IRS World Domination Continues - 6 More Countries Sign Intergovernmental Agreements to Disclose YOUR
IRS World Domination Continues - 6 More Countries Sign Intergovernmental Agreements to disclose YOUR overseas ACCOUNTS
As Foreign Account Tax Compliance Act, or FATCA readies for 2014, the IRS shows no signs of stopping when it comes to getting more and more countries on board. Briefly, under the new FATCA rules, foreign governments who sign IGA (Intergovernmental Agreements) with the United States will be required to disclose foreign bank account information of both U.S. citizens with accounts overseas, as well as U.S. citizens living overseas with Foreign Accounts.
To that effect, the United States has recently signed six more intergovernmental agreements with a half dozen jurisdictions, including several traditional offshore tax havens, to implement FATCA, including Malta, the Netherlands, the Islands of Bermuda, and three United Kingdom Crown Dependencies: Jersey, Guernsey and the Isle of Man.
In accordance with the requirements set forth in theses Intergovernmental Agreements, the countries' foreign financial institutions are mandated to report on the holdings of U.S. taxpayers to the Internal Revenue Service or face heavy penalties. This has sparked much outrage, especially overseas where foreign financial institutions are simply refusing to open bank accounts for U.S. Citizens (domestic or abroad) - leaving tens of thousands of expats without any access to bank accounts.
In total the United States has 18 FATCA intergovernmental agreements, and is n the process of negotiating with several other countries to facilitate further FATCA expansion. Under FATCA, U.S. financial institutions withhold a portion of certain payments made to foreign financial institutions who do not agree to identify and report information on U.S. account holders.
In order to effectively comply with FATCA, foreign financial institutions will either register with the IRS, or depending on the terms of the specific IGA, deliver the information to their governments, which will turn the data over to the U.S. Registration.
In addition, U.S. persons may also be effected, since depending on the nature and amount of financial transfer, a U.S. person may be required to withhold a 30% tax on that income paid to a non -U.S. person and mandate that U.S. entities keep documentation on those certain non-U.S. persons - as well as conduct necessary due diligence.
As a result, it is very important that if you are going to maintain a foreign account, that you disclose the value of the account (If it meets certain threshold requirements) and that you file the necessary forms and documentations with the IRS come tax time âEUR" otherwise, you may be facing STIFF penalties!
As Foreign Account Tax Compliance Act, or FATCA readies for 2014, the IRS shows no signs of stopping when it comes to getting more and more countries on board. Briefly, under the new FATCA rules, foreign governments who sign IGA (Intergovernmental Agreements) with the United States will be required to disclose foreign bank account information of both U.S. citizens with accounts overseas, as well as U.S. citizens living overseas with Foreign Accounts.
To that effect, the United States has recently signed six more intergovernmental agreements with a half dozen jurisdictions, including several traditional offshore tax havens, to implement FATCA, including Malta, the Netherlands, the Islands of Bermuda, and three United Kingdom Crown Dependencies: Jersey, Guernsey and the Isle of Man.
In accordance with the requirements set forth in theses Intergovernmental Agreements, the countries' foreign financial institutions are mandated to report on the holdings of U.S. taxpayers to the Internal Revenue Service or face heavy penalties. This has sparked much outrage, especially overseas where foreign financial institutions are simply refusing to open bank accounts for U.S. Citizens (domestic or abroad) - leaving tens of thousands of expats without any access to bank accounts.
In total the United States has 18 FATCA intergovernmental agreements, and is n the process of negotiating with several other countries to facilitate further FATCA expansion. Under FATCA, U.S. financial institutions withhold a portion of certain payments made to foreign financial institutions who do not agree to identify and report information on U.S. account holders.
In order to effectively comply with FATCA, foreign financial institutions will either register with the IRS, or depending on the terms of the specific IGA, deliver the information to their governments, which will turn the data over to the U.S. Registration.
In addition, U.S. persons may also be effected, since depending on the nature and amount of financial transfer, a U.S. person may be required to withhold a 30% tax on that income paid to a non -U.S. person and mandate that U.S. entities keep documentation on those certain non-U.S. persons - as well as conduct necessary due diligence.
As a result, it is very important that if you are going to maintain a foreign account, that you disclose the value of the account (If it meets certain threshold requirements) and that you file the necessary forms and documentations with the IRS come tax time âEUR" otherwise, you may be facing STIFF penalties!