Fortunately, none of this applies to private citizens who happen to be holding foreign currency. I took the time to call the IRS this afternoon. I spoke to a supervisor named Ms. Theresa Klier (Employee# 1000349035). She informed me that this form has been in existence since June of this year following heightened attempts by speculators in recent months to shield themselves from federal levies, so the obligation to report income derived from foreign currency didn’t suddenly become law last week. She said that the IRS is targeting a specific group of individuals who, until now, have been hiding assets with the specific intent of avoiding taxation by the Treasury Department. Per Ms. Klier, the federal government requires individuals to complete Form 8938 only under the following circumstances:
1) If you hold stock issued by a foreign corporation
2) If you earn capital or have accrued interest from profits earned through a foreign partnership
3) If you hold notes, bonds, debentures or other debt instruments issued by a foreign entity
4) If you’ve earned interest in a foreign trust or a foreign estate
5) If you hold options or other derivative instruments with respect to any of the forgoing examples or with respect to any currency or commodity that’s entered into with a foreign counter-party or issuer
***I made a point of asking her if currency secured through a licensed currency trader would bring a private citizen under the purview of the laws that Form 8938 is designed to enforce and she said “NO”. Other than the conditions referenced above, we would only be obliged to fill that form out if we purchased the currency directly from a foreign agent or any bank or agent operating outside of our borders***
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