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Friday, August 01 2014 @ 10:26 PM EDT

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The External Revenue Service - Coming To Get Your Ass In Panama
Authored by: Don Winner on Friday, April 06 2012 @ 01:36 PM EDT

@susan: The complete and current instructions for filing IRS Form 8938 are located here - http://tinyurl.com/74mqtnb.

The reporting thresholds regarding who must file this form, and under what conditions hinge on a couple of factors. They change depending on whether or not you live in the United States or overseas. They change depending on whether you are single, married, filing jointly or seprately, etc. And, the reporting requirements vary depending on the value of the assets held.

There are all kinds of different scenarios and examples, depending on any one set of individual circumstances. And, I specifically said in this article that if falls to every individual to check these filing instructions for Form 8938 to determine whether or not they have to file. For example, the numbers you cited as $300K for single and $600K for joint filers - is wrong. Here's what the instructions say:

"Taxpayers living abroad. If your tax home is in a foreign country and you meet one of the presence abroad tests described next, you satisfy the reporting threshold if you are not filing a joint return and the total value of your specified foreign financial assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year.

If you are married and file a joint income tax return, you satisfy the reporting threshold only if the total value of all specified foreign financial assets you or your spouse owns is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year."

But all of that hinges on your qualification as "living overseas" through the "presence abroad" tests. Did you (or your spouse) spend 30 days or more in the US last year? If so, then you don't qualify for these levels of exemptions.

And again, the focus and thrust of this article is NOT on indivudals who are following the law, doing everything correctly, and trying to file as required and pay their taxes as required. This article focuses on those people who have been depending on the privacy and secrecy laws in Panama to hide their assets. Those who are not filing as required. Those who have set up Panamanian corporations and foundations to hide from the IRS and not pay their taxes as required. Since you are probably not trying to hide from the IRS Susan, then this article was not aimed at you.

Don