Category Archives: Issues regarding US persons abroad

The largest pension schemes in Hong Kong escape from Fatca after being judged to be low risk for tax evasion.

Hong Kong retirement funds to be exempt from Fatca

ZURICH, SWITZERLAND – Ed. note: William Olenick has been active in Republicans Abroad in Switzerland, where he is a longtime resident. He sent the following email letter to friends 28 January; we reprint it in full as part of our coverage of the ongoing problems for US citizens in Switzerland.“Dear all,

Read the article below my comments and you will see why I also have my problems with the banks and I am tax compliant.

For the last 25 years I have been busting open nitch markets for American products, contributing to lowering the trade deficit, developing new markets for US producers, creating employment for my brethren back home, increasing the tax base where they live.

The only way to do this is to be on the ground in the countries you are selling.

In my case, my markets were Europe, North Africa and the Middle East so it made sense to set up a base of operations in Switzerland, as it was close to the markets, was a well run country, my wife happened to be Swiss, from a large, close-knit family, so it was a no brainer.

Two months ago my bank informed me that I could no longer make wire transfers to the states.

That being the case how will I pay my suppliers?
 
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On a somewhat lighter note, since we have Isaac as a mascot here, shouldn’t we have a caricature for our arch-nemisis?   Continue reading →

This just out from Steven Mopsick after a few week’s radio silence:

http://mopsicktaxlaw.blogspot.ch/2013/01/living-with-fatca-uncertainty-what.html

There is some interesting material in his post.   Calling all Brockers, please hammer the Mopsick site with comments and spread the link around as well as the link to this thread here at IBS.    Some quotes: Continue reading →

By Amy Feldman

NEW YORK | Mon Jan 28, 2013 3:25pm EST

(Reuters) – When Andrew Winfield applied to become a U.S. citizen in 2011, he realized he owed taxes on accounts he had left behind in his native England.

So he paid what he believed he owed — $2,800 in back taxes, plus the estimated interest and penalties – and entered the U.S. Internal Revenue Service’s overseas disclosure program.

But when the IRS assessed its penalty in November, Winfield was stunned to learn that it would be $28,000 — 10 times the amount of tax he owed from 2003 to 2010.

“My first reaction was: ‘There’s no way in hell I’m going to pay that,'” the 39-year-old Wake Forest, North Carolina, resident says. “It’s kind of crazy when you look at the numbers and compare the penalty to the $2,800 (in back taxes) due.”

The IRS has been aggressively seeking out taxpayers with offshore assets, asking them to come in on their own to avoid further prosecution and requiring foreign financial institutions to send information about American accounts.

But the voluntary disclosure programs have lumped together overseas Americans and immigrants with relatively small accounts and those trying to evade taxes by putting their money offshore….

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This post was on the RenounceUScitizenship blog.

The Most Ridiculous Law of 2013 (So Far): It Is Now a Crime to Unlock Your Smartphone – Derek Khanna – The Atlantic http://t.co/KFkVzNLr

— U.S. Citizen Abroad (@USCitizenAbroad) January 28, 2013

When I first read this article I thought it was a joke. This is so crazy that I still can’t decide. Has the US gone completely out of its mind? This reminds me of Mr. FBAR.

What do you think?

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Need help getting out of a financial fix? Email andrewallentuck@mts.net for a free Family Finance analysis…

Linked below is the January 25th advice he gives this family.

Financial Post says Dual Canadian-US Citizens Can Conquer Tax Challenges

Off the top, I don’t see any line item for accountng / US tax compliance expenses, nor does Mr. Allentuck consider their family RESP with a $115,000 balance — but the US citizen Canadian resident wife may not have her name on that account.  Are their children “Accidental Americans”?

Do you live somewhere other than America, are an American citizen and sell junk on eBay for the fun of it?  Welcome to Section 6050W.

Under new rules added to the US Tax Code in January 2012, credit card processing companies must now collect and verify the tax identification number (TIN) and legal name associated with that number for each merchant customer.

Section 6050W of the US Internal Revenue Code now requires merchant-acquiring entities in the US such as American Express to document the status of any US or foreign business they settle transactions with….

The new law represents another effort by the US government to boost transparency and possible tax collection for Americans overseas.

More in Regional merchants face new US withholding tax [Caribbean News Now, Grand Cayman, Cayman Islands]

Well, that’s great, so how might IRC Section 6050W affect you?  On this, PayPal writes:

PayPal will track the payment volume of your account(s) to check whether your payment volume exceeds both of these levels in a calendar year:

•   $20,000 USD in gross payment volume from sales of goods or services in a single year
•   200 payments for goods or services in the same year

You may be asked to add your tax ID number, such as a Social Security Number (SSN) or Employer Identification Number (EIN), to your existing account(s), if you don’t already have one on file.

If you cross the IRS thresholds in 2012, PayPal will send Form 1099-K to you and the IRS for the 2012 tax year in early 2013.

Everything you need to know about IRC Section 6050W

So, if you live in China and sell 200 pencils to 200 customers for 200 Renminbi, add form 1099-K to the many other forms your expensive tax preparer will be delighted to fill out for you.

I just became aware of the article http://www.financialtaskforce.org/2013/01/23/four-questions-for-jack-lew-obamas-pick-for-treasury-secretary/#comment-777179702 via Maple: http://maplesandbox.ca/why-congress-doesnt-get-it/#comment-3892 and posted a comment to Financial Task Force site.  Calling all Brockers: please go to the FTF site and hammer them with comments.  My comment was as follows: Continue reading →