The Foreign Account Tax Compliance Act, is the latest government effort to eliminate financial privacy from the international banking system. Already provisioned within the law are reporting requirements and penalties, so the intent of this regulation requisite, seems more intent on closing down foreign bank relations for American citizens.
- FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts
- FATCA focuses on reporting
- By U.S. taxpayers about certain foreign financial accounts and offshore assets
- By foreign financial institutions about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest
- The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting
As FATCA Comes Online July 1, 2014, most foreign banks will be under the gun to make inquires of their customers.
- Were you born in the USA?
- Do or did you ever have a U.S. Passport?
- Do or did you ever have a U.S. Green Card (Permanent residency status)?
- Do or did you ever live in the United States and, if so, provide all dates of residing in the U.S.?
- Do or did you ever have a physical address in the U.S.?
- Do or did you ever have a U.S. mailing address in your name?
- Do or did you ever have a U.S. mailing address in care of your name?
- Do or did you ever have legal representation in the U.S.?
If you answer yes to any one of the above questions, some banks will immediately close your account and forwarded on the balance to you and other banks sent W-8BEN and/or W-9 IRS forms for completion and mailing back to the bank upon which a possible 30% U.S. tax withholding would be levied upon your accounts.