- 1 FBAR for PayPal, Apple Pay, and Virtual Wallets
- 2 PayPal and FBAR
- 3 Apple Pay, Virtual Wallets, and FBAR
- 4 Late Filing Penalties May be Reduced or Avoided
- 5 Current Year vs Prior Year Non-Compliance
- 6 Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)
- 7 Need Help Finding an Experienced Offshore Tax Attorney?
- 8 Golding & Golding: About Our International Tax Law Firm
FBAR for PayPal, Apple Pay, and Virtual Wallets
The FBAR refers to foreign bank and financial account reporting. Each year, U.S. taxpayers across the globe who meet the threshold requirements for having to report their foreign bank and financial accounts will do so by filing an annual FBAR — which is submitted directly online to FinCEN on FinCEN Form 114. While the majority of the time, taxpayers will have foreign bank and investment accounts to report such as a savings account, a current account, or an investment account such as pooled funds (Mutual Funds and ETFs), there are many other types of accounts that a taxpayer may have to file as well. Let’s take a look at these other increasingly common types of accounts to determine whether or not these types of accounts are reported annually to the IRS on the taxpayer’s FBAR form.
PayPal and FBAR
PayPal is still a common method that some taxpayers use to earn money and many taxpayers may maintain one or multiple PayPal accounts. If the taxpayer has a PayPal bank account in which they are holding money and that account is located outside of the United States, then presumably they would have to include the PayPal account on the FBAR. This is different than if the account is located in the United States but the taxpayer lives abroad. In this latter scenario where the account is located in the United States, it is typically not reported on the FBAR.
Apple Pay, Virtual Wallets, and FBAR
Unfortunately, the Internal Revenue Service does not provide a specific guide about each and every virtual wallet or similar type of payment method that may be reported on the FBAR. Typically, if the money is considered to be in an account or an account equivalent, then it is reportable — but not all types of payment methods are reportable. For example, if a person has a credit card linked to a bank account, that does not necessarily mean that the credit card itself has to be reported, because the credit card is not an account. Likewise, if the credit card is attached to an account that is located outside of the United States and the taxpayer owns the account located outside of the United States or has signature authority, chances are the account itself is reportable.
*When it comes to cryptocurrency wallets, the current rule is that a cryptocurrency wallet or account is not reportable so long as there is only cryptocurrency in the account and not a hybrid of currency and cryptocurrency. It is also important to note that this is for FBAR purposes, and even if an account is not reportable for FBAR, it may still be reportable for FATCA.
Late Filing Penalties May be Reduced or Avoided
For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.
Current Year vs Prior Year Non-Compliance
Once a taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.
Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)
In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties.
Need Help Finding an Experienced Offshore Tax Attorney?
When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting.
Golding & Golding: About Our International Tax Law Firm
Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure.
Contact our firm today for assistance.