IRS; We are going to get ours regardless of where you are

[Robby999 1,024]

Monday, April 7, 2014, 09:11

How far can the reach of US taxman extend

By Tim Collard

How far can the reach of the United States’ Internal Revenue Service (IRS) extend? Certainly it is no longer strictly “internal”. The US has already secured agreements with most of her Western allies (and Japan) to provide information on the finances of their residents upon which the US taxman can stake a claim. It is also to ensure people cannot keep their money from the clutches of Uncle Sam simply by physically relocating. Now the tentacles of the US Foreign Account Tax Compliance Act (FATCA) are reaching out to Hong Kong in the form of a mutual information-sharing agreement on the finances of each other’s residents. This is only a first step which will lead to an agreement that Hong Kong will enforce American law on US’s behalf. (The agreement is only theoretically mutual, as Hong Kong does not enforce taxation laws on non-residents.)

How are Americans able to do this? Taxation normally depends on residence, and countries other than the one in which a person is resident in usually have no claim, hence the need for separate agreements with other jurisdictions. And the provisions of FATCA are not even limited to US citizens. Any person with the right of residence in the US is covered, as are partnerships or trusts based in the US. So why are other economic centers prepared to do the IRS’s dirty work for them? There must be considerable advantages which can be gained by the US’s partners; either that or great disadvantages for non-participants. The US position is that financial institutions from countries, which refuse to sign a FATCA agreement, will be subject to a 30 percent withholding tax from any of their US-related businesses. Therefore, governments can easily be pressured from financial institutions to sign up.

The recent agreement with Hong Kong obviously opens up the question: what about the Chinese mainland? Apparently US authorities are confident China will sign up to FATCA in due course, to maintain her position in the US-dominated global financial system. I can imagine, however, that there might be some resistance. Will all Chinese business people who hold US “green cards” really welcome the attentions of the IRS? And, although mainland financial institutions will find their US operations easier and more profitable, how will FATCA affect relations with their domestic customers? Hong Kong is already witnessing banks displaying some reluctance to open accounts for customers with US connections, on the grounds that information transfer requirements are likely to lay them open to extensive compliance requirements.

So, will the US be able to continue expansion of the FATCA regime indefinitely? It is clear that a degree of financial and economic hegemony must exist before one country can enforce its own regulations on other jurisdictions. Other countries can’t do this. Britain, for example, falls over herself to make life tax-free for foreign citizens and companies. She is even prepared to pretend they don’t live in London when they obviously do. This is because London is competing with other centers for its share of financial services — as is Hong Kong.

The US does not believe it really needs to compete — it thinks it is so central to the global economic system that no serious player can afford to ignore it. There is a parallel here with the increasing inconvenience imposed on travelers by US immigration. It is simply assumed the US can make immigration as difficult as it likes because everyone who matters sometimes has to visit the US. When the US has to compete for international attention, things might change.

This will probably be more important in determining China’s attitude to the acceptance of foreign tax-enforcement agreements rather than the short-term convenience, or otherwise, of a FATCA deal. The Chinese government may be prepared to sign up for practical reasons. But in the long term they will find it very difficult to accept clear evidence of an American hegemony which China does not believe can last. Many Chinese (and non-Chinese too) believe that, one day, business people will be able to pick and choose whether they need an operation in the US. But they will pay whatever they need to in order to establish themselves in China.

So, although it is clear that the US tax regime has made a first successful incursion into Chinese territory, it is far from clear what the ultimate outcome of this will be. The outcome is likely to be determined by China’s reluctance to concede that the US has any right to impose compliance requirements on any other jurisdiction other than on a multilateral basis. And also the belief that if any country is to have such a dominant position in the global economy (and able to enforce its tax legislation worldwide) then it should not necessarily be the US.

The author served 1986-2006 in the British Diplomatic Service, including nine years in Beijing. He is now a freelance writer, journalist and commentator on political, economic and diplomatic affairs, especially China.

http://www.chinadailyasia.com/opinion/2014-04/07/content_15129200.html

[Karee 4,191]

I'm going to attempt to open a bank account in Bangkok this Friday. I've been hearing rumblings that the Thai banks don't want to bother with U.S. citizens any longer because of all the reporting requirements tied to it. I'll find out Friday if that's true or not.

[Karee 4,191]

#### me. Just found this little tidbit on a Thai Visa website:

I am an American citizen and I want to get a retirement Visa.

Here is my problem. I can't get a bank account. Last week I went to K-Bank as I was told that is the best bank and I was turned down as soon as they saw my passport. I went to some other branches and was told no. I went to Bangkok bank and was told they don't take Americans and I stopped at a couple other banks while walking around and told no Americans.

I need to have 800,000 baht in a bank account but I can't get a bank account!

My plan was to open the account, have a nice little holiday, go back home and wire in the money as you need to have the money in for a few months before the Visa. But I can't find a bank that will take me as a customer.

I'm old enough for the Visa but too young and don't have a pension.

I've been ripping my hair out with the catch 22 of you can't get a Visa without a bank account but you can't get a bank account! I just don't know what to do and am afraid I will go back home with no bank account and then I don't know how I will get my Visa when I come back next time.

Any help or suggestions GREATLY appreciated.

Source: http://www.thaivisa.com/forum/topic/716951-american-no-bank-account-no-visa-catch-22-help-please/

[Merrytooth 5,748]

Are foreign banks require to report accounts of US LPR to US IRS too?

[CarlosAndSveta 808]

Are foreign banks require to report accounts of US LPR to US IRS too?

Resident Aliens are usually treated the same as U.S. citizens for tax purposes, so I would assume that the law also applies to US LPRs.

[Karee 4,191]

A U.S. passport becomes more of a liability every day.

[The Nature Boy 4,224]

We are heading down the sticky slope to totalitarianism and anybody who dares see the emperor is naked is ridiculed and in many instances attacked by our own government

I am so over the Dem Vs Repub thing. It's two sides of the same coin.

[Merrytooth 5,748]

Singapore is committed to the FATCA intergovernmental agreement.

[Karee 4,191]

We are heading down the sticky slope to totalitarianism and anybody who dares see the emperor is naked is ridiculed and in many instances attacked by our own government

I am so over the Dem Vs Repub thing. It's two sides of the same coin.

The U.S. govt. is so worried they're not going to have enough of everyone's money to pi$$ away, they've resorted to turning over everyone's couch and digging around for pennies.

[deleted-05292014 331]

#### me. Just found this little tidbit on a Thai Visa website:

Ah that's a no brainer.

Tell that guy I have a friend in Nigeria that can help him out. Have him wire me the money and I will send it to my friend in Nigeria who will then create an account in Thailand for him, for only a small commission say .0025% ?

[Robby999 1,024]

The U.S. govt. is so worried they're not going to have enough of everyone's money to pi$$ away, they've resorted to turning over everyone's couch and digging around for pennies.

The Dems want every dime you have to finance their Utopian Dream.

It has been estimated that the U.S. Treasury loses as much as $100 billion annually to offshore tax non-compliance.^[13] Therefore, supplementing the reporting regimes already in place was deemed to be an effective means of increasing compliance and raising government revenue.^[14] After committee deliberation, Sen. Max Baucus and Rep. Charles Rangel introduced the Foreign Account Tax Compliance Act of 2009 to Congress on October 27, 2009. It was later added to an appropriations bill as an amendment, sponsored by Sen. Harry Reid, which also renamed the bill the HIRE Act.^[15] The bill was signed into law on March 18, 2010.

http://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act

[Mr. Big Dog 10,747]

DS-4081

[Karee 4,191]

DS-4081

I've considered it. I'd need another country, which isn't as easy as it might seem. Even then according to that form, it may not exempt you from taxation.

To be clear, I'm not b!tching about the taxes, I'm b!tching about the fact that if I want to open a bank account in another country, they've made the rules so onerous, banks are starting to turn away Americans. Despite what many think 'Merica isn't the greatest country in the world. Far from it.

[Mr. Big Dog 10,747]

I've considered it. I'd need another country, which isn't as easy as it might seem. Even then according to that form, it may not exempt you from taxation.

To be clear, I'm not b!tching about the taxes, I'm b!tching about the fact that if I want to open a bank account in another country, they've made the rules so onerous, banks are starting to turn away Americans. Despite what many think 'Merica isn't the greatest country in the world. Far from it.

Have you tried opening a local account at any of the large international banks that have a presence in Thailand? There are US based Institutions with local presence in Thailand. Since US based institutions have the compliance issues around US regulations largely worked out, perhaps it's easier to establish local bank account through them?

[Robby999 1,024]

http://photos.state.gov/libraries/jamaica/231771/PDFs/ice_form_i_210.pdf