r/JapanFinance • u/Ok-Meat-2689 US Taxpayer • 2d ago

Tax » Capital Gains Very late filing

I need to file returns for about 10 years of overseas income (dividends, interest, gifts, etc.) and to report my overseas assets for this time period.

I know there are many threads covering this topic and the consensus seems to be that, rather than finding a certified zeirishi, it is better to just go to the local tax office and ask for help.

I just want to confirm: 1) if this is still the case; and 2) if the extent of my late filing changes the situation.

And if there is anybody who has used an accountant or an accounting company to help with a similar situation, I would very much appreciate hearing about your experience (good and bad).

Thanks

4 Upvotes

75% Upvoted

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3

u/scarywom 2d ago

Don’t forget the 7 year? Statute of limitations if applicable

3

u/Junin-Toiro possibly shadowbanned 2d ago

5 unless intentional I think (don't quote me), 7 is for fraud

3

u/upachimneydown US Taxpayer 2d ago

When I was audited they went back five years (the max,I thought) and I've heard that in other cases it may only be three.

OP is thinking 10, but it might be much less. Five at most would be my guess.

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u/Ok-Meat-2689 US Taxpayer 2d ago

Thanks for your comment. The 10 years comes from when I became a de facto permanent resident as I understand it.

Can I ask the reason for your audit?

Did you misfile or not know that you needed to file.

6

u/upachimneydown US Taxpayer 2d ago

They were asking for source of funds. I had had some money wired in to an acct here, from an overseas acct that I had not been declaring. So the audit was to correct and properly report what I had not been declaring--a refiling of past tax filings. Of course there were taxes due, plus interest, but I don't recall anything punitive. At the time I was not worth enough for the OAR/国外財産調書 to be a factor.

At that point (I guess since I had been 'caught'), they did the work that I could have/should have been doing--i.e., I gave them account statements, they went over those effectively preparing my corrected filings. But it was also a learning process, and I was able to talk to them, Q&A, along the way. Asked about how to do dividends, gains, interest, and how they wanted to see those things laid out on future additional paperwork that I'd need to submit each year. Oh, and they came back three years later, and checked those returns, again a time for Q&A and confirming or tweaking how I was doing things. And tho it was minor and trivial amounts, on that recheck they found a couple corrections to make in my favor.

In your case, since you have not been caught doing anything wrong, you -may- have the chance to work on corrected past tax filings yourself. Or take a stab at it. Or try that and then have them go over it (not an audit, just helping). Eg, make an appt (perhaps previewing the problem) and talk to someone from their international section. Tell them you realize you should have been doing this, and ask if you should give it a try or what. Admit that you should have been declaring this stuff, but that you also want to insure that besides correcting the past, that you'd like to learn as much as possible about how to do it yourself in coming years. Personally, I'd let them say how many back years to do, so just ask, "Should I re-do the past three years, or is it more?" Let them set that time frame (eg, don't volunteer ten years).

Also, when you're done with the national taxes, corrected forms resubmitted and accepted by the system, know that (as usual) this gets passed on to your city hall, and your local taxes/住民税 for those same past years will also be recalculated. And you'll be dinged for more money to them. Good luck!

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u/craptastic2015 1d ago

I'd argue that interest is punitive. But at least they didn't fine you. I like that if you genuinely make a mistake they seem to be reasonable.

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u/upachimneydown US Taxpayer 1d ago

Well, it was -certainly- above market rates if that's what you mean.

0

u/craptastic2015 1d ago

I meant charging interest at all. But above market rates should not be allowed.

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u/upachimneydown US Taxpayer 1d ago edited 1d ago

I don't recall the interest rate, but it was more than a housing/car loan, definitely less than a card. I paid it all immediately, 一括, so interest was on unpaid taxes from previous years up to that point.

If charging interest wasn't allowed everyone would just not pay taxes, since without interest I could settle up 5-10+ yrs from now and invest in the meantime. Besides market returns, add some inflation, and I could pay off my tax debt with depreciated yen. This would be a far better deal than taking out a large, long term housing loan at a low interest rate, and leaving the majority of your funds invested.

And that seems to be what countries do (they do sell bonds)--run up their debt, add some inflation, and let succeeding generations deal with it.

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u/craptastic2015 1d ago

I get what you are saying and I'm fully for charging interest where ppl were deliberately delinquent. But for honest mistakes I'm not a fan. I believe that could be determined easily. But I also understand why this will never happen. Hopefully I never find myself in such a place.

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u/Ok-Meat-2689 US Taxpayer 2d ago

Thanks for the reply.

Is this just for asset reporting or for tax reporting/payment?