Roy Chaney: So, I see it's the top of the hour. For those of you just joining, welcome to today's webinar: Streamlined Domestic Offshore Procedure, FBAR and Form 8938. We are glad you're joining us today. My name is Roy Chaney, and I may Senior Stakeholder Liaison with the Internal Revenue Service. I will be your moderator for today's webinar, which is slated for 120 minutes.

Please note that this webinar will also be translated in Korean once the topic content starts.

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please note continuing education credit or certificates of completion are not offered if you view any version of our webinars after the live broadcast. Again, we hope you won't experience any technology issues. But if you do, this slide shows helpful tips and reminders. We posted a technical help document you can download from the materials section on the left side of your screen. It provides the minimum system requirements for viewing this webinar, along with some best practices and quick solutions. If you complete it and pass your systems check and are still having problems, try one of the following. One, close the screen where you are viewing the webinar and relaunch it. Number two, click on the settings on your browser viewing screen and select HLS. Now you should have received today's PowerPoint in a reminder email, but if not, no worries. You can download it by clicking on the materials drop-down arrow on the left side of your screen as shown on this slide. Closed captioning is also available for today's presentation. If you're having trouble hearing the audio through your computer speakers, please click the closed captioning drop-down arrow located on the left side of your screen. This feature will be available throughout the webinar. And if you have a topic specific question today please submit it by clicking the ask question drop-down arrow to reveal the text box. Type your question in the text box and click send. Very important, please do not enter any sensitive or taxpayer specific information. During the presentation we will take a few breaks to share knowledge-based questions with you. At those times a polling style feature will pop up on your screen with the question and multiple-choice answers. Select the response you believe it is correct by clicking on the radio button next year selection and click submit. Some people may not get the polling question. This may be because you have your pop-up blocker on. So please take a moment to disable your pop-up blocker now so you can answer the questions. We have included several technical documents that describe how you can allow pop-up blockers based on the browser you are using. We have documents for chrome, Firefox, Microsoft edge and Safari for Macs. You can access them by clicking on the materials drop-down arrow again on the left side of your screen. We are going to take some time and test the polling feature. Here is your opportunity to ensure your pop-up blocker is not on so you can receive the polling questions throughout the presentation. So let's try it. How many times have you attended an IRS national webinar? Is it A first time, B, one through five times, C, six through 10 times, D 11 through 15 times or E 16 or more. Please take a moment and click the radio button that corresponds to your answer. Let me reread the question. How many times have you attended an IRS national webinar. A, this is your first time B1 through 5C6 through 10 D 11 through 15 or E 16 or more. I will give you a few more seconds so you guys can make your selection. Okay we are going to stop the polling now. Let's see how often you have attended a national webinar. The first time attendees are 21%. Welcome. We are glad you're joining us today. For those of you who have joined us for multiple webinars please welcome back. So let's take a look. I see now let me take a look at the percentages. They are coming up. We are still getting the data as we speak. I see now that 13% of you have attended one through five webinars. 44% of you have attended 11 through 15 webinars. And while another 44% of you have attended 16 or more webinars. We hope you have received the polling question and was able to submit your answer. If not, now is the time to check your pop-up blocker to make sure you have it turned on. Again, welcome and thank you for joining us for today's webinar. Before we move along with our session, let me make sure you are in the right place. Today's webinar, Streamlined domestic offshore procedures FBAR and form 8938. This webinar is scheduled for approximately 120 minutes. Let me introduce today's speakers. We have Christine Stone and Minh Tran who are both technical specialist for the offshore arrangements network inside the IRS's large business and international division going to turn it over to Christine to begin the presentation. Christine, the floor is yours. Christine: thank you, Roy. Welcome everyone.

Today we are going to be covering three topics. First we will talk about the Streamlined domestic offshore procedures focusing on a taxpayer with the US presence. Next we will provide an overview of the report of foreign bank and financial accounts commonly referred to as the FBAR. We will concentrate on who must file and the potential penalties for failure to file and lastly we will engage in a high-level discussion of the form 8938 statement of specifying foreign financial assets filing requirements and the penalties for failure to file. [Korean transcript not available] please advance slide.

Christine: the Streamlined advanced filing procedures which we call Streamlined for short, is one of several offshore compliance options. And when we say offshore compliant, weaning both income tax compliance and other reporting requirements of US taxpayers with foreign financial assets, such as foreign bank accounts, or foreign entities. The purpose of Streamlined is to provide an avenue for taxpayers to voluntarily come into compliance, resolve their tax and penalty obligations, when there is no potential [disclosure]. These procedures are for taxpayers who can certify their actions were non-willful. In return, the service offers a limited disclosure period and a set penalty structure. [Korean transcript not available] Please advance slide.

Christine: The original Streamlined procedures announced in 2012 were very restrictive. They were significantly modified and expanded in 2014. The 2014 Streamlined procedures are open-ended.

However, the service may close the procedures at any time. Streamlined is divided into two broad categories of taxpayers, domestic and foreign, determined by a non-residency test that is unique to Streamlined. Domestic or FBO taxpayers failed to meet these nonresidency requirement. We will discuss the Streamlined nonresidency requirement later. [Korean transcript not available] Please advanced slide.

Christine: Streamlined taxpayers are required to certify under the penalties of perjury that their actions were nonwillful. They must provide a detailed narrative of the facts with their submission forms explaining why their noncompliance was due to nonwillful conduct. After making a Streamlined submission taxpayers could be subject to an examination under regular examination selection procedures. And taxpayers must maintain compliance for all future years. [Korean transcript not available] please advance slide. Christine: The benefit of entering Streamlined procedures include a limited disclosure period. This means the service will only look at the last three years of income tax returns and the last six years of FBARs. The service will not look at compliance for taxpayers deemed eligible to participate. Penalties are limited and determined by which category of filer that you fall under. Streamlined foreign or Streamlined domestic. There are no accuracy, delinquency, FBAR or failure to file international information return penalties for both domestic and foreign taxpayers. But, Streamlined domestic taxpayers will be subject to a 5% miscellaneous offshore penalty, referred to as the FDO MOP that we will discuss in a few slides. Streamlined is a submission processing procedure. Upon receipt, the returns are processed like every other return processed by the service except they are afforded the special penalty of suppression. Again, taxpayers could be subject to an examination under regular examination selection procedures.

[Korean transcript not available] Please advance slide. Christine: The Streamlined procedures are only available for US individuals estates, non-US persons and domestic or offshore business user not eligible. A Streamlined taxpayer must have failed to report income related to foreign financial assets and pale tax due with respect to those assets. The failure to report income means gross income amounts, not the net tax effect. Serve for example when a US taxpayer earns foreign wages and claims of foreign income exclusion effectively reducing taxable income to zero, they still have a filing requirement. Or when a taxpayer claims a foreign tax credit to offset tax due, they still have a filing requirement. The foreign earned income exclusion and the foreign tax credit are elections that the taxpayer must voluntarily request on a filed income tax return to offset their income or tax due. This is not to be confused with a taxpayer who does not meet the dollar threshold required to file an income tax return. A taxpayer who does not meet the income threshold to file a tax return may choose to apply to the Streamlined procedures and file returns if they have other delinquent international information returned. But remember, for Streamlined, there must be unreported offshore income. Taxpayers must be able to certify that their failure to report the income and assets was due to nonwillful conduct. Nonwillful conduct is conduct that is due to negligence. Inadvertent or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law. Other eligibility requirements state the service cannot have initiated a civil examination regardless of whether the exam relates to the offshore noncompliance and taxpayers must have a valid taxpayer identification number. [Korean transcript not available] please advance slide Christine: It is advantageous to be classified as a Streamlined foreign taxpayer because there are zero penalties. And you can be either a filer or unknown filer. SFO taxpayers must meet the nonresidency test. All taxpayers who fail the Streamlined nonresidency requirement default to Streamlined domestic. Domestic Streamlined taxpayers cannot been non-filers. They will have to provide amended returns as part of their submissions. They cannot file delinquent form 1040s. [Korean transcript not available] Please advance slide.

Christine: Domestic Streamlined taxpayers are subject to a 5% title 26 miscellaneous offshore penalty, the SDO MOP. The penalty is equal to 5% of the highest aggregate balance or value of the taxpayers foreign financial assets during the years in the covered tax return and the covered FBAR period. For this purpose, the highest aggregate balance or value is determined by aggregating the year-end account balances and year end asset values for each foreign financial asset subject to the penalty. Taxpayers need to sum the balance for each year of the disclosure period. The one year with the highest aggregate balance or value from among all the years will be multiplied by 5% to determine the MOP. There are three categories of assets that are included in the highest aggregate balance penalty base. They include a foreign financial account that was required to be reported on an FBAR but was not. A specified foreign financial asset that should have been but was not reported on a form 8938, and for each of the three years in the covered tax return period, all foreign financial accounts and assets for which gross income was not reported for that year. We will cover what a foreign financial account is for FBAR purposes and what a specified foreign financial asset is for form 8938 later in the presentation. [Korean transcript not available] Please advance slide. Christine: In order to pass the nonresidency test in any one of the most recent three years you cannot have had a US abode and you must be physically outside the US for 330 days. In other words, you can only be in the US for no more than 35 days. This is a bright line test and is not negotiable. You only have to meet this test for one of the most recent three years. If you do not meet the nonresidency test, you will automatically default to the Streamlined domestic. Which means you cannot be a non-filer and you will be subject to the 5% penalty. If you filed a joint return, both taxpayers must meet to the nonresidency test. If one meets it and the other does not, both will be classified as Streamlined domestic. [Korean transcript not available] Please advance slide. Christine Why don't we have a pause here and take on our first polling question. Roy? Roy: sounds like a great idea. Okay, audience it's time it looks like for our first polling question. Please take a moment and answer the following question. For a taxpayer to be eligible for Streamlined domestic offshore procedures, they must A, B an individual or an estate with a valid taxpayer identification number,, B, have failed to report income related to foreign financial assets, C, be able to certify they were nonwillful,, D, not be currently under examination, E, have failed to meet the Streamlined nonresidency requirements or F, all of the above. Click the radio button that best answers the question. I will give you a few more seconds to make your selection. [Korean transcript not available] please answer the question. Roy: All right. We are going to give you guys another five to seven seconds to go ahead and make your selection. [Korean transcript not available] Roy: All right. We are going to stop the polling now and let's share the correct answer on the next slide. [Korean transcript not available] Please advance slide. Roy: All right. And the correct responses F, all of the above so let's see how well you did with this question. Oh, I see that 92% of you responded correctly. My goodness.

That's a wonderful response rate. Christine I will go ahead and turn it back over to you.

Christine: Thank you, Roy. Here is a simple example to compute the SDO MOP. Assume the taxpayer has three foreign after assets, to make accounts that was open 10 years ago and a rental home that was purchased in year three of the disclosure period the taxpayer did is not file a FBAR or form 8938 for any year in the file the original form 1040. The taxpayer did not report the interest and dividends earned for bank account X, and no income was earned related to bank account Y. taxpayer also did not report rents received from the rental property. We said earlier, the penalty applies to assets that were required to be reported on an FBAR and on form 8938 but were not. Or if the assets were reported on an FBAR and form 8938, were tax noncompliant. Rental real estate is not an asset is required to be reported on an FBAR or form 8938, thus it is not included in the SDO MOP penalty base. It does not matter that it was tax noncompliant, both tax noncompliant and it was not reported on FBAR or form 8938 so it must be included in the computation. Even though bank account Y was tax compliance, the taxpayer failed to report bank account Y on a timely filed FBAR and form 8938 for all years, thus bank account Y's year-end value is included. As you can see on the slide, we entered the year end value for each asset separately, then we totaled all asset values for each year and selected the year with the highest aggregate balance, which in this case is year five, with $1 million, and multiply that by 5% penalty rate. In this example, the 5% SDO miscellaneous offshore penalty would be $50,000. [Korean transcript not available] Please advance slide. Christine: Just like filing for any other return, the service will not send you a confirmation or receipt of your filing. Streamlined procedures follow the same routine for processing returns, except they receive a favorable penalty suppression. If you would like confirmation of receipt, use certified or registered mail with return receipt requested. You will only hear from the IRS if your submission was incomplete and needs perfection, or if your returns were later selected for examination. Streamlined procedures are a federal program. Adjustments made it to your federal returns could impact your state return, requiring you to file separate amended state tax returns. [Korean transcript not available] please advance slide. Christine: Roy, let's do that second polling question now. Roy: all right thank you. Audience I hope you're ready is time for a second polling question, and it states, the 5% SDO miscellaneous offshore penalty is applied to the year with the highest balance, comprised of A, foreign financial accounts required to be reported on FBAR that were not reported, B, specified foreign financial assets required to be reported on form 89 38, that were not reported, C, specified foreign financial assets that were tax noncompliant or D, all of the above.

Please take a moment and click the radio button that best answers the question. I will give you a few more seconds to make your selection. [Korean transcript not available] Please answer the question. Roy: All right. We are going to go ahead and give you a few more seconds and stop the polling and we will share the correct answer on the next slide. [Korean transcript not available] Please advance slide. Roy: And the correct answer is D, all of the above. So let's take a look at the results. Let's see how well you all did with this question. I see that 85% of you responded correctly. Minh, I will go ahead and turn it over to you now. [Korean transcript not available] Please advance slide.

Minh: thanks, Roy. Our next topic is a report of foreign bank and financial accounts commonly called FBAR. let's look at who is required to file. There are several key elements to consider in all of these criteria must be met. All US persons are required to file if they meet the other filing requirements. US persons are citizens or residents of the United States determined by green card status, or the substantial presence test. US persons are also domestic entities which include corporations, partnerships and trusts. US persons status is determined on a yearly basis, so a taxpayer could be a US person one year but not another. A US person must have a financial interest in, or signature authority over a foreign financial account. Financial interests can be direct or indirect. A direct interest refers to the owner of record or holder of legal title. This is usually the name listed on the account as owner or beneficial owner. If more than one name is listed as a holder of record then each account holder who is a US person holds a financial interest in the account. Other financial interests or indirect interests happens when the holder of record is acting on behalf of the US person as an agent, nominee, attorney or in some other capacity. An indirect interest could also be present when a US person has interest in the stock or profits of a foreign corporation, or a shell corporation, which has no business activities that merely holds investment assets. Or when the US person is the grantor of a foreign trust. Signature authority over for an account occurs when a person can control the disposition of assets by direct communication to the bank that maintains the account. It also refers to persons with authority under general powers of attorney, or powers of authority. For FBAR purposes, if the taxpayer can withdraw money from the account in which he or she is not the account holder and he or she has authority and would be required to include that account on an FBAR. The authority can be written or otherwise including withdrawal and other account maintenance instructions by letter, fax, telephone or in person. The next criteria is that it must be a financial account in a foreign country. Financial accounts include bank accounts such as savings accounts, checking accounts and time deposits, securities accounts, such as brokerage accounts and securities derivatives or other financial instruments accounts commodity futures or options accounts, insurance policies with a cash value such as a whole life insurance policy, mutual funds or other pool funds also foreign retirement plans, which are reportable on FBAR unless they meet strict exceptions. The account must be capped in a foreign financial institution where foreign means outside of the US. The United States includes the states of the United States and the District of Columbia, the territories of the United States and the Indian lands as defined in the Indian gaming regulatory act. The actual location of an account, not the nationality of the financial institution which the account is held determines whether the account is in a foreign country. Any financial account except accounts maintained with the US military banking facility that is located in a foreign country should be reported. Even if the account is held with the branch of US financial institution located abroad. Accounts of foreign financial institutions located in the United States are not considered foreign accounts for FBAR. Lastly the aggregate balance in these accounts maintains a $10,000 at any time during that year. So, to summarize, the taxpayer must be a US person who has a financial interest in, or signature authority over a foreign financial account or accounts where the combined balances exceed $10,000 on any day on the calendar year.

[Korean transcript not available] Please advance slide Minh: Let's discuss the FBAR filing threshold in more detail and then we walk through a simple example. A single account with a balance exceeds $10,000 on any given day of the calendar year will trigger an FBAR filing requirement. An FBAR filing requirement may also be triggered if the taxpayer has multiple accounts with balances below $10,000 but together they add up to more than $10,000 on any given day of the calendar year. The high balance date might not be the same for each account and transfers between accounts should also be taken into consideration. For the amount you report on the FBAR, you will need to value each account to determine its highest valuation during the year in the foreign denominated currency. After the maximum value of the account is determined, convert the maximum account value for each account into US dollars using the exchange rate on the last day of the calendar year.

on any day of the year. It does not need to be the year-end balance. You will need to determine whether you meet the filing requirement annually. [Korean transcript not available] Please advance slide. Minh: In this example on October 31, US person owns three foreign financial accounts. Number one, two and three, with account balances of 8000, 1000 and $3000 respectively. Does the US person have an FBAR filing requirement? Yes the US person is required to file an FBAR because the aggregate value on the accounts is over $10,000 on October 31. It does not matter in the single account where the balance at year-end exceeded the $10,000 threshold.

Once you have determined the $10,000 threshold has been met on any given day of the year, you must separately report the highest balance for the year on each foreign account. This does not have to be the balance for the day you determine you met the filing threshold when there are multiple accounts. Also, whether an account produces income does not affect the requirement to file an FBAR. [Korean transcript not available] Please advance slide. Minh: Roy, I think now would be a good time for our next polling question. [Korean transcript not available] Roy: Thank you. That's a good idea. Let's take a look at our third polling question. Audience the question states a taxpayer has an FBAR filing requirement when their highest aggregate balance of all foreign financial accounts is, A, greater than $10,000 on the last day of the year, B, greater than $10,000 on any day of the year, C, less than $10,000 in the last day of the year and D, less than $10,000 on any day of the year. Take a moment and click the radio button the best answers the question. I will give you a few more seconds to make your selection.

[Korean transcript not available] Please answer the question. Roy: All right.

We are going to go ahead and give you a little more time and then stop the polling and let's share the correct answer on the next screen. [Korean transcript not available] Please advance slide. Roy: All right, the correct answer is B greater than $10,000 on any day of the year. So let's see how well you all did with this question. I see that 1% of you responded correctly. Looks like we need some help with this one. Minh, can you provide a little bit more detail? Minh: Sure, Roy... Go ahead, Minh.

Minh: sure Roy, so the FBAR threshold is met when the balance exceeds $10,000 on any day of the year. So the correct answer is B greater than $10,000 on any day of the year is the correct response. Roy: all right thank you for the explanation. That helped a lot. I will turn it back over to you. [Korean transcript not available] Please advance slide. Minh: So, the due date of the FBAR is April 15 at the following calendar year. There is an automatic extension until October 15. These dates align with the form 1040 income tax return due dates. For calendar year 2022, the FBAR is due on April 13, 2023 with an automatic extension until October 15th 2023. If you fail to timely or correctly file, you may be subject to penalties. A violation is deemed to have occurred on the due date of the return. If the FBAR is not filed by the automatic extension date of October 15 the violation date reverts back to April 15 if original due date. The service has six year to assess an FBAR penalty from the due date of the return for the statute starts to run even if the FBAR was not filed. However taxpayers may agree to extend the statute by signing a consent under a common-law agreement. [Korean transcript not available] please advance slide. Minh: when the service examines and determines there is an FBAR violation there are four civil penalties available. Negligence, pattern of negligent activity, pattern for non-willful violation and penalty for willful violation. We will focus on the most common FBAR penalty for nonwillful violations and willful violations. An IRS examiner will evaluate the facts and circumstances of the case and determine whether penalties are appropriate.

An examiner has discretion in determining the amount of the civil penalties and uses IRS developed mitigation and other guidelines in making this determination. Generally, the maximum nonwillful penalty that can be applied to each violation is $10,000. This $10,000 amount is adjusted for inflation periodically. Reasonable cause exception may apply to nonwillful violations only.

[Korean transcript not available] Please advance slide. Minh: There is no reasonable cause exception for the FBAR penalty the maximum willful penalty can be computed by comparing the greater of $100,000 to 50% of the account balance at the time of violation. This comparison is made for each violation. The $100,000 is indexed for inflation currently indexed to $144,886. There are mitigation guidelines in determining both of the willful and nonwillful penalties that can be considered if certain criteria are met. [Korean transcript not available] Please continue. Minh: Roy can we do another polling question?

[Korean transcript not available] Please advance slide. Roy: Yes, we sure can. Audience, here is our full polling question. The question states the willful FBAR penalty computation is A, greater of 100,000 adjusted for inflation or 50% of the account balance, B, 50% of the account balance, C, 10,000 per violation or D, none of the above. Again, take a moment, click the radio button the best answers the question. I will give you a few more seconds to make your selection. [Korean transcript not available] Please answer the question. Roy: All right. I will give you a little bit more time. We are going to stop the polling now. And let's share the correct answer on the next slide. [Korean transcript not available] Please advance slide. Roy: All right. Let's take a look the correct answer is A, the greater of 100,000 adjusted for inflation of the account balance. Again, let's see how well you all did with this question. I see that 83% of you responded correctly. Great job. Nice job, audience.

Christine, I believe you will be covering the next topic. The floor is yours. [Korean transcript not available] Please advance slide. Christine: Correct, Roy thank you. The last topic we will be discussing today is form 8938 statement of specified foreign financial assets for this form can about under the higher Ed act of March 2010. The first year it was required to be filed for individuals was 2011. And 2016 for domestic entities. Form 8938 is required under the Internal Revenue Code section 6038 D, for US specified individuals and domestic entities if they hold an interest in certain specified foreign financial assets that exceed a dollar threshold. The filing requirement is determined each year. If required to file, the form 8938 should be attached to the related annual income tax return. For example, form 1040 for individuals or form 1120 or 1120S for corporations and so on.

If there is no income tax return filing requirement, then the form 8938 is not required to be filed. Even if all the other filing requirements of the form 8938 are met. [Korean transcript not available] Please advance slide. Christine: This is a visual of a form 8938. Part one counts the number of foreign deposit or custodial accounts and their total dollar value. So these are typically bank accounts. Part two counts other specified foreign financial assets and their total dollar value.

This would be qualified assets not reported in part one. Part three reports income associated with the assets reported in parts one and two. Part four counts the number of international information returns that you filed that include other specified foreign financial assets not reported in parts one and two, in order to eliminate duplicative reporting. Parts five and six are not shown but require you to provide detailed information about specific assets. [Korean transcript not available] Please advance slide. Christine: The form 8938 requires you to be a specified individual.

The definition of form 8938 specified individual is slightly different than an FBAR. Individual.

While they both include US citizens, green card holders and those who meet the substantial presence test, the form 8938 also includes a taxpayer who made an IRC 6013 election. This election allows non-US persons to file joint income tax returns with their US person spouse. Essentially with 6103 you are electing to be treated as a US person for tax purposes. Form 8938 specified individuals also include nonresident alien who is a bona fide resident of American Samoa or Puerto Rico. [Korean transcript not available] Please advance slide. Christine: The form 8938 is required for certain domestic entities including corporations, partnerships and trusts. Specified domestic corporations and partnerships are defined as being closely held or owned by a specified individual who is someone who had 80 percent of the voting power including spouses of individual family members and at least 50% of the entity's gross income is passive income. Or at least 50% of its assets are assets that produce or are held for the production of passive income, meaning it is not an operating entity. Specified domestic trusts are defined under IRC 7701 A 30 E, which defines them as including any trust if a US court can supervise the ministration of the trust and one or more US persons have authority to control the trust. Also if the trust has one or more specified persons as the current beneficiary.

[Korean transcript not available] Please advance slide. Christine: Okay, now that we know who must file, let's discuss what must be reported. A specified foreign financial asset is defined as any financial account maintained by a foreign financial institution and any of the following assets which are not held in an account maintained by a foreign financial institution, including any stock or security issued by a person other than the US person, any financial instrument or contract held for investment that has an issuer or counterparty which is other than US person, and any interest in a foreign entity. [Korean transcript not available] Please advance slide. Christine: This slide summarizes a list of common specified foreign financial assets. We have deposit and custodial accounts, foreign mutual funds, hedge funds or private equity funds. Foreign life insurance or annuity with a cash value, foreign pension plans. Foreign stocks or securities not held in a financial account. And foreign partnership interests. [Korean transcript not available] Please advance slide. Christine: This slide shows assets that are not considered specified foreign financial assets. They are financial accounts maintained by a US payor. That would mean any account at a foreign branch of the US financial institution or any account held at a US branch of a foreign financial institution. This is different than FBAR, which is based on the location of the account. Foreign real estate is not reportable on form 8938, but it may be reported if it is held inside a foreign entity. Directly held foreign currency is not a specified foreign financial asset and is not reportable on the form 8938. Directly held precious metals, such as gold and silver, and tangible assets such as art, antiques, jewelry, cars, and other collectibles are not specified foreign financial assets. The instructions to the form 8938 contain other special asset valuation rules and asset reporting exceptions that we do not cover during this presentation. [Korean transcript not available] Please continue. Christine: Roy, I believe we are ready for our final polling question.

[Korean transcript not available] Please advance slide. Roy: That is correct audience here is our fifth and final polling question and you guys have been great tonight. The question states which of the following is not a specified foreign financial assets reportable on form 8938? is the correct answer A, deposit and custodial accounts, B, foreign mutual funds, C, foreign stocks not held in a financial account and D, foreign real estate. Take a moment, click the radio button that best answers the question. I will give you a few more seconds to make your selection for this final question.

[Korean transcript not available] Please answer the question. Roy: Okay we are going to stop the polling now and let's share the correct answer on the next slide. [Korean transcript not available] Please advance slide. Roy: All right. Let's take a look and see what the audience states. The correct answer is D, foreign real estate. So let's take a look and see how well you all did with this question. I see that 86% of you responded correctly. Again, fantastic job, audience, Christine I will pass the microphone back to you to continue with the presentation. [Korean transcript not available] Please advance slide. Christine: Thanks, Roy. The reporting thresholds vary depending on whether the individual files joint or individual US income tax return, and whether the taxpayer resides inside or outside the United States. Each married taxpayer who files a separate US income tax return computes their threshold amount separately from their spouse. This slide shows a chart. Focusing on the married filing joint taxpayer you see those residing in the US must file if the total value of their specified foreign financial assets were more than $100,000 on the last day of the tax year or more than 150,000 at any time during the tax year. If they were to reside outside the US, they must file if the total value is more than 400,000 on the last day of the tax year, or 600,000 at any time during the tax year. The thresholds are proportionate for married filing joint and unmarried individuals. As you can see from the flight, the filing threshold is higher for taxpayers who reside outside the US.

[Korean transcript not available] Please advance slide Christine: There is an initial financial penalty for failure to complete form 8938. If the failure continues 90 days after the IRS notifies the taxpayer of their filing requirement, a continuation penalty applies. It is $10,000 for each 30 day period that the taxpayer remains noncompliant. The continuation penalty is capped at $50,000. The maximum total penalty for each failure to file form 89 and 38 is $60,000. 10,000 initial penalty +50,000 in continuation penalty. Reasonable cause can apply to the failure to file penalty, but does not apply to the continuation penalty because after the IRS notifies the taxpayer of their filing requirement, their failure to file cannot meet the reasonable cause standard. [Korean transcript not available] Please advance slide. Christine: This is a snapshot of an IRS.gov resource comparing the form 8938 and the FBAR. It is a tidy summary comparing the filing requirements, thresholds and timelines for both the forms side-by-side. The chart provides a list of various financial assets and which forms they should be reported on. [Korean transcript not available] Christine: Roy, that concludes our presentations I will turn it back over to you to close us out. [Korean transcript not available] Please advance slide Roy: All right, thanks to Christine and Minh for all the wonderful and needed information.

Audience, we are planning additional webinars throughout the year to register for all upcoming webinars. Please visit IRS.gov keyword search Webinars and select the Webinars for Tax Practitioners or Webinars for Small Businesses. When appropriate we will be offering credit and CE credit for upcoming webinars, we invite you to visit our video portal at www.IRSvideos.gov. There certificates of completion are not offered if you view any version of our webinars after the live you can view archived videos of the webinars. Please note continuing education credit or broadcast. Again, a big thank you to Christine and Minh for providing a great webinar and sharing their expertise. I also want to thank you, our attendees, for attending today's webinars Streamlined domestic offshore procedures, FBAR and Form 8938. [Korean transcript not available] Please advance slide. Roy: All right. If you attended today's webinar for at least 100 minutes after the official start time, you qualify for two possible CE credits. If you stayed on for at least 50 minutes from the start time of the webinar you qualify for one possible CE credit.

Again the time we spent chatting before the webinar started does not count toward the 100 or 50 minutes. If you are eligible for continuing education from the IRS and registered with your valid PTIN your credit will be posted in your PTIN. if you qualify and have not received your certificate and/or credit by February 24th please email us at cl.sl.web.conference.team@IRS.gov.

The email address is shown on the slide as well. If you are interested in finding out who your local Stakeholder Liaison is, you may send us an email using the address shown on this slide, and we will send you that information. [Korean transcript not available] Please advance slide. Roy: We would appreciate it, though, if you would take a few minutes to complete a short evaluation before you exit. If you would like to have more sessions like this one, let us know. If you have thoughts on how we can make them better, please let us know that as well. If you have requests for future webinar topics or pertinent information you would like to see in an IRS fact sheet, tax tip, or FAQ on IRS.gov, then please include your suggestions in the comments section of the survey. Click the survey button on the screen to begin. If it does not come up, check to make sure you disabled your pop-up blocker. [Korean transcript not available] please advance slide.

Roy: thank you audience, it has been a pleasure to be here with you and on behalf of the Internal Revenue Service and our presenters we would like to thank you for attending today's webinar. It is important for the IRS to stay connected with the tax professional community individual taxpayers, industry associations along with federal, state and local government organizations. You make our job a lot easier by sharing information that allows for proper tax reporting. Thanks again for taking time out of your day to attend today's webinar. We hope you found the information helpful.

You may exit the webinar at this time. [Korean transcript not available]