Are World Bank Accounts & Pension FBAR & FATCA Reportable?

World Bank Accounts & Pension (FBAR & FATCA)

When it comes to Foreign Bank Account Reporting and Specified Foreign Financial Asset Disclosure, it can become unnecessarily complicated — when it really should not be. This becomes quite evident when a US Taxpayer has foreign accounts at international banking institutions such as the World Bank. That is because the FBAR and FATCA reporting rules are not always in unison, so while some foreign accounts/assets may not reportable for some purposes (such as FBAR), other accounts such as Pension Accounts from the World Bank may be reportable for FATCA purposes on Form 8938.

Let’s take a look at some basic introductory information about World Bank.

What is the World Bank?

The World Bank is an international institution.

As provided by the World Bank:

• • • The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. Its five institutions share a commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development.

Are World Bank Account Reportable for FBAR?

In general, World Bank Accounts are not reported for FBAR (FinCEN Form 114).

As provided by the IRS:

• • • International Financial Institution.

    • A foreign financial account of any international financial institution (if the United States government is a member) is not required to be reported by any person.

      • Examples are the World Bank and the International Monetary Fund (IMF).

Are World Bank Accounts Reported for FATCA

Unlike the FBAR instructions, the FATCA Form 8938 (Specified Foreign Financial Assets) instructions do not exclude World Bank Accounts from the Form 8938.

In fact, the World Bank itself determined that the Pension Accounts are Reportable for FATCA.

As provided by the World Bank:

• • • Are the World Bank Staff Retirement Plan (“SRP”) benefits considered a specified foreign financial asset?

      • Under the current law, World Bank Staff Retirement Plan benefits are considered “specified foreign financial assets” and may have to be reported if you satisfy the requirements mentioned above, even if you have not yet received any payments or distributions from the plan (in other words, the disclosure requirement applies to active staff and deferred retirees as well).

      • What is the value of my World Bank pension for FATCA purposes? If you are still working for the Bank and have not started receiving your pension benefits: • Net Plan participants who are not yet eligible for the lifetime pension1 :

        • You should report the US dollar equivalent of the lump-sum withdrawal amount as of the last month of the tax year for which you are filing taxes…”

Missed Reporting for FBAR and FATCA?

While the failure to submit these forms may result in significant fines and penalties — although these penalties can oftentimes be reduced or eliminated through one of the offshore amnesty programs.

Thus, it is important for taxpayers to carefully assess their situation before filing any returns in prior years to determine exactly what needs to be filed — and whether they qualify for any of the international tax amnesty programs.

About our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure and compliance.

Contact our firm for assistance.