Tag Archive for foreign assets

FATCA 2015 Roundup: It’s All Serious Business!

TaxConnections Member Manasa Nadig

A lot has been written about the Foreign Account Tax Compliance Act {FATCA} in the past year. As this year comes to a close and I write up this post, I wanted to give you all, my dear readers a synopsis at your finger-tips, a round-up, if you will of some major FATCA events for 2015:

1. FBAR Deadlines Changed:

On July 31, 2015 President Obama signed the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 into law, which modified the due date of several key forms for Americans with foreign income and Americans living abroad. That includes the Report of Foreign Bank and Financial Accounts, or Form 114, colloquially known as the FBAR.

Any U.S. person with a financial interest in, or signatory authority over, foreign financial accounts must file the FBAR, if at any time, the aggregate value of their relevant foreign account or accounts exceeds $10,000. An account over Read more

Foreign Trust Protection for Foreign Assets: A Myth Busted!

Manasa Nadig - 12-2-15

It is not uncommon anymore that a US Citizen has parents and elders living in foreign countries who may have set up trusts in those countries under (obviously) its laws. There are also US Citizens who have expatriated to/ now live in foreign countries and set up trusts for their children there.

Today’s post was prompted by questions from several clients about an urban legend that seems to be perpetuating itself out there: “You do not have any US tax reporting requirements if you are a US citizen/ permanent resident and your foreign assets and/ investments are in a foreign trust.”

If you have believed this to be true and set up a trust in a foreign country or are thinking of taking this step or are just Read more

This Just In! Final Regulations On Reporting of Foreign Specified Assets On Form 8938!

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Form 8938, is the Statement of Specified Foreign Financial Assets. This form is required to be filed to remain in compliance with IRC § 6308D. You may not have known that the Internal Revenue Service hadn’t yet made the 2011 rules and regulations under this code final, comments and concerns were still being gathered.

The Internal Revenue Service on December 11th, 2014 has issued final regs that provide guidance on the requirement under Code § 6038D, for Form 8938 filers. This provides more information and clarifications on certain filers, types of assets to be reported, valuation etc.

The final regs apply for tax years ending after Dec. 19, 2011, but taxpayers may apply them 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

IRS Reminds Those with Foreign Assets of U.S. Tax Obligations


Nonresident aliens who received income from United States sources in 2013 also must determine whether they have a U.S. tax obligation. The filing deadline for nonresident aliens can be April 15 or June 16 depending on sources of income. See Taxation of Nonresident Aliens on

Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to fill out and attach Schedule B to their tax return. Certain taxpayers may also have to fill out and attach to their return Form 8938, Statement of Foreign Financial Assets. Read more

Beware, US Citizens Using their Other Passport to Open Foreign Bank Accounts

FATCA requires foreign banks to conduct due diligence to see if there are US persons with foreign bank accounts. The fact you did not give a foreign bank your US passport still does not mean they might not report your foreign bank, financial and other accounts to the US and IRS.

FATCA was enacted to expose those US citizens and green card holders who are trying various tricks such as dual passports, etc. to avoid reporting and paying taxes on their foreign financial accounts.

Under the FATCA law in order to stay in good graces of the IRS, the foreign banks must put into place procedures to weed out account holders who are Americans and US green card holders even though the passport they opened the account with said otherwise. These are the questions you need to ask yourself before you take the HUGH risk of not reporting those accounts on form TDF 90-22.1 (FBAR form).

Are there any US address associates with your account?
Are there any US phone numbers with your account?
Is your birthplace listed as somewhere in the US?
Have you made more than one wire in or out form the US?
Any other item that may make the bank suspicious you are a US person. Read more