Fatca And Its Possible Effects For U.S. Expats

[Guest StephenB]

Well FATCA is new news to me, but not the annual foreign accounts ownership paper to the Treasury. You can read a article here about FATCA.

http://www.forbes.co...news-for-fatca/

This might have the potential to get ugly, and effect my yearly Visa renewal as Thai banks could tell me to get lost.

On a side note- Would the U.S. please go broke allready so it can't police my bank account way over here. Somebody take me back to the 80's...

[maxman71]

Most of this is old news. Form 8938 is new, and I still need to get my arms around it. For those who have been reporting their WW income, filing FBAR's and Form 5471 (this form is for US citizens who have ownership of at least 10% in a foreign corp, trust, etc. and is a real pain in the butt to fill out the first time), this should not be a big deal. The only new potential catch for those US citizens who are and have been in compliance is how Thai banks are going to react to having to play "pitbull" for the IRS and start collecting and reporting US citizen ID and account info to the IRS. If Thai banks refuse, that's a serious issue. But, Citibank and BofA have branches in BKK, and I would assume that these Thai branches will comply. So it may mean us Yanks will need to move our accounts to one of these BKK branches of US banks.

The US citizens who really need to do some serious and immediate soul-searching are those who are not in compliance. Given the IRS provided two opportunities to come forward via two partial amnesty programs they ran in 2009 and 2011, I view FATCA and the new foreign bank reporting requirements as yet another step to get at the people who are still "underground". And the ones who get caught are in for a world of hurt.

The days of a sleepy-eyed IRS when it comes to offshore accounts are over; like it or not. And with the ever-increasing technology capabilities as well as increased IRS staff to go after those in non-compliance, it's is going to be extremely difficult, if not impossible, to stay off the IRS' radar much longer.

[cloudhopper]

Thanks I never heard of 8938 either. From one of the links in the article it appears that unless your foreign financial assets exceed $600k (for an expat filing jointly) during the year you are exempt from filing. Also those who do not need to file a 1040 are exempt.

FBAR is different and those reporting requirements remain the same i.e. over $10,000 aggregate at any time during the year.

[crusader79]

The US citizens who really need to do some serious and immediate soul-searching are those who are not in compliance. Given the IRS provided two opportunities to come forward via two partial amnesty programs they ran in 2009 and 2011, I view FATCA and the new foreign bank reporting requirements as yet another step to get at the people who are still "underground". And the ones who get caught are in for a world of hurt.

The days of a sleepy-eyed IRS when it comes to offshore accounts are over; like it or not. And with the ever-increasing technology capabilities as well as increased IRS staff to go after those in non-compliance, it's is going to be extremely difficult, if not impossible, to stay off the IRS' radar much longer.

The IRS has recently extended the amnesty program indefinitely, at somewhat higher penalty rates.

[maxman71]

I wasn't aware the IRS extended the partial amnesty program. What I do know is in either 2010 or 2011, the IRS received about 630,000 FBAR's. There are about 5+ million US citizens living abroad, a large percentage of which undoubtedly have offshore accounts which under the regs are required to be reported. Add to that figure US citizens living stateside who also have offshore accounts, many of which are also required to be reported.

Do some rough math and I think it is reasonable to assume that there are a lot more offshore accounts out there that are unreported that are required to do so. And many of those unreported accounts are the Big Fish; I have read tax lawyer blogs that say many of these big fish have thus far been willing to take their chances and stay underground as the penalties they face are huge if they come forward.

One should be aware that early in Obama's presidency, he directed his Treasury staff to "mine the expats"...and he (and Congress) appears to be keeping his word on that directive. Also keep in mind that the requirement to file FBAR's has been in place since 1973, but the law was rarely enforced until a few years ago.

[dtaa farang]

cloudhopper r u saying that a rtd us that saves 300000 thb from rtd pay has to do add paperwork. we havebeen svg so don't need ltu fm embassy every year/unforseen med exp.thanks

[IMA_FARANG]

I'm retired and living in Bangkok.

I filed the FBAR on my 800K retirement account and I'm complaiant.

The 800K baht in my Thai bank retirement account is less than $30,000....but if somebody wants to give m anoher $220,000 or so I can put in my Thai bank account....I'll be happy to take it.

Then I'll happily file the new decarations for that $250,000 amount.

Not ALL americans retired and living overseas are wealhy...some of us live on our less than $2000 a month Social Security.

[dekestone]

The only new potential catch for those US citizens who are and have been in compliance is how Thai banks are going to react to having to play "pitbull" for the IRS and start collecting and reporting US citizen ID and account info to the IRS. If Thai banks refuse, that's a serious issue. But, Citibank and BofA have branches in BKK, and I would assume that these Thai branches will comply. So it may mean us Yanks will need to move our accounts to one of these BKK branches of US banks.

This is my issue. Totally compliant with FBAR and 8938 but working for a Thai multinational company and my salary is deposited in a local bank. If Thai banks start closing American accounts because of the FATCA hassles -- and honestly, I can't say I'd blame them considering the huge expense it will take to please the IRS -- what happens then? I know I've mentioned this on other threads so please forgive me for being redundant -- but I have yet to hear anything about what Thai banks intend to do regarding FATCA. If anybody knows anything, please post.

Edited July 20, 2012 by dekestone

[cloudhopper]

cloudhopper r u saying that a rtd us that saves 300000 thb from rtd pay has to do add paperwork. we havebeen svg so don't need ltu fm embassy every year/unforseen med exp.thanks

As I understand FBAR, if at any time during the year the sum of all your foreign account balances exceeds the equivalent of $10,000, you are required to file their form. Regardless of your residency or work status. edit-and regardless of whether you are required to file a 1040 either...

Edited July 20, 2012 by cloudhopper

[Guest StephenB]

Wish the existing laws were enforced.

As I understand the new FATCA rules apply to 50,000 USD or more overseas. I don't have the problem reporting it, but the Thai Banks might, Not just Thailand, but all over the world. I really haven't read much about it, but speed reading on the internet I thought I read it was pushed back a year maybe in 2014 for reporting of 2013 taxes.

This will be interesting to see how it plays out.

Edited July 20, 2012 by StephenB

[maxman71]

The only new potential catch for those US citizens who are and have been in compliance is how Thai banks are going to react to having to play "pitbull" for the IRS and start collecting and reporting US citizen ID and account info to the IRS. If Thai banks refuse, that's a serious issue. But, Citibank and BofA have branches in BKK, and I would assume that these Thai branches will comply. So it may mean us Yanks will need to move our accounts to one of these BKK branches of US banks.

This is my issue. Totally compliant with FBAR and 8938 but working for a Thai multinational company and my salary is deposited in a local bank. If Thai banks start closing American accounts because of the FATCA hassles -- and honestly, I can't say I'd blame them considering the huge expense it will take to please the IRS -- what happens then? I know I've mentioned this on other threads so please forgive me for being redundant -- but I have yet to hear anything about what Thai banks intend to do regarding FATCA. If anybody knows anything, please post.

I share your concern. I am the MD of a Thai limited co. and have both personal and co. accounts that I have been reporting to the IRS. Like you, I need these accounts to live and work here. So when I return to LOS in mid-August (I am on a long-term biz assignment in the US), I am going to 1) Check with my current bank (Krung Thai) to see if they are going to comply with the FATCA requirements. 2) Check with the BKK branches of Citicorp and BofA and see if they will accept US citizen accounts and also comply with FATCA. 3) Check with my Thai lawyer and accountant to see if I can have my Thai Ltd. co. accounts with a US bank branch in Thailand.

[dekestone]

Thanks, Max, appreciate any info you can pass on.

[Cheapcharly]

I think that Thai banks will not comply with fatca. They will be FATCA on paper as they don't have the choice, but they will probably ask any USA person to leave and shop somewhere else.

Why do you think other eu banks are not accepting USA person?

Do you think Thai banks are better than eu banks?

Get real, nobody like too be fatcaed...!