Hi EL,
I am an expat living in China for 7 years.
I have filed taxes every year up until 3 years ago.
I just forgot to do so.
I've also had a bank account in China for the entire 7 year duration.
I mostly use it to make funds transfers for a family relative, so the funds inside are not technically mine, nor is it income, nor have I reported it.
I just found out that even though its not income, you are still supposed to report these funds.
I didn't come forward under the new program that just ended, because there is no way I would be paying a penalty of the funds in the account since they arent mine to begin with.
Now, I want to renounce the citizenship and will be getting a St. Kitts passport soon.
I know that I will have to file the past 3 years of taxes, which I will do accurately, as well as the 8854 form.
I am thinking that an audit will likely happen as a result of the 8854 form and they will find out about the bank account.
However, I will maintain that these funds were not mine and I was just moving them around for a relative. I guess that will have to be a something I need to try to prove.
I was wondering if there was a better way to avoid this altogether.
For example, if I were to cancel the bank account and transfer the funds back to my family relative and then wait 5 years then renounce, would I be in a better position because the previous 5 years, I would have not had any accounts in my name?
Thanks,
John

