FBAR/FinCEN 114 and currency exchange services

[MonsieurMD]

Hello, I am a US expat living in France.

Over the years, I have reported my foreign bank accounts consistently on the FBAR/FinCEN 114, but now I am concerned that I should be reporting my use of Wise (formerly TransferWise) to make occasional currency exchange transfers between my bank account in France and the US.

Note, I do not have a Wise Borderless account where one can hold a balance. Rather, when I want to make a transfer, I wire money to one of Wise's bank accounts (from my French account which is already reported on my FBAR). Wise then makes the transfer between their own accounts and credits my bank in the US. 

To be safe, I am planning to report my use of Wise on the FBAR, but I am wondering what I should put as the maximum account value? Should it correspond to the maximum amount that I have transfered in a given year? Or is it more accurate to say the value is zero, given that I do not have a financial account with them that actually holds a balance?

Any insights would be appreciated. Thank you.

[pk]

@MonsieurMD , from your post and information of how WISE works for a standard account, what I get is that  WISE facilities that you are using is  like  Western Union of old time.  It is a conduit for transferring monies  between  two  bank accounts  in two countries  ( in your case ).  Thus it is NOT  a bank account in the traditional sense of the word ( not a savings / checking / investment  )  financial account.  Even in the extreme  case where  you transfer  say $10, 000  from   your French  Savings account ( already reported under FBAR ) to your bank account in  Australia ( also reported  on FBAR )  where  for some reason  the withdrawal takes place immediately but  is not completed/ deposited   for a week ( thus  monies rested in your WISE account for a week ), it still does not require reporting because  it is still a conduit., perhaps a slow one   Therefore I do not believe  this type of account  comes  under the purview of FBAR or FATCA regulations.   

On the other hand  if you had the type called  "account without borders " where monies actually  are held   and can be withdrawn  in any of the allowed / supported currencies , it would need to be reported  because  it is not behaving as conduit -- it is  just an account where monies  are held in one denominated currency and can be  withdrawn/credited in any other denominated currency -- thus meeting the definition of a normal  bank/financial  account that you control.   This would have to be reported for FBAR/FATCA purposes.

Does this make sense ?

Is there more I can do for you ?

[MonsieurMD]

Thank you pk, that makes a lot of good sense to me!

[abmarone]

Thank you for the explanation. Do you happen to know what country I should be saying my Wise.com account exists in? I'm an American, living in the USA, using my "account without borders" to purchase and renovate an apartment in Italy (so holding euros >$10K). Thanks in advance!

[DaveF1006]

Yes, your Your Wise account is a borderless account which is regulated by the Financila Coduct Authority in the UK, and as such is considered as a foreign account for US residents and citizens.

For the country, you would use UK to report the country that Wise.com exists in.

@MonsieurMD 

[In_Vino_Veritas]

As I understand it, based on the above thread, as a US citizen residing in the USA, I have to report my Wise borderless account. However, I have multiple currency balances (EUR, GBP, USD, CAD, MYR, etc.). Under the USD balance, Wise shows the address of Wise US Inc. while under, say, the GBP balance, a UK address is displayed. Should I report them separately?

[pk]

@In_Vino_Veritas , I don't understand why the 3520 --- assuming that the wise account belongs to you and controlled by you.   You would probably come under  FBAR and possible FATCA.

And as a US citizen / GrrenCard holder , US residency is not required --- the  US tax laws apply to you no matter where your tax home is..

If you hold multiple currencies , for purposes of FBAR and FATCA regs, you report the  aggregate  amount in  US dollars.

Does this make sense ?   Is there more I can do for you ?

pk

[DianeW777]

For the country, you should use UK to report the country that Wise.com exists in. Also, pk provided the details about your situation in that 'If you hold multiple currencies , for purposes of FBAR and FATCA regs, you report the  aggregate  amount in  US dollars'.

Wise (formerly TransferWise) is a UK-based foreign exchange financial technology company founded in January 2011. Wise specializes in cross-border payment transfers. As of 2023, it offers three main products: Wise Account, Wise Business, and Wise Platform.

@In_Vino_Veritas 

[In_Vino_Veritas]

First off, many thanks to you and pk for your answers. First-time user on this board, I am very grateful that you took the time to help. 

To clarify I am subject to FATCA and FBAR. Until I started using Wise, the process was fairly straightforward: I looked up my foreign bank statements and provided the required information including the address of the branch where the account is located. The multi-currency functionality that Wise provides somehow complicates things a little! So, Diane W777, if I understood your response correctly, with regard to the Wise address that I need to provide, I should report the one in the UK for all foreign currencies (regardless of the currency, with all the currency amounts to be converted to USD and aggregated)?

[DianeW777]

Yes, that is correct.  This is also includes the same information from from pk as well.

@In_Vino_Veritas 

[pk]

@In_Vino_Veritas  while generally agreeing with  @DianeW777  reply to your specific  "facts and circumstances",  I would like to generalize the answer  ---  

1. if your foreign currency holding are  through an account  in an  US financial entity ( whether located in the US or in a foreign branch of the US entity ), you may or may not come under FBAR ? FATCA regs  ( depending on the exact facts and circumstances ). .

2. if your foreign currency assets  are  in  a foreign  financial entity , with a domestic branch  ( US locus), you may still be not subject to FBAR /FATCA regs , depending on the exact facts and circumstances.

3.if your foreign or US dollar  account is in a foreign financial  entity, then you definitely come under FBAR / FATCA regs..

Point here is that it is not the  currency  but the account holding entity that determines  whether you come under FBAR/FATCA regs or not .

Does this make sense ?