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US-Taxpayers Advisory: Reporting Foreign Bank Accounts

Small Thai industries appraised of Thai-Japan trade pact

BoT supports bank mergers, more foreign financial institutions

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US-Taxpayers Advisory: Reporting Foreign Bank Accounts

Joseph Krebs
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.
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 requirement.
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 requirement, 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].

Small Thai industries appraised of Thai-Japan trade pact

Small-sized Thai industries will be given clear and detailed explanations about the controversial Japan-Thailand Economic Partnership Agreement (JTEPA) in order to deal appropriately with their biggest trade partner, Industrial Economics Department director Atchaka Sribunruang Brimble said in statement last Friday.
Helping Thai industries relate to the provisions of the new JTEPA accord is an end product of a recent survey conducted by the Industrial Economics Department with 118 small-scale industrial entrepreneurs in and around Bangkok.
In cooperation with the Commerce Ministry, the Industrial Economics Department plan to open orientation courses about the JTEPA dealings for entrepreneurs of the small-sized industries, especially those dealing in the clothing and garment industry, which looks to have promising trade prospects in the Japanese market, Mrs. Atchaka said. Japan imports Bt40 billion in clothing and apparel items, about 90 per cent of which emanate from China and only about one per cent from Thailand, annually.
Large-sized industries, especially those already registered with the Federation of Thai Industries and other trade associations understand the connotations of JTEPA, she added, but the small industries apparently did not have specialised personnel to deal with the intricacies of the new pact. (TNA)