The IRS Is Coming For Your Offshore Bank Account

[babylonsister]

http://www.motherjones.com/mojo/2014/06/offshore-bank-accounts-fatca-irs


The IRS Is Coming For Your Offshore Bank Account
—By Alex Park
| Tue Jul. 1, 2014 6:00 AM EDT


It's always been a pretty simple arrangement for America's superrich: Park your money in a country whose banks know how to keep a secret and then underreport your assets to the IRS. Without a way to independently verify how much money you have abroad, the taxman had to take your word for how much money you had stashed in a Swiss vault or in a sunny haven like the Cayman Islands. But as of yesterday, the US government will require foreign banks to report their American clients' assets, or face 30 percent tax penalties on some offshore deposits.

The move is part of the Foreign Account Tax Compliance Act (FATCA), which was introduced in 2010. Since then, more than 80 countries have agreed to open their ledger books to the feds. After some complicated last-minute negotiations, even Russia and China have started to cooperate.

Companies and individuals have long used offshore banking to keep their taxes low: Last year, American multinationals kept an estimated $2 trillion (yes, with a "t&quot abroad, according to a Bloomberg analysis. In recent years, tech companies have become some of the most enthusiastic offshore depositors. Between 2010 and 2013, Microsoft more than doubled its foreign stockpile to $76.4 billion, while Apple increased its pot abroad more than fourfold to $54.4 billion.

But while big US companies have stowed a massive pile of cash abroad, US banks hold even more money for foreign clients. According to Tax Justice Network, a British-based advocacy and research group, out of the $21 to $32 trillion kept offshore globally, about 22 percent is kept in the United States—a fact that's not lost on countries complying with FATCA, some of whom are embracing the law because it means they'll get to learn a few things about their own citizens' holdings in the US.

[FSogol]

1. What took so long? Seize away! n/t

[Aerows]

2. I'll believe it when it actually happens

to more than 1 person.

[russspeakeasy]

8. + 100000000000000000000

[MineralMan]

3. Not mine. It's non-existent.

[WinkyDink]

4. You mean my account that's sinking?

[The Magistrate]

5. Glad To Hear It, Ma'am

Long overdue.

Nations need to co-operate against these companies, rather than compete for their favor....

[conservaphobe]

6. It's about time.

I suspect this is one of the major reasons why Congress has been more subversive than usual with the IRS.

Putting a bunch of millionaires with a grudge about about paying taxes in charge of IRS oversight is detrimental to our political system.

[Sen. Walter Sobchak]

7. This is a gong show

The only people who will get caught up in this in sizable numbers are the children of American expats who likely owe no taxes in the first place and don't have the presence of mind to lie to their bank when asked if they're a US citizen.

The tax evaders on the other-hand got a five year head-start to either disappear their assets into the world of private banking or renounce their citizenship.

This will accomplish less than nothing while annoying the fuck out of people with few or no material ties to the US.

[valerief]

9. So the rich have had 4 years to move their money to a safe place. Space station maybe? nt

[muntrv]

10. I'll believe it when I see it.

[Jackpine Radical]

11. OMG, woddle I do?

I gotta move $12 bil from the Caymans to Mars overnight!!

[factsarenotfair]

12. I wonder if this has anything to do with the House removing the travel disclosure requirement?

http://www.fitsnews.com/2014/07/01/house-republicans-remove-travel-disclosure-requirement/

[progressoid]

13. Experience tells me to not hold my breath.

[winter is coming]

14. I hope they give me a heads up on where it is. I didn't know I had one. n/t

[Hassin Bin Sober]

15. Expect a few new sign-ups (and a few older) DUers to come along and tell us ...

... how oppressive this law is to little old lady pensioners living abroad.

The wealthy don't squeal when they are stuck. They pay other people to squeal for them.

[Sen. Walter Sobchak]

16. The wealthy have the world of private banking open to them

The heavy hand of this law falls on the expat retail banking customer who probably doesn't owe anything in the first place.

[Hassin Bin Sober]

17. Tell that to the Beanie Baby billionaire.

Although he DID manage to escape jail time. The judge let him skip jail due to his "troubled childhood"

[Sen. Walter Sobchak]

18. That had precisely nothing to do with FATCA

There is a whole new breed of private banks that have no US ties ready to cater to this market.

The only people who will be snared by FATCA are people who have made no effort to conceal there holdings, these will be significantly people who didn't know they had any obligations in the first place and probably don't owe anything in the first place.

All at once the US approach to taxing expats is extremely reasonable, yet completely ridiculous.