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If a US person (either resident alien, permanent resident, or citizen) in a given year, claimed as a dependent on a US citizen's return, had a salary of less than $1500, domestic interest income/dividends/capital gains of less than $300, and passive interest income on a foreign bank account of less than $200, does he/she have to file taxes (in any of the years of the last decade) or does the Personal Filing Threshold apply?

Further, do the requirements of Form 8938 force such an individual to file federal taxes if the balance of the foreign bank account is sufficiently high?

I would appreciate an answer that answers the two questions separately because the balance might have been below the 8938 threshold in certain years.

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  • By US person, do you mean a US citizen or a US resident for tax purposes (not necessarily the same as a US resident as per visa status)? What about the someone else on whose return you are being claimed as a dependent?
    – Dilip Sarwate
    Mar 2, 2014 at 17:26
  • I edited my answer. The individual who claimed the person of interest was a US citizen and the person of interest went through all of the different US person classifications listed through the years.
    – Wuschelbeutel Kartoffelhuhn
    Mar 2, 2014 at 17:32

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If you're considering OVDP - you should pose this question to your attorney and not relay on laymen on Internet forums.

Personally I would suggest filing tax return in this case regardless of the personal threshold, because part of the return is the stupid checkbox that you must click to notify the IRS that you have these accounts is on schedule B, and unless you file and its checked, it is considered unchecked.

If your balances high enough to require form 8938 than you must file, and the statute of limitations clock for that year doesn't start ticking until you do.

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  • Thanks for your answer. I didn't make enough dividends/interest for Schedule B, so I'm not sure that "it is considered unchecked." The reason I asked this question is to see if I could do the paperwork myself instead of paying legal fees that eat up my entire salary.
    – Wuschelbeutel Kartoffelhuhn
    Mar 2, 2014 at 19:52
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    @WuschelbeutelKartoffelhuhn If it is not checked - of course its unchecked. Did you check it? No, you didn't, because you didn't file a return - but who cares. What exactly are you talking about when you're saying that you could do the paperwork yourself - OVDP? You want to do OVDP yourself? Don't be an idiot.
    – littleadv
    Mar 2, 2014 at 20:05
  • But if it is unchecked (if I'm below the Schedule B requirement) then I won't check it either when I file a delinquent return (because the delinquent return won't have a Schedule B). Regarding your last comment, are you implying that it is a bad idea to go through the OVDP w/o representation?
    – Wuschelbeutel Kartoffelhuhn
    Mar 2, 2014 at 20:11
  • @WuschelbeutelKartoffelhuhn I don't understand why would you not check it. Did you have a foreign account at that year? From your question it seems that you have. Why would you not check it? Yes, I'm implying that going through OVDP w/o representation is a financial suicide.
    – littleadv
    Mar 2, 2014 at 23:38
  • The checkbox is on Schedule B. If I'm below the $1500 (interest + dividends) Schedule B filing threshold, I wouldn't fill out Schedule B. If I'm below the Personal Filing Threshold, I wouldn't even file a 1040. Filing a delinquent return triggers 'failure to file' penalties. Regarding the second point: The OVDP seems straightforward enough. The uncertainty for me is limited to the question asked above. Two other people told me that hiring a lawyer was, in fact, the "financial suicide," not the expected IRS penalties. Why do you believe that representation is important?
    – Wuschelbeutel Kartoffelhuhn
    Mar 3, 2014 at 20:54

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