Article On Fatca Related Issues

[OnMyWay]

More evidence that the U.S. government is out of control.

 

http://news.morningstar.com/articlenet/SubmissionsArticle.aspx?submissionid=193374.xml

[earthdome]

Just trying to gain more control over their tax slaves who do not reside on the plantation.

 

For those who might take offense at me using the term slave. If you are a slave when your master takes 100% of the fruits of your labor and provides minimally for you to survive. What are you when your master only takes 50% and lets you pay for your own survival? Are you still a slave then? Maybe you could be called a free-range slave then.

[scott h]

Sorry, I just don't see it, as it says in the article lead in:

 

 "American accountholders in the name of hunting down U.S. taxpayers hiding assets in offshore accounts &  the IRS hoped to catch cheats"

 

We had to comply with this requirement last tax season. Just filled in a form and sent it in. I personally think this one falls in under the ole "If you have nothing to hide, you have nothing to worry about" And the author is a CPA so naturally he doesn't like anything that makes his job harder lolol.

 

We have two bank accounts here, no problems or even comments from them.

 

Oh and I got a refund this year :thumbsup:  :dance:  :540:

[jon1]

What I see is that they are trying to bring us back into the herd of our homeland by making it tougher to keep up with stuff. I liquidated all of my stock holdings last year and moved my 401K into a cash fund. When my employment ended recently, I flipped my 401k (minus the 10% penalty and Income tax withholding) into an overseas rental unit in my non-US wife's name. She pays the taxes locally on the rent and it is not in US currency so I won't have to worry about exchange rates. The other thing is that the rental money can be an offset for the inflation and devaluation of the dollar.

 

My biggest concern is that the US loses the International Currency to the Chinese. The Chinese are already making inroads with the UK financially on trading their currency. The Brits lost the International currency when their economy collapsed after WWII. Sound familiar? I am trying to find ways of mitigating my US holdings into non-affected means (gold? a more stable currency?).

[OnMyWay]

Sorry, I just don't see it, as it says in the article lead in:

 

 "American accountholders in the name of hunting down U.S. taxpayers hiding assets in offshore accounts &  the IRS hoped to catch cheats"

 

We had to comply with this requirement last tax season. Just filled in a form and sent it in. I personally think this one falls in under the ole "If you have nothing to hide, you have nothing to worry about" And the author is a CPA so naturally he doesn't like anything that makes his job harder lolol.

 

We have two bank accounts here, no problems or even comments from them.

 

Oh and I got a refund this year :thumbsup:  :dance:  :540:

 

Scott, here in the Philippines we are somewhat "lucky" in that it appears that most banks will be FATCA compliant.  This was discussed in another thread.  Philippines has too much to lose by not being compliant, given how many Filipino-Americans and Filipino OFWs there are, sending $ home.

 

However, in other countries the banks are saying the heck with it, we don't need the hassle, and they are booting US customers.

 

And in the U.S., the brokerages are booting customers.  Last year, Fidelity send me a letter to terminate my account because I listed my address as the Philippines.  Luckily I was able to change it to my U.S. mailing address and that fixed it, for now.  Who knows what the future holds?  Fidelity does not mind if you live in certain countries, but Philippines is not one of them.  And now they have put everyone on notice that you will no longer be able to buy mutual funds from them if you live anywhere overseas.

 

This is all due to the bureaucracy that FATCA creates for all of these financial business'.  I understand going after large sums that are being hidden overseas, but creating a paperwork nightmare for everyone involved who has more than $10,000 in a bank or other financial institution is ridiculous.  $10,000 is peanuts.  And on top of that, mandatory reporting by FOREIGN banks goes beyond the reach of our borders.  Where does it end?

 

I could deal with not having a bank account overseas, but if I can't live overseas and keep my investments in a US investment firm, I don't know what I will do.  Like many retired expats, I am relying on my investments to provide income for my family for many years.

[Americano]

Ok boys and girls let's get down to some facts and stop spreading rumors and guesting what effect FACTA will have on foreigners living in Philippines who are US citizens and other people who have stayed in the USA for more than 31 days in the previous year.

 

I keep hearing people say more than $10,000 in a foreign bank but that is not what the banks in the Philippines are saying. They are saying they must collect and pay to the IRS 30% of payments from US source income.

 

Here is the letter I received from Land Bank which is one of the major banks in the Philippines, the Certification, Consent and Waiver form and my letter to the Head of the Land Bank in Carcar:

 

 

 

 

 

 

 

Land Bank (FATCA) Letter.doc

 

 

[Americano]

If I receive a reply from Land Bank I will post it here. Otherwise it may be over a month before I know if Land Bank will withdraw any money from my account and send it to IRS.

[OnMyWay]

I keep hearing people say more than $10,000 in a foreign bank but that is not what the banks in the Philippines are saying. They are saying they must collect and pay to the IRS 30% of payments from US source income.

 

The $10,000 threshold is regarding when YOU have to report to the IRS your foreign bank account information to the IRS via FBAR.  This was discussed in another thread and all ties into FATCA.

 

The tax withholding is something I had not read about on the IRS website but I was looking at the requirements for individuals.  I will see if I can find out more about that by reading the foreign bank requirements.

 

If it is applicable, that explains even more why the banks don't want to comply to FATCA.  Every bank in the world has to create a system to report back to the US IRS, not only balances, but then transfer withholding taxes to the US?  That is ridiculous.  Of course any bank that only has a few US customers is going to dump them.  You have to have a lot of US customers before you are going to invest in creating a system to do that.

 

Mike S., in another thread, said what if the Philippines required the US to provide all the OFW U.S. bank information back to the Philippines?  The US would tell them to shove it.

 

However, there is a big reason why the Philippines would never need to do that anyway.  The good old USA is the only major country that taxes foreign income like this.  Other countries just let you pay the local income tax and be done with it.

 

I reported my Philippines foreign income on my 2013 US tax return (bank account interest less than $50).  Philippines deducted taxes from it and then I paid US taxes on it.  There is a complicated way to get credit for the Philippine tax but it is not worth it for a small amount.

 

So if the new IRS withholding applies, we will have PH tax withheld (I think 2.5%?) and 30% for the IRS.

[jon1]

but then transfer withholding taxes to the US?  That is ridiculous.

 

I agree, other than interest income, how can a Philippine bank know that you have US generated income?

 

 

Philippines deducted taxes from it and then I paid US taxes on it.  There is a complicated way to get credit for the Philippine tax but it is not worth it for a small amount.

 

This is just the beginning of the complications. As the RP tax enforcement gets stronger the complications will get worse for us. 

[robert k]

Looks like I will be writing checks to the significant others account for living expenses or just wiring myself money. I wonder if the banks could open an account that pays no interest and you write checks to it from your US bank so you are not receiving money, just depositing money you already have? :thumbsup: