• Marco Zawar MBA/LLM (Tax)

U.S Tax Advocate Service (TAS) released the 2020 purple book


The United States Tax Advocate Service (#TAS) released the

The 2020 Purple book presents 58 legislative recommendations with the aim strengthening taxpayers rights and to improve tax administration.

TAS highlighted under #Recommendation11 in the 2020 Purple Book that U.S taxpayers, and in particular #US #taxpayer living abroad facing increased reporting burden as a result of duplicate and overlapping tax filing requirements under

  • #FinCEN Report 114, Report of Foreign Bank and Financial Accounts (#FBAR) and

  • #FATCA #Form8938 Statement of Specified Foreign Financial Assets

The complexity is increased as Form 8938 "Statement of Specified Foreign Financial Assets" provides different thresholds in comparison to the FBAR reporting and in addition exempt assets to be reported under Form 938 8when they already reported under

  • Form 3520 – Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign gifts;

  • Form 5471 – Information Return of U.S. Persons With Respect To Certain Foreign Corporation;

  • Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund; or

  • Form 8865 – Return of U.S. Person With Respect to Certain Foreign Partnerships

TAS recommendation

To reduce the reporting burden of U.S Taxpayer TAS propose under recommendation #11to

  • eliminate duplicative reporting of assets on Form 8938 and the FBAR reporting

  • exclude financial accounts maintained by a foreign financial institution of which the U.S Citizen is a bona fide resident from reporting under Form 8938

The Authors thoughts

The proposed approach is a step in the right direction to relief from FATCA burden for U.S. Citizen leaving abroad but unfortunately did not provide any solution how U.S Citizen leaving abroad – and especially “accidental Americans” shall be treated under the FATCA regulations having a bona fide residency.

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©2019 by Marco Zawar