Post: #1

Hello,

I don't know if anyone is aware yet but there is new tax reform that passed in United States around 2011 called FATCA. This law states that Americans who live outside of United States have to pay taxes to United States even though they do NOT work within United States.

I have a dual citizenship and I have family in Europe. So, I go to Europe around 5-6 times a year and most of my family also have American citizenship but they live in Italy. They moved back there for good. This FATCA has been accepted by all EU countries, even Russia, Turkey and Ukraine had to accept it.

Basically, lets say you are American and working in Germany. Based on your job, lets assume that you pay %25 tax in Germany because you are working there. Since you are American, you also have to file income tax for United States and let them know that how much you are earning in Germany. If your taxes would be around %35 if you lived in United States, you'd have to pay %10 differences to United States as a tax even though you don't work in United States.

Yes, I am dead serious. How do I know this?

My uncle just got arrested at JFK yesterday while visiting New York because he had 84,000 Euro's in his Italian bank in Italy and not paid any tax for United States. Meanwhile, he moved back from United States to Italy for good back in 2008.

IRS told him that any American who has over $10,000 balance in foreign banks outside of United States, still have to pay taxes.

It sounds crazy but it is unfortunately true.

While, Citibank who had profit $14 billions, Bank of America who had profit of $9 billions, G.E who had profit of $19 billions and Verizon who had profit of $14 billions:

Paid $0 Federal tax.

Very good, Obama. Thanks.

Post: #2

Yeah, this has been out for a while as you noted. The US government is looking for quarters in the sofa cushions at this point - they are desperate for revenue and will use the power of trade sanctions to get cooperation from every country if they have to. If you have a bank account and you do not disclose it to the IRS it is a $10k fine plus half of whatever is in the account. Talk to a tax attorney, but it isn't something you want to ignore.

Post: #3

(11-29-2016 08:19 PM)SlickyBoy Wrote:  Yeah, this has been out for a while as you noted. The US government is looking for quarters in the sofa cushions at this point - they are desperate for revenue and will use the power of trade sanctions to get cooperation from every country if they have to. If you have a bank account and you do not disclose it to the IRS it is a $10k fine plus half of whatever is in the account. Talk to a tax attorney, but it isn't something you want to ignore.

Law passed in United States on 2011 or 2012 but EU accepted the deal with USA on 2014 and enforcing since 2015. So it's relatively new, I know a lot of people in Europe who have American citizenship, almost none knew about this.

I spoke with some accountants in New York, not even accountants in New York knew about it and I work for JP Morgan.

Post: #4

Dupe

/thread-37988.html

Post: #5

MCMV - Are you absolutely sure that your uncle was arrested for not paying taxes on money sitting in a bank account in Italy? Are you sure there was not some other 'crime' alleged? Was he carrying more than $10,000 in cash without declaring it at the border? Did he enter the US on his US passport?

I am not hating on you - but this is the first I've heard of a middle class American citizen being arrested upon entry into the United States SOLELY for having money in a foreign bank account. Read on - because if we have now entered the realm where american citizens are being arrested at ports of entry into the United States for having undeclared foreign bank accounts - this place truly is hell and we should all be aware of this!

I've followed FATCA implementation - it is NOT income taxation. The example above that you gave of the American citizen in Germany working above and paying US income taxes is not about FATCA - because you always had to pay US income taxes on your worldwide income. We've always been one of the only countries that taxes its citizens on income earned in other countries over a certain amount. The double taxation treaties in effect are such that you pay the difference in taxes between the foreign country and the US - meaning that you only pay up to the US tax amount. If Germany taxes you at 45% and the US taxes you at 45% - you would only pay to Germany. If Germany taxed you 25% and the US taxed you at 45% then you pay Germany 25% and the US 20%.

FATCA requires foreign banks to REPORT the existence of bank accounts held in their institutions when the dollar amount is over a certain limit. As a matter of practice, the foreign banks report all US owned accounts in their depositories now to avoid the trouble of counting the money in the accounts. Your US income tax return requires you to state in 'Yes' or 'No' format if you own an account or interest in a foreign depository (i.e. a bank). If you check off NO on the form and you own a foreign account - you have filed a fraudulent tax return. If you check off YES - you have more forms to fill-out and they are onerous and you would have to prove where the money came from and that it is, or was NOT - income subject to taxation. If you simply don't file a US tax return because you feel you don't owe and taxes and you have a foreign bank account that would have to be declatred - that is some other 'failure to file' federal crime.

Now the RUB - are FATCA violations by US citizens where the 'violation' is solely assumed from information received by the US from foreign banks NOW RESULTING IN TREASURY DEPARTMENT HOLDS AND ARREST WARRANTS BEING PUT INTO THE TECHS COMPUTERS IN USE AT AIRPORTS. Typically, when you land in a US port after being abroad, you first go through the immigration desk to check your status and identity but when you see a US customs officer - they scan your passport and one of the databases you are run against is the Treasury Departments system. If you uncle got picked up - the data and directive was in that system for non-payment of taxes.

The hate that you should have for the current system, - that retired people living abroad for years are being arrested right out of an airport and charged with federal crimes should make your blood boil I feel there are A LOT of senior citizens who are going to get arrest records because of this.

If you do business abroad, the most dangerous place for you to pass through may just well by the US customs inspection at the airport. Particularly, if you spend long long times abroad and dont keep good paperwork, or spend lots of money having accountants prepare your taxes.

Post: #6

How did the I.R.S. know how much money was in his bank account in Italy?

Post: #7

(11-29-2016 09:53 PM)Brother Abdul Majeed Wrote:  How did the I.R.S. know how much money was in his bank account in Italy?

Non-US banks are required to report the assets and identities of US citizens holding accounts with them. It's a huge pain in the ass for the banks themselves and as a result many non-US banks now refuse to grant accounts to US citizens in order to avoid the paperwork.

Post: #8

(11-29-2016 08:16 PM)MCMV Wrote:  Basically, lets say you are American and working in Germany. Based on your job, lets assume that you pay %25 tax in Germany because you are working there. Since you are American, you also have to file income tax for United States and let them know that how much you are earning in Germany. If your taxes would be around %35 if you lived in United States, you'd have to pay %10 differences to United States as a tax even though you don't work in United States.

This has nothing to do with FATCA and was always the case. It also ignores the foreign earned income exclusion, which was $100k in 2015 - anything under that amount earned abroad is not subject to US income tax provided you were outside the US for 330 days out of the year (or otherwise qualify for the exclusion).

(11-29-2016 08:16 PM)MCMV Wrote:  IRS told him that any American who has over $10,000 balance in foreign banks outside of United States, still have to pay taxes.

It's a $10k balance in an individual non-US account that forces you to declare the account. You aren't necessarily liable to pay tax on it but it is a pain in the ass for the average person. You can have multiple accounts with $9k and you're not required to declare them. Even the Swiss were bullied into complying with it.

Post: #9

(11-29-2016 08:29 PM)MCMV Wrote:  I spoke with some accountants in New York, not even accountants in New York knew about it and I work for JP Morgan.

It got a good amount of publicity when it was passed into law, and there has been a lot of press particularly about how it broke the Swiss secret banking system.

Any accountant working with US citizens living abroad would make it their business to know about it, but most US-based accountants don't know even the most basic laws regarding foreign-earned income, so it doesn't surprise me that they ignore FATCA. Find an accountant that specializes in expat tax law.

Post: #10

The best thing to do is, and has always be, get a firm to open an offshore company for you with nominee shareholders. If you choose a shelf company rather than a new company, you can get everything set up for around $3,000. Takes around 2 weeks. Then your firm or agent will help you open a bank account with most internationan banks. Since the company's nominee isn't a US citizen, the US government will know zero, niet, nada about your activities. That advice is also good for other countries' citizens too.

If you have a little bit more wealth and are concerned about Big Brother pressuring people to turn over your information, then you might want to:
1) Have at least $1M in your bank account
2) Get a second passport from a "citizenship by investment" country such as Malta, Austria, Antigua & Barbuda, etc.
3) Go to a US embassy abroad, and renounce your citizenship
4) Open a bank account wherever the fuck you want.

Or, use Bitcoin to store your savings. It all depends what makes you comfortable.

Post: #11

(11-29-2016 10:29 PM)Rawmeo Wrote:  The best thing to do is, and has always be, get a firm to open an offshore company for you with nominee shareholders. If you choose a shelf company rather than a new company, you can get everything set up for around $3,000. Takes around 2 weeks. Then your firm or agent will help you open a bank account with most internationan banks. Since the company's nominee isn't a US citizen, the US government will know zero, niet, nada about your activities. That advice is also good for other countries' citizens too.

If you have a little bit more wealth and are concerned about Big Brother pressuring people to turn over your information, then you might want to:
1) Have at least $1M in your bank account
2) Get a second passport from a "citizenship by investment" country such as Malta, Austria, Antigua & Barbuda, etc.
3) Go to a US embassy abroad, and renounce your citizenship
4) Open a bank account wherever the fuck you want.

Or, use Bitcoin to store your savings. It all depends what makes you comfortable.

This is one of the reasons I moved to Panama. It's quite easy to get residency, and from there it's only 3 years to becoming a citizen.
There are certain schemes where a person can get their residency for as little as 25g's, and only needs to step foot in the country one day every two years. I actually want to live here though.

All Western nations are really clamping down, and it won't be long before more and more restrictions are placed on citizens. It's becoming like a witch hunt. They do not want your money to leave.

Post: #12

(11-29-2016 09:47 PM)Jim Kirk Wrote:  MCMV - Are you absolutely sure that your uncle was arrested for not paying taxes on money sitting in a bank account in Italy? Are you sure there was not some other 'crime' alleged? Was he carrying more than $10,000 in cash without declaring it at the border? Did he enter the US on his US passport?

I am not hating on you - but this is the first I've heard of a middle class American citizen being arrested upon entry into the United States SOLELY for having money in a foreign bank account. Read on - because if we have now entered the realm where american citizens are being arrested at ports of entry into the United States for having undeclared foreign bank accounts - this place truly is hell and we should all be aware of this!

Yes. I just got back from JFK with 2 lawyer friends. As I said, I've been working in finance industry since 2008 but most of accountants don't know about this law in United States because it applies to people who live outside of the country.

Let's say, if you have $50,000 (50,000 Euro) worth money in Swedbank in Sweden because you're working in Sweden and not report anything to United States, you will get arrested starting from 2016.

You will hear a lot of these incidents starting from 2017 because EU countries accepted this deal (reporting US citizens income to USA if those individuals live in EU countries) in 2015 and they're enforcing this law by 2016. So, it's very very new. As time goes by, more people will get arrested when they come to United States.

We just paid $11,800 and got him out today. He had to spend the night at JFK cell last night.

Post: #13

I'm a US national abroad.

OP i'm skeptical of your story and your understanding of tax reporting abroad is equally off. These rules have been around forever and are part of the cost of being a citizen of the global American empire. FATCA started to be enforced a few years ago when some high profile Americans from sillycon valley upped and left with their stock option cash and didn't pay the IRS.

There are two things that stand out for me:
1. Others have mentioned the foreign income exclusions. Had your uncle been smart he wouldn't have had to pay US taxes. What the heck was he doing, using turbo tax or just not filing his taxes each year?

2. Registering for FATCA is so stupid easy. It takes 10 minutes to fill out and it can be submitted over the Treasury website for FREE.

(11-30-2016 08:50 AM)MCMV Wrote:  Let's say, if you have $50,000 (50,000 Euro) worth money in Swedbank in Sweden because you're working in Sweden and not report anything to United States, you will get arrested starting from 2016.

You will hear a lot of these incidents starting from 2017 because EU countries accepted this deal (reporting US citizens income to USA if those individuals live in EU countries) in 2015 and they're enforcing this law by 2016. So, it's very very new. As time goes by, more people will get arrested when they come to United States.

We just paid $11,800 and got him out today. He had to spend the night at JFK cell last night.

In your Swedish bank example, assuming you've been paying a foreign government its taxes and utilizing the foreign income exclusions, if you register for FATCA you won't have to pay anything.

Your story has some significant holes and it sounds like your uncle either incorrectly reported his income or was hiding it AND failed to register his bank account for FATCA.

FATCA enforcement has been in the news and made its rounds in several international newspapers (especially in Europe). There even was a forgiveness period to register up for it to avoid penalties. Heck, there have already been a bunch of high profile individuals from Europe who got dinged for back taxes because of not filing yearly even though they haven't been back in the US since their rugrat days. This all started coming to force way back in 2014/2015. See Boris Johnson's case back in 2015 http://www.telegraph.co.uk/news/politics...-bill.html

Without being familiar with his situation and seeing his records, it sounds like he was blissfully unaware of the tax rules for US citizens abroad and didn't bother filing his taxes for however long he has been abroad. Hence: Go to jail, do not collect $200, and pay an accountant/lawyer to properly set up your life to avoid this.

Tell the rest of your family to get good international accountants if they haven't been filing US tax returns for a significant amount of time. US passports can be canceled if there is back tax on anything.

Post: #14

(11-30-2016 09:32 AM)The Beast1 Wrote:  I'm a US national abroad.

OP i'm skeptical of your story and your understanding of tax reporting abroad is equally off. These rules have been around forever and are part of the cost of being a citizen of the global American empire. FATCA started to be enforced a few years ago when some high profile Americans from sillycon valley upped and left with their stock option cash and didn't pay the IRS.

There are two things that stand out for me:
1. Others have mentioned the foreign income exclusions. Had your uncle been smart he wouldn't have had to pay US taxes. What the heck was he doing, using turbo tax or just not filing his taxes each year?

2. Registering for FATCA is so stupid easy. It takes 10 minutes to fill out and it can be submitted over the Treasury website for FREE.

My family live on/off in Italy since 1990's, if those rules around forever why didn't nobody have this problem while entering USA? My dad is living in Rome and retired, has over $800,000 in his bank in Italy but he never did file tax for USA because he hasn't been living in the country for 25 years. So, if those things are around forever, why nothing ever happened to people that I know? And, I know Italian/American community in Rome really well. Nobody even had this issue ever.

Plus, if he has to file for tax while in Italy and get taxed even though he's not living in the country, what's the purpose anyway since you have to pay tax? Well, he paid his tax at JFK. It's samething as long as you pay. He would just avoid getting suck there yesterday. Thats all.

I spoke with IRS at JFK for 2 hours. They're telling me that this is new law between European and Americans and you're telling me that its been there forever. Should I believe IRS or you?

(11-30-2016 09:32 AM)The Beast1 Wrote:  In your Swedish bank example, assuming you've been paying a foreign government its taxes and utilizing the foreign income exclusions, if you register for FATCA you won't have to pay anything.

Your story has some significant holes and it sounds like your uncle either incorrectly reported his income or was hiding it AND failed to register his bank account for FATCA.

FATCA enforcement has been in the news and made its rounds in several international newspapers (especially in Europe). There even was a forgiveness period to register up for it to avoid penalties. Heck, there have already been a bunch of high profile individuals from Europe who got dinged for back taxes because of not filing yearly even though they haven't been back in the US since their rugrat days. This all started coming to force way back in 2014/2015. See Boris Johnson's case back in 2015 http://www.telegraph.co.uk/news/politics...-bill.html

Without being familiar with his situation and seeing his records, it sounds like he was blissfully unaware of the tax rules for US citizens abroad and didn't bother filing his taxes for however long he has been abroad. Hence: Go to jail, do not collect $200, and pay an accountant/lawyer to properly set up your life to avoid this.

Tell the rest of your family to get good international accountants if they haven't been filing US tax returns for a significant amount of time. US passports can be canceled if there is back tax on anything.

Yes, you have to.

If you work abroad and file your taxes: you will pay the tax % difference. If you work in Europe, make $$$, pay tax to whichever country you're working in, you will also have to pay tax to US starting from 2015. It doesn't matter if you file your taxes or not.

If you file tax to US, good. This will send your bill to pay up.

If not, they will arrest you at the airport and make you pay.

There's no difference really. I just spent 7 hours at JFK today and spoke to 10 people about this with 2 lawyers and JP Morgan accountant.

Plus, my uncle isn't working in Italy. How can you tax a person who is NOT working and living IN foreign country? I mean, how can he pay the tax for the income that he's not earning? This was our problem. My uncle retired basically around 2005 and moved to Italy on 2008. He hasn't been working over 10 years. And, US want to tax him because he has money in his account in Italy.

Post: #15

Quote:My family live on/off in Italy since 1990's, if those rules around forever why didn't nobody have this problem while entering USA?

Rules existing and rules being enforced are two different things. Like SlickyBoy said, America is getting to digging through the couch for quarters territory.

Quote:Plus, my uncle isn't working in Italy. How can you tax a person who is NOT working and living IN foreign country? I mean, how can he pay the tax for the income that he's not earning? This was our problem. My uncle retired basically around 2005 and moved to Italy on 2008. He hasn't been working over 10 years. And, US want to tax him because he has money in his account in Italy.

Interest income, dividends, and capital gains are all considered taxable income.

Post: #16

(12-01-2016 01:07 AM)Peregrine Wrote:  Rules existing and rules being enforced are two different things. Like SlickyBoy said, America is getting to digging through the couch for quarters territory.

Interest income, dividends, and capital gains are all considered taxable income.

Exactly, that's why it's shocking that they started to do this recently. Because he's been coming to US 3-4 times a year and he never had a problem for past 10 years. He always had balance in his accounts in Italy.

When I spoke with the IRS office at JFK, they said they're enforcing this law starting from 2015.

It's weird. Lets say, I'm living in Italy with my life savings but yet, I have to pay tax to United States even though, I'm not working anywhere or living there. What the hell is that?

Post: #17

(11-30-2016 08:12 PM)MCMV Wrote:  

(11-30-2016 09:32 AM)The Beast1 Wrote:  I'm a US national abroad.

OP i'm skeptical of your story and your understanding of tax reporting abroad is equally off. These rules have been around forever and are part of the cost of being a citizen of the global American empire. FATCA started to be enforced a few years ago when some high profile Americans from sillycon valley upped and left with their stock option cash and didn't pay the IRS.

There are two things that stand out for me:
1. Others have mentioned the foreign income exclusions. Had your uncle been smart he wouldn't have had to pay US taxes. What the heck was he doing, using turbo tax or just not filing his taxes each year?

2. Registering for FATCA is so stupid easy. It takes 10 minutes to fill out and it can be submitted over the Treasury website for FREE.

My family live on/off in Italy since 1990's, if those rules around forever why didn't nobody have this problem while entering USA? My dad is living in Rome and retired, has over $800,000 in his bank in Italy but he never did file tax for USA because he hasn't been living in the country for 25 years. So, if those things are around forever, why nothing ever happened to people that I know? And, I know Italian/American community in Rome really well. Nobody even had this issue ever.

Plus, if he has to file for tax while in Italy and get taxed even though he's not living in the country, what's the purpose anyway since you have to pay tax? Well, he paid his tax at JFK. It's samething as long as you pay. He would just avoid getting suck there yesterday. Thats all.

I spoke with IRS at JFK for 2 hours. They're telling me that this is new law between European and Americans and you're telling me that its been there forever. Should I believe IRS or you?

Enforcement officers will not know the law. They're just enforcing it. This is part of the reason you can't trust cops to have your best interests at heart.

Get an international accountant who can explain it to you. As others have said, law being on the books versus actually getting enforced are two very different things.

(11-30-2016 08:12 PM)MCMV Wrote:  

(11-30-2016 09:32 AM)The Beast1 Wrote:  In your Swedish bank example, assuming you've been paying a foreign government its taxes and utilizing the foreign income exclusions, if you register for FATCA you won't have to pay anything.

Your story has some significant holes and it sounds like your uncle either incorrectly reported his income or was hiding it AND failed to register his bank account for FATCA.

FATCA enforcement has been in the news and made its rounds in several international newspapers (especially in Europe). There even was a forgiveness period to register up for it to avoid penalties. Heck, there have already been a bunch of high profile individuals from Europe who got dinged for back taxes because of not filing yearly even though they haven't been back in the US since their rugrat days. This all started coming to force way back in 2014/2015. See Boris Johnson's case back in 2015 http://www.telegraph.co.uk/news/politics...-bill.html

Without being familiar with his situation and seeing his records, it sounds like he was blissfully unaware of the tax rules for US citizens abroad and didn't bother filing his taxes for however long he has been abroad. Hence: Go to jail, do not collect $200, and pay an accountant/lawyer to properly set up your life to avoid this.

Tell the rest of your family to get good international accountants if they haven't been filing US tax returns for a significant amount of time. US passports can be canceled if there is back tax on anything.

Yes, you have to.

If you work abroad and file your taxes: you will pay the tax % difference. If you work in Europe, make $$$, pay tax to whichever country you're working in, you will also have to pay tax to US starting from 2015. It doesn't matter if you file your taxes or not.

If you file tax to US, good. This will send your bill to pay up.

If not, they will arrest you at the airport and make you pay.

There's no difference really. I just spent 7 hours at JFK today and spoke to 10 people about this with 2 lawyers and JP Morgan accountant.

Plus, my uncle isn't working in Italy. How can you tax a person who is NOT working and living IN foreign country? I mean, how can he pay the tax for the income that he's not earning? This was our problem. My uncle retired basically around 2005 and moved to Italy on 2008. He hasn't been working over 10 years. And, US want to tax him because he has money in his account in Italy.

Are you sure you work in finance? I suggest reading up on how this works. https://www.irs.gov/individuals/internat...-exclusion

FATCA isn't a tax. It's a bank account reporting rule. You only pay tax if the government finds out you've been getting income from taxable activities and not paying it to a tax authority.

Had you and your family got an accountant and properly refilled your older returns, you only would have to pay the back taxes to the italians and not the US.

It sounds like your uncle has been taking 401k or an IRA and social security withdrawals and not paying tax on them to either the IRS or the Italian equivilent. All of those are taxable events. You and your family clearly need to get some useful tax advise and fast. Did you all think you could avoid paying tax on retirement accounts by moving to Europe?

I recommend you go and call Deloitte or some large firm with international experience. It's obvious your JP Morgan buddies are clued in more to domestic scene than the international one.

Not trying to be difficult, but you're talking to a group of expats here who have all become semi experts on international taxes out of neccessity. I suggest dropping the, "screw the US woe is me" attitude and call a qualified tax professional who can get you and your entire family into compliance.

This "problem" isn't going to go away and whining about it is only going to make the taxman slap you harder next time.

Post: #18

(12-01-2016 03:27 AM)The Beast1 Wrote:  Enforcement officers will not know the law. They're just enforcing it. This is part of the reason you can't trust cops to have your best interests at heart.

Get an international accountant who can explain it to you. As others have said, law being on the books versus actually getting enforced are two very different things.

Exactly, this is what I'm saying. There could laws about this long time too but nobody was enforcing it, so nobody cared. I mean, jaywalking is illegal in Manhattan too but everyone is doing it.

A guy who's been coming to US 3-4 times a year, landed here two days ago, who lives in Italy and who had over 50k in his account in Italy in past 10 years, got arrested this time.

When he asked the reason, they said: "You have 80K in your account in Italy, why didn't you pay taxes?" He says, "I'm retired and I don't have any income from Italy." So, in the end, he got arrested anyway.

(12-01-2016 03:27 AM)The Beast1 Wrote:  Are you sure you work in finance? I suggest reading up on how this works. https://www.irs.gov/individuals/internat...-exclusion

FATCA isn't a tax. It's a bank account reporting rule. You only pay tax if the government finds out you've been getting taxable activities and not paying it to anh tax authority.

Had you and your family got an accountant and properly refilled your older returns, you wouldn't have had to pay anything during the grace period. Again all over the news.

It sounds like your uncle has been taking 401k or an IRA and social security withdrawals and not paying tax on them to either the IRS or Italian equivilent. All of those are taxable events. You and your family clearly need to get some useful tax advise and fast.

I recommend you go and call Deloitte or some large firm with international experience. It's obvious your JP Morgan buddies are clued in more to domestic scene than the international one.

Not trying to be difficult, but you're talking to a group of expats here who have all become semi experts on international taxes out of neccessity. I suggest dropping the, "screw the US woe is me" attitude and call a qualified tax professional who can get you and your entire family into compliance.

This "problem" isn't going to go away!

I am sure, do you want my JP Morgan e-mail to verify?

No, he didn't take any 401k. It has nothing to do with USA. He basically made that money in United States while working and he took his savings there by $10k, everytime he visited Italy over period time. That income has been already taxed while he was working. He just saved over 150k while working and this 80k was what it was left.

I mean, I have some good amount savings in my Citibank account in Manhattan. Can't I just take my own money to Italy and deposit into my account? Apparently, not.

Post: #19

(11-29-2016 10:29 PM)Rawmeo Wrote:  The best thing to do is, and has always be, get a firm to open an offshore company for you with nominee shareholders. If you choose a shelf company rather than a new company, you can get everything set up for around $3,000. Takes around 2 weeks. Then your firm or agent will help you open a bank account with most internationan banks. Since the company's nominee isn't a US citizen, the US government will know zero, niet, nada about your activities. That advice is also good for other countries' citizens too.

This won't work any more as banks everywhere are required to identify beneficial owners. Maintaining financial privacy these days requires either an extremely complicated trust/foundation structure (legal, expensive) or private nominees (friends) in third countries (not very legal).

Post: #20

(12-01-2016 03:53 AM)MCMV Wrote:  A guy who's been coming to US 3-4 times a year, landed here two days ago, who lives in Italy and who had over 50k in his account in Italy in past 10 years, got arrested this time.

When he asked the reason, they said: "You have 80K in your account in Italy, why didn't you pay taxes?" He says, "I'm retired and I don't have any income from Italy." So, in the end, he got arrested anyway.

Yeah, but this has nothing to do with the tax code, which, as The Beast pointed out earlier, has always subjected Americans to worldwide taxation (except ~$100k FEIE exception and tax treaty benefits where applicable).

Even if you don't have any income but do have money in bank accounts, you're required to report it these days. It doesn't result in tax dues, but you have to report it anyway. That's life for Americans.

So he has two options:

1. file a FATCA report every year with details of his bank balances: https://www.irs.gov/businesses/corporati...-taxpayers

2. relinquish his US citizenship. Remember there are two options: to relinquish and to renounce. Renunciation is more expensive and difficult. Both result in the loss of US citizenship and its associated rights and burdens.

Post: #21

(12-01-2016 03:53 AM)MCMV Wrote:  

(12-01-2016 03:27 AM)The Beast1 Wrote:  Enforcement officers will not know the law. They're just enforcing it. This is part of the reason you can't trust cops to have your best interests at heart.

Get an international accountant who can explain it to you. As others have said, law being on the books versus actually getting enforced are two very different things.

Exactly, this is what I'm saying. There could laws about this long time too but nobody was enforcing it, so nobody cared. I mean, jaywalking is illegal in Manhattan too but everyone is doing it.

A guy who's been coming to US 3-4 times a year, landed here two days ago, who lives in Italy and who had over 50k in his account in Italy in past 10 years, got arrested this time.

When he asked the reason, they said: "You have 80K in your account in Italy, why didn't you pay taxes?" He says, "I'm retired and I don't have any income from Italy." So, in the end, he got arrested anyway.

(12-01-2016 03:27 AM)The Beast1 Wrote:  Are you sure you work in finance? I suggest reading up on how this works. https://www.irs.gov/individuals/internat...-exclusion

FATCA isn't a tax. It's a bank account reporting rule. You only pay tax if the government finds out you've been getting taxable activities and not paying it to anh tax authority.

Had you and your family got an accountant and properly refilled your older returns, you wouldn't have had to pay anything during the grace period. Again all over the news.

It sounds like your uncle has been taking 401k or an IRA and social security withdrawals and not paying tax on them to either the IRS or Italian equivilent. All of those are taxable events. You and your family clearly need to get some useful tax advise and fast.

I recommend you go and call Deloitte or some large firm with international experience. It's obvious your JP Morgan buddies are clued in more to domestic scene than the international one.

Not trying to be difficult, but you're talking to a group of expats here who have all become semi experts on international taxes out of neccessity. I suggest dropping the, "screw the US woe is me" attitude and call a qualified tax professional who can get you and your entire family into compliance.

This "problem" isn't going to go away!

I am sure, do you want my JP Morgan e-mail to verify?

No, he didn't take any 401k. It has nothing to do with USA. He basically made that money in United States while working and he took his savings there by $10k, everytime he visited Italy over period time. That income has been already taxed while he was working. He just saved over 150k while working and this 80k was what it was left.

I mean, I have some good amount savings in my Citibank account in Manhattan. Can't I just take my own money to Italy and deposit into my account? Apparently, not.

The penalty your uncle had to pay was the penalty for not reporting his bank account to the IRS. They will levy a 10k fine and extra penalties for each form not submitted even if you have no taxes to pay you still need to file.

Without knowing his specifics and seeing his paperwork all we have to go off of are your conjectures which aren't giving us a complete picture.

Stop whining, get responsible, and get an accountant. Do it today.

More reading for you: https://www.taxesforexpats.com/italy/us-...italy.html

Edit: FYI- even if you decide to relinquish US citizenship you will have to pay any outstanding taxes, penalties, and also an exit tax for it to be finalized.

Post: #22

(12-01-2016 04:15 AM)The Beast1 Wrote:  Without knowing his specifics and seeing his paperwork all we have to go off of are your conjectures which aren't giving us a complete picture.

Stop whining, get responsible, and get an accountant. Do it today.

More reading for you: https://www.taxesforexpats.com/italy/us-...italy.html

Edit: FYI- even if you decide to relinquish US citizenship you will have to pay any outstanding taxes, penalties, and also an exit tax for it to be finalized.

Thank you - OP needs to stop pushing back & getting mad at the forum and find some pros who know, not overseas expats who live in blissful ignorance. This situation won't go away, and even if it's possible, renouncing US citizenship and getting a second passport is not a solution.

Post: #23

I think overall there is an appalling lack of outrage as to what has occurred here. To throw a retired American in a cell for one night coming through an airport for a failure to disclose a foreign bank account is horrendous. Arguing that this would have been avoided because 'see - a good little boy would get an accountant' is the same as arguing that you would be able to beat a false rape accusation had you videotaped every sexual encounter you ever had with a girl and got a notarized general release from her after having sex to 'protect yourself.'

I don't have time to go through it now, but tax havens and American worldwide efforts to tax its citizens and even resident aliens over the world has been a pet hobby of mine for decades along with research into just how far the surveillance state is going to take it on everyone in this country. The movie 'V' was prescient in certain ways and I caught the line that one of the scientists who experimented and tortured the prisoners of Larkhill had requested permission to leave England and it was denied for whatever reason. The end goal of current ICE/TREASURY regulators is to make it as difficult to leave the United States as to enter into the country. Trump's wall with Mexico is GOING TO CUT BOTH WAYS.

MCMV - thank you for posting this.

Post: #24

(12-01-2016 01:12 AM)MCMV Wrote:  It's weird. Lets say, I'm living in Italy with my life savings but yet, I have to pay tax to United States even though, I'm not working anywhere or living there. What the hell is that?

It isn't just at all - US taxation should be residency-based, not citizenship-based. However, the only way around it for an individual is to renounce/relinquish citizenship. If you decide that your tax liability outweighs the benefits both accrued and projected of being a US citizen, and you have citizenship elsewhere, you can take that step. I know a guy who is relinquishing purely for tax purposes (although he's optimistic that some of these laws may change under Trump).

To be completely clear - if you're just living in Italy off your life savings and are not earning income off of those savings, you're not liable for tax. There is no wealth/assets tax in the US unlike many other countries. However, under FATCA you do have to declare the account and the IRS can verify on the bank's end that the account exists.

Sorry to hear about your uncle - lesson learned.

Post: #25

I believe there's a penalty of 30% for the bank. Americans don't have a minimum value for bank accounts to be disclosed. Banks who have american accounts must disclose it to IRS. If not they pay 30%. But europeans I believe it's only above 50k. And penalties are lower. read this a while ago so the numbers could be skewed.
There are some banks in switzerland who dropped the bank status. But still operates as de facto banks. Even though not subjected to Facta.
Anyway there's a new law coming in effect in 2018. More jurisdictions will be subject to this.

This of course is a subversion of tax law. A bank account per se is not income. The reason why it should be disclosed is a clear intrusion on privacy. But to me whats more stupid is the west have been functioning well before all this regulation came to force. This honestly is typical of dictatorships. And will not end well. I agree with Jim. It's kinda like a Berlin wall or finantial wall. In eastern Berlin people were shot for wanting to cross the wall. Here your thrown into jail.

It's probably an automatic procedure. The bank in Europe sends a notification automatically to the US IRS when they open an account to an american. The IRS also automatically checks if this account is in the databse. If not some algorythm sends an alert to every public enforcement agency. As soon as stepping foot in the US it's automatically activated. The immediate arrest was probably the guideline officers received when they received training about this type of situations. This will happen a lot before a public outrage.

His uncle might have an easier solution just put the money into an italian family member account. Im not advising him or you to do this.