Chasing down the fat cats
In 2010, the US Congress adopted a piece of legislation called the Foreign Account Tax Compliance Act (FATCA) to fight offshore tax evasion by its own citizens. The acronym seems a wry nod to President Barack Obama’s frequent denunciations of “fat cats” who salt their untaxed wealth away in offshore accounts.
Under this new legislation, Washington is demanding that all foreign financial institutions (banks, life insurance companies, investment funds, foundations), including even those not operating in the US, give up names and data of all their customers who are subject to American tax.
This means all American citizens or non-nationals resident in the US, American expatriates, and foreigners with significant holdings in the US.
All financial institutions abroad are required to register with the US Internal Revenue Service (IRS) and to enter into an agreement by which they undertake to identify customers subject to American tax and give their names and bank data to the IRS.
Don’t worry, this situation is aacltuly quite common! Many expats don’t know that they need to file.You are required to file US expat taxes if you are above the respective thresholds. Note that it does not matter where this money was earned, what country your company is from, what currency it was paid in or where you were living. The thresholds are currently as follows:Single with income over $9,350Married filing jointly with income over $18,700Married filing separately with income over $3,650You must also ensure that you qualify as an expat and meet either the Physical Presence Test or Bona Fide Residence test, respectively. Concerning your FBAR, you will need to file the FBAR for any financial account that has had a balance of over $10,000 at any given time over the year. This includes savings, current and investment accounts. If you do not file these, you could be subject to seizure of up to 50% of the assets.The Offshore Voluntary Disclosure Initiative presents an opportunity for people such as yourself to get compliant while facing reduced penalties and interest. This is a good time to get compliant with both your delinquent returns and FBAR’s. Take notice to act quickly this offer expires August 31st!If you have any other questions about your , please don’t hesitate to contact us. Sincerely,The Greenback Team
I have lived in Canada for forty years now, maintaining dual cihnzeistip. I have never earned money in the U.S. and never taken any benefits. Do I understand correctly that I should have been paying U.S. taxes? I’ve never filed an FBAR, having just learned about it. I would like to be able to earn a living in the U.S. should I decide to return. What does the Aug. 31 deadline mean to me? I’ll be reading everything I can find on this.