Sending Us Dollars Overseas

[chokeonit]

FYI.........

November 10th, 2011

Starting January 1, 2012, Form 1099s will become a means of reporting

to the IRS the purchases of all goods and services including precious

metals such as gold coins and bullion.

Furthermore, the HIRE Act passed in April 2010, effective January

1, 2012, requires banks to withhold 30% of any dollars being

transferred/wired offshore to another country and remit it to

the IRS.

You can get it back when you file your tax return "IF" you tell

the IRS where it went and that you are paying taxes on it. And

banks cannot be held liable for making a mistake. Want to place a

$50,000 down payment on a property in Thailand? You'd better wire

$75,000. Your daughter is on study-abroad and needs $4,000?

You'll need to send your daughter $6,000.

I don't have any more info, just passing on a email from a buddy who is state side.

[neilrob]

Interesting post because this is a topic relevant to US citizens. US citizens are of course already supposed to report their foriegn accounts to the IRS on form 5500 each year. The act is however more complex than described and the provision for expats takes effect on Jan 1, 2013, not 2012. Also, the 30% withholding only applies for foriegn financial institutions which do not comply with the act. My guess is that major banks in Thailand will comply and therefore there will be no such withholding. However, there will be increased reporting of accounts held by US citizens by these banks

[roger1999]

I just now did a quick five minutes of research on the HIRE act. At least one web site is reporting that wire transfers to yourself (iwhen the name on the account in the US matches the name on the non-US bank) then the 30% will not be withheld. Two websites reported that this takes place on Jan. 1, 2013.

My US accountant told me I do not have to report any details of my Thai bank account to the IRS as long as my balance is below $10,000 at all times.

[maxman71]

Concerning US citizens being required to report foreign bank accounts with a USD value of 10K or more:

This 10K threshold applies to the total AGGREGATE of all foreign bank accounts held by a US citizen AND US legal residents; i.e. green card holders. Example: If you have the equivalent of USD 5K in a Thai bank account, and the USD equivalent of 7K in a Hong Kong account, then you need to report both accounts. Also, if this 10K threshold is met for even just one day in a calendar year, then you have met the threshold.

While a US taxpayer must indicate he/she has foreign bank accounts on the 5500 form, it is the FBAR form (Foreign Bank Account Reporting) that needs to be completed and sent in. The FBAR form does not get filed with the 1040/5500. The FBAR needs to be RECEIVED by the IRS by June 30 for the preceding year.

Additionally, if a US citizen has control of a financial account in an overseas bank, such as being a Director, officer, etc. of a foreign corp, trust, etc, these rules also apply to the entity's account(s) and must be reported accordingly. And, if a US citizen has at least 10% ownership in a foreign corp, trust, etc., they also need to complete Form 5471 and associated Schedules and Statements.

The US Congress passed a bill in March of either 2010 or 2011 (can't recall which year) that requires foreign banks to provide the IRS with identification info on all their US citizen account holders. Now, whether all foreign banks will comply right away is another story, as this creates a workload burden for the banks. But if the banks don't comply, there is language in the bill that would make it more difficult for foreign banks to utilize various US banking and financial systems.

The IRS just recently completed their 2nd partial amnesty program in August 2011 for those who have not previously reported their foreign bank accounts. The 1st program expired in October 2009. The IRS went back to 2003 in wanting all pertinent reporting sent in, that included not only the existence and the highest balances in all accounts during each year, but also any income derived from those accounts, i.e. via interest, dividends, etc. Those participating in these programs in turn paid reduced penalties (about 10 - 25% of the highest balance of all accounts for the years reported) + any back taxes owed, interest and penalties on the tax due. In most cases, so long as the accounts and income derived were not as a result of criminal activity, the taxpayer avoided criminal charges and jail time. For those who had accounts that paid no interest and had no income from the accounts, they generally were not charged any penalties. Most of the people who did have previously unreported accounts and unreported income, they were audited. Between these 2 amnesty programs, about 30,000 people came forward and last I read, the IRS netted several billion in back taxes, penalties and interest. Then UBS handed over about 4,500 US citizen account holders as part of a huge settlement with the IRS concerning UBS' setting up US citizen accounts with the objective of evading US taxes. Now another Swiss bank (Credit Suisse?; not sure which one), is also in negotiation with the IRS for the same issues as UBS. It is expected thatthousands more US citizen account info will handed over to the IRS.

The IRS made it clear after the 2nd amnesty program that no further amnesties would be granted, and anyone caught with unreported accounts/income going forward, they can expect some truly draconian penalties. Such as: as much as 125% of the highest balance during all the years gone unreported, interest and huge penalties. And depending on the amounts in question and circumstances, JAIL TIME.

These new reporting/witholding rules for foreign banks is just one method the IRS is using to flush out those who have not previously reported their foreign accounts and income when they were supposed to and had the chance to come forward during the 2 partial amnesty programs, and didn't.

The days of banking secrecy and hiding money offshore are rapidly coming to an end.

Best of luck and limited sympathy to those who should have been reporting and didn't, and wind up getting caught.

[BEENTHEREDONETHAT]

Concerning US citizens being required to report foreign bank accounts with a USD value of 10K or more:

This 10K threshold applies to the total AGGREGATE of all foreign bank accounts held by a US citizen AND US legal residents; i.e. green card holders. Example: If you have the equivalent of USD 5K in a Thai bank account, and the USD equivalent of 7K in a Hong Kong account, then you need to report both accounts. Also, if this 10K threshold is met for even just one day in a calendar year, then you have met the threshold.

While a US taxpayer must indicate he/she has foreign bank accounts on the 5500 form, it is the FBAR form (Foreign Bank Account Reporting) that needs to be completed and sent in. The FBAR form does not get filed with the 1040/5500. The FBAR needs to be RECEIVED by the IRS by June 30 for the preceding year.

Additionally, if a US citizen has control of a financial account in an overseas bank, such as being a Director, officer, etc. of a foreign corp, trust, etc, these rules also apply to the entity's account(s) and must be reported accordingly. And, if a US citizen has at least 10% ownership in a foreign corp, trust, etc., they also need to complete Form 5471 and associated Schedules and Statements.

The US Congress passed a bill in March of either 2010 or 2011 (can't recall which year) that requires foreign banks to provide the IRS with identification info on all their US citizen account holders. Now, whether all foreign banks will comply right away is another story, as this creates a workload burden for the banks. But if the banks don't comply, there is language in the bill that would make it more difficult for foreign banks to utilize various US banking and financial systems.

The IRS just recently completed their 2nd partial amnesty program in August 2011 for those who have not previously reported their foreign bank accounts. The 1st program expired in October 2009. The IRS went back to 2003 in wanting all pertinent reporting sent in, that included not only the existence and the highest balances in all accounts during each year, but also any income derived from those accounts, i.e. via interest, dividends, etc. Those participating in these programs in turn paid reduced penalties (about 10 - 25% of the highest balance of all accounts for the years reported) + any back taxes owed, interest and penalties on the tax due. In most cases, so long as the accounts and income derived were not as a result of criminal activity, the taxpayer avoided criminal charges and jail time. For those who had accounts that paid no interest and had no income from the accounts, they generally were not charged any penalties. Most of the people who did have previously unreported accounts and unreported income, they were audited. Between these 2 amnesty programs, about 30,000 people came forward and last I read, the IRS netted several billion in back taxes, penalties and interest. Then UBS handed over about 4,500 US citizen account holders as part of a huge settlement with the IRS concerning UBS' setting up US citizen accounts with the objective of evading US taxes. Now another Swiss bank (Credit Suisse?; not sure which one), is also in negotiation with the IRS for the same issues as UBS. It is expected thatthousands more US citizen account info will handed over to the IRS.

The IRS made it clear after the 2nd amnesty program that no further amnesties would be granted, and anyone caught with unreported accounts/income going forward, they can expect some truly draconian penalties. Such as: as much as 125% of the highest balance during all the years gone unreported, interest and huge penalties. And depending on the amounts in question and circumstances, JAIL TIME.

These new reporting/witholding rules for foreign banks is just one method the IRS is using to flush out those who have not previously reported their foreign accounts and income when they were supposed to and had the chance to come forward during the 2 partial amnesty programs, and didn't.

The days of banking secrecy and hiding money offshore are rapidly coming to an end.

Best of luck and limited sympathy to those who should have been reporting and didn't, and wind up getting caught.

10 to 25% tax on the highest amount and they go back 7 or 8 years. So that is somewhere between 70% and 200% of what you report they want. Basically report it and send it all in to the IRS. Or am I reading this wrong?

[maxman71]

Concerning US citizens being required to report foreign bank accounts with a USD value of 10K or more:

This 10K threshold applies to the total AGGREGATE of all foreign bank accounts held by a US citizen AND US legal residents; i.e. green card holders. Example: If you have the equivalent of USD 5K in a Thai bank account, and the USD equivalent of 7K in a Hong Kong account, then you need to report both accounts. Also, if this 10K threshold is met for even just one day in a calendar year, then you have met the threshold.

While a US taxpayer must indicate he/she has foreign bank accounts on the 5500 form, it is the FBAR form (Foreign Bank Account Reporting) that needs to be completed and sent in. The FBAR form does not get filed with the 1040/5500. The FBAR needs to be RECEIVED by the IRS by June 30 for the preceding year.

Additionally, if a US citizen has control of a financial account in an overseas bank, such as being a Director, officer, etc. of a foreign corp, trust, etc, these rules also apply to the entity's account(s) and must be reported accordingly. And, if a US citizen has at least 10% ownership in a foreign corp, trust, etc., they also need to complete Form 5471 and associated Schedules and Statements.

The US Congress passed a bill in March of either 2010 or 2011 (can't recall which year) that requires foreign banks to provide the IRS with identification info on all their US citizen account holders. Now, whether all foreign banks will comply right away is another story, as this creates a workload burden for the banks. But if the banks don't comply, there is language in the bill that would make it more difficult for foreign banks to utilize various US banking and financial systems.

The IRS just recently completed their 2nd partial amnesty program in August 2011 for those who have not previously reported their foreign bank accounts. The 1st program expired in October 2009. The IRS went back to 2003 in wanting all pertinent reporting sent in, that included not only the existence and the highest balances in all accounts during each year, but also any income derived from those accounts, i.e. via interest, dividends, etc. Those participating in these programs in turn paid reduced penalties (about 10 - 25% of the highest balance of all accounts for the years reported) + any back taxes owed, interest and penalties on the tax due. In most cases, so long as the accounts and income derived were not as a result of criminal activity, the taxpayer avoided criminal charges and jail time. For those who had accounts that paid no interest and had no income from the accounts, they generally were not charged any penalties. Most of the people who did have previously unreported accounts and unreported income, they were audited. Between these 2 amnesty programs, about 30,000 people came forward and last I read, the IRS netted several billion in back taxes, penalties and interest. Then UBS handed over about 4,500 US citizen account holders as part of a huge settlement with the IRS concerning UBS' setting up US citizen accounts with the objective of evading US taxes. Now another Swiss bank (Credit Suisse?; not sure which one), is also in negotiation with the IRS for the same issues as UBS. It is expected thatthousands more US citizen account info will handed over to the IRS.

The IRS made it clear after the 2nd amnesty program that no further amnesties would be granted, and anyone caught with unreported accounts/income going forward, they can expect some truly draconian penalties. Such as: as much as 125% of the highest balance during all the years gone unreported, interest and huge penalties. And depending on the amounts in question and circumstances, JAIL TIME.

These new reporting/witholding rules for foreign banks is just one method the IRS is using to flush out those who have not previously reported their foreign accounts and income when they were supposed to and had the chance to come forward during the 2 partial amnesty programs, and didn't.

The days of banking secrecy and hiding money offshore are rapidly coming to an end.

Best of luck and limited sympathy to those who should have been reporting and didn't, and wind up getting caught.

10 to 25% tax on the highest amount and they go back 7 or 8 years. So that is somewhere between 70% and 200% of what you report they want. Basically report it and send it all in to the IRS. Or am I reading this wrong?

As I understand it, it's based on the one year with the highest balance out of all the years. So you're not paying 10-25% for each year.

[maxman71]

Concerning US citizens being required to report foreign bank accounts with a USD value of 10K or more:

This 10K threshold applies to the total AGGREGATE of all foreign bank accounts held by a US citizen AND US legal residents; i.e. green card holders. Example: If you have the equivalent of USD 5K in a Thai bank account, and the USD equivalent of 7K in a Hong Kong account, then you need to report both accounts. Also, if this 10K threshold is met for even just one day in a calendar year, then you have met the threshold.

While a US taxpayer must indicate he/she has foreign bank accounts on the 5500 form, it is the FBAR form (Foreign Bank Account Reporting) that needs to be completed and sent in. The FBAR form does not get filed with the 1040/5500. The FBAR needs to be RECEIVED by the IRS by June 30 for the preceding year.

Additionally, if a US citizen has control of a financial account in an overseas bank, such as being a Director, officer, etc. of a foreign corp, trust, etc, these rules also apply to the entity's account(s) and must be reported accordingly. And, if a US citizen has at least 10% ownership in a foreign corp, trust, etc., they also need to complete Form 5471 and associated Schedules and Statements.

The US Congress passed a bill in March of either 2010 or 2011 (can't recall which year) that requires foreign banks to provide the IRS with identification info on all their US citizen account holders. Now, whether all foreign banks will comply right away is another story, as this creates a workload burden for the banks. But if the banks don't comply, there is language in the bill that would make it more difficult for foreign banks to utilize various US banking and financial systems.

The IRS just recently completed their 2nd partial amnesty program in August 2011 for those who have not previously reported their foreign bank accounts. The 1st program expired in October 2009. The IRS went back to 2003 in wanting all pertinent reporting sent in, that included not only the existence and the highest balances in all accounts during each year, but also any income derived from those accounts, i.e. via interest, dividends, etc. Those participating in these programs in turn paid reduced penalties (about 10 - 25% of the highest balance of all accounts for the years reported) + any back taxes owed, interest and penalties on the tax due. In most cases, so long as the accounts and income derived were not as a result of criminal activity, the taxpayer avoided criminal charges and jail time. For those who had accounts that paid no interest and had no income from the accounts, they generally were not charged any penalties. Most of the people who did have previously unreported accounts and unreported income, they were audited. Between these 2 amnesty programs, about 30,000 people came forward and last I read, the IRS netted several billion in back taxes, penalties and interest. Then UBS handed over about 4,500 US citizen account holders as part of a huge settlement with the IRS concerning UBS' setting up US citizen accounts with the objective of evading US taxes. Now another Swiss bank (Credit Suisse?; not sure which one), is also in negotiation with the IRS for the same issues as UBS. It is expected thatthousands more US citizen account info will handed over to the IRS.

The IRS made it clear after the 2nd amnesty program that no further amnesties would be granted, and anyone caught with unreported accounts/income going forward, they can expect some truly draconian penalties. Such as: as much as 125% of the highest balance during all the years gone unreported, interest and huge penalties. And depending on the amounts in question and circumstances, JAIL TIME.

These new reporting/witholding rules for foreign banks is just one method the IRS is using to flush out those who have not previously reported their foreign accounts and income when they were supposed to and had the chance to come forward during the 2 partial amnesty programs, and didn't.

The days of banking secrecy and hiding money offshore are rapidly coming to an end.

Best of luck and limited sympathy to those who should have been reporting and didn't, and wind up getting caught.

10 to 25% tax on the highest amount and they go back 7 or 8 years. So that is somewhere between 70% and 200% of what you report they want. Basically report it and send it all in to the IRS. Or am I reading this wrong?

Further note: If you are not in compliance and want to be, I STRONGLY suggest you contact a knowledgeable and competent tax professional who is very familiar with these matters. The 10-25% penalty was in place during the two amnesties and they are not offering any further amnesties according to what's been made public, so the penalties going forward are much higher, like 125%.

[calbts2]

Thia draconian law is called FATCA and many international financial institutions are resisting its imperial overreach.

Read more about it here;

http;//www.aca.ch

[Pib]

According to this web site Link, the impact of the HIRE Act on expats should be along these lines:

The U.S. government – under a new law incorporated in the Hiring Incentives to Restore Employment Act signed by President Barack Obama on 18 March 2010 – is demanding that international financial institutions reveal which of their clients are U.S. citizens with accounts of more than $50,000. Foreign banks are, in effect, being asked to act as the international enforcement arms of the Internal Revenue Service. Those banks that don't comply will be subject to a 30% withholding tax on all payments made to them in the U.S. /quote]

This implies the tax will be on those foreign banks which also have operations in the U.S., not the individual if the bank does not comply in reporting those folks with overseas bank accounts of more than $50,000 which equates to around 1.5M Baht. If that is the case, I doubt many expats in Thailand keep more than $50K (1.5M Baht) in a Thai bank. Even those who use the 800K baht in a Thai bank for extension of stay/visa renewal purposes then that only equates to around $26.7K. Throw in another 200K baht in living expense/buffer money on top of the 800K baht to reach the 1M baht Thai govt insured amount per bank account and that 1M baht equates to approx $33.3K which is way below the over $50K trigger level. Stay below the $50K amount (about 1.5M baht) in sending additional money to your account to replenish the account as needed (like for living expenses) and a person may not have an issues.

But I guess the true impact will depend on which foreign banks also have operations in the U.S. like Bangkok Bank, the implementation devil-in-the-details, etc. Too early to run for the hills yet.

[maxman71]

One possible outcome from this draconian overreach, is the potential for foreign banks to not accept US citizen accounts. The other thing to keep in mind, is even though the foreign bank isn't required to report accounts under the 50K threshold, when a transfer of USD 10K or more in or out of a US bank (i.e. sending money to Thailand for visa, living expenses, buying a condo, etc) the US bank reports the transfer to the IRS. The overall trend is towards less banking privacy, not more. With the US and now the EU in a real debt mess, Mommy Gov't is going after all the money it can get its hands on. The ObamaChrist early in his presidency promised to "mine the expats" towards this end, and that is one promise he is keeping. His promise to repeal the Constitution-defying Patriot Act disappeared like a fart in the wind. The SOB didn't even have the balls to sign it in ink initially; he did it using an "electronic pen", until he was called on it. So how is all this "hope and change" working out for you who voted for this a$$clown charlatan???

[Soutpeel]

One possible outcome from this draconian overreach, is the potential for foreign banks to not accept US citizen accounts.

This already exists with a lot of foreign banks, and even the overseas arms of US banks...ie Citibank, and has been in place for years

Go an try and open a bank account at Citibank in Singapore and you will be asked if you are a US citizen, if you say you are see what happens..

The banks dont want the aggravation of dealing with US citizen;s accounts.

[thrilled]

it looks like the best thing is to transport money on your person.it sounds like it would be cheaper in the long run to just make several trips