ATTN: All American Citizens! Taxes! Citizen vs. Residency based taxation, FBAR, FATCA, please read!

Legal Taxes
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Sorry for my late reply to all of this.

For those of you who are out of the loop on what is going on, I urge you to read this to help you understand why FATCA is bad: treasury.gov/connect/blog/Pa … FATCA.aspx ACA has written a response to the treasury over this.

As far as your message above about the IRS’s new streamline program, I would seriouslly think twice before you do anything. As I have seen there are more than seven ways for US payers who are not complient to get complient, however, all seven carry serious risks. There is not good way to become tax compliant if you are not. The IRS loves penalites more than it does the taxes it can make from back filing, which is something ACA is strongly against. I am very much for residency based taxation, and I urge the rest of you to support it also, it may eliminate our need to even file a tax return in the future, but until now nothing has been changed. Frankly I do not really trust those tax services recommendations, because many of them are only looking out for themselves and not the tax payer. PWC is a prime example, they will never recommend you to do anything other than follow the law and in some cases by doing so you will put yourself in a worse off position than you would be by simply just paying taxes going forward and doing your taxes right. The IRS loves dishing out penalites as they can make more money through the penalities than they can on the actual taxes owed! I am not advising nor suggesting you do that either, anyone who is not compliant needs to seek out all the alternatives and spend time researching before they start doing anything.

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Please be advised that any letters to the Senate Finance Committee on tax reform are due tomorrow, January 17, 2014.

americansabroad.org/issues/taxat … ax-reform/

isaacbrocksociety.ca/2013/11/19/ … porations/

americansabroad.org/issues/taxat … committee/

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JEFFG and others. Thanks for the information posted.

Filing U.S. tax related forms is certainly becoming a nightmare. I never thought I would consider giving up my U.S. citizenship due to potential of such heavy fines on forms which I might not be aware of…and actually don’t result in my paying more taxes (since I already report annually). :astonished: :noway:

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Flakman you are welcome. There will be more to come soon as I am preparing a letter for the finance minister, and I am attempting to get the newspapers to publish it as well. But I will be posting the letter to this thread at the same time.

In the meantime here are some interesting reads.

Quick Glance at FATCA and the Tragedy of Double Taxation: pennstatelawreview.org/the-f … -taxation/

Every wondered what they do with all those FBARs, this might help shed some light: treasury.gov/tigta/auditrepo … 125fr.html

For those of you who are interested to get involved or learn more, I encourge you to join ACA -American Citizens Abroad. It’s about $70 a year for membership. americansabroad.org/support/membership/

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JEFFG…good luck with your efforts. I already pay a U.S. tax accountant US$600 to fill out my tax forms as I don’t think I have the mental capacity to handle it. The price keeps going up as new forms/rules appear. I was thinking to just try to do the forms myself but guess will wait for all of this expatriate tax stuff to settle down.

I guess I must be more diligent to keep abreast of tax related news as is so easy to become a tax criminal while living abroad.

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[quote=“Flakman”]JEFFG…good luck with your efforts. I already pay a U.S. tax accountant US$600 to fill out my tax forms as I don’t think I have the mental capacity to handle it. The price keeps going up as new forms/rules appear. I was thinking to just try to do the forms myself but guess will wait for all of this expatriate tax stuff to settle down.

I guess I must be more diligent to keep abreast of tax related news as is so easy to become a tax criminal while living abroad.[/quote]

This is one of the major issues that I find most Americans living abroad have issues with. Paying an accountant $600 to fill out your forms when yo probably owe $0 in tax is ridiculous. However, making simple mistakes can cost you 10s of thousands in penalities, another ridiculous issue. Once FATCA is implemented, and we are praying it never will be, the problems are only going to escalate further, and not just for those Americans abroad, and thus many of us are fighting this horrible tax law. As you may be aware, the Republican party has put a bill out to repeal it, but no one knows if they can get enough support to kill it.

It is estimated that more than 3/4s of Americans living abroad are not tax compliant and have no idea of the rules. And many accountants are just as ignorant when they are filing tax returns for Americans abroad.

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Today at the bank I had to worry if the new account I opened would create a new account number. This worry is due to FBAR.

Recently I am moving money in and out of an account to deposit into new fixed period accounts (to obtain higher interest rates). The problem is FBAR wants me to provide the amount of funds in each of my accounts during the year. However, if I report Account A has $100,000 and Account B has $100,000 and Account C has $100,000…then the U.S. government will surely assume I have $300,000 in funds in Taiwan…when actually I only have $100,000. The logical way is simply for me to provide the amount of interest earned on my funds abroad…which I already due on my IRS forms.

Meanwhile, my plan is to pick a dollar amount for each account to report on FBAR which is actually more representative of how money was in that account…so the total amounts on FBAR add up to my actual funds in Taiwan. Of course, this is not what they want…

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[quote=“Flakman”]Today at the bank I had to worry if the new account I opened would create a new account number. This worry is due to FBAR.

Recently I am moving money in and out of an account to deposit into new fixed period accounts (to obtain higher interest rates). The problem is FBAR wants me to provide the amount of funds in each of my accounts during the year. However, if I report Account A has $100,000 and Account B has $100,000 and Account C has $100,000…then the U.S. government will surely assume I have $300,000 in funds in Taiwan…when actually I only have $100,000. The logical way is simply for me to provide the amount of interest earned on my funds abroad…which I already due on my IRS forms.

Meanwhile, my plan is to pick a dollar amount for each account to report on FBAR which is actually more representative of how money was in that account…so the total amounts on FBAR add up to my actual funds in Taiwan. Of course, this is not what they want…[/quote]

I think you don’t need to worry so much about creating a new account number. The biggest issue is how much you have in all your accounts combined. I had nearly 20 accounts in Taiwan, many of them dormant or with little money in them, I starting closing nearly half of them this year because from this year we have to file electronically so I can’t go back and just update the old form. The IRS sure makes it EASY on us… :fume:

In addition, yep, FBAR will make it look like you have $300,000, that’s right, I have gone through this worry as well. If you do not have that much money, I wouldn’t worry about it, but if you really are moving hundred’s of thousands or millions, get a good accountant to make sure you make 0 mistakes, because one small mistake could cost you US$10,000 in penalities! :fume: :fume:

I would be very careful with how you report this on FBAR, because if and when Taiwan signs FATCA, the IRS is going to know what you are doing, granted if they find you, the needle, in the haystack… This is what FATCA is trying to do is to uncover hidden money, but it is putting a lot of people in a bad situation who are not hiding money, but simply mess up on their FBARS or other filing errors. It’s totally ridiculous!

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Because the two threads are bound to become separated, the link to the 121 questions I submitted to many Taiwan government agencies concerning FATCA can be found here: forumosa.com/taiwan/viewtop … 9&t=126132.

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I wrote to this email address (BSAEFilingHelp@fincen.gov) to ask them how to report the duplicated funds as I mentioned above. Two days ago and waiting for response.

I am okay with reporting all of my Taiwan funds but just find it ridiculous that such a obvious problem is not addressed on FBAR forms.

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[quote=“Flakman”]I wrote to this email address (BSAEFilingHelp@fincen.gov) to ask them how to report the duplicated funds as I mentioned above. Two days ago and waiting for response.

I am okay with reporting all of my Taiwan funds but just find it ridiculous that such a obvious problem is not addressed on FBAR forms.[/quote]

I don’t really think you are going to get a positive response about this. As I often transfer money between accounts also I have worried about this also. It is an inflated amount, I know and it makes us look like we have more money than what we are reporting, and they love that! The IRS could careless about the taxes that we actually owe, what the love is the penalties associated with the taxes with owe, and for minor reporting errors. This is where they make their money. It is an abuse by the IRS. We overseas Americans have been a target of the IRS for decades, but it is not being recognized because alot of people back home simply believe that if we do not live in the US we are not real Americans. This is such a complete cluster****. The IRS needs to be dismantled and abolished. At the very least a push towards residency based taxation which ACA is pushing for and has been included in reports in Washington already. Let us know what you hear back from BSAEF, I would be very curious to see what they say.

FATCA is worse than Obamacare! A double trainwreck that is going to destory many families.

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Below is response I received when asking question via email regarding FBAR. I find this quite annoying. For questions, you must call and leave a message…they will call you back. I am now asking them via email if they will really call me back overseas.

You are receiving this e-mail in reference to your BSA E-Filing ticket (#00621499).

We can only provide technical support relating to computer issues and website functionality. We are not authorized to answer any inquiries regarding regulations, extensions, exemptions, or proper completion of the reports. For assistance with regulations and how to properly complete reports please contact the Regulatory Hotline at (800) 949-2732 or (703)905-3975. The Regulatory Hotline only accepts requests at the number provided. They do not provide support via email. Be advised that they do not accept live calls. You will need to leave them a detailed message and they will conduct research and return your call. Please refer to the list of options below:

  1.  Reporting Suspicious Transactions Related to Terrorism

  2.  Technical Support & System Questions for the BSA E-Filing System

  3.  Mandatory E-Filing Requirement Questions

  4.  Money Services Businesses Questions

  5.  Financial Institution CTR Questions

  6.  Financial Institution SAR Questions

  7.  Filing Requirements Questions for Other businesses (Not Banks or Money Services Businesses Questions)

  8.  All other Questions

Thank you,

BSA E-Filing Help Desk
Phone: 866-346-9478
8:00 am to 6:00 pm EST
BSAEfilingHelp@fincen.gov

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I think I finally just realized what you did… But I am confused… Why are you contacting the financial crimes unit to discuss FBAR issues? I would think you should be contacting the Treasury Department that handles FBAR right? Although frankly I don’t think I would want them to have my email address or phone number or for that matter even my name…

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Whoops. I did write to wrong address. The address I wrote to help for e-filing of FBAR. Now I have written to: FBARquestions@irs.gov

I can use different email address to write to them. :wink: Yes, I am not quite ready to provide them my name and contact info.

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Here is the response I received regarding duplication of funds reported on FBAR. My enquiry shown at bottom…

Good morning,

You must list each account valued separately at its highest value during the year. It does not matter where the funds originate from. You must list the maximum value each account reach at any time during the calendar yr. Your records will reflect the true amount.

Pamela Turner
Tax Law Specialist
Compliance Review Team 204

Hello,

I live overseas. I often move money from one account into other accounts (to obtain higher interest rates). Each account has its own account number. On FBAR if I provide the “maximum account value” during the year for each account, then there is duplication of actual fund amount.

Example, funds moved from Account A to Account B for 3 months then moved to Account C for 6 months. These 3 accounts are using the same funds. If on FBAR I provide the “maximum account value” for Account A, B, and C then I will be reporting the same funds 3 times (in 3 different accounts).

What is correct method to report such duplication of funds?

Thank you for your help.

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[quote=“Flakman”]Here is the response I received regarding duplication of funds reported on FBAR. My enquiry shown at bottom…

Good morning,

You must list each account valued separately at its highest value during the year. It does not matter where the funds originate from. You must list the maximum value each account reach at any time during the calendar yr. Your records will reflect the true amount.

Pamela Turner
Tax Law Specialist
Compliance Review Team 204

Hello,

I live overseas. I often move money from one account into other accounts (to obtain higher interest rates). Each account has its own account number. On FBAR if I provide the “maximum account value” during the year for each account, then there is duplication of actual fund amount.

Example, funds moved from Account A to Account B for 3 months then moved to Account C for 6 months. These 3 accounts are using the same funds. If on FBAR I provide the “maximum account value” for Account A, B, and C then I will be reporting the same funds 3 times (in 3 different accounts).

What is correct method to report such duplication of funds?

Thank you for your help.[/quote]

Thanks for posting the new letter you recieved about this, want to push the issue a bit with them? Comlain to them it makes you look like a millionaire because of their way of calculating it? If you aren’t comfortable doing it, I will, I want to see their response. I don’t mind fighting with these people sometimes.

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The FBAR is frustrating as so easy to overstate the actual amount of funds you have overseas. Well, the whole process is ridiculous anyway. I do not see why need to pay taxes on Taiwan income received. If I need to pay my share of running the U.S. government then charge me a flat fee on annual basis…to me that makes more sense. Call it a “U.S.A. citizens abroad tax.”

If must have FBAR then make it simple. Total fund amount in financial institutions. List of financial institutions used. That way government can approach them directly for verification. The current “maximum amount” during the year is just confusing.

I don’t feel like fighting with them right now. But I do feel like pulling all my funds out of U.S. to avoid IRS from arbitrarily fining me and removing funds from my accounts.

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[quote=“Flakman”]The FBAR is frustrating as so easy to overstate the actual amount of funds you have overseas. Well, the whole process is ridiculous anyway. I do not see why need to pay taxes on Taiwan income received. If I need to pay my share of running the U.S. government then charge me a flat fee on annual basis…to me that makes more sense. Call it a “U.S.A. citizens abroad tax.”

If must have FBAR then make it simple. Total fund amount in financial institutions. List of financial institutions used. That way government can approach them directly for verification. The current “maximum amount” during the year is just confusing.

I don’t feel like fighting with them right now. But I do feel like pulling all my funds out of U.S. to avoid IRS from arbitrarily fining me and removing funds from my accounts.[/quote]

I sent them a letter a little while ago and dug in a little bit critizing them how poorly designed it is. We’ll see how they respond.

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Article about Taiwan signing IGA for FATCA.

TAIWANESE FATCA PACT EXPECTED IN JUNE
Tax News: 13 May 2014

http://www.tax-news.com/news/Taiwanese_FATCA_Pact_Expected_In_June____64664.html

Seems will sign model 2 agreement which means individual banks/institutions must get consent from U.S. customers to release customer account details to IRS. I assume if customer does not agree then account can be closed.

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Is that realistic that the banks in Taiwan will only tell them your info if you give them permission? They need your consent? Really?