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Tag Archive for FFIs

‘Justice Delayed Is Justice Denied’?

Wighead English jurist William Gladstone, the author of this famous quote, was obviously not a criminal defense lawyer. In many, if not most, cases, delay is a fundamental element of a successful defense, or even the lynchpin of the entire schmear. Over time, memories fade, evidence is lost (or at least becomes more difficult to find and use in court), witnesses relocate, and prosecutors lose interest in the case. All of these developments weigh in favor of criminal defendants.

To paraphrase Gordon Gekko: Delay is good. Delay is right; delay works. So, there were champagne corks popping all along Wall Street and into the uttermost parts of the earth when the IRS announced that it would delay certain FATCA bank withholding requirements until 2019. However, it remains to be seen whether the delay is a legitimate reprieve or Read more

What If I Own Real Estate In A Foreign Country? Answers Here!

There’s this question that I always get from my clients: “Do I have to report my real estate holdings in a foreign country?” To which, my answer (in true accountant style) is always: “It depends”. Let me explain further.

You may be a first generation immigrant to the US and still have strong ties to your home country; by way of family elders who live there or a strong sense that you would like to some day retire back there, where you grew up. Or you are an adventurous investor who would like to invest in a little vacation home by the beach in the Caribbean. Or you were stationed abroad through your job and loved it so much that you invested in some property there. Then this blog is for you to read! Read more

Hong Kong And The United States Sign FATCA Agreement

On November 13, 2014, Hong Kong and the United States signed an inter-governmental agreement (IGA), which will require financial institutions in Hong Kong to comply with the US Foreign Account Tax Compliance Act (FATCA).

FATCA provides the Internal Revenue Service (IRS) with the tools it needs (not a scalpel but a chainsaw) to obtain information on financial accounts held at foreign financial institutions (FFIs) by US persons. An FFI’s failure to disclose information on their US clients hits it where it hurts the most: in their wallets. Very simply, it results in the withholding of 30 percent tax on payments of US-sourced income.

Model IGAs are creatures of the US Treasury and have been developed to overcome a Read more

FAT(CA) – No One Is Getting “FAT” Except The IRS

President Obama in 2010, signed P.L. 111-147, the Hiring Incentives to Restore Employment Act. The purpose of the law is in its eponymous title, but the Internal Revenue Service got into the act with the Foreign Account Tax Compliance Act (FATCA) provisions.

FATCA is an attempt by the IRS to “improve reporting compliance” — translation: “widen the net” — to tax United States citizens who stash assets abroad.

The new FATCA reporting rules are broad and will impact U.S. corporations and high-income individuals with offshore financial holdings. The IRS issued its final regulations in January 2013 and put its Treasury Department “tax ambassadors” to work.

The result was a series of intergovernmental agreements with more than 50 other countries. Read more

The IRS Will Soon Be Asking Questions, PART II: Nominees and FATCA

FATCA and the Nominee –

Part I of this post can be found here.

By brief background, under FATCA, foreign financial institutions (FFIs) must agree to verification and due diligence procedures – meaning they must be on the look-out for customers, owners or beneficiaries evidencing any “US indicia”. They must identify and report information on US account holders/owners directly to the Internal Revenue Service or to their own government via an intergovernmental agreement (IGA). They must look through their customers and counterparties’ ownership to find “substantial US owners” (generally, more than 10% ownership) of any entities holding accounts at the financial institution. Read more

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