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Foreign bank interest - I did not report my UK Retirement account (about $12k).
Anonymous2 views3 answers
In the FBAR (TD F 90-22.1) forms that I filed in last few years - I did not report my UK Retirement Account (12k) assuming that it was Tax free in US as well.
Now I know that I should have reported it - but I am not sure how to minimize my penalties? Any suggestions?
Thanks.
The issue is whether you paid the U.S. income tax on the account. If no income tax was due, for example due to the foreign tax credit, then there is nothing for you to do other than to file a corrected FBAR. The IRS will not assess a penalty for a mere technical failure to file correctly.
The fact that you filed for other accounts is a good thing as shows good faith in your part. The account is not large relative to the $10k threshold so I would suggest the "practical" answer would be to ignore the past and simply disclose the account in your 2013 year and let the chips fall where they may if something ever surfaced.
Get in compliance and the IRS may levy small penalties, but they would likely let this slide if you show good faith here. If you have not had issues in the past, as Mr. Corrigan said the IRS will generally try to work with you to resolve things without being excessively punitive. You could always hire your own attorney to do a little work on this for you and talk to the IRS for you about this.
