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Some time ago, I suggested banding together to fight FATCA and FBAR.
Now a group of xpats in Switzerland have done just that…
See [url=http://americansabroad.org/]AmericansAbroad.org here[/url]
[url=http://aaro.org/]The Association of Americans Resident Overseas[/url]
[quote=”VictoriaLST”]Some time ago, I suggested banding together to fight FATCA and FBAR.
[/quote]
So how’s that going, Victoria? What has been accomplished?
An update for you ….
Elfinancierocr.com reports that “the Foreign Account Compliance Act (FATCA) is a reality and the truth is that to date, there are very few financial institutions in our region who are prepared to meet the requirements of this U.S. legislation. The reason: the majority are waiting for clarification on some gray areas, especially given the possibility that the U.S. government will sign intergovernmental agreements which will simplify the reporting process. “
“… this U.S. legislation seeks bank account information, transactions and investments that U.S. taxpayers have made outside its borders, information which will be collected and sent directly to the U.S. Government from every financial institution in the world. Prior to this, each of the entities had to sign a contract with the Treasury Department of the country. “
But the U.S. government has opened up the possibility of signing intergovernmental agreements with countries that need them. Through these agreements, “the world’s financial institutions don’t have to sign a contract with the Department of the Treasury and, instead of sending the information to the U.S. government, they can provide it to their own government, which, as an intermediary, will send the data periodically. To date, Costa Rica has not negotiated or signed this agreement, which they has been signed by Spain, Japan, Switzerland, Germany and the UK, among others. “
Dear Fellow Democrat Abroad,
In mid-November, four groups representing overseas Americans (Dems Abroad,
Association of Americans Resident Overseas, Federation of American Women’s Clubs
Overseas and American Citizens Abroad) met for an hour with senior IRS and
Treasury officials. Joe Green represented Dems Abroad and also had meetings with
the Taxpayer Advocate and the IRS assistant deputy commissioner for service and
enforcement.As you may recall from our previous reports, the IRS has two existing voluntary
compliance programs for delinquent tax filers; these are intended to reach out
to US “persons” (a very complicated term indeed!) who may have significant
unreported income and/or accounts and who wish to avoid potential criminal
action by paying the fines and penalties imposed by the IRS. These programs are
aimed at helping delinquent tax filers who may have considerable unmet tax
obligations.But the IRS also understands that there are a number (many, some, at least a
few) of us whose failure to file does not reach the size or complexity that is
anticipated by the official voluntary disclosure programs. So, this past August
(and now in effect for the 2012 tax year) the IRS announced a less onerous
amnesty program for what the Service calls low-risk non-filers.The details of this option (called “New Filing Compliance Procedures for
Non-Resident U.S. Taxpayers”) can be found at the following IRS website:http://www.irs.gov/uac/IRS-Announces-Efforts-to-Help-U.-S.-Citizens-Overseas-Inc
luding-Dual-Citizens-and-Those-with-Foreign-Retirement-Plans“The IRS is aware that some U.S. taxpayers living abroad have failed to timely
file U.S. federal income tax returns or Reports of Foreign Bank and Financial
Accounts (FBARs), Form TD F 90-22.1. Some of these taxpayers have recently
become aware of their filing obligations and now seek to come into compliance
with the law. The Service is announcing a new procedure for current
non-residents including, but not limited to, dual citizens who have not filed
U.S. income tax and information returns to file their delinquent returns…“The IRS will determine the level of compliance risk presented by the submission
based on certain information provided on the returns filed, and based on certain
additional information that will be required as part of the submission. Low risk
will be predicated on simple returns with little or no U.S. tax due. Absent high
risk factors, if the submitted returns and application show less than $1,500 in
[US] tax due in each of the years, they will be treated as low risk. In general,
the risk level will rise as the income and assets of the taxpayer rise, if there
are indications of sophisticated tax planning or avoidance, or if there is
material economic activity in the United States. Additional risk factors include
any additional history of noncompliance with United States tax law and the
amount and type of United States source income.”Slightly more detailed, but perhaps more complex “Options Available to Help
Taxpayers With Offshore Interests” may be found at this IRS website:http://www.irs.gov/Individuals/International-Taxpayers/Options-Available-to-Help
-Taxpayers-With-Offshore-InterestsPlease note the following admonition on the above website: “The IRS reminds
taxpayers to consult with their professional tax advisor in determining which
option is the most appropriate given their facts and circumstance.”While using a tax preparer can be burdensome, and while there are tax-filing
sharks in the international waters (beware!), we may have to conclude that IRS
compliance will likely involve a financial cost associated with the privilege of
living abroad.For those overseas Americans who have not been filing and who fit within the
IRS’s definition of low risk, this recently announced option could bring some
relief.We also want to tell you that, while the implementation of the FATCA regulations
is still being worked out amongst and between the IRS and various foreign
governments and financial institutions, the threshold for reporting financial
holdings by overseas Americans has been raised to $400,000 US for single filers
and to $600,000 for joint filers.We must reiterate as we close this update that we cannot offer tax advice and
neither do we maintain a list of tax consultants..We will bring you further updates as our work with IRS, Treasury and Senate and
House members and staff continues.With best regards for peace at home and abroad in the new year,
Democrats Abroad FBAR/FATCA Task Force
Joe Green, Stanley Grossman, Maureen Harwood, Carmelan Polce, Maya Samara,Joe
SmallhooverWHY??? do I have to pay 100% of my income IF!!! I do not live in the USA.
I do not use the roads, hospitals, library, Schools, ETC..
I should pay, OK but I should not pay the same as someone that lives in the States because I do not use their services.
Last time I heard was “NO taxation without Representation” and that started a WAR with the British Empire to make the USA a country.
We pay taxes in CR were we live and pay taxes to the USA were we don’t.
this is comforting, however:
We also want to tell you that, while the implementation of the FATCA regulations
is still being worked out amongst and between the IRS and various foreign
governments and financial institutions, the threshold for reporting financial
holdings by overseas Americans has been raised to $400,000 US for single filers
and to $600,000 for joint filers.I was wondering if anyone had heard anything or had personal experience with private banks like HSBC, now Davivienda, or Scotiabank, or any others, closing accounts from U.S. citizens or refusing new accounts in Costa Rica due to these regulations? As in, they don’t want to be bothered with all the hassle so it’s easier to not have U.S. customers.
The reason I ask is that, according to a friend, it is happening in Uruguay. There’s been a systematic closure of all accounts held by U.S. citizens.
We have both dollar and colon accounts at Davivienda (formerly HDBC) and have had no problems with the status of those accounts. We regularly deposit a U.S. credit union check into our dollar account. They take ten business days to clear and there is no cost whatsoever.
Our experience may be due to the fact that we have a home mortgage with them and they want to be paid.
Our accounts there date from 2006. Your mileage may vary.
same as david except i have no mortgage with that bank. but i have had an account there since 2005 and i haven’t heard any rumors from them (i know the gerente) that there is going to be a problem in the future, but it’s costa rica, so it could all change tomorrow.
It seems to me that BNCR is more than happy to have our Social Security checks deposited every month. Do you suppose they will close those accounts if we make additional deposits? Doubt it.
not a one of us gets enough in social security to make it worth the while of any bank to conform to the new regulations. they basically have to overhaul their entire system. you and i and just about every expat i know is a little tiny fish that barely makes a ripple in the money pond. it’s just that the hammer hasn’t hit the anvil yet. but just wait.
According to the [url=http://www.internationalman.com/global-perspectives/weekly-update-the-grip-gets-tighter-irs-finalizes-fatca]InternationalMan.com[/url]
“Last week the IRS finalized the widely unpopular FATCA regulations, a monstrosity of 544 pages.
These costly regulations make the world a smaller place for Americans. Most foreign banks want nothing to do with American clients and it is no wonder why. The benefits do not outweigh the costs; any rational business owner would make the same decision.
Perhaps it is a desired effect.
Edicts like FATCA serve as an indirect form of capital controls, as they effectively create significant barriers for capital to leave the US.
We shouldn’t be surprised that broke governments everywhere are finding all sorts of dastardly creative ways to squeeze their citizens more and more.”
According to [url=http://www.deloitte.com/view/en_US/us/Services/tax/930c9948e681a210VgnVCM100000ba42f00aRCRD.htm]Deloitte[/url]:
“The legislative intent of FATCA is to ensure there is no gap in the ability of the U.S. government to determine the ownership of U.S. assets in foreign accounts. As such, this revenue raising provision, which was originally enacted as a part of the Hiring Incentives to Restore Employment (HIRE) Act (Pub. L. No. 111-147), is expected to significantly impact the systems and operations of both U.S. and non-U.S. companies.”
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