BY: MARISSA MARTINEZ
Debbie Wassermann Schultz called out Mitt Romney as President Obama doubles down on the “evils” of having offshore account. It’s time the American public learn about the new found powers of the IRS tentacles reaching all Americans and foreign banks alike around the world.
Americans disagree on many issues, but having to file IRS tax forms is something we can all agree on, it’s confusing, daunting, and overwhelming.
On March 18, 2010, President Obama with a democratically controlled congress passed the HIRE ACT of 2010. It’s another “you have to pass the bill to find out what is in the bill”. In n the bill are FBAR (Foreign Bank and Financial Accounts) & FACTA (Fair and Accurate Credit Transaction). IRS agents create these rules that have become law. In an effort to keep this “kiss” I will break it down to its simplest form.
Pay attention Debbie, you just might learn something.
Who and How much:
FBAR, assets exceeding $10,000.00 in a foreign country must be reported to the IRS.
FACTA, assets exceeding $50,000.00 in a foreign account, it must be reported to the IRS.
Required to file are all US citizen, resident, in the US or broad, AND their foreign spouses’, any person(s) born of one American parent (even if they didn’t know they wee American), corporation, partnership, estate and trust.
Foreign Bank Requirements & Penalty:
Foreign banks are REQUIRED to provide ALL US account numbers, identification, cash totals, and private information to the IRS. Failure to comply results in 30% withholding of all investment payments received from the US. These banks also include the Cayman Islands and Switzerland. Sovereignty, is no excuse, everybody MUST comply.
Civil and Criminal Penalties:
Earned less than 10k but did not report it, made a mistake on your return, reported late, penalties are $10,000.00 EACH.
Failing to report, $10,000.00 – $50,000.00 fee,
Underreporting additional 40% assessment.
Misrepresentation of funds, $500,000.00 and/or a 10-year imprisonment.
With the recent demonization of the Catholic Church, maybe the IRS will try to imprison the Pope and clergy.
Devils is in the details!!
A term used for expatriated citizens or citizens living abroad, now singled out and, ostracized, due to the IRS rules and penalties resulting in having their bank accounts frozen with no access to money. They have been overburden with penalties and fees, feeling helpless, and abandon, with no means to pay for food, housing etc, as a result; renouncement of citizenship is the only way to survive. As they go through the process, many have stated, “It is like losing a part of a loved one, extremely emotional and loss of identity.”
How and why did this become a problem for expats? You are required to pay an income tax to the IRS no matter what country you live and/or earn your money. Expats are required to pay two income taxes, one to the foreign nation where they live and work, the second to Uncle Sam. Often times, they never knew they had to pay the IRS an income tax for living and working abroad. Simply put, it is a “fee” for being American.
Your Parting Gift Is…….
For all Expats trouble and grief, tell them what they have won Bob. Our parting contestants on “give me all your money because I decide how much is enough,” they will receive an Expatriate tax. That’s right, we know they cannot afford it, but we still want it. They have just won fines, penalties and an exit tax but wait, that’s not all Bob, to further alienate and humiliate them, their name will be part of the “name and shame,” list. Yes Bob, they will be identified by name in hopes of shaming them for all of their lives.
As an added bonus, they will most likely feel a lifetime of regret and betrayal, but we really do not care; we just want all their money because we know best. We remind all contestants and future participants to look for the board game “1001 ways to demonize American success and creative ways take all of your money” available in an IRS office near you. What’s that, you cannot find an office, not to worry, we’ll find you!
Which is it?
1 The President and Congress don’t read the bills they pass.
2 Money is only evil when conservatives are in possession of it.
3 Some congressional members excel in being ignorant of laws they pass.
4 Hurting Americans living abroad is “okay” if it helps you win an election. And;
5 President Obama KNOWS there is no way to “hide” monies anywhere but is banking that you don’t know that.
Note: Financial Crimes Enforcement, Federal Register rules pg 10245 IRS forms 8938 and TD F 90-22.1 FBAR (Resource Material)