My Kantonal Bank is asking me to do an OVDP ?

Finance, Taxes, Banking, Insurance and Retirement
1
My Kantonal Bank who I have a mortgage with and who has already asked me not to use my account there for regular transactions is now asking me for past FBARS and returns which, as a great procrastinator (for the returns) I am totally behind on. As far as FBAR I did not even know the darn things existed.

The other "option" they give me is to enter an "OVDP"

But I read thats for tax cheats. I am just your procrastinator (and most certainly not very wealthy, on a disability pension).

I have come across something called streamlined procedure thru another expat site which does not cover Switzerland much. The procedure : http://www.irs.gov/uac/Instructions-...r-US-Taxpayers but have found little info about this preocedure on this site.

Shouldn't my bank accept that I go the streamlined way ?

2
Unfortunately the IRS doesn't care if you didn't know about FBAR or Form 8938. If you have not filed as required, they consider you a cheat. Heck, they seem to consider all Americans abroad as tax cheats...the FBAR is filed with the Financial Crimes division.

Anyway, your bank probably doesn't know enough about the streamlined procedure or who qualifies. All they know is they face a fine for your non-compliance and they don't want that. It is easier to just report you with OVDP. Your best bet is to meet with a tax professional and get it sorted ASAP. Good luck!

3
This Forbes article might be helpful to you:

http://www.forbes.com/sites/robertwo...tizens-abroad/

A Canadian website might be useful:

http://isaacbrocksociety.ca/

This website also lists meetings called "Solving the Problems of US Citizenship" for April 5 in Munich and April 6 in Zurich. The Zurich meeting does not list a location and may be unconfirmed.

http://isaacbrocksociety.ca/2014/03/...tion-sessions/

Good luck!

4

It’s not just your bank that’s asking for FBAR’s and other info.

Postfinace DEMANDS past FBARs

Streamlined is the quickest and easiest way for you to catch up on your delinquent filing returns. And no, your bank won’t just accept that you’ll go Streamlined or any other program. They’ll want proof that you’ve entered a program so they can then prove to the IRS that you’re tax compliant so they won’t incur a fine as 3Wishes says.

Contact a US tax specialist asap to work out your best option and remember that FBAR’s have to be filed by the end of June - there is no extension time given for filing them and they must be done either online yourself or your tax preparer can file on your behalf. Trying to file paper copies now incurs a penalty.

5
As has already been stated, you need to immediately contact a tax expert. In your letter, where they state you should enter the OVDP program - that has set a date - if you enter after that date, your bank can claim that they were involved in bringing forth a tax cheat, and can use it to reduce their penalty using the increased fines that come from your entering that program AFTER the bank informed you about it. I would advise you get legal council and do not talk directly with your bank without it. I am sorry to repeat what was said earlier but you are considered a "tax cheat" by the department of treasury for failing to do FBAR and by the IRS for the non filed tax returns.

6
I'd say, relax and act promptly. File the FBAR's online, use an online free-filer to get the returns done, snail mail the past returns to the IRS, send copies of the FBAR's and returns to your bank along with the W9 and the bank form which states you have been filing all along (this should include late filings but doesn't state so). That should be sufficient for your situation. The bank just wants to know that you are doing what the US wants you to do. For the FBAR's, start with 2008, save the form locally and then reuse it to submit each year with your reason as to why you didn't file on time. As a little fish with nothing, there shouldn't be any reason for anyone to make a fuss and I doubt that you need to pay costly tax preparer fees. This process is likely called a "quiet disclosure" which is probably similar to streamlined. As I understand it, expats with limited savings get FBAR amnesty if they file before the US demands such from them and late tax returns with no tax due shouldn't be a problem. Just be honest, do the best you can and don't procrastinate any further.

7
There has been much written since 2013 regarding what the IRS is doing

regarding quiet disclosures. You can Google this to see. Additionally, it is easier for them to target quiet disclosure as the FBARs have to be submitted electronically.

http://federaltaxcrimes.blogspot.com...tay-quiet.html

http://taxblawg.net/2013/10/18/are-q...-even-riskier/

http://americansabroad.org/issues/ta...sclosures-jig/

8
The internet is bloated with scare propaganda, especially from profit-seekers and Jack's writings (federaltaxcrimes) are rather bigoted. Yet, overall, Jack focuses on the big fish, like most of the FATCA noise.

9
Hello,

Has anyone had any luck with this method? (submitting past FBARS online).

I am an American Citizen in CH since 1998. I have never earned enough money here to owe to the IRS so I never files returns, until fiscal year 2012. Last year I filed 2010-2012, each year showing that I don't owe any US tax. I plan to file 2013 soon. I also filed my 2012 FBAR on time last year. As it was the first time I'd ever heard of an FBAR, i only filed for 2012. My bank (BCV) is now demanding proof that I've been filing FBARS since 2008... It was not enough to prove to them compliance since 2012. I have had two phone calls with the bank (one anonymously) to find out my options. They say that if I can't provide proof that 2008-2011 were filed , I will need to enter the OVDP. As the OVDP seems to be designed for tax cheats and incurs significant fines, there's no way I'll do that. My thought was to use the new online system file 2008-2011. Doing so will definitely provide proof (I already filed 2013 last week and received a reply right away that it was received). There is a section on the online from to explain why I'm filing the FBARS late. I'm a little worried about it arousing attention at the IRS. But, since I'm just a minnow (around 100k in my combined accounts at the bank) I don't think my filings will get noticed. Plus, this should satisfy the bank's demands, no?

Any advice? Has anyone tried this?

Thanks

10

No, you definitely don’t want the OVDP. If you’re keeping your US citizenship and expect to file in the future, then the newer Streamlined program would be a better option.

http://www.irs.gov/uac/Instructions-…r-US-Taxpayers

Or just file the back FBAR’s if you can and hope that’s enough. But I’d advise getting professional advice from a US tax preparer before you do anything.

11
Hi,

Thanks for your reply. I've read about the "streamlined" program. It doesn't seem to apply to me since I'm current with my tax returns and I've filed some

FBARs (2012 last year and 2013 already with the new online system). I'm only missing 2008-2011 FBARs.

12

Actually you may not be. There’s also a new IRS form, similar to the FBAR, but with a higher reporting threshold. It’s called the 8938 form. It might apply to you with the amount you said you had in your accounts. Double check to make sure:

http://www.irs.gov/instructions/i8938/index.html

Otherwise, file the FBAR’s you’re missing if you can and hope your bank accepts them.

13
Question: Are you a dual-citizen (Swiss/USA)?

Now, stay a thousand miles away for the OVDP. That is not for you or your situation. The OVDP is designed for big wigs who are hiding money. That dosen't seem to fit your description.

Don't pay attention to the scare stuff on the internet. Most of it is bloated. Try the Expatforum, which operates out of Canada, but has very international responses from expats in a similar situation to yours.

http://www.expatforum.com

Go to the forum on expat taxes. It can be very helpful and reassuring.

Your problem is very likely your mortgage. Otherwise, you probably wouldn't get so hassled. You might really have to get professional tax support.

Quiet disclosure is not quite the same as the streamlined procedure. But, the streamlined procedure requires of you that you owe less than $1500 in taxes.

But, by all means, don't panic. There are thousands of people out there just like you. Unfortunately, in Switzerland we may have more to fear from the banks than from the IRS.

Welcome to the future. :-)

14
Thanks. That 8938 does not seem to apply to me since I have never earned more than the threshold before having to pay US taxes. Especially now as I am unemployed! "If you do not have to file an income tax return for the tax year, you do not have to file Form 8938"

15
Thank you. No I'm not a dual citizen... yet. We're in the final stage of the process. Should be Swiss by the end of the summer.

I agree that the OVDP is not for me. I'm definitely not hiding anything! I've never earned more than the threshold to where I would have to pay US tax. I was completely ignorant of the FBARS until last year. I've read a lot of really scary stuff on the internets and I've learned to stay away from those ones. Plus, a lot of websearches bring up websites of lawyers and accountants who seem to be taking advantage of the this situation.

Thanks for the link to the other forum. I'll take a look.

By the way, I think it's too late for me to take advantage of the streamlined since I already filed tax returns from 2010 (even though I probably didn't need to) AND because I already sent my 2012 FBAR last year on time. Streamlined seems to be for people who have not filed ANY returns or FBARs. I'm only missing 4 FBARs...

16
The IRS writes the following on FBAR's:

"The IRS will not impose a penalty for the failure to file the delinquent FBARs if there are no underreported tax liabilities and you have not previously been contacted regarding an income tax examination or a request for delinquent returns."

http://www.irs.gov/Individuals/Inter...hore-Interests

"Fortunately, the IRS seems to be more lenient to those people who come forward voluntarily"

http://www.greenbacktaxservices.com/...ate/#post-7391

"The IRS has declared filing three years back taxes is adequate for most US expat tax filers who are delinquent and there shall be no penalties for late FBARs (Foreign Bank Account Reports) from those who were unaware of the requirement to file."

http://www.brighttax.com/8/post/2012...compliant.html

17
I went to the IRS site mentioned in previous post: http://www.irs.gov/Individuals/Inter...hore-Interests And it says to send FBAR to "Department of Treasury, Post Office Box 32621, Detroit, MI 48232-0621) and attach a statement explaining why the reports are filed late."

This confused me as I thought all FBARs had to be filed online now. Can you still send in a paper copy to this address?

18
True that all FBARs must be filed online now, even if sending late or multiple reports. I even called the helpline on the online reporting site to verify. No more paper.

19
Is there any disadvantage to on-line reporting over against paper? Personally, I don't particularly like the idea.

20
The advantages are that we don't have to waste money on postage and we get a confirmation right away that they've received it. Not sure about the disadvantages, except for the fact that we have to send them to the "Financial Crimes Enforcement Network". Pretty rude that normal law abiding citizens like us need to be associated with something with that name, and on an annual basis...