[booshala]

Certain countries want a certain amount of money (e.g. $30k USD) in a local bank account so that you can get fast tracked with a visa, residency, etc... is it a viable option to have 4 separate accounts with $7500 each to meet that requirement while avoiding FACTA reporting?

Obviously need to talk to an accountant about this, but guys in Thailand, Malaysia, Uruguay probably have boots on the ground knowledge.

[chakalaka]

I believe in the begining there were thresholds but now All accounts will be reported to the american IRS the balance is not relevant even though it's also reported. Im pretty sure on this. I never read Fatca but i read it from the european savings directive. Which is being implemented in many countries of Europe.
I thought it would go directly from the bank to the IRS but it's first sent to the country of origin IRS And this country sends it to US IRS. Probably american banks are more complaint. If you open an account in a small regional bank I bet they will not pay attention to this. Your uncle probably had his account in a US bank?

Another solution is simply having the account in the US. Of course it's less convenient. This is in reality a capital outflow restriction disguised as a tax evasion measure.

Don't consider any statement i make as an advice. Because im not making one. You should always be legal. But not reckless.

[CleanSlate]

Here is what my accountant told me:

"You cannot have $10,000 in aggregate in your foreign accounts, at any time of the year. So in your case, if this is your only foreign bank account, and it will stay under $10,000 throughout the year, you are exempt from filing the FBAR."

So if you have 4 bank accounts with $7500 each, that is an aggregate total of $30,000. You have to file the FBAR.

[Cattle Rustler]

(12-01-2016 08:39 PM)booshala Wrote:  

Certain countries want a certain amount of money (e.g. $30k USD) in a local bank account so that you can get fast tracked with a visa, residency, etc... is it a viable option to have 4 separate accounts with $7500 each to meet that requirement while avoiding FACTA reporting?

Obviously need to talk to an accountant about this, but guys in Thailand, Malaysia, Uruguay probably have boots on the ground knowledge.

The gubbmint might call that structuring. I'm sure Merenguero knows this better. It's "illegal" in the US but not sure how that applies abroad. I may or may not have attempted to structure some financial instruments....and the person at the bank once told me not to do flat amounts like 7500 but rather 5349, 8764, 2697, 6853, 6337 so it's not as obvious.

Quote:

The definition of structuring for the purpose of evading the transactions in currency reporting is found at 31 CFR 1010.100(xx). The elements of the structuring regulations are:

A person acting alone, in conjunction with others, or on behalf of others

Conducts or attempts to conduct

One or more transactions in currency

In any amount

At one or more financial institutions

On one or more days

In any manner

For the purpose of evading the reporting requirements of 31 CFR 1010.311 (CTR), 1010.313 (Aggregation of transaction totaling more than $10,000 during one business day), 1020.315 (Transactions of exempt persons by banks), 1021.311 (CTR-Casino), or 1021.313 (Aggregation of transactions totaling more than $10,000 during any gaming day – casino).

"In any manner" includes, but is not limited to, the breaking down of a single sum of currency exceeding $10,000 into smaller sums, including sums at or below $10,000, or conducting a transaction or series of currency transactions at or below $10,000. The transaction or transactions need not exceed the $10,000 reporting threshold at any single financial institution or on any single day in order to constitute structuring within the meaning of this definition.

The definition is specifically written to include those transactions that occur beyond a single business day and transactions which are conducted through more than one financial institution, but only if the purpose of the transaction(s) is to evade the reporting requirements. It is not the intent of the definition to expand the reporting requirements of a financial institution.

The definition of structuring does not make reference to legal funds or to illicit funds. The law specifically prohibits conducting a currency transaction with a financial institution in a way to circumvent the currency transaction reporting requirements.

Structuring a transaction in order to circumvent the reporting or recordkeeping requirements along with other facts known about the underlying pattern of activity by the customer, may warrant the filing of a Suspicious Activity Report (SAR) by the financial institution.

The definition of structuring is not the same as, and is separate from, any requirement to report suspicious transactions. However, attempts to structure need to be reported as suspicious transactions on a Suspicious Activity Report (SAR).

[SlickyBoy]

(12-01-2016 08:39 PM)booshala Wrote:  

Certain countries want a certain amount of money (e.g. $30k USD) in a local bank account so that you can get fast tracked with a visa, residency, etc... is it a viable option to have 4 separate accounts with $7500 each to meet that requirement while avoiding FACTA reporting?

If this is anything like other anti-money laundering laws (which is how it's being sold, regardless of what we may think of it), then no, it would not be a good strategy. Banks in the US are required to report deposits of greater than $10,000, but if you try to get around this by depositing several smaller amounts (even at different banks), there is software that can detect this and alert the authorities. As CR pointed out,it is called structuring, sometimes also referred to as smurfing when it involves multiple people doing the deposits.

I would not be surprised if they had some kind of rebuttable presumption that you intended to avoid reporting by opening several accounts and depositing just under the reportable amount. A good question for your tax pro, though.

[Peregrine]

Quote:

Another solution is simply having the account in the US. Of course it's less convenient. This is in reality a capital outflow restriction disguised as a tax evasion measure.

I don't think it is, considering that the US shows net capital inflows on Bloomberg. Capital is rushing to the US to avoid NIRP elsewhere.

FATCA is a tax measure.

[booshala]

Hmmm, didn't think about it in context of structuring, but I guess what all you guys say makes sense. Thanks very much for the info guys, especially to CleanSlate for the data.

[Brodiaga]

Filling out a FBAR form (reporting foreign bank accounts) is no big deal. Set a reminder every year, spend like 10 minutes (save previous year's copy as PDF for reference).

Also, i don't think IRS will go after a guy just because he reports some money in foreign bank accounts unless it's several hundred thousands or millions of dollars. My educated guess is that if you show 15K one year and 30K the next year nobody will care, but if you show a few millions next year, then the IRS may have questions for you. Other than that, foreign bank account reporting is easy and doesn't even require proof that you paid taxes on the money you keep in foreign accounts (unless you are audited).

Keep in mind that millions of immigrants who live in the US still have foreign ties and keep their foreign accounts open. Having a foreign bank account doesn't automatically mean to the IRS that you are rich and trying to hide something.

[chakalaka]

There´s no universal rule about Fatca. Since each country has it own agreement with the US. And threfore FATCA rules are country specific. I´ve searched the italian-US agreement:

https://www.treasury.gov/resource-center...0-2014.pdf

"III. New Individual Accounts. The following rules and procedures apply for identifying
U.S. Reportable Accounts among accounts held by individuals and opened on or after July 1,
2014 (“New Individual Accounts”).
A. Accounts Not Required to Be Reviewed, Identified or Reported. Unless the
Reporting Italian Financial Institution elects otherwise where the implementing rules in
Italy provide for such an election:
1. A New Individual Account that is a Depository Account is not required to
be reviewed, identified, or reported as a U.S. Reportable Account unless the
account balance exceeds $50,000 at the end of any calendar year or other
appropriate reporting period.
2. A New Individual Account that is a Cash Value Insurance Contract is not
required to be reviewed, identified, or reported as a U.S. Reportable Account
unless the Cash Value exceeds $50,000 at the end of any calendar year or other
appropriate reporting period. "

Supposedly only accounts above $50,000 are reported. But the treaty allows "the Reporting Italian Financial Institution elects otherwise". This means any bank can decide wether they should or not report you regardless of the value of your account.

I have no doubts US banks will be more strict in following this regulation than some litle regional bank. What I had heard and read is all accounts are reported regardless of the value. I´ve look into this because of EU regulations. Not FATCA.

Companies are also subject to FATCA. Reporting accounts prior to the agreement is limited to above 250k. But with companies I didn´t found any value for new accounts. I didn´t search more into this. But at first sight all accounts are reported.

About agregation accounts:

Account Balance Aggregation and Currency Translation Rules
1. Aggregation of Individual Accounts. For purposes of determining the
aggregate balance or value of accounts held by an individual, a Reporting Italian
Financial Institution shall be required to aggregate all accounts maintained by the
Reporting Italian Financial Institution, or Related Entities, but only to the extent
that the Reporting Italian Financial Institution’s computerized systems link the
accounts by reference to a data element such as client number or taxpayer
identification number, and allow account balances to be aggregated. Each holder
of a jointly held account shall be attributed the entire balance or value of the
jointly held account for purposes of applying the aggregation requirements
described in this paragraph.
2. Aggregation of Entity Accounts. For purposes of determining the
aggregate balance or value of accounts held by an Entity, a Reporting Italian
Financial Institution shall be required to take into account all accounts held by
Entities that are maintained by the Reporting Italian Financial Institution, or
Related Entities, to the extent that the Reporting Italian Financial Institution’s
computerized systems link the accounts by reference to a data element such as
client number or taxpayer identification number and allow account balances to be
aggregated.
3. Special Aggregation Rule Applicable to Relationship Managers. For
purposes of determining the aggregate balance or value of accounts held by a
person to determine whether an account is a High Value Account, a Reporting
Italian Financial Institution shall also be required, in the case of any accounts that
a relationship manager knows or has reason to know are directly or indirectly
owned, controlled, or established (other than in a fiduciary capacity) by the same
person, to aggregate all such accounts.
4. Currency Translation Rule. For purposes of determining the balance or
value of accounts denominated in a currency other than the U.S. dollar, a
Reporting Italian Financial Institution must convert the dollar threshold amounts
described in this Annex I into such currency using a published spot rate
determined as of the last day of the calendar year preceding the year in which the
Reporting Italian Financial Institution is determining the balance or value.

Italy detailed this agreement into law:

https://www.oecd.org/tax/automatic-excha...ation-.pdf

In this law there are more exceptions. I believe saving accounts are one of them. Or accounts created for the purposes of buying real estate.

Here´s the list of countries with FATCA agreements.

https://www.treasury.gov/resource-center...FATCA.aspx

There´s a lot of tax exempt senior retirement schemes in Europe. Your uncle probably should use one of them. In some cases no taxation in both countries.

Not legal advice or tax or any other type of advice. At best this should be considered personal opinions.

[SlickyBoy]

That link of the various countries is very helpful and will likely be updated - goes into detail for the status of FACTA as it applies to each country agreement with the US and what kinds of accounts need to be reported. Surprisingly, not every type is required to be reported, though most are. Thanks!

[chakalaka]

(12-02-2016 07:14 AM)SlickyBoy Wrote:  

That link of the various countries is very helpful and will likely be updated - goes into detail for the status of FACTA as it applies to each country agreement with the US and what kinds of accounts need to be reported. Surprisingly, not every type is required to be reported, though most are. Thanks!

Ah. You haven´t seen my invoice yet .

[samsamsam]

Just saw this on Reddit - I know some guys are planning on spending some time in Ukraine.

http://en.censor.net.ua/photo_news/42697...tion_photo

U.S. Ambassador in Ukraine Marie Yovanovitch and Ukrainian Finance Minister Oleksandr Danyliuk signed an Intergovernmental Agreement (IGA) yesterday to implement provisions of the Foreign Account Tax Compliance Act (FATCA) and to promote transparency between the two nations on tax matters.

The agreement underscores our continued cooperation and strong bilateral relationship with Ukraine as well as growing international cooperation to curb offshore tax evasion.

"The United States and Ukraine have developed a very strong partnership on tax administration issues and I am pleased that our work on FATCA will further enhance our efforts in this sphere. Today's signing marks a significant step forward in our collaborative efforts to combat tax evasion - an objective that mutually benefits our two countries. We look forward to full implementation of this agreement, which will better enable us to detect, deter, and discourage tax abuses through increased transparency and enhanced reporting," the U.S. ambassador said.
Source: http://en.censor.net.ua/p426971

[LeavingAmerica]

Banks in Antigua & Barbuda are now reporting banks over $50,000 to the IRS. Just in case anybody was considering banking over there.

[BrewDog]

I'm hoping that Trump will put a stop to this horseshit. What sort of Murka freedom is this that the US government can interfere with your life all over the goddamn world? Expats will tell you that opening a bank account overseas can be a fucking pain.

[LeavingAmerica]

(02-08-2017 06:59 PM)BrewDog Wrote:  

I'm hoping that Trump will put a stop to this horseshit. What sort of Murka freedom is this that the US government can interfere with your life all over the goddamn world? Expats will tell you that opening a bank account overseas can be a fucking pain.

This is also affecting foreign spouses and children of US Citizens. Americans with foreign spouses are now avoiding joint bank accounts all together.

[buja]

Even if you don't need to file an FBAR (FinCEN Form 114) because the total is less than $10,000, you still must list foreign accounts on Form 1040 Schedule B.

From PremierOffshore.com:

Quote:

If you have a foreign account, you must also file a Form 1040 Schedule B and complete Part III regarding foreign bank accounts—regardless of whether you are required to file a FinCEN Form 114, or have any interest or dividend income to report on the Schedule B.

This requirement to report your foreign bank account is one of the most important obligations you have as a U.S. citizen living abroad. The law imposes a civil penalty for not disclosing an offshore bank account or offshore credit card up to $25,000 or the greatest of 50% of the balance in the account at the time of the violation or $100,000. Criminal penalties for willful failure to file an FBAR can also apply in certain situations. Note that these penalties can be imposed for each year.

In addition to the FBAR penalties above, intentionally failing to check the box on Schedule B to report a foreign account is a Felony. It is possible for a single violation to result in 6 to 12 months in prison!

I have personally handled many FBAR and Schedule B related cases and can tell you with certainly that the IRS is very aggressive in prosecuting these matters.

For example, in one case in 2010 a client plead guilty to a single count of failing to check the box on Schedule B, and was given 6 months of confinement. In addition to the criminal case, the IRS initiated a civil audit which, when taxes, fines, interest and penalties were calculated, the client was wiped out financially.

Finally, to add insult to injury, the State of California came in with their taxes, interest, and penalties.

In another case in 2014, three defendants were charged in a tax case, the court found that there was no tax loss...that there was zero money lost by the IRS...but they still received 10 months in prison because forms were not filed on time.

The Schedule B rules and the FBAR are no joke, and they are not just used against money launders and drug dealers. Prosecutions and civil fines have become a major revenue sources for the IRS.