NB: CALLING ALL EU BROCKERS
I am looking for known contacts in Budapest, Bratislava, South Tyrol, Burgenland & Vienna. Interested in local information only. Complete confidentiality assured. If you know someone, please email me at nobledreamer16 at gmail dot com
Hamilton, ON L8P 0A1 MAP
Why am I getting letters from my bank all of a sudden?
The “FATCA Hunt” – the hunt for U.S. persons (whatever that is) began on July 1, 2014 which was “Canada Day”. Although both the definition of “U.S. person” and whether one meets the definition is not always clear, the search has begun. The level of FATCA awareness has begun. Some organizations are actively warning people that “U.S. Personness” matters. The purpose of the warning is presumably to encourage people to ”come clean” and deal with their U.S. tax situations. In some cases, there is no particular warning – just a letter indicating that they are suspected to be a “U.S. person”. Often one must prove to the institution sending the letter that one is not a U.S. person.
What individuals are U.S. taxpayers? Who is a U.S. citizen?
There are individuals that the U.S. government would define as “U.S. citizens” who:
- do NOT agree that they are U.S. citizens because they have performed a “relinquishing act” under applicable U.S. laws;
- do NOT even know that they may be U.S. citizens because they have never lived in the United States
- are citizens and residents of countries that do NOT allow multiple citizenships
To put it another way: one’s status as a U.S. citizen is NOT always clear.
I have never heard of these requirements! What determines the income that must be reported to the IRS? What “Information Returns” are required to be reported to the IRS?
- FBAR (Now called FinCen 114)
- FATCA 8938 – Report of Specified Foreign Assets
- 5471 – Information return for Foreign Corporation
- 3520 – Information return for a “Foreign Trust”
- 3520A – related to the 3520
I am only a snowbird! Why does this affect me?
- Substantial Presence Test
- Form 8840 Closer Connection Exception Statement for Aliens
- Caution: Streamlined Programs & 35 day rule – Catch 22
What are the ways I can become compliant?
- Offshore Voluntary Disclosure Program – AKA “OVDP – Not appropriate for the vast majority of people
- Streamlined Compliance – A pre-packaged way to “clean up” past compliance problems
- Obeying the law – filing amended tax returns outside the “IRS Created” programs
- Delinquent FBAR Submission Procedures
What costs are involved in renouncing U.S. citizenship?
- The costs of a total of 6 years (5 years prior the year of renuncation plus the year of renunciation) of tax compliance and information returns
- The cost of any back taxes and penalties
- A $2350 administrative fee
- possibility of having to pay an “Exit Tax” (which can be the biggest problem)
WHO: John Richardson, B.A., L.L.B., J.D., is a Toronto lawyer and a member of the Ontario Bar.
Hope to see you, your families & friends. Spread the word!
Information presented is NOT intended or offered as legal or accounting advice specific to your situation.