I am a US citizen. Say I open up an account with a Taiwan bank. Will the bank share info with the IRS if the IRS requests such info from them? Or will the bank tell the IRS to shove off?
AFAIK, the US has not yet been successful in getting Taiwan to sign a tax treaty, so the IRS would not be able to get your account info through an officially established process. However, if the IRS considers you a big fish that’s worth frying, they may deal directly with banks in order to get the goods on you. If your bank has any interests in the US, then it is open to coercion, perhaps even if ROC law forbids the bank from giving up your info.
Note that as a US citizen, you are required to report yearly to the Treasury Department the existence of any overseas accounts that have at any time in the year held more than US$10,000.
If you ever plan to return to the US, it’s best to just bend over and comply. It’s upon return to the US when the IRS usually nails the long-term expat who has been non-compliant on tax filing. I’ve known or know of a few people who thought they were getting away with it while abroad, only to find out otherwise when they resettled in the US.
[quote=“Jive Turkey”]However, if the IRS considers you a big fish that’s worth frying, they may deal directly with banks in order to get the goods on you.[/quote]So is that a yes (i.e. if the IRS politely asks bank(s) about you, they will hand over the info without resistance)?
[quote=“Jive Turkey”]If your bank has any interests in the US, then it is open to coercion, perhaps even if ROC law forbids the bank from giving up your info.[/quote]What is the definition of “any interests in the US?” How does one make that determination?
[quote=“Jive Turkey”]If you ever plan to return to the US, it’s best to just bend over and comply. It’s upon return to the US when the IRS usually nails the long-term expat who has been non-compliant on tax filing. I’ve known or know of a few people who thought they were getting away with it while abroad, only to find out otherwise when they resettled in the US.[/quote]My taxes are filed each year, that’s not a problem.
No. There is no tax treaty and I know of no sharing of Taiwan bank information with the U.S. nor vice versa.
EDIT: Don’t forget to file your informational return which exempts your first 80,000 U.S. income from U.S. taxation. On the other hand, if you are Taiwanese, don’t forget to report your interest income with the Taiwan tax officials. BTW, capital gains in the U.S. or in Taiwan are not presently reported nor taxed as is interest income, if reported, as it should be.
Also, BTW, what the hell is “banksrus” with 3 posts?
EDIT: banksrus? I invite you to give even one example of U.S. expats getting hammered while here. True, when they go home, and perhaps that should be “if” they will get penalized for not filing an informational return, but even if they made large amounts of money, say, for example teaching bushiban, there is absolutely no way for them to know. I don’t suggest breaking the law, but on the other hand, use your head.
[quote=“Enigma”]EDIT: banksrus? I invite you to give even one example of U.S. expats getting hammered while here. True, when they go home, and perhaps that should be “if” they will get penalized for not filing an informational return, but even if they made large amounts of money, say, for example teaching buxiban, there is absolutely no way for them to know. I don’t suggest breaking the law, but on the other hand, use your head.[/quote]Thank you for the information. I did not imply I knew of US citizens who have been caught by the IRS in this manner. I did not know if a tax treaty existed between Taiwan and the USA, but as you said none exists which is good.
Well, it is not entirely good that there is no tax treaty. One, and probably the only benefit of there being a tax treaty is that such treaties usually stipulate that any tax advantaged retirement account that you have in the country will be treated in the same way as a tax advantaged account in the US. I have no idea if IRA or 401K type accounts even exist in Taiwan, but here in HK, everybody has one by law. The problem is that with no HK-US tax treaty, I have to report dividends and capital gains in my HK retirement account as I would for a regular taxable account in the US. Adding to the trouble is the fact that I can’t even get all the required details from the account custodian to properly report it. For a middleclass schmuck like me, a tax treaty would actually not be such a bad thing.