“What’s in a name?” I believe Shakespeare first coined that phrase in “Romeo and Juliet.” Well I am phrasing it again now, this time, in disbelief that the United States Treasury would actually use the term “FinCEN” in the name of a tax form.
On Schedule B of every tax return, the Internal Revenue Service asks the following question: “At any time during 2013, did you have a financial interest in or signature authority over a financial account (such as a bank account, securities account, or brokerage account) located in a foreign country? If “Yes,” are you required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), formerly TD F 90-22.1, to report that financial interest or signature authority?
In a nutshell, if that account was at any time over $10,000, the answer is yes, Form FinCEN 114 must be filed.
So the right thing to do, obviously, is to comply with the law and file this form. So, for example, a couple emigrated to the United States from Italy, and are now U.S. citizens. They have parents in Italy, and the parental home needs some work. Well, elderly parents may not have the means to do the work necessary to make the home more comfortable for them in their later years, so this wonderful young couple sends money over to Italy, to make it easier to pay the licensing and zoning people, architects and contractors. Now, when this couple goes to Italy to make sure all is going as planned, they have easier access to funds for payment, etc. And yes, this account may be over $10,000. In fact, it’s naive to think anything can be done in Italy for less than $10,000.
As a practitioner, imagine the client simply asking the following question. “Our tax return is Form 1040, there is a Schedule B, Schedule A, etc. What kind of name is FinCEN 114? What does that mean?”
Well, FinCEN is short for “Financial Crimes Enforcement Network.” That is worth repeating. A.U.S. Citizen who just opened a bank account abroad, with over $10,000 in it, is a God-fearing individual who is taking care of his elderly parents in their homeland, has to deal with the anguish of knowing they must report their activity with the Financial Crimes Enforcement Network.”
I personally just went through this. I had no answer for a client that asked me, “Paul, are we criminals for this?” In a politically correct world where we go through incredible pains to sugar coat things that we all agree do not need sugar-coating, our illustrious United States Treasury comes flat out and tells innocent people they must report a foreign bank account with the Financial Crimes Enforcement Unit.
We all know who they are targeting, and those investigations and prosecutions can continue without prejudice without the need to implement scare tactics on the rest of us who follow the law.
Commissioner, I ask you. “What’s in a Name?” Do you mind changing this one please?