I am an expat living and working in Mexico since 1998, except for the years 2011-2015, when I lived and worked in Peru. I have a Vanguard self-managed portfolio, so I have filed a tax return every year with the IRS, using TurboTax, and have never owed the government any money.
I use a family member’s address for all my stateside finances and accounts. As I had more than 10K in my Peruvian bank account when I worked there, I filed fbars for these years. When I left Peru I closed this account and wired the balance to my stateside bank account. I have never had more than 5K in my Mexican bank account, so I never filed fbars for the years I have lived in Mexico.
But I found out only recently that I had 20K in a pension plan in Peru, which I was able to cash out, with a wire transfer to my American bank account. A little googling told me that this transaction generated a CRT. Which up to now, I had no idea about.
Here are the problems:
I thought that unless I earned more than 100K in foreign income, I did not have to report it to the IRS, so I have always checked the wrong box when prompted by the TurboTax application. I also recently found out that my Peruvian pension account counts as a foreign holding, so in theory I should have been flling fbars since 2015, when I returned to Mexico.
My question is: should I take some action or just “let sleeping dogs lie”? I am inclined to just keep filing as I always have since I do not and will not owe the IRS anything, and am not trying to hide anyhting from them.
What you should do is file amended tax returns for the years you made errors. Also I do not believe pensions qualify for the foreign earned income exclusion.