FBAR - Do I need to report my Canadian account to the IRS?

[CaliforniaWifey]

I'm planning on moving back to Canada, I am a PR here in the US.

In 2014, my Canadian bank account went from $3,000 to $30,000 after I sent some money for the eventual trip over (I now have a balance of over $200,000CAD as of Feb 2016)

This money is not generating any interest or income. It's just sitting in my Canadian bank account.

Question: I NEVER reported this to the IRS. I had no idea I might have to do this.. Do I? Am I in trouble now?

I still live in the US currently.

 

[keesio]

If the combined value of your foreign accounts (like Canadian bank accounts) ever exceeded $10K USD during the year, then all foreign accounts must be reported in "FBAR" form for that year to the US State Dept (not the IRS). It doesn't matter if any interest is earned. It must be reported. There is also FATCA for the IRS, which is similar to the FBAR but the threshold is much higher (200K USD)

If you never filled out an FBAR/FATCA form and you were supposed to, then yes, you are in violation of US tax laws. As for if you are "in trouble", well... each situation is different. The IRS/US state dept has been known to be lenient for people who recognize that they have been non-compliant and wish to be compliant by being pro-active and sending out the forms for the last 3 years. They key thing if they are lenient is if you don't owe any (or minimal) back taxes. Now, the vast majority of these cases usually applied to Americans living abroad with no/minimal ties to the US (they have not lived in the US for awhile). Your case is less common as the US is your current residence so I don't know how lenient they will towards people in your scenario. My bet is that they will likely be lenient also because you didn't earn any interest/income from the accounts but I can't say with any certainty.

If you are moving back to Canada soon AND plan on giving up your PR AND have not been a long time PR (less than 5 years), then it could be that you could just give up your PR, come to Canada, cut your ties with the US and be done with it. I don't know how this will all pan out however and how the US would regard you (if they ever found out).

 

[jes_ON]

I'm planning on moving back to Canada, I am a PR here in the US.

In 2014, my Canadian bank account went from $3,000 to $30,000 after I sent some money for the eventual trip over (I now have a balance of over $200,000CAD as of Feb 2016)

This money is not generating any interest or income. It's just sitting in my Canadian bank account.

Question: I NEVER reported this to the IRS. I had no idea I might have to do this.. Do I? Am I in trouble now?

Welcome to our nightmare.

Yes, you need to complete the FBAR for 2014 and 2015. If you owe no taxes and you're only late by 1 year, just complete the forms for both years, you will be OK. If you are asked to explain why the 2014 form is late, you will be in the company of tens of thousands who said some variation of "I didn't know, I just found out."

Don't know how long you've been in the USA, but it gets trickier if you also have other investment accounts in Canada (it's not just bank accounts). And as long as you hold PR status, you will have to file the FBARs even after you return to Canada.

As for the FATCA (Form 8938).. The 200K (USD) threshold applies to those living outside the USA... Unless the account is at a Canadian branch of a US Bank, since you were a resident of the US, you're required to file this form with your US Tax return if your foreign accounts are USD 50K or more at the end of the year, or $75K at any time of the year (if you are single; thresholds double if you are married).

https://www.irs.gov/Businesses/Comparison-of-Form-8938-and-FBAR-Requirements

Generally, if you make a good faith effort to correct these omissions, you will be forgiven... If you can afford it and are experiencing high anxiety, see a cross-border tax attorney (expect a few thousand dollars), otherwise, just know that you will eventually muddle through like the rest of us. Good luck!