TaxConnections

 
 

Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Please enter your input in search

Archive for FATCA

Survey Dispels Myth Of Wealthy Americans Abroad And Why Middle Class Americans Abroad Are Forced To Renounce U.S. Citizenship

John Richardson On FATCA

Introduction

This blog post features the research of Laura Snyder. It is (I believe) the single and most comprehensive study of (1) the U.S. legislation that is understood to apply to Americans abroad and (2) the disastrous impact this legislation has on them. To put it simply, Congress is forcing Americans Abroad to renounce their U.S. citizenship.

The bottom line is that for Americans Abroad:
“All Roads Lead To Renunciation!”

And now over to Laura Snyder with thanks.

“I Feel Threatened by My Very Identity:”

US Taxation and FATCA Survey

Introduction

In autumn 2018 I worked with a France-based association of Americans living overseas to organize an online survey addressing the topics of FATCA and US taxation. The survey was open for participation for a period of about six weeks, from late September to early November. The survey was conducted using the open source software LimeSurvey.

Approach and Methodology

Read more

How Could The IRS Find Out That I Am Not Tax Compliant As An Expat?

Olivier Wagner

You’re living your adventure and you’re settled in your new home, having non-US bank accounts, a non-US employer and a non-US social life. You have limited ties with the US and since the people who pay you (banks, employer) are not in touch with the IRS, you consider simply not filing US tax return. What could go wrong?

As you might know, on some level… US citizens are required to report their worldwide income on a US tax return, regardless of where they live.

Think AGAIN…

IRS has a few proven ways they use to track people down.

Below you will find the most common ways that IRS can track you down and check if you filed your US tax return, no matter where you live in the World.

Read more

Dutch Tax Minister: U.S. Won’t Take Immediate Action Against Banks Over FATCA Info Shortcomings

Dutch Tax Minister, FATCA

Dutch tax minister Menno Snel has said that his country’s banks and financial institutions should not feel a need to panic over those of their so-called “Accidental American” account-holders who lack U.S. Social Security numbers and other key data soon to be required by the U.S. tax authorities, as he has been assured that any repercussions for failing to comply with the regulations in question could be delayed by as long as several years.

Snel’s comments came in a 16-page update to fellow Dutch lawmakers, written in Dutch, on various tax matters. He also made similar comments in recent briefing of Dutch MPs, according to DutchNews.nl, an English language news website based in the Netherlands.

Snel’s reading of the situation is likely to be viewed with interest and in some cases, relief by expat “accidentals” who lack Social Security numbers and who have been warned that they stand to lose their bank accounts by Dec. 31, or earlier, because of this. That’s the date when a “grace period,” during which non-U.S. banks and financial institutions have not had to report to the U.S. internal Revenue Services the Tax Information Numbers (TINs) of all of their American citizen account holders, ends.

U.S. authorities have not been forthcoming on the matter, nor have most non-U.S. financial institutions, beyond telling their clients that they need to get a Social Security number as soon as possible if they are not to lose their accounts. As many as 300,000 accidental Americans are believed to live in the European Union alone, according to European Parliament estimates, of which around 1,000 have been estimated to live in the Netherlands.

Read more

Presumptions Of Tax Residency In A FATCA World

John Richardson

Introduction – All The World Is A Multiple Choice Test

Q.1 – A tax resident of the United States is taxable on his worldwide income. According to the Internal Revenue Code of the United States, which one of the following is NOT a tax resident of the United States of America?

(A) A Congresswoman “Born In The USA”, head of her household, who does not and has never had a U.S. Passport
(B) An unmarried Green Card Holder who has never filed an FBAR who lives in El Paso Texas
(C) A fifty year old U.S. citizen who is divorced has never set foot in the United States, doesn’t have a U.S. Social Security Number and lives in and pays full taxes in Germany
(D) A citizen of only Canada who lives four months a year in Florida with his U.S. citizen wife, in a house he owns where he parks a car he owns with Florida license plates
(E) A citizen of Grenada who lives full time in the USA with an E1 visa operating a fast food franchise

For help in finding the answer see …

Read more

IRS Provides Limited Tax Relief For Certain Individuals Renounced(ing) After March 18, 2010

John Richardson On Renouncing U.S. Citizenship

In what appears to be a response to how FATCA issues affect “accidental Americans” living outside the United States, the IRS has introduced a procedure providing limited tax relief, penalty relief and certainty for accidental Americans who need to renounce U.S. citizenship in a FATCA world. The problem is described in this recent article by Helen Burggraf at American Expat Finance. Note that March 18, 2010 was the date that the HIRE Act (of which FATCA was a revenue offset) was enacted – making it clear that this relief is tied to FATCA and NOT to “citizenship-based taxation” per se.

In a nutshell, it appears (I will read this in more detail again) to say that Individuals who:

1. Have NEVER filed a 1040 U.S. tax return

2. Have relinquished/renounced U.S. citizenship after March 18, 2010

3. File the five tax years in the year prior to relinquishment

4. File a tax return in the year of relinquishment

5. Have a net worth of less than 2 million USD at the time of relinquishment AND at the time of filing

6. Have a total of less than $25,000.00 in U.S. tax liabilities over the five year period

7. Certify that their failure to file was non-willful.

can file, avoid paying the U.S. taxes owed and NOT be a covered expatriate.

Read more

Accidental Americans Get Relief! New Announcement From The IRS

Manasa Nadig

Stop the presses, hold the phones, drop everything you are doing! The Internal Revenue Service announced “Relief Procedures for Certain Former Citizens” on September 6th, 2019. If you are an “Accidental American” and planning on renouncing your U.S. Citizenship, you should be reading this.

Let’s dig back a bit and refresh our memories: The United States Constitution provides through the 14th Amendment that “all persons born or naturalized in the United States” are citizens of the USA. A person born abroad to a U.S. citizen parent or parents acquires U.S. citizenship at birth if the parent or parents meet conditions as specified in § 301 and following sections of the U.S. Immigration and Nationality Act.

Those who have acquired U.S. citizenship in such a manner may not be aware of the obligations and consequences of this status. As you my dear readers already know from my blog, that by law, U.S. citizens regardless of where they live have to report and possibly pay tax on their world-wide income to the Internal Revenue Service.

Read more

U.S. Citizenship And Immigration Services To Close All But Seven Of Its Overseas Offices

Helen Burggraf

The U.S. Citizenship and Immigration Services has announced that it plans to close all but seven of its 23 overseas offices, including those in London, Frankfurt, Rome and Bangkok.

This represents a change from its earlier plan, announced in March, that it would close all 23 of the outposts.

In a statement, the USCIS said the “organizational changes” would “allow more effective allocation of USCIS resources to support, in part, backlog reduction efforts.”

It said the offices it plans to keep open would be those in Beijing and Guangzhou, China; Nairobi, Kenya; New Delhi, India; Guatemala City, Guatamala; Mexico City, Mexico; and San Salvador, El Salvador.

“The first planned closures are the field offices in Monterrey, Mexico, and Seoul, South Korea, at the end of September,” the USCIS statement said.

Read more

UK MP Vows To Continue Speaking Out On Behalf Of Accidental Americans Living In Britain

Helen Burggraf

Preet Kaur Gill, a British Labour Party member of Parliament from the greater Birmingham area,  has said she plans to continue asking questions of the UK government on behalf of U.S.-born British citizens – like at least one of her constituents, who are facing unprecedented “negative financial implications” as a result of the way such individuals are pursued for tax by the U.S. authorities.

Gill’s vow to continue speaking out on behalf of such dual U.S./British citizens comes as resistance is reported to be growing on the part of European governments to continuing to accommodate the American government’s extra-territorial tax enforcement efforts, which is currently done in part through intergovernmental agreements signed in the wake of the 2010 passage of the Foreign Account Tax Compliance Act.

Under FATCA, non-U.S. financial institutions around the world are required to report to the U.S. on those accounts they hold on behalf of American citizens. They do this by reporting the information to the authorities in the country in which the financial institution in question is located – which in turn, under the terms of the IGA, forwards the information to the U.S. Internal Revenue Service.

As reported here last month, a growing number of the more than 100 countries that have signed up to participate in a new, global automatic banking information exchange program modelled on FATCA, and organized over the last few years by the Brussels-based Organization for Economic Cooperation and Development, have begun to question the fact that the U.S. has opted not to participate – and is understood to be giving as its excuse the fact that it has FATCA, and therefore has no need to.

Such countries are said to be frustrated in particular because the U.S. has failed to “reciprocate” with respect to the information it receives from them through their FATCA agreements with the same kind of information on accounts held by their taxpayers in U.S. financial institutions.

Read more

Foreign Financial Institutions To Report U.S. Taxpayers Bank Information: FATCA Intergovernmental Agreements

U.S. Department Treasury

FATCA was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.

FFIs are encouraged to either directly register with the IRS to comply with the FATCA regulations (and FFI agreement, if applicable) or comply with the FATCA Intergovernmental Agreements (IGA) treated as in effect in their jurisdictions.

For jurisdiction status on intergovernmental agreements and relayed agreements and date jurisdiction agreements are treated as having an IGA in effect read below:

Read more

The United States Imposes A Separate And Much More Punitive Tax On U.S. Citizens Who Are Residents Of Other Countries

John Richardson - The United States Taxes Citizens Who Reside In Another Country

On February 28, 2019 TaxConnections kindly posted my first post comparing the way that 19th Century Britain and 21st Century America Treated Its Citizens/Subjects. The post received a great deal of interest resulting in more than 120 comments (largely reflecting the frustration of Americans abroad and accidental Americans).

The purpose of that post focused largely on citizenship and the fact that the United States imposes worldwide taxation on U.S. citizens who are tax residents of other countries and do NOT live in the United States. What that post did NOT do was to focus on HOW the Internal Revenue Code applies to U.S. citizens who do NOT live in the United States.

The Bottom Line Is:

The United States is in effect imposing a separate and more punitive tax system on its citizens abroad. Strange but true. The purpose of this post is to explain how that works and to provide specific examples.

Read more

Expatriates Are Very Upset With The United States IRS: 120+ Comments Educate You Why

John Richardson On Expatriate Taxes

We continue to receive commentary on the article written by TaxConnections Member John Richardson of Citizenship Solutions. His blog post on USA Of The 21st Century Is Like Britain In The 19th Century has hit a nerve with many expatriates around the world. The blog post and the 120+ comments that follow explain what is happening to those who happened to be born here but do not live in the United States. There is more to learn that will leave you at the edge of your seats so stay tuned to this post.

Read this post that has 120+ comments and growing by the day and please forward to expatriates you know to add commentary.

https://www.taxconnections.com/taxblog/the-usa-of-the-21st-century-is-like-britain-in-the-19th-century/#.XH3XiKJKiJB

Please add your commentary below to continue to educate others on the consequences of United States FATCA tax laws on your life.

Written By TaxConnections CEO, Kat Jennings

 

WOW! A Big Reaction To The Article Posted Yesterday Called “USA Of The 21st Century Is Like Britain In The 19th Century”

John Richardson About Americans Citizens Abroad

Yesterday, we posted an article called The USA Of The 21st Century Is Like Britain In The 19th Century written by John Richardson of Citizenship Solutions in Canada. John is an internationally recognized expert on the subject of dual citizenship and accidental Americans. The post created a significant amount of reaction and response which I want to bring to your attention today. It is important to understand the impact of U.S. tax laws and how they are affecting Americans who moved long ago to another country, or may have just been born here but do not reside in the United States.

It is a great article and the commentary continues to highlight the issues faced by many. You can read the article and the comments at this link:

https://www.taxconnections.com/taxblog/the-usa-of-the-21st-century-is-like-britain-in-the-19th-century/#.XHkuBqJKiJA

Your comments are welcome to continue enlightening the world.

Kat Jennings, CEO TaxConnections