New Tax Nuisance from Uncle Sam!

dees_annonymous
by dees_annonymous
13-Oct-2009
 

I live outside the US and so I don't get all the US related news way over here. But yesterday I read an article in NY  Times regarding a new tax rule for US citizens that have foreign bank accounts. The IRS expects them to file forms for their accounts.  I know this is in the hopes of taxing rich people with bank accounts in Switzerland, but it is also a headache for poor people that happen to also have multiple citizenships, including US citizenship but live outside the US.   I don't envision going back to the US anytime soon, but I was wondering how other "non-wealthy" ordinary people in similar circumstances are dealing with this? What feelings or advice do you have on this?  Personally I find the new rule overly intrusive. For example the other countries I hold citizenship do not force me to do all this useless paperwork. On top of that the U.S. never gave me any services: No health care, no nothing...

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HollyUSA

Well

by HollyUSA on Wed Oct 14, 2009 10:23 PM PDT

A lot of " other western countries " don't require citizens to file taxes every year either. You can't really 'compare' such laws.

Also, reportedly the IRS is identifying money moving from European banks to into the Caribbean and Asia. They also said they will likely not consider cases where people came forth AFTER they were informed by their bank that their name was being provided to the IRS, as 'voluntary disclosure', thus possibly leading to criminal charges.

Most if not all, will end up having to pay a penalty of 20% of the highest value of
the account since 2003. That's not even counting the back tax itself and interest. 

I'm not sure how long you lived here and how much you know about how the IRS operates but they ain't kidding when they come after you! the expensive attorney may come in handy with the criminal charges if they miss the deadline to come forward but they'll still have to pay Uncle Sam. And Uncle Sam is even setting up offices around the world to make sure he collects.

The way I see it, it's a good deal even if they collect 50% of what is due.

 


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dees_annonymous

If you heard the NPR audio

by dees_annonymous on Wed Oct 14, 2009 10:00 PM PDT

If you heard the NPR audio piece or read other articles and related information you may realize that it is not just a tiny little "form" that must be filled.   I mean not all "forms" are the same. I'm hearing that, at least the first time when filling the paperwork, one has to go back with data from 5 or 6 years, provide all sorts of documents showing all your balances, material to support balance changes and probably all translated officially into English.

 

I am all for taxing people that have earned money in the U.S. and rich people who are hiding money, but I think these new rules should have specified directly tax haven countries like Switzerland and Panama. The rules should have been written in a way that would affect only rich or well-off people trying to cheat.

From articles I've read it looks like these rich people are continuing to cheat, thanks to the fact that they can pay expensive lawyers, while the people suffering the consequences of these new rules are precisely normal people with little or no money.

 Giving up my US citizenship is becoming definitely an option I will consider. Ironically that means I will have to pull out of the U.S any 401K or savings I have kept there. I think many in my position will consider doing the same, at least part 2.  I think the US government or IRS not taking into consideration the little guy is alienating many normal citizens which will take their US savings out of the US.

Just as a comparison, while I was living in the U.S, my other western country of citizenship did not require me to be filing forms for them. 

 

 


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HollyUSA

I'm all for it...

by HollyUSA on Wed Oct 14, 2009 08:34 PM PDT

Be it for the purpose of taxing the rich who evade taxes or going after money laundering by drug dealers. For those who don't fit in to any 'illicit' categories, filling a form is a small price to pay considering what it is designed to accomplish.

And I agree with another blogger (sorry I forget the name), if you don't want/need your US citizenship then just give it up and you won't have to deal with this. But I think you want your cake AND eat it too. That's cool, we all do... we just don't often get to ;)

I agree with Capt. Most rich people in the US do not pay their fair share. The system is DESIGNED to suit them. Hopefully we'll see more changes soon.


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capt_ayhab

NOT_AK69 is correct. There

by capt_ayhab on Wed Oct 14, 2009 02:13 PM PDT

NOT_AK69 is correct. There has been  this law that banks are required to prepare and  submit a report of EVERY CASH deposit of over $10,000. to State Department, IRS and Homeland security. Even if the banking institution and business entity are both in USA .

Asides form trying to control possible money exchange for terrorist organization, one of the main purposes of the law been to control money laundering by drug cartels and criminal entities.

 

-YT 


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che khabar e

dees, come on!

by che khabar e on Wed Oct 14, 2009 10:30 AM PDT

Filling out a form once a year is a big deal?  Jeez... who knew...lol

The US might not be perfect but it's still the best thing going on.  :-)

Listen.  You have a citizenship for a reason... no?  That reason, whatever it is, is important enough for you to maintain citizenship in a country you obviously dislike.  If you don't want it, give it up.  If you intend to keep it, again for whatever reason you have it, it should be enough for you to fill out a form once a year.  IMHO of course.  :-)

But you still didn't answer my question and since you obviously DO hold multiple citizenships, you can confirm this... how many different citizenships can an individual hold?


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dees_annonymous

Regarding the comment that

by dees_annonymous on Wed Oct 14, 2009 02:25 AM PDT

Regarding the comment that suggested that doing the "paperwork as being no big deal", my reply is that yes it is a big deal.  In my case for example, I am not sure if I ever want to live in the U.S. again, so having to file these forms EVERY YEAR FOR THE REST OF MY LIFE, while not even living in the U.S. is a pain in the butt.

As far as service related comments.  Taxes are supposed to be spent by the government in services for its citizens.  In the U.S., at least California, they dont' repair roads , they cant build a useful subway system, there is no health care if you are left unemployed.  Maybe for those of you who live in the U.S. you think this is normal, but to those of us living in more civilized places, it appears as pathetic.

 

 


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Ostaad

This may shed some light on this issue:

by Ostaad on Tue Oct 13, 2009 09:49 PM PDT


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bahram9821

Names Deal Cracks Swiss Bank Secrecy

by bahram9821 on Tue Oct 13, 2009 07:02 PM PDT


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NOT_AK69

FBAR aka Bank Secrecy Act aka FAAR aka pain in the a$$

by NOT_AK69 on Tue Oct 13, 2009 05:49 PM PDT

This disclosure requirement has been around for decades. Every few years they reduce the minimum aggregate value; more aggressively so after 9/11/01. It is because they think it requires less money to finance smaller terrorist operations. What terrorists has mutual funds??? LOL

"On top of that the U.S. never gave me any services: No health care, no nothing..." - LOL U must be a Democrat; very ignorant statement IMHO


AK69 WAS HERE


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che khabar e

I hate paperwork as much as the next guy

by che khabar e on Tue Oct 13, 2009 05:02 PM PDT

but how exactly is this a burden on you to comply?  A form to fill out?  Seems pretty easy to me.  I'm also curious as to what you are expecting from "uncle sam" since you point out that you don't have health care or "nothing"... it appears that you expect that you should be getting "something".  :-)

I'm curious too...  how many citizenships can one individual hold?  You mention "multiple"... I was under the impression that one could hold two citizenships... but not "multiple".

Captain is right... the majority of wealthy Americans don't pay their fair share of taxes and the intention of the bill is to curtail and/or identify illegal off-shore accounts... both domestic and international.


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dees_annonymous

I agree with going after the

by dees_annonymous on Thu Oct 15, 2009 06:16 AM PDT

I agree with going after the wealthy people.  I remember back in the day how these wealthy silicon valley would give donations to charity just because it helped them with their taxes. The new law should have been for tax haven countries or for large quantities or for money originating in the US.  But I dont think they made any distinctions from what I have read so far.

 Since I have no money, I'm not worried about my wealth. 

 


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capt_ayhab

my 2 cents

by capt_ayhab on Tue Oct 13, 2009 12:54 PM PDT

The purpose of new tax proposition is to to shore-off the funds that have been made in US, and transferred to foreign bank accounts for the purpose of tax evasion. This will not affect any form of wealth by dual citizens who have funds and assets in foreign countries which does not have US originated source of income.

As a matter of fact, in past recent months, US state department has been in courts in Switzerland trying to get the names of large account holders whom they suspect of having transferred money outside in order to hide them from IRS audits. Same step was taken by US treasury dept and state department in the past which has yielded few dozen names with huge multi-billion accounts in foreign bank. This time around government of Switzerland been kind of defensive about it, fearing that if they give out names, then people might stop HIDING their money in such banks.

I am of opinion that wealthy people in US do not, most often , pay their fair share in taxes. 

So your wealth is safe ;-o)

-YT 


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