Form 8938

[ATSMAN]

I got a referral to a potential new client today. The gentleman is an Indian citizen but has US Green Card (Just got it at the end of 2013). He is married but his wife and 2 kids are in Mumbai, India. He owns a house there and several bank and investment accounts in joint names with his wife and 2 children (16 and 20) and the aggregate value of the account when converted to US dollars is approx $60,000 to $70,000.

His bank account in USA is at Bank of America, approx balance $20,000. His W2 income is $90,000. He is currently renting but look at purchasing a house when his wife gets a visa to come here later this year.

Question:

Can we divide the balance by the # of account holders to drop his balance below $50,000 so that he does not have to file Form 8938.

He was told by his Bank of America client relationship manager that India has signed a treaty with USA to share all financial information of its citizens who may be subject to US Income taxes. It is making him nervous.


Last year he did his taxes online as single, though I believe it should be MFS? Wife or kids do not have ss# or ITIN. He has ss#. Should he apply for a ITIN for wife and possibly kids. The issue is how to get the original documents to IRS. There is no IRS office in India to my knowledge.

[Black Bart]

I got a referral to a potential new client today. The gentleman is an Indian citizen but has US Green Card (Just got it at the end of 2013). He is married but his wife and 2 kids are in Mumbai, India. He owns a house there and several bank and investment accounts in joint names with his wife and 2 children (16 and 20) and the aggregate value of the account when converted to US dollars is approx $60,000 to $70,000.

His bank account in USA is at Bank of America, approx balance $20,000. His W2 income is $90,000. He is currently renting but look at purchasing a house when his wife gets a visa to come here later this year.

Question:

Can we divide the balance by the # of account holders to drop his balance below $50,000 so that he does not have to file Form 8938.

He was told by his Bank of America client relationship manager that India has signed a treaty with USA to share all financial information of its citizens who may be subject to US Income taxes. It is making him nervous.


Last year he did his taxes online as single, though I believe it should be MFS? Wife or kids do not have ss# or ITIN. He has ss#. Should he apply for a ITIN for wife and possibly kids. The issue is how to get the original documents to IRS. There is no IRS office in India to my knowledge.

Sorry AT; I'm clueless and can only help by bumping this query back up top. You're a better man than I am -- anybody willing to open this can of worms at crunch-time deserves a medal for courage under fire (what further time-eating twists/turns could he possibly present with?). If there ever was a case screaming for an extension (assuming you don't run him off) and some summer work, this is it.

[Koss]

Form 8938

Yes, he should have filed MFS or MFJ. It is also possible that he should have filed a 1040NR, or that he was a dual-status alien for 2013.

For the wife and kids to get an ITIN, the IRS will still accept certified copies of most documents. And even if there is no IRS office over there, there might be an IRS rep available at the US embassy once or twice a month.

I agree with Bart's comment that this guy probably needs an extension.

With all that being said, why not just do the Form 8938 in order to be safe??

BMK

[ATSMAN]

Thank you all. After much reflection (so close to tax season start) and my lack of experience dealing with non citizen tax returns that are this complicated I have decided to call the gentleman up and give him 2 options:

1) If he wants me to handle it. I will need some extra time because I have not dealt with a similar situation. I will charge him what i charge my US citizen clients filing MFJ or MFS. I will not charge him for my learning time! So more than likely it will go on extension. The FBAR statements are due in June anyways.

2) If he is in a rush to get it done then I will not hold it against him. He is free to seek other professionals.

My gut tells me that he may have checked with other accountants and was quoted a fee that he was not happy with hence he asked his co-worker (my client) to get him a referral!


What would you folks charge such a client? Ballpark figures.

[AZUKHiker]

Fee estimate

For client's in similar situations I charge $280 to $320 depending on the complexity of the foreign investments i.e. PFICs, FBAR , form 8938 etc

[ATSMAN]

Thanks. That is in the ballpark.