Foreign bank deposits - Red Flags - Russians - Open for problems?
I recently took a position with a Russian oil company. Job is overseas in Dubai. This is my 5th year overseas, but first with this new company. I've been filing taxes with no issues, however, 2014 was the first year for which I had an overseas bank account open which I will need to report on by June 30th, 2015.
So two things are happening here. New overseas bank account report (FBAR). No issue on the surface, except the big red flag the IRS to investigate to make sure it was really only opened last year. I guess this is because the GAO told them a lot of people say this, only to "quiet report" and cover old sins without a penalty or whatever. Not in this case here, but...
However, the second issue is HUGE. This employer forces me to use this one account for all payments, whether they are income OR expense! I fly all over the world, and into some dangerous and very expensive areas.
Put simply, my question is, are all deposits into a bank account "income" until proven otherwise? Now that the IRS can force any bank to turn over records (this is a Citibank account), do I need to be able to explain (prove) each and every deposit into this account? Some of these deposits are quite large for business trips, and...obviously, I will not receive 1099, or even very much detail on the payslips. Being as it is a Russian company, they don't much care about my tax issues, and report nothing to anyone.
So what do I do? I'm not paying taxes on money I am reimbursed to do the company's will, or pay my credit cards that I ran up with flight tickets (I buy much of my own transportation), car rentals, personal security (in some countries), etc.. That is insane. But then, if an auditor looked into this bank account, it looks like I'm a CEO not an engineer! One thing in my favor I guess, is that the net balance doesn't change much (unfortunately). Still, it is a lot of money and I'm worried.
Last edited by slackin : 03-19-2015 at 09:17 AM.