Fbar for employer accounts

Go Back   Expat Forum For People Moving Overseas And Living Abroad > Expat Forum General and International > Expat Tax

Expat Tax This forum is for tax related queries and discussions for all expats.

Fbar for employer accounts


Reply
 
Subscribe to this Thread Thread Tools
  #1 (permalink)  
Old 23rd May 2020, 03:02 PM
New Member
 
Join Date: May 2020
Posts: 5
Rep Power: 0
Cdnexpat4 is on a distinguished road

Default Fbar for employer accounts

Hi, I am a US citizen in Canada potentially looking at stepping up my career into management.

I am worried about the viability however due to fbar requirements. Specifically, having to file an fbar for accounts I may have signing authority over but no financial interest in, specifically employer bank accounts.

Personally, if i owned a Canadian business and i was Canadian only, i wouldn't want an American to be a manager in my business as i wouldn't want my bank and money business being reported to the US government. I'm sure many Canadian businesses would feel this way.

As I'm looking for work now, obviously if i was a manager with signing authority I'd have to report my employer's accounts, and many employers would not want me to do that. But I'd have to be honest and explain I'd be obligated to do that.

And I'm quite sure I wouldn't get hired. Filing fears is a material requirement I'd have to be honest about during the hiring process.

I'm looking at some specifically Canadian businesses I'd like to work for with no US interests so they wouldn't already be filing fbar reports of their own.

Am I shooting myself in the foot and disqualifying my career with many employers? I feel like I will never be able to move ahead in life or do what I want for a living with the companies I'm interested in because of the jail sentence that is the fbar and being a US citizen expat.

Thanks for your input!

Reply With Quote Quick reply to this message
  #2 (permalink)  
Old 23rd May 2020, 03:47 PM
Bevdeforges's Avatar
Super Moderator
 
Join Date: Nov 2007
Location: deepest, darkest Essonne
Posts: 47,456
Rep Power: 23345
Bevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond repute
10275 likes received
1478 likes given

Users Flag! Originally from usa. Users Flag! Expat in france.
Default

You're far from the first to have noticed this. Over here in Europe, there are companies that shy away from hiring American citizens into positions where they would have signing authority over company accounts. OTOH, if you do have to report company accounts in that "signing authority but no financial interest" category, you CAN just fill in the name and address of your company/employer and that's it. Read through the FBAR instructions carefully and they tell you to do that - (Instructions for Part IV):
Quote:
. In addition, United States person who (1) resides
outside of the United States, (2) is an officer or employee of an employer who is physically
located outside of the United States, and (3) has signature authority over a foreign financial
account that is owned or maintained by the individual's employer should only complete Part I
and Items 34-43 of Part IV.
No balance information and only identifying info on your employer, not anything on the specific accounts themselves.

Reply With Quote Quick reply to this message
  #3 (permalink)  
Old 23rd May 2020, 04:20 PM
New Member
 
Join Date: May 2020
Posts: 5
Rep Power: 0
Cdnexpat4 is on a distinguished road

Default

Quote:
Originally Posted by Bevdeforges View Post
You're far from the first to have noticed this. Over here in Europe, there are companies that shy away from hiring American citizens into positions where they would have signing authority over company accounts. OTOH, if you do have to report company accounts in that "signing authority but no financial interest" category, you CAN just fill in the name and address of your company/employer and that's it. Read through the FBAR instructions carefully and they tell you to do that - (Instructions for Part IV):
Quote:
. In addition, United States person who (1) resides
outside of the United States, (2) is an officer or employee of an employer who is physically
located outside of the United States, and (3) has signature authority over a foreign financial
account that is owned or maintained by the individual's employer should only complete Part I
and Items 34-43 of Part IV.
No balance information and only identifying info on your employer, not anything on the specific accounts themselves.
I didnt realize that, thanks for the clarification. That's not as bad as I thought.

However I'm not sure how I'd make explaining that palatable to a potential employer.

"I'm American and although I don't have to give account specifics, I still have to advise the IRS I have signing authority over company accounts due to my position."?

As an employer, I think that would still turn me off hiring an American as a manager.
Any thoughts?

Thanks again, I really appreciate it!

Reply With Quote Quick reply to this message
Sponsored Links
Advertisement
 
  #4 (permalink)  
Old 23rd May 2020, 07:56 PM
Bevdeforges's Avatar
Super Moderator
 
Join Date: Nov 2007
Location: deepest, darkest Essonne
Posts: 47,456
Rep Power: 23345
Bevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond reputeBevdeforges has a reputation beyond repute
10275 likes received
1478 likes given

Users Flag! Originally from usa. Users Flag! Expat in france.
Default

It can depend on the employer, but mostly it seems to be smaller employers who might have a problem with the idea. Larger companies have probably encountered the situation before and realize what the situation is.

Now, if you get into the position where you are a company director or holder of 10% or more of the stock of the company, that does bring with it some pretty heavy reporting obligations for your employer.

Reply With Quote Quick reply to this message
  #5 (permalink)  
Old 23rd May 2020, 10:03 PM
New Member
 
Join Date: Aug 2019
Posts: 47
Rep Power: 0
Jca1 is on a distinguished road
3 likes received
3 likes given

Default

Quote:
Originally Posted by Cdnexpat4 View Post
I didnt realize that, thanks for the clarification. That's not as bad as I thought.

However I'm not sure how I'd make explaining that palatable to a potential employer.

"I'm American and although I don't have to give account specifics, I still have to advise the IRS I have signing authority over company accounts due to my position."?

As an employer, I think that would still turn me off hiring an American as a manager.
Any thoughts?

Thanks again, I really appreciate it!
Personally I don't think I'd tell the employer as no company information other than that you work there in management is being disclosed.

Reply With Quote Quick reply to this message
  #6 (permalink)  
Old 24th May 2020, 03:19 PM
Member
 
Join Date: Jul 2011
Location: Canada
Posts: 2,569
Rep Power: 0
Nononymous is on a distinguished road
476 likes received
10 likes given

Users Flag! Originally from canada. Users Flag! Expat in canada.
Default

If you are serious about staying in Canada, get Canadian citizenship as soon as you can, then if it's possible for you, cease all US tax compliance, including FBAR reporting of employer's accounts. Ultimately you may need to either renounce, lie to employers, or avoid any opportunities that require signing authority.

Reply With Quote Quick reply to this message
  #7 (permalink)  
Old 24th May 2020, 03:20 PM
Member
 
Join Date: Jul 2011
Location: Canada
Posts: 2,569
Rep Power: 0
Nononymous is on a distinguished road
476 likes received
10 likes given

Users Flag! Originally from canada. Users Flag! Expat in canada.
Default

delete - missed earlier comment

Reply With Quote Quick reply to this message
  #8 (permalink)  
Old 24th May 2020, 09:05 PM
New Member
 
Join Date: May 2020
Posts: 5
Rep Power: 0
Cdnexpat4 is on a distinguished road

Default

Quote:
Originally Posted by Nononymous View Post
If you are serious about staying in Canada, get Canadian citizenship as soon as you can, then if it's possible for you, cease all US tax compliance, including FBAR reporting of employer's accounts. Ultimately you may need to either renounce, lie to employers, or avoid any opportunities that require signing authority.
Do you think all of that would be necessary? Jca1 indicated I'd really only be disclosing my employer and the fact that's I'm in management, thus no confidential employer info and thus not necessary to say anything to employer.

Bevdeforges also kindly pointed out only reporting the employer name and address is actually required and not actual account info, and that the real reporting obligations kick in at director or 10% of stock holding only.

So I'm just curious why you feel such drastic action would be more advisable.

Thanks everyone for your opinions, t appreciate them and the variety is food for thought.

Reply With Quote Quick reply to this message
  #9 (permalink)  
Old 25th May 2020, 01:51 AM
Member
 
Join Date: Jul 2011
Location: Canada
Posts: 2,569
Rep Power: 0
Nononymous is on a distinguished road
476 likes received
10 likes given

Users Flag! Originally from canada. Users Flag! Expat in canada.
Default

Apologies, I've conflated the personal and the professional issues.

On the professional front, I really don't know if the quite limited FBAR requirement for signing authority would be a problem for a Canadian employer. Cross that bridge when you come to it, I guess. Possibly it's a non-issue, but we've heard reports from people in Europe who feel that their career prospects are damaged because of US citizenship. Certainly partnerships and things like that are much trickier once there are US filing requirements involved; not surprisingly, people outside the US tend not to want to go into business with Americans.

On the personal front, if you are planning to spend the rest of your life in Canada, then it makes sense to not be filing US tax returns unless you have some significant financial interests in the US. In addition to the hassle and cost if you pay someone to do your returns, US tax compliance means you will miss out on savings opportunities available to Canadians, such as TFSA accounts and no capital gains tax on the sale of a primary residence, among others. You don't necessarily need to renounce US citizenship; once you have Canadian citizenship you are protected from any attempt at collection by the IRS, so you can simply cease filing and ignore the US government. This again assumes no US financial ties or expected inheritance of property etc.

Reply With Quote Quick reply to this message
  #10 (permalink)  
Old 25th May 2020, 02:30 AM
New Member
 
Join Date: May 2020
Posts: 5
Rep Power: 0
Cdnexpat4 is on a distinguished road

Default

Quote:
Originally Posted by Nononymous View Post
Apologies, I've conflated the personal and the professional issues.

On the professional front, I really don't know if the quite limited FBAR requirement for signing authority would be a problem for a Canadian employer. Cross that bridge when you come to it, I guess. Possibly it's a non-issue, but we've heard reports from people in Europe who feel that their career prospects are damaged because of US citizenship. Certainly partnerships and things like that are much trickier once there are US filing requirements involved; not surprisingly, people outside the US tend not to want to go into business with Americans.

On the personal front, if you are planning to spend the rest of your life in Canada, then it makes sense to not be filing US tax returns unless you have some significant financial interests in the US. In addition to the hassle and cost if you pay someone to do your returns, US tax compliance means you will miss out on savings opportunities available to Canadians, such as TFSA accounts and no capital gains tax on the sale of a primary residence, among others. You don't necessarily need to renounce US citizenship; once you have Canadian citizenship you are protected from any attempt at collection by the IRS, so you can simply cease filing and ignore the US government. This again assumes no US financial ties or expected inheritance of property etc.
Thank you for the clarification, I appreciate your detailed response.

I do plan on living in Canada for good as I'm married to a Canadian, and will get my citizenship at some point. However that said I do have family in the US, so return frequently, hence why I wouldn't even be able to cease US tax compliance, as they could stopmpeople at the border should the IRS ever tie your tax compliance to your passport and border patrol sees it, wouldn't surprise me at all the way things are going, I'm sure that will be done nitwits big idea sometime soon.

Keeping my US citizenship is just less hassle for returning when I need to, and also for times such as now with covid when I wouldn't be able to return without cause passport due to border closures. Something like covid which I wouldn't have guessed a year ago, show we never know what may come up, and somewhat of a benefit of keeping a US passport as well. Crazy times.

That said, as you mentioned the US passport is also a jail sentence in other ways, fbar concerns such as my original post and tax filing costs, as well as losing out on TFSA benefits (although I do take advantage of rrsps since they are included in the tax treaty). My house although increased in value, wont hit over the 500k/2 (married) capital gain exemption any time soon (especially now with housing price drops with covid).

So I guess it's a balance of the benefits vs cost of US citizenship and practicalities of basic life as an expat. I just wish the idiocy of citizenship based taxation (instead of the proper, and fair, residency based) didn't exist, and the fbar is just the worst.

My spouse isn't happy about reporting our personal business to the IRS either, much less the other financial caveats you mentioned. And the fact the fbar is administered by Financial Crimes Enforcement Network? What other country in the world basically suspects you're a financial criminal just by being president elsewhere? Just unreal.

But thanks again I appreciate the input. 🙂

Reply With Quote Quick reply to this message
Reply


Quick Reply
Message:
Options

Register Now

In order to be able to post messages on the Expat Forum For People Moving Overseas And Living Abroad forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.
User Name:
Password
Please enter a password for your user account. Note that passwords are case-sensitive.
Password:
Confirm Password:
Email Address
Please enter a valid email address for yourself.
Email Address:
Location
Where you live
Expat From Country
Please select the country you originate from. This will appear as a flag when you make posts on the site.
Expat To Country
Please select the country you have either moved to or want to relocate to. This will be presented on the site when you make posts.

Log-in


Thread Tools

Posting Rules
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


FORUM PARTNERS

ExpatForum.com is owned and operated by VerticalScope Inc.

Retiring Overseas Guides | Moving Overseas Guides | Cost of Living | Health Care Guides


All times are GMT. The time now is 06:31 AM.


Powered by vBulletin®
Copyright ©2000 - 2020, vBulletin Solutions, Inc.
Search Engine Friendly URLs by vBSEO
vBulletin Security provided by vBSecurity v2.2.2 (Pro) - vBulletin Mods & Addons Copyright © 2020 DragonByte Technologies Ltd.