Warning To All Overseas Americans

[Mr Lee]

A new IRS filing requirement resulting from FATCA legislation begins with fiscal year 2011 (the tax forms required to be filed on April 15th 2012). US citizens and green card holders living outside the United States will have to a file a new Form 8938 to list all their personal foreign financial assets along with their 1040. This form must be filed in addition to the FBAR form which is sent separately to the Treasury Department. The reporting requirements of Form 8938 are more comprehensive and more complicated than those for the FBAR. However, 8938 reporting is required only on personally owned assets; it does not include any foreign accounts over which you had only signatory authority but no financial interest, contrary to the requirements for the FBAR. The 8938 reporting threshold of foreign assets depends on whether you are a bona fide overseas resident or a US resident and whether you file “married filing jointly” or otherwise. Only draft versions of Form 8938 and the instructions are available as of November 2011. ACA strongly recommends that you read the draft instructions and form carefully to understand the scope of your reporting requirements and to consult with a professional tax preparer or tax advisor on any questions you may have. The link to the instructions is: www.irs.gov/pub/irs-dft/i8938--dft.pdf The link to the form is: www.irs.gov/pub/irs-dft/f8938--dft.pdf The Foreign Account Tax Compliance Act (FATCA), passed into law in March 2010, is the law that requires the new filing of Form 8938. FATCA also requires all foreign financial institutions, including banks, brokers, pension funds, insurance companies, hedge funds, mutual funds, trusts, to report to the IRS holdings of their clients who are US persons. This will come into force on January 1, 2014 and will allow the IRS to cross-check between reports of foreign financial institutions and individual filings of Form 8938. If FATCA is implemented, it could seriously harm the US economy due to the inevitable disinvestment by foreigners out of US assets and it would create a huge potential systemic risk for the international financial system. FATCA is particularly prejudicial to Americans residing overseas as it is shutting off access to international banks and investment opportunities and creates the new reporting requirement of Form 8938. For all these reasons, ACA has launched a worldwide campaign calling for the rapid repeal of FATCA. You will find more information on this ACA. We need your support – volunteer time and donations to strengthen the campaign.