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jwgibson

30% Tax

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So.. a Dem sponsored bill backed by a bunch of rinos are costing us money and headaches. You got it.

Could you please read my posts a little more carefully. I explicitly stated that it was sponsored by a Dem and a Rep. Orrin Hatch and Charles Schumer to be more precise.

I'm not trying to argue about the bill's merits or lack thereof. What I object to is misinformation being posted as facts and the not so suble grinding of political axes.

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I did some reading about the HIRE Act and I don't believe that is where this is coming from. The HIRE Act was just that, an act regarding hiring of employees by small business http://hireact.org/ and in fact, the IRS site http://www.irs.gov/B...s-for-Employers references FATCA as a "related" subject and that is the Dodd/Frank legislation that is giving all of us a pain in the tail feathers. I could have missed something, but I don't think so. The ACA people are trying to get FATCA repealed because of the turmoil it's causing us expats.

Here, the truth shall set you free.

''The Foreign Account Tax Compliance Act (FATCA), Subtitle A of Title V of the Hiring Incentives to Restore Employment Act (HIRE), enacts Chapter 4 of, and makes other modifications to, the Internal Revenue Code in the United States.

FATCA has three main parts:

  1. It requires foreign banks to find any American account holders and disclose their balances, receipts, and withdrawals to the US Internal Revenue Service (IRS), or be subject to a 30% withholding tax on income from US financial assets held by the banks.[1][2]
  2. Owners of these foreign-held assets must report them on a new Form 8938 along with US tax returns if they are worth more than US$50,000; a higher reporting threshold applies to overseas residents.[3] Account holders would be subject to a 40% penalty on understatements of income in an undisclosed foreign financial asset.[1]
  3. It closes a tax loophole that investors had used to avoid paying any taxes on dividends by converting them into dividend equivalents.[4]

The reporting requirements are in addition to reporting of foreign financial assets to the US Treasury Department,[5] particularly the "Report of Foreign Bank and Financial Accounts" (FBAR) for foreign financial accounts exceeding US$10,000 required under Bank Secrecy Act regulations issued by the Financial Crimes Enforcement Network (FinCEN).[6]''

I typed ''FATCA'' into Google and guess what? It was the first hit.

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Ok, I'll split it with you, it is part of HIRE, but FATCA is where they spell out the punishment.

To summarise, under FATCA, most non-U.S. financial institutions, including investment funds, may enter into an agreement with the Internal Revenue Service ("IRS") to provide certain information concerning their U.S. account holders. Although entry into such agreement with the IRS is not technically mandated by the statute, failure to do so will result in a 30 percent withholding tax on U.S.-source income and gross proceeds and on certain "passthru payments", unless the financial institution is treated as "deemed compliant" with respect to FATCA.

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The withholding has already been delayed for a year. I believe a number of Canadian banks have indicated they won't cooperate.

Let's see if it actually happens and BTW don't be surprised if foreign financial institutions with no interests in the U.S. tell the IRS to take a hike. The U.S. is having a hard time learning that it really doesn't run the world. This legislation sure seems to reflect that.

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I've been telling people for years to get their money out of the US but no one listens. They may have moved this back, although I can't find that info, but it will be back.

The US is having to borrow $1.2T ayear and eventually, that will become impossible. (Will your CC company raise your limit forever?)

The biggest pile of cash left in the US is retirement funds. Eventually, they will get to them. Everyone tells me that will never happen. Happened in Hungary, Ireland, Greece, Argentina and more. You have been warned......

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Vette

You are an "entrepreneur" here right?

Half the people that could use your services may decide to go to a competitor because of your expressed views.

If they do, THEN, you'll have headaches.

But, say what you feel, we want to know

I like to think of my wife and I as entrepreneurs. We built our thriving business from nothing. Without the help of some government. We had many lean years and ate tortillas and cheese for meals at times. We paid our price. Now out of our business we have several local Mexicans working and we are paying for Nursing school for two of them. My wife is back in school for the next 13 months taking a special course on Geriatrics and Alzheimer's. We will always do ok.

However I will never change my core values and principles for making a buck. If people decide not to use our services because of my beliefs or my politics OR my religion of my looks then so be it.

To the walkers Thank you. Ron Langley

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I didnt threaten him.

I suggested he consider what he posts

If he wants to P.O. people , it's his decision.

I just wanted to remind him of how polarized the world is.

He is welcome to his free speech.

As am I, and as are we all.

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The concerns here are that while the FATCA regs are no doubt aimed at "rich people" the IRS has an extremely low bar for that qualification. Take FBAR, it's probably 30-40 years old and meant to go after bad guys when $10K was a sizable amount of money, now it's not hard to find they have used it on retired people who are completely legal, just out of compliance possibly out of ignorance. Giving a can of gas and matches to a pyro is not a good idea.

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There are a lot of videos put on Youtube by foreign banks explaining this situation. It appears that the law of unintended consequences has kicked in. I suspect the original intention of the law was to target drug cartels, but that will not stop them. I see where they are making huge confiscations of cash all the way from Nogales up into the Texas Pan Handle. For each load they catch, probably a hundred go undetected.

This law will just hamstring honest people and businesses.

When my mother wanted to send money to family in Mexico, she just rolled it up in a religious magazine and sent it through the mail. It always got there; sometimes it took quite a while, but it always showed up.

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I've been telling people for years to get their money out of the US but no one listens. They may have moved this back, although I can't find that info, but it will be back.

The US is having to borrow $1.2T ayear and eventually, that will become impossible. (Will your CC company raise your limit forever?)

The biggest pile of cash left in the US is retirement funds. Eventually, they will get to them. Everyone tells me that will never happen. Happened in Hungary, Ireland, Greece, Argentina and more. You have been warned......

Yes, this actually happened. There is nothing as pervasive and all enduring as a bad idea. This seems to be the topic of a lot of financial advisors' columns lately. It is really scary. The idea is that funds would be seized and government bonds would given in place of IRA's and 401K's. Then the value would be inflated away. In the soviet union, the bonds could not be sold or redeemed, but just exchanged for new bonds.

Worse nightmare is that the government decides to discontinue payment of social security, disability and pensions to persons resident outside the US. Sounds impossible?

In 1980 it was decided by the US government that social security and disability would not be paid to incarcerated persons. I thought there would be a lot of law suits over this. It happened without so much as a whimper.

http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/259/~/social-security-benefits-while-in-prison

I guess it is best to stay out of jail and be Canadian.

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Read up on FATCA at www.irs.gov and then come back to the table. US is attempting to negotiate "agreements" (think "treaties") with foreign governments that will permit the financial institutions in those countries to participate in the disclosure sought by the U.S. government. Agreements may be reciprocal or non-reciprocal. The UK has signed an agreement already which I am planning to read today.

Negotiations are underway with Mexico and Canada as well as other countries. There will be a conference in December in Qatar to push the negotiations along.

The plan is to eventually have a published list of "compliant" foreign institutions which US Banks would have access to. If the US money is being transferred to a compliant institution, there would be no withholding of 30%. The more bizarre, to me, part of the plan is to require foreign institutions to withhold and turn over to the IRS 30% of income derived from deposits made with funds from U.S. sources.

The original idea was to begin the program in January 2013, but then the US discovered that most countries did not permit their financial institutions to make the kinds of disclosures the US sought -- so the start date had to be push further out on the horizon to make time to "persuade" other countries to sign those agreements. I suppose that if many or even "key" countries refused to sign, the plan would die.

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I am not a US citizen but all my savings are in US institution and I am hit with an automatic 30% witholding every time I get money from the States, I eventually get some back when I file my taxes but they are already witholding from foreigners.

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