US taxes and FATCA: 'The time for hiding is over'

[umbertino]

FATCA. Since July 2014, the five-letter acronym has instilled dread in the hearts of American expats all around the world.

 

 

Published: 26 Jan 2016 09:12 GMT+01:00

 

 

The "Foreign Account Tax Compliance Act" (FATCA) requires banks to report information to the IRS regarding all financial accounts held by American clients,” Ines Zemelman, expat tax specialist and founder of Taxes for Expats, tells The Local. "The age of financial privacy is over.”

 

American citizens must report their worldwide earnings and assets to the IRS no matter where in the world they live.  With the implementation of FATCA, expats who have spent years avoiding this uncomfortable truth are being reminded of it -- as well as being punished if they don’t comply.

 

This development has led to many foreign banks trying to track down their American clients – and in some cases, lessen their own burden by simply refusing Americans service.

 

Many expats have begun to receive a ‘FATCA Letter’ from their bank requesting certain information about their US tax status (and asking them to complete either Form W-9 or W-8). The letter usually offers a brief explanation of the FATCA legislation that requires the bank to share your name, address, and other personal details with the American tax authorities - the Internal Revenue Service.

 

But what if you're not compliant? Some expats choose to ignore the request - but this high-risk approach is likely to quickly bring about a negative outcome.

 

Your bank might simply close your account, or even freeze your funds. Alternatively, your details may be forwarded to the IRS anyways and you may end up with a big red flag by your name.

 

“If you are not presently compliant with US tax laws, the time for hiding is over," Zemelman says. "Your goal should now be to make the appropriate IRS voluntary disclosure to come clean and resolve your undisclosed foreign accounts."

 

For expats who are not yet compliant with US tax filings, including submitted FBARs (Foreign Bank Account Report) and tax returns, Taxes for Expats recommends three steps.

 

"Respond to the bank immediately and tell them you are in the process of filing," advises Zemelman. "Ask to set up a timeline or get an extension."

 

Next, contact a professional US expat tax preparation company such as Taxes for Expats.

 

"If you were not working against the clock you could try to do it all on your own - but it's not something we'd advise if the bank is already on your case," Zemelman remarks.

 

Finally, make sure to take advantage of the Streamlined Filing Procedure, which can help you become fully compliant without the risk of penalties. The procedure requires completing three years of tax returns and six years of FBAR, and will put you in the clear once and for all.

 

Think your bank won’t know you’re American? You’re probably wrong, Zemelman warns.

 

Foreign banks have a list of various criteria to examine when determining if clients have a significant connection to the US. Every account is evaluated individually.

 

“Your birthplace is shown on your passport - even if it’s not a US one. Likewise, a client may have transferred funds to the US or may have an American address,” Zemelman says.

 

If banks fail to comply and report your information to the US, they get slapped with heavy fines - so instead they opt to play nice with Uncle Sam.

 

“If you are an American with an overseas bank account, it is likely that your bank has already asked or is going to ask about your US compliance status,” Zemelman says. She advises US citizens outside the US to plan for this - as foreign banks have essentially become enforcement agents of the IRS.

 

So what do you do when the bank in your country of residence starts sniffing around and asks about your US tax compliance status? It doesn’t have to be a nightmare, Zemelman says – if you handle it right.

 

“Don’t wait for the enforcement division to find you,” Zemelman concludes. “Come forward and fix your US tax situation first.”

 

Presented by Taxes for Expats

Photo: Flickr/Pictures of Money

 

 

http://www.thelocal.it/20160126/hiding-over-us-taxes-for-expats-fatca-get-compliant-fbar-tlccu

Edited February 4, 2016 by umbertino

[SgtFuryUSCZ]

***///

 

Wonder if the kommie klintons - CRIMINALarious & Slick Willie - got their letters yet...?

 

Forming a "charitable " organization CANADA in which to hide millions of Dollars "donated" by

entities turning out to be the RUSSIANS paying for some URANIUM....

 

And on that "Board" being paid millions in "salaries".... yup... all the Clintons and the guy who

"brokered" the URANIUM deal.  

 

Oh, sure, they spread the required 10% around to make it look legit, but it's a drop in the bucket

compared to the lavish existence they're leading courtesy of this "CHARITY"...

 

CAN  YOU  SAY  "MONEY LAUNDERING"....?

 

The former Gov. of Virginia is doin' time for accepting $165,000. worth of presents from some

vitamin guy lookin' for a favour....

 

What the Clintons have done / ARE doing -- is endangering human beings and entire Nations.

 

Anyone wanna guess why Lois Lerner and the rest of HER criminal tribe don't cut the Clintons down to size...?

 

 

Anyone wanna guess why Slick WIllie is lookin' like SICK WILLIE, so gaunt, drawn and haggard....

 

yup, beeatch wife runnin' him into the ground with worry he'll die in some FEDERAL PEN somewhere.

 

He can't sleep nights knowin' what he knows and not being able to reign her in as her greed knows no bounds.

[Thaiexpat]

Hahaha. Look at the author of the article. He's here to help you. Hahahaha. First, why in the world would ANYONE put money in their name? The only account I have going on is my pension, which comes from the gubermint. So its not like I am hiding anything there. besides, its tax-free to begin with.

2nd: what factual evidence does anyone have to show the codes, regulations, statues or even the constitution apply to me (or you)? No facts, no application. Pretty simple. Dunno, just saying....Cheers