detroit, Michigan, and
should NOT be filed as an attachment to an individual’s Federal income tax
return. This Form along with instructions can be accessed for downloading
at: www.irs.gov/ pub/irs-pdf/f90221.pdf
Further, taxpayers, who file their tax returns on Form 1040, are
specifically asked on “Schedule B – Interest and Dividend Income” if they
have any foreign financial accounts. In the absence of filing Form 1040 and
Schedule B, taxpayers using either 1040A or 1040EZ as alternative means to
file their Federal income tax returns are still subject to comply with the
requirements of Public Law 91-508 and Public Law 93-579 for filing this
Treasury Department report nevertheless.
The term “foreign country” includes all geographical areas located outside
the United States, Guam, Puerto Rico, and the Virgin Islands. Thus, all of
the foreign nations located in Southeast Asia including Thailand and
Malaysia are identified as foreign countries within the meaning of this
Foreign financial accounts include any bank, securities, securities
derivatives or other financial instruments accounts. Such investments
generally encompass any accounts in which the assets are held individually
or in a commingled fund, and the account owner holds an equity interest. The
term also means any saving, demand checking, deposit, time deposit, or any
other account maintained with a financial institution, whether individually
or jointly held. In addition, if an account is maintained in the name of two
persons jointly, or if several persons each own a partial interest in an
account, each of the U.S. taxpayers are deemed to have a reportable
financial interest in that account.
There are two noteworthy exceptions that exempt U.S. taxpayers living abroad
from requirements to file Form TD F 90.22.1. There is no need to report any
financial accounts held in a facility known as a “United States military
banking facility” operated by the U.S. financial institution designated to
serve U.S. Government installations abroad, even if the facility is located
in a foreign country. Secondly, there is no need to report any account
maintained with a branch, agency, or other office of a foreign bank located
within the United States or one of its territories.
The principal purpose for reporting this information is to ensure the
reporting of activities that have a high degree of abuse in criminal, tax,
or regulatory investigations or proceedings. Disclosure of this information
is mandatory. Thus, civil and criminal penalties, including a fine of not
more than $500,000 and imprisonment of not more than five years, are
provided for failure to file this report, supply information, or for filing
a false or fraudulent report. Moreover, Social Security numbers are used as
a means to identify individuals who file or fail to file this report.
Consequently, taxpayers living abroad are encouraged to take heed of these
requirements, and file Form TD F 90.22.1 if appropriate.
Joseph “Joe” Krebs, CPA is a U.S. tax practitioner living in Thailand. Send
questions about this Advisory to: [email protected]
may go dry
on drinking gone too far?
Many hotels in Chiang Mai pride themselves with being
within walking distance to the city’s temples. Soon these hotels may have
wished different if a government bill banning the sale of alcoholic drinks
is endorsed by the National Legislative Assembly.
Though the bill is aimed at curbing alcoholic drinks to the Thai youth, the
prohibition will mostly affect tourists who want to enjoy a cocktail in the
The government’s proposed alcohol consumption-control bill may hurt the
country’s tourism industry due to its restrictions over the sales and
advertisements of alcoholic beverages, the Thai Hotels Association (THA)
THA president, Mr Chanin Donavanik, was quoted in a Bangkok newspaper as
saying: “The law would clobber the tourism industry, especially hotels,
restaurants and bars. Almost 4,000 hotels have huge investments at stake.”
THA is in the process of pleading for hotels and resorts to be exempt from
the terms of the bill, which has already been approved by the Cabinet. The
bill, aimed at tightening control over the consumption of alcoholic
beverages by Thai youth nationwide, is waiting for endorsement by the
National Legislative Assembly.
Under the bill, sales of alcoholic beverages are not allowed on premises
that are located within 200m of schools and temples. Neither are
advertisements for alcoholic beverages allowed at all times and places.
Sales of alcoholic beverages to youth aged below 20 are prohibited.
According to THA, several hotels in Bangkok and Chiang Mai are located near
schools or temples. THA said around 30 per cent of hotel revenues were from
the sales of all types of beverages. (CMM Reporters/TTG)