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Re: NEW US TAX LAW – FATCA – “VERY AMBITIOUS” [Re: Marty] #469958
08/10/13 11:01 AM
08/10/13 11:01 AM
Joined: Oct 2003
Posts: 492
TExarkana, USA
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catdance62 Offline
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catdance62  Offline
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we've always complied with FBAR, but haven't and probably won't have enough money in our Belize bank accounts to have to worry about FACTA.

Re: NEW US TAX LAW – FATCA – “VERY AMBITIOUS” [Re: catdance62] #470449
08/17/13 10:26 AM
08/17/13 10:26 AM
Joined: Jun 2008
Posts: 2,000
SW, MA / SW, FL
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ragman Offline
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ragman  Offline
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Originally Posted by catdance62
we've always complied with FBAR, but haven't and probably won't have enough money in our Belize bank accounts to have to worry about FACTA.


Cat, I do not think I explained my point correctly, allow another attempt to show why this may very well affect you.

Like you I’ve always reported to the IRS as required. I supply this info to my CPA. He unknown to me always reports to the IRS even though my account has been purposely kept just under the reporting requirements. He is the pro so I questioned but will go along with his thoughts.

The banks also have to monitor accounts of American accounts to make sure they do not meet the reporting requirements. They also have to report on those that do. You can expect the dollar level which requires reporting to decrease over the years. This is an expense and hassle to the banks that have few American accounts in the whole country and does put them at risk. The USA has proposed serious penalties to these banks if there reporting is found incorrect. I have to assume that they will have to submit to audits and investigations when a case is brought to USA’s attention.

The banks that are forced to deal with the USA may throw up their hands and say no more USA citizens may have an account or maybe only those over a certain large amount that makes it worthwhile. Maybe they will eventually drop all accounts. Another matter which is being pushed by the progressives in the USA is to tax wealth. This requirement will require even more reporting and I’m sure will include real estate and their transactions.

This is a hassle all over the world. Google Americans who are denouncing their citizenship to escape taxes and reporting and you will see that the numbers are relatively small but increasing dramatically. The USA is one of the only countries in the world that taxes American income no matter what country it was earned in. This includes any money made on a real estate transaction. For the first time in my memory there is serious talk of exit taxes, even on smaller amounts for people who are leaving the USA. I thought it was only the repressive communist countries that trapped their citizens inside their borders but……..I may have to rethink that position.

The monster of big government in the USA must be fed and is constantly looking for the food which keeps it going. (money) It is a nightmare.


Jim
Formerly from somewhere on a beach in Belize
Re: NEW US TAX LAW – FATCA – “VERY AMBITIOUS” [Re: ragman] #470493
08/18/13 07:39 AM
08/18/13 07:39 AM
Joined: Oct 2003
Posts: 492
TExarkana, USA
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catdance62 Offline
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catdance62  Offline
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well, I guess we will just have to ride it out to see what happens.....Don't know what else to do! And I don't want to renounce citizenship.

Re: NEW US TAX LAW – FATCA – “VERY AMBITIOUS” [Re: catdance62] #470498
08/18/13 08:43 AM
08/18/13 08:43 AM
Joined: Jun 2008
Posts: 2,000
SW, MA / SW, FL
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ragman Offline
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ragman  Offline
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Originally Posted by catdance62
well, I guess we will just have to ride it out to see what happens.....Don't know what else to do! And I don't want to renounce citizenship.


Yes, I agree with every word. Time will tell.


Jim
Formerly from somewhere on a beach in Belize
Re: NEW US TAX LAW – FATCA – “VERY AMBITIOUS” [Re: Marty] #474395
10/08/13 05:11 AM
10/08/13 05:11 AM
Joined: Oct 1999
Posts: 58,984
oregon, spr
Marty Offline OP

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Marty  Offline OP

FATCA seminar hears of stiff penalties

The U.S. Internal Revenue Service has at least seven ways to catch those trying to avoid its Foreign Accounts Tax Compliance Act, and a Department of Justice database on 33,000 taxpayers to help.

Local officials estimate that as many as 6,000 people in Cayman – more than 10 percent of the population – will have obligations under FATCA, whether paying taxes, filing forms, reporting on bank accounts or just seeking legal advice.

“FATCA is coming. The U.S. has delayed implementation by six months, but it’s coming,” said George Town representative Roy McTaggart.

Opening Friday’s half-day FATCA seminar in a packed ballroom at the Westin, Mr. McTaggart said the Cayman Islands government hoped to offer “a kind of road map, giving you the best resources available,” helping U.S.-affiliated people navigate the complexities of the law, intended to collect arrears from delinquent taxpayers.

Many may be caught unaware

A host of those liable to the IRS may not even know it. The IRS net is designed to catch Green Card holders; property owners; anyone with a U.S. bank account or signing rights; anyone with shares in a U.S. company, a trust or pension plan; anyone with a U.S. passport, whether they use it or not; even anyone born in the U.S. whether or not they have a U.S. passport; or even using a U.S. mailing address.

“These are enhanced reporting requirements to help the U.S. government ferret out those who have not been paying their taxes,” said keynote speaker Steven Cantor, managing partner at Miami’s Cantor and Webb law firm.

“The U.S. is against taxpayers collecting foreign income outside of tax,” he said, explaining that even the American spouse of a non-American is liable for half the income earned in the joint household.

Acknowledging the welter of detail and difficulties in the law, part of 2010’s Hiring Incentives to Restore Employment Act, Mr. Cantor said the only people that like FATCA are lawyers and accountants.

“From the perspective of a U.S. international tax attorney, we love FATCA for four reasons: complexity; uncertainty, with all the changes since 2010; change, with all the amendments and reforms to the law; and fear-mongering,” Mr. Cantor said.

“One man told me it was the end of Western civilization as we know it,” Mr. Cantor said, explaining that “No, FATCA is aimed at foreign financial institutions and other financial intermediaries to prevent tax evasion by U.S. citizens and residents through use of offshore accounts.”

Those “foreign financial institutions” and intermediaries include any business that accepts deposits in the ordinary course of its affairs. The definition includes banks and financial services firms, and any entity, including insurance companies, that invests, trades in securities or commodities, partnership interests or annuity contracts.

Penalties

Any foreign financial institution failing to identify its U.S.-owned accounts faces a 30 percent withholding tax on all U.S.-based income and assets.

On Aug. 19, the IRS opened an online “portal” by which FFIs register with the agency, providing information on operations related to U.S. account holders.

They must finalize that information by January 2014, receiving a “global intermediary identification number,” followed by the June IRS publication of the FFI list.

Mr. Cantor described the seven ways the IRS could identify someone trying to avoid FATCA compliance, starting with IRS litigation.

“There also could be changes in the law. There might be a whistleblower. If you go to renew your U.S. passport, you may be asked if you have paid your taxes. There is what we call ‘audit by infection,’ when your name may come up during the course of someone else’s audit.

“When you enter into the U.S., you may be asked, and your Green Card taken. The officer will tell you where you can pick it up as long as you bring your tax returns proving you have paid.”

Finally, Mr. Cantor said, the agency will learn about ownership of U.S. assets at the time of your death.

Audible despair gripped the hundreds of audience members when Mr. Cantor described eight IRS and Treasury Department forms required by the agency, followed by another five that might be needed.

Penalties are stiff for not filing, he said. For example, falsifying or failing to submit Treasury Department Form 90-22.1 could draw a $500,000 fine and up to 10 years for in prison. Tax evasion, he said, is liable to a $250,000 fine and up to five years. Failing to file a tax return attracted a $100,000 fine and up to one year imprisonment.

Following the presentation, Mr. Cantor, alongside Mr. McTaggart and KPMG partner and “head of tax” Doug Harrell, heard an hour of eager audience questions, most related to complex personal circumstances.

Mr. Cantor told one interlocutor that renouncing U.S. citizenship is unlikely to be effective: “First, you have to have another passport before you can do that. You cannot be stateless.”

An “exit tax” would also apply, he said, describing a law that “started when a certain resident here [Cayman] came from Belize.” Someone seeking to expatriate themselves, he said, could be forced to sell their assets, relinquish any trusts and pay state taxes.

“Until the State Department gives you a certificate [of expatriation], you cannot relinquish your passport, not until all your taxes are paid.”

Source


Re: NEW US TAX LAW – FATCA – “VERY AMBITIOUS” [Re: Marty] #474405
10/08/13 05:50 AM
10/08/13 05:50 AM
Joined: Oct 2001
Posts: 5,999
San Pedro AC Belize
Diane Campbell Offline
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Diane Campbell  Offline
Yep, a goldmine for tax attorneys and accountants. It's become very expensive to document the honest fact you don't owe the government any money.

This is not going to fix the US financial problem.

More effective I think would be to invite the money into the country because it is easy to comply, easy to do business, easy to understand tax codes.


Re: NEW US TAX LAW – FATCA – “VERY AMBITIOUS” [Re: Marty] #474474
10/08/13 04:08 PM
10/08/13 04:08 PM
Joined: Apr 2007
Posts: 2
MakingProphets Offline
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MakingProphets  Offline
Most people do not know that you can actually set up financial privacy and anonymous banking right in the U.S. but there are cases where offshore is right, especially for U.S. expats who live overseas.

MakingProphets

Re: NEW US TAX LAW – FATCA – “VERY AMBITIOUS” [Re: Marty] #474482
10/08/13 04:27 PM
10/08/13 04:27 PM
Joined: May 2011
Posts: 1,520
PACWest, SACSouth
Bear Offline
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Bear  Offline
FBAR is filed with the US Treasury not with the IRS...the IRS as well as BATF, DEA, has access to the information if they choose to request it. Been through filing several times. We report everything and never a peep or hassle...not saying I like it but its been fairly easy to comply.

I should also mention that some friends were recently informed by the Director of the IT Dept of the GOB that all income regrdless of source was to be aggregated to determine income realtive to the $75KBz Belizean Business Tax exemption level. Doesn't sound like grasping for a buck is exclusive to the US...or perhaps considering FACTA it's tit for tat?

Re: NEW US TAX LAW – FATCA – “VERY AMBITIOUS” [Re: Marty] #476746
11/07/13 03:51 AM
11/07/13 03:51 AM
Joined: Oct 1999
Posts: 58,984
oregon, spr
Marty Offline OP

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Marty  Offline OP

BCCI: Info Bulletin - Updated information on the United States - Foreign Account Tax Compliance Act (FACTA)

The U.S. Embassy in Belize has shared the following latest release from the IRS. It is the draft agreement and rules for foreign financial institutions (FFI) to report the necessary FATCA information to the IRS. Please click these links to find out more:

http://www.treasury.gov/press-center/press-releases/Pages/jl2194.aspx

http://www.irs.gov/pub/irs-drop/n-13-69.pdf


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