FATCA Fury

Perhaps this should go into Rants, because I feel emotional about it,
but I really would like to have some informed and intelligent feedback.

I can't stop asking myself HOW the USA can assume to make demands and laws upon all the other countries of the world???

It is insane! We're having to talk with our banker right now, who is aware they must make reports for the IRS, but doesn't really understand any of this, how it works. They just get scared and assume they will be attacked if they don't do it.

This seems to me to be nothing short of bullying. -From the country that is all into a anti-bullying media fad when to comes to children.

The laws are completely screwed up and badly written, and will end up hurting innocent people more than the rich tax evaders it meant to get.
But just add that to the completely insane method of just acting as world dictator, I start to feel less sad about renouncing a nationality to a country that has gone mad.

Do it. Renounce this convoluted mess. The dream is dead!

I'd do it in a heartbeat if I could afford it.



PS: You won't have to pay US taxes on top of what you pay to the country you're in! Bonus!

It's because the American Government believes it runs the world and wants to overlord the rest of us like it treats it people , like serfs.

a reply to: Bluesma

Mate, nationality is much akin to parents. You don't get a choice.

When you get older as you are, you can make those other choices so don't be sad, just do what you've gotta do.

Kind Regards
Myselfaswell

a reply to: Bluesma

I can't stop asking myself HOW the USA can assume to make demands and laws upon all the other countries of the world???

Damn control freaks.

One of the reasons is something I have heard called American Exceptionalism. Obama uses the term in speeches. What he means by that is that the people at the top do in fact believe that the American way of life is exceptional to all other cultures and beliefs. They cite "Democracy" when saying this but the word is really a monomer when it comes to how the country is supposed to be set up. America is a Republic as ordained by the founding Fathers beholden to the Constitution. Sadly, nowadays, the Constitution is the last thing applied to the American people and foreign policy. Especially foreign policy.

Since these people want what you have they have to use excuses to get it. One is that they are better than everyone else and this helps them to believe you should just do what they say. For "Humanity" sake.

I could rant on about it too, but leaving it there for now.

I can completely relate!

Look into renouncing though... I have.

There are only a few legitimate reasons to renounce without repercussions. A few that I know of are; military service in another country, political position in another country and possibly getting citizenship in a country that doesn't allow dual citizenship.

If you are seen to be renouncing because of financial reasons or tax purposes (which they pretty much assume, if it's not one of the above reasons), then you will be investigated, and be made to continue reporting your taxes and finances for 10 years after renouncement.

What's worse is that you get your name put on a "name and shame" list for renouncing, with the likes of criminals and political exiles, and may be denied entry if you ever try to travel back into the US.

It's seriously messed up and draconian, and your average US citizen has no idea the extents to which US foreign policy is completely out of line with the rest of the world.

There are only two countries in the world that still tax based on citizenship.

Eritrea (a dictator ship that only takes 2% of all abroad citizens)... and the USA... who take 25%... lol

FATCA is an ill-conceived policy that is alienating US citizens around the world, making them into pariahs as far as any financial dealings. Banks in Australia are already denying US citizens from opening bank accounts.

... land of the free, home of the brave... if you're not overseas.

a reply to: Bluesma

FACTA had me freaking out when I first learned of the reporting requirements. Fortunately, I had been reporting my foreign income to the IRS, and paying any tax that was due. No late tax = No penalties ...

a reply to: tamusan

That's good if you knew... but how about people who were born in another country, from US parent, and find themselves 30 years later looking at 7 years of fines, plus interest, plus back taxes on 7 years of non-reporting, often amounting in potentially hundreds of thousands, on an income that never had anything to do with the US, withot ever knowing of the obligation.

There's around 6 million expats around the world, many who haven't reported for up to 60 years without a problem... then all of a sudden the US is trying to act as if everyone should have been doing it all along. I know for a fact that a couple that migrated to australia 40 years ago got advice at the time that there were no reporting requirements... what changed?

No recourse.

The best advice I’ve managed to hear, and almost no lawyer/accountant will go on the record as saying it is... do nothing.

Plus the exemption for income overseas is only around $92,000. Anything above that gets double taxed... from the country of residence (in Australia around 30%), then the IRS also wants 25% of the full amount over 92k (so 55% tax on gross). The exemption is also only on income, it doesn't apply to interest, bank accounts, property, capital gains... etc.

I have friends who have a couple of houses who are now looking at a tax bill to the US of one of their houses... without ever having worked in the US.

The whole US tax system and foriegn financial policy really needs to be rebuilt... with brains, and good management as a necessity that currently doesn't exist.

The US really do have an exceptional view of themselves... exceptionally insane!

a reply to: puzzlesphere

I didn't know about the reporting requirement until the end of last year. I didn't comply until January of this year. It was also not my accounts in danger, but instead those belonging to my foreign national wife. This was money she earned and/or inherited several years before she became a "u.s. Person".

We talked to a few attorneys and were told to enter the disclosure program and prepare for big penalties. After that, I read the IRS code and the information put out by FINCEN. Luckily, Japan has some of the lowest interest rates available on savings accounts. My wife was keeping money in accounts that basically earned 0% interest.

originally posted by: Bluesma
I can't stop asking myself HOW the USA can assume to make demands and laws upon all the other countries of the world???

It's really not complicated - it is because those countries want to do business with the USA.

In fact EVERY country in the world puts obligations on others for things like import/export or currency controls or immigration.

The US is just more linked to everywhere else, and more people want to do business with it.

It's not American exceptionalism, it is not trying to rule the world - it is saying "this is how we want to do business".

Seems as though they left a letter off of the acronym for the bill: FATCAT.

And yet, we lambaste North Korea and others for their dictatorial traits, while avoiding the insight gained from taking a good long look in the mirror as to our own behavior. The hypocrisy is staggering.

a reply to: Aloysius the Gaul

Are you actually defending FATCA?

Do you even know anything about it?

Not want to... have to.

Regardless of your exceptional attitude, we all live on one planet, and unless there is compromise from the most powerful, then we are all living in a fascist regime. Where does one go to escape the draconian influence of US law? Obviously, you believe that everyone should be subject to US law... global dictatorship anyone?

"Do it our way, or we will make life miserable for you". Doesn't something seem wrong with that attitude to you?

The irony with your post is, your comment shows American exceptionalism in practice.

Disgusting.

a reply to: puzzlesphere
you miss my point - I don't live in the USA - I live in one of het countries that "has to" comply with FACTA.

the fact is that if none of the institutions here did business with the USA then we would have no great need to "comply" with FACTA - if our banks were not linked into the worldwide banking system then we could care less.

FACTA was "big news" here when "accidental americans" who were not aware of their citizenship started getting caught up in it, so yes, I am aware of het situation.

However the thrust of FACTA is one that all countries generally agree with - cutting out tax rorts and evasion - my country is just as eager to do so as the USA, and we have our own miniscule version of FACTA and we are actively involved in the various international efforts to cut down tax havens and the like.

a reply to: tamusan


In my case (24 years living in another country) I was not working for much of that time, I was a stay at home mother. So I didn't have any income to report. When I started to work, I got minimum wage jobs (and already pay very high taxes in my country of residence), so I didn't think about it. Our account was more often in the red than not, we were a struggling young couple with small children.

We have no savings, no savings account, and our checking account does not ever have anything close to the amount of exemption.

But this law came up with a new term "US persons" which englobes much more than people with US nationality! A couple of french people here had their kid in a student exchange program, in the US, so they were deemed then to be US persons, and the IRS decided it could seize their account in France.
My husband, (who has no US citizenship, no green card, nothing) can be called a US person because he is married to me. He cannot live in the US, work in the US, have any of the rights of the US citizens, but must pay income tax to the US.
He is just starting to make enough income for us to stop being in the red all the time, and maybe consider trying to save some money for retirement or something. But since he'll be paying taxes to TWO countries, it isn't worth it. I have no interest in keeping my job if I am going to be paying double taxes too.

The worst really is the effect upon our bank, who are suddenly all worried about what they must do and how, and starting to look like they might just end up prefering not to have any US persons as clients. Our banker was concerned that if they do something wrong on accident, I might get my nationality revoked, and then they would be held responsible for that (by me). I explained that won't happen under any circumstances: but it illustrates the confusion they are dealing with, and why they are close to just kicking us out of the bank to avoid the headaches.

originally posted by: puzzlesphere

There are only a few legitimate reasons to renounce without repercussions. A few that I know of are; military service in another country, political position in another country and possibly getting citizenship in a country that doesn't allow dual citizenship.

If you are seen to be renouncing because of financial reasons or tax purposes (which they pretty much assume, if it's not one of the above reasons), then you will be investigated, and be made to continue reporting your taxes and finances for 10 years after renouncement.

What's worse is that you get your name put on a "name and shame" list for renouncing, with the likes of criminals and political exiles, and may be denied entry if you ever try to travel back into the US.

It's seriously messed up and draconian, and your average US citizen has no idea the extents to which US foreign policy is completely out of line with the rest of the world.

Thanks for that. I don't know yet what to do then. My children don't know what to do. They have never lived in the US but have double nationality, and one is just entering the work force, the other has been working for a few years, but never knew anything about this. He already is having problems paying the income taxes in this country, there is no way he could afford to pay more to any other.

I feel like their having an american mother was curse that none of us recognized until now, and I can't do anything about it.

a reply to: Bluesma

I would think you and your husband, sense he is not an American Citizen should just take your name off the account.
But here is some information for you and a website.
From what I've read, you need to have a lot of money in an account before you or your bank needs to worry.

Reporting Requirements for Individuals

Individual Americans (citizens and tax residents) were already required to file a yearly report about their foreign accounts to the Department of Treasury. This is called "Foreign Bank Accounts Report" (FBAR), and is filed using Form 114 on the FinCEN web site. You're required to file this form for every year during which your total (aggregate) worth of all of your foreign accounts exceeded $10000 on at least one day. This includes, by the way, any account you might have - including savings, checking, investment, pensions of any kind (including "managerial insurance" which is essentially a pension savings account), your educational funds, etc etc.

So What's New?

FATCA adds additional reporting requirements for individuals. In addition to FBAR, you're now required to report your foreign accounts and specified assets as part of your tax return on form 8938. The threshold requirements for form 8938 are different from FBAR, so you may be required to file FBAR - but not required to file form 8938. For Americans living abroad the thresholds are much higher than for Americans living in the US. Also, the reports include slightly different information.

But in general - there's double reporting to different agencies of the Department of Treasury. FBAR goes to the FinCEN, and form 8938 goes to the IRS - but both include roughly the same things.

This applies for all US citizens/tax residents, and the source of your income doesn't matter for this requirement.

Reporting Requirements for Banks

The more important portion of FATCA is the imposition of reporting requirement about Americans on foreign financial institutions. Foreign banks are now required to report about any American with an account(s) worth $50000 or more, and if they don't - they face severe limitations on their activity in the US (essentially flat 30% tax on their US transactions). This requires the banks to break many local laws and as such is a problematic requirement. Many foreign banks chose to close their doors for American customers instead.

LINKY
You might want to show this to your banker!! Ease their mind!!

originally posted by: guohua
a reply to: Bluesma

I would think you and your husband, sense he is not an American Citizen should just take your name off the account.
But here is some information for you and a website.
From what I've read, you need to have a lot of money in an account before you or your bank needs to worry.

-------
You might want to show this to your banker!! Ease their mind!!

One of the problems here is that for one, I have to have my name on the account in order to be employed. By law, no one can be paid with, say, a check- all salaries must be done through a bank transfer directly into an account in the employees name. So I have to stop working to get my name off the account (and can no longer have access to any money, checks, cards..... I might as well wear a hijab while I'm at it).

But also, by french law, any and all property and finance is considered jointly held by us because we're married- we cannot have separate accounts, or property that is not in both names.

I told the banker that they do not have to report accounts that have less than (the equivalent of ) $50,000, but since she did not know for sure, she is nervous and still saying they have to avoid the risk of paying a huge fine to the US.
We'll be meeting her this week again, and hopefully she will have learned a bit more about this, but for the moment, this just looks to me like it has been badly written and carried out, and will have too many negative repercussions.

a reply to: Bluesma

Are you talking about this:
Foreign Account Tax Compliance Act
en.wikipedia.org...

Because I didn't think this was anything new.....the law has been around since 2010...and you've had a question on your 1040 for quite awhile.....I guess making the banks report it is the newer part.
Not sure I see it much different than a 1099.

Which is not to say I don't think the IRS is an invasive behemoth, dangerous to Citizens and the Republic.

ETA
I have since read the other posts of yours...and am appalled.
How can the US do that to non-citizens not living in the US?????
Just as bad as if I wanted to move to Canada.....and pay US taxes on my US income, even though I don't live in the US anymore.

a reply to: DontTreadOnMe
It is only as of June 30th that the banks in other countries are obligated to report all financial information of any "US Persons" to the IRS.

I have not been filing any tax returns up to now while living in another country because I was either unemployed or making such small wages I am not obligated to. But what we never considered is that my husband is considered a "US Person" and perhaps should have been filing and paying income taxes to the US too!

That is part of my gripe- the terminology created in order to get money from Non-Us Citizens, as well as the dictation to private businesses in other lands.

I was not aware that the IRS could just seize peoples accounts over here before, I do not know if that is new or what. In any case, we never heard of happening before now.

These attempts to bully other countries risk biting us in the ass I am afraid. Like the recent attempt to punish France for dealing with Russia with a penalty to the BNP is just making France turn towards the Eurasian alliance of Russia and China and away from the dollar.

If the banks stop holding accounts for US persons, then that isn't going to help the IRS in the long run.