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Are you a US taxpayer? Do you have at least $10,000 in overseas accounts? Its time to put those annual disclosure statements in the mail and quickly. Let me explain.
Each year by June 30th, US taxpayers are obliged to report all foreign financial accounts in which they have either a beneficial interest or signature authority, so long as the aggregate value of all the accounts exceeds $10,000 at any time during the calendar year. The form is known as the FBAR.
You must accurately disclose the highest value of each account during the previous calendar year on your FBAR so make sure you go back through your bank and brokerage statements to check.
Let me give you a few examples:
Iggy Noramus is a US citizen who keeps all of his money in the United States. He happily watches the value of his dollars depreciate and completely ignores important warning signs like the Treasury Department confiscating pension funds to make up for their budget shortfalls. Iggy does not need to file the FBAR.
Guy Sharpe is also a US citizen who took action in 2010 to set up a foreign bank account in Hong Kong after reading an issue of Sovereign Man: Confidential. He only funded the account with $1,000, figuring that he just wanted to have an overseas account ready in an emergency. Guy doesnt need to file the FBAR either.
Dee Pockets is a US citizen with four overseas accounts. One personal account in Switzerland has just over $1 million, one business account in Singapore has $5 million, one small account in Belize has just $50, and a Cayman brokerage has $250,000. Dee must file the FBAR and declare each of the four accounts.
Goldie Bugg is another US taxpayer who established an account in 2010 with GoldMoney; she opened the account with only $8,000 at the beginning of the year, but the market value of her gold peaked at $11,500 during 2010. Goldie must file an FBAR as well.
The gold ruling is new this year, and we first reported this back in March. The Financial Crimes Enforcement Division (FinCEN) made it quite clear that any gold held in the custody of another firm or individual constituted a foreign financial account and needs to be reported on the FBAR.
Frankly Im starting to believe that this was part of a larger movement to recast gold as a financial instrument, subjecting precious metals to regulation, control, and potential confiscation.