FATCA Discussion Thread (Ask your questions) Part Two
Please ask your questions here about FATCA.
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NB: This discussion is a continuation of an older discussion that became too large for our software to handle well. See FATCA Discussion Thread (Ask your questions) for earlier discussion.
This is how I understand it: one can gift up to $147,000 to a NRA spouse with no tax implications. If you go above that, there will be tax implications *unless* you make use of the lifetime unified estate and gift exemption ($5.43 million).
Phil Hodgen talks a bit about this here: http://hodgen.com/community-property-and-form-8854s-balance-sheet/
Note his mention of the “unified credit”.
@SylvanMoon
I should ask your other questions again over on the Expat taxes and Fbar section, as others will chip who have been through the back filing process, I was up to date/compliant when I renounced, so can’t really help with the forms needed.
There is a foreign earned income exclusion if you earn below around $90,000/yr so hopefully it should be quite simple for you on a teachers salary
I believe that you should include a letter that states you had no idea that you needed to file in the US and have only just found out.
Also take a look at the 8854 to see what is required.
Take a look at the renunciation guide link on the bottom of this page, it’s very helpful
Good Luck
@Heidi
Thanks for all your help/guidance on this. I’ve just found the relevant section on the IRS website (http://www.irs.gov/Individuals/International-Taxpayers/U-S-Taxpayers-Residing-Outside-the-United-States) . I’m not going to do the renunciation bit, but will retain my US passport and continue to file the taxes each year. Since I’m retiring this year, it should be pretty straight forward.
When filing your taxes (I’m going to use TurboTax software), I assume that I have to convert all my figures into dollars. What exchange rate do I use for that? An average of the year or something like that?
@SlyvanMoon I used the exchange rate I found here:
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Treasury-Department-End-of-Year-Exchange-Rates
Doesn’t have the 2014 figures yet though, but I expect they’ll be added fairly soon.
I finally heard back from the last of the 9 credit unions that I polled (in May 2104!) about FATCA reporting. These all have high-interest savings accounts (1.8% to 2.1%) and are available Canada-wide. Many are Manitoba-based with unlimited balances being provincially insured (not limited to the CDIC $100K), many have good online access, cheques, low or zero fees, electronic transfers, GICs, TFSAs, Canada-wide “Ding-Free” ATMs, etc. More details can be found from the links here:
https://www.highinterestsavings.ca/chart/
All of the nine only allow Canadian residents to hold accounts, but only three of the nine are FATCA-free as “Registered Deemed Compliant Foreign Financial Institution – Local Client Base”. I originally expected a much higher number to be exempt!
FATCA-free:
Accelerate Financial (and their parent, Crosstown Civic Credit Union)
Achieva Financial
Implicity Financial
FATCA-reporting:
Canadian Direct Western (aka Canadian Western Bank) (Edmonton)
Outlook Financial
Peoples Trust
Hubert Financial
Maxa Financial (originally said FATCA-free but in the end are reporting)
Bridgewater Bank (Calgary)
Thun Financial publishes another article on the struggle of Americans living outside the United States:
http://thunfinancial.com/top-ten-investment-mistakes-made-americans-abroad/
@tuli:
#13
Staying a US citizen.
@Bubblebustin
#14 Letting anyone know u have the US taint
This article
‘FATCA leads MFs to avoid fresh investments from US investors’
January 11, 2015 is out of India, but mentions Canada:
“…..To lower the reporting burden, many mutual funds including HDFC MF, ICICI Prudential MF, Quantum MF and Baroda Pioneer MF, DSP Blackrock MF have even barred investment from residents of US and Canada for some of their schemes, while others are not very keen on investments from such entities….”…
I haven’t been able to actually listen to the audio for this video, but I see it features substantial screenshots from IBS:
https://www.youtube.com/watch?v=iXiVFaaTSK0
‘6 FATCA – Customer Communications’
Haydon Perryman
‘Lawmakers Re-introduce Bill to Curb Offshore Tax Havens’
Washington, D.C. (January 13, 2015)
By Michael Cohn
“…Among the provisions in the bill are ones that would strengthen the Foreign Account Tax Compliance Act, or FATCA, prohibiting U.S. banks from dealing with foreign banks that violate FATCA and ensuring that credit and debit cards issued by the offending foreign banks do not work in the U.S. Any money transferred to an offshore account would be considered taxable income that has not yet been taxed….”….
And what if we abroad choose to spend our money anywhere other than the US, because the US declares that our credit and debit cards issued by “OFFENDING FOREIGN banks” will be declined – or because we boycott the US?
What do the American Chamber of Commerce and the Retail and Tourism sectors think about that proposal? Yes, great idea – stop those abroad from buying things in the US, visiting, etc. with our “offending foreign” credit and debit cards.
Are US legislators really that stupid?
Really, who can believe anything the IRS says?
Koskinen of the IRS says:
…”“The opening of the International Data Exchange Service is a milestone in the implementation of FATCA,” said IRS commissioner John Koskinen in a statement.”
He claims that:
;;;;;;;;“With it, comes the start of a secure system of automated, standardized information exchanges among government tax authorities. This will enhance our ability to detect hidden accounts and help ensure fairness in the tax system.”……….
Using IDES, a Web application, the sender encrypts the data and IDES encrypts the transmission pathway to protect data transfers. Encryption at both the file and transmission level is intended to safeguard sensitive tax information….”…
But, also recently;
…..”….Internal Revenue Service (IRS) Commissioner Koskinen has advised employees that the budget cuts will result in reduced services to taxpayers. In an email to employees sent earlier today, Commissioner Koskinen advised that “realistically we have no choice but to do less with less.”
Forbes author Kelly Phillips Erb says:
“What does that mean for taxpayers?
Identity theft could increase. Despite the need for increased taxpayer protections against identity theft, the implementation of additional measures will be delayed. That’s bad news for taxpayers since, despite the efforts of IRS and other agencies to stem the tide of identity theft, scammers have grown more bold. TIGTA reported that telephone scammers, posing as IRS representatives, managed to steal more than $5 million from taxpayers last year. And as quickly as the scams are picked up, they change. IRS-Criminal Investigation has responded to what has been termed an “epidemic” of identity theft by ramping up investigations – but with wholesale cuts to IRS, expect those investigations to dip, too….”…
The Taxpayer Advocate and the GAO and TIGTA have all identified IRS data security wanting;
ex.
http://webcache.googleusercontent.com/search?q=cache:2Z3u0CXRjzwJ:www.law360.com/articles/595818/irs-security-flaws-leave-taxpayer-data-exposed-gao-says&hl=en&gl=ca&strip=1
So any government with an IGA is exposing their financial sector and all their accountholders to an agency who admits it cannot cope, and who has already been taken to task for the inability to secure taxpayer data.
@ badger
I rather like this take on IDES too …
https://bancdelasteroideb612.wordpress.com/2015/01/13/owngoal-team-usa-new-american-kidnapping-tool-released-by-irs-fatca-tool/
Beware the IDES of IRS.
Beware the IDES of IRS. Clever. I was wondering how that was going to be adopted into the Brock vernacular 🙂
Hello. Got my CLN nearly 2 yrs ago but have not filed 5-6yrs back or 8854. I will not be returning to the USA ever. I have not filed because I do not know how and I have no finances, no possible way for me to afford hiring a specialist advisor to do it (It looks like $250 a year). How safe or screwed am I? My earnings are meager, my assets total maybe 20k at time of CLN. What happens if I file a year from now or should I never file and avoid US soil? I did want to file and make a clean break but financial situation is beyond my control. It is somewhat unsettling to not know the repercussions.
@howscrued
Were you born in the US? What country do you now live in? Are you a citizen of that country? Also, do you do your own taxes for your country of residence?
If you don’t want to answer some or all of the above, that’s fine. It would just be easier to talk about the practical aspects of your situation if we knew. FWIW, with your meagre earnings and assets, you’re highly unlikely to be any kind of priority for the IRS.
Born in the US and left 17yrs ago
Australian citizen 6yrs
i use a budget tax service in Aus for my Aus taxes
cheers
@how scrued, the IRS can’t do anything so I wouldn’t bother to try now. They can’t collect anything from you in Australia and you’ll never go back to the States so that’s it. You have a CLN to show your bank if they need to know your US status.
http://www.businessinsider.com/weaponization-of-finance-eurasia-group-2015-1
‘2015 Could Be The Year We Witness The ‘Weaponization Of Finance’
Elena Holodny
Jan. 5, 2015
“Forget nukes and battleships.
Washington may increasingly flex its geopolitical muscle in 2015 using an unconventional weapon: finance.
“Access to the US marketplace and US banks, and Washington’s ability and willingness to use them, are becoming more important as instruments of foreign and security policy,” Eurasia Group’s Ian Bremmer writes.
“There is no better example of this trend than the weaponization of finance — the systematic use of carrots (access to capital markets) and sticks (varied types of sanctions) as tools of coercive diplomacy,” he says.”
Exactly what FATCA is.
And it is being turned on allies like Canada and the UK, just as it is being turned on Russia, etc.
The US Treasury wanted NO exceptions for FATCA and the IGAs. Too much work. Just point the FATCA gun and wave it around in everyone’s face.
The article goes on to describe the drawbacks of this approach for the US;
“…….Although the “weaponization of finance” is a way to exert force without direct military conflict, the US risks further complicating political relations. And the strategy may see only limited success.”
Read more: http://www.businessinsider.com/weaponization-of-finance-eurasia-group-2015-1#ixzz3PQhZxObs
Whatever happened to James George Jatras. There doesn’t appear to have been any activity at Repeal fatca since July . Guess there was no lobbying money in it. He appears to have moved on to anti jihad
and Ukrainian nationalism.
@ Portland PLC
I noticed the absence of James Jatras too. He had focused very hard on preventing FATCA but after it was a done deal he did seem to to withdraw his involvement. I wish he would have kept some of his focus on FATCA but there are so many things going on in the world today (most of them born of deception and completely contrived to produce maximum chaos) that perhaps, above all, he is now determined to disable the true evil-doers who are pushing for a WW3 to solve their problems and pile more problems on us, the others. At least I hope that’s what he is doing. He was certainly right about how misguided the sanctions on Russia were and still are.
http://www.wsj.com/articles/SB10001424052970203918304577239480280823676
‘Regulations are prompting some financial advisers to urge their clients to bring money back to the U.S’
US Advisors assist with the US roping and corralling the assets of those deemed US taxable persons – including those living outside the US:
“…. says Mr. Kolstad. An alternative to a Swiss account, he says, may be a trust set up in Delaware, Alaska and South Dakota, states where the law favors trustees. The new reporting requirements also apply to certain foreign financial assets, including stock of foreign companies and business partnerships, which didn’t have to be reported before. Some of these investments may become too troublesome to be worthwhile, advisers say. ”
Oh yes says the US, US trusts are good. Give us your money. All other accounts deemed by the US to be ‘foreign trusts’ are bad. Delaware trusts are good. Canadian ‘trusts’ like RESPs, RDSPs, TFSAs, etc. are all bad. Invest only in the US even if you don’t live there. Don’t hold stock in your local companies and business partnerships where you live outside the US.
Gimmee gimmee gimmee all your money. The US wants to hold ALL the chips – even those originating, generated by, belonging to and located in the economy and treasury of other countries.
Isn’t that a Canadian sovereignty concern? And a trade and NAFTA issue?
badger,
Is that what our Canadian (and other country) financial advisors and our governments shall advise us as well — sending our money to the US for investment? Perhaps OK to those of our *foreign financial institutions* who have indeed become part of the US financial system and have sold out on the idea of Canadian sovereignty — will there be some new *US Person* investment vehicle directing dollars there?
As many others here, I’ve personally determined it is not OK and no longer have any US investments, nor do I intend to spend tourist or shopping dollars where those dollars will not benefit my own or any other country than the US. My small moral statement which would not be so insignificant if we all did that.
Perhaps good advice for those *US citizens residing in Canada for a short work-related time* but that financial advice is offensive to me.
@calgary411;
Consider the motives and behaviour and self interested claims of the Canadian banksters in front of our Parliament re FATCA when reading this recent story:
http://www.thestar.com/business/2015/01/22/rbc-buys-us-bank-for-54-billion-us.html
“……Royal Bank of Canada plans to boost its services for wealthy clients by paying about $5.4 billion in cash and stock to buy U.S.-based City National.
The takeover marks an expansion into U.S. private and commercial banking under David McKay, who took over as chief executive officer in August……”
“The City National deal fuels expansion in a “country which we view as our second home market,” McKay, 51, said in the statement. “City National serves high-net-worth and commercial-client segments in select high-growth markets, and represents a unique opportunity to complement and enhance our existing U.S. businesses.””
A Canadian BANKSTER says that he/RBC VIEWS the US as “OUR SECOND HOME”.
Says it all.
Turn that around and think how we’d feel to read about a US bank CEO calling Canada his second home as he bought up a Canadian bank for the benefit of Americans.