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Has your foreign bank asked you to fill out a US IRS W-9?


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American citizens abroad in other communities are starting to get requests from their banks that they fill out a W-9 to show whether we are exempt or liable for FATCA's $50,000 in foreign financial assets requirements. Even if we are exempt, we have to sign a W-9 saying that we are exempt.

Has anyone here gotten this request?

There are some additional details on this at: http://yucalandia.com/2014/05/26/irs-fatca-reaches-out-and-touches-in-unexpected-ways/

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I haven't received any notification from our bank.I filed my fbar last week,it was easy,are you saying that there's another form I need to fill out?

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Our banks have not asked us (yet?). From what I read, some financial institutions are just now starting to ask their US citizens to fill out W-9's so the bank can meet IRS requirements that are coming online July 1, 2014. So far, maybe our banks that have US connections are waiting until July 1 for us to fill out the W-9. If we have more than one foreign account, there is no way for each bank to know about the other accounts, so the IRS seems to be requiring each of them to have us confirm that we are exempt, having less than $50,000 total abroad on any single day.

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The insanity is running rampant, this is so far beyond unbelievable, not to mention unreasonable I have no words to explain it.

What's the big deal about complying with the fbar?I've been doing it for years,now it's even easier,you can do it online.

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You didn't get the memo, this isn't FBAR, also an antiquated regulation being used to beat expats to death - this is FATCA, a totally new law that was sneaked through, hidden in a jobs bill a couple years ago. If you're not familiar with it - better read up. It's causing ramifications worldwide, some international banks have simply told their American clients to close their accounts and leave.

Here, the new $4K min deposit is very likely being driven by FATCA imposing new demands on foreign banks. It's another jack booted thug tool for the IRS to supposedly "catch" rich people hiding money out of country. Analysis indicates it could raise $800M dollars - but will actually cost considerably more to enforce and in terms of alienating relationships with foreign countries and banks, it's definitely very successful. And, of course, the "rich" people it's supposed to corner have the money and resources to continue to evade the IRS, so it's a total bust except for what it does to us at this level.

And BTW, FBAR is a 30-40 year old law that was enacted to stop money laundering by bad guys - when $10K was actually big money if that tells you how old the law is, but again, it's been resurrected by the IRS to beat some retires simply to show they can.

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It's another jack booted thug tool for the IRS to supposedly "catch" rich people hiding money out of country. Analysis indicates it could raise $800M dollars - but will actually cost considerably more to enforce and in terms of alienating relationships with foreign countries and banks, it's definitely very successful. And, of course, the "rich" people it's supposed to corner have the money and resources to continue to evade the IRS, so it's a total bust except for what it does to us at this level.

The DOJ already got $2.6 BILLION in fines from Credit Suisse for their non-compliance in reporting accounts held by Americans. I personally don't mind filing out a form or two (or three or four) if it keeps the Robert Vesco's and Bernie Cornfields from ducking their taxes.

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We'll disagree on this one, as you say, Credit Suisse paid, the first one was UBS I think, but NOT Vesco or Cornfield or any other rich guy. If I had a ton of money the first thing I'd do was find a person who knows where and how to "put it". There are trusts in the Cook Islands, another deal in South Dakota, they all cater to the rich. If MX had chosen not to sign onto this deal I believe all of our deposits would be taxed, in other words, my SS as well as yours even though that's our total "wealth". And from what I read, a lot of countries have elected not to sign on. I'm well under the FATCA threshold and when Bancomer reports to the IRS that's exactly what it will say, so why now all of a sudden more forms? Let me venture a guess, when you sign that form you are now bound and if something screws up, they've got you by the throat for lying to a Federal agency (not that the fools who created this legislation don't lie daily and are never held to account).

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An excellent question - but how would you know?

I'm still stuck back on the FBAR and FATCA. I have a checking account at Wells Fargo and I keep $100 in it to pay for the annual Safe Deposit Box rental. The account pays no interest, it's just a convenience account. So, let's say manana I match 5 on Powerball and win $1M (minus 40% for the IRS) but just say $1M and I put it in that account. Ok, I know, WF knows, the IRS doesn't know and I don't have to tell them squat.

So, now I'm in MX and I have $10,001 in my similar account here for only one day in a year, now I'm mandated to report that to the Treasury (I'm sure they don't share with the IRS?) - what business is it of theirs if I'm not earning interest? And, if I were not reading forums and was totally on SS, how would I even know I'm supposed to fill out the FBAR? - or FATCA for that matter?

No, this thing is way out of hand and I'm doing more research this morning, but it appears the W9 came out in 2001 after 911 and it's just another torture tool the IRS has in it's bag to beat us with and attempt to justify their existence.

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Here's more on the W-9 form from Intuit:

Form W-9—Request for Taxpayer Identification Number and Certification—is one of the most commonly used IRS forms. If you’ve ever been an employee of a company, you’ve probably completed a Form W-9. True to its name, individuals and entities use the form to provide their taxpayer identification number to entities that will pay them income during the tax year. Your employer uses your W-9 for payroll purposes but doesn't send the form to the Internal Revenue Service. The information is used to prepare employee paychecks during the year and W-2 forms at the end of the year. If you have your own business or work as an independent contractor, a client may request that you provide a W-9 so they can accurately report the payments they make to you.

So, my "employer" is the SS Administration, they have my TIN, so it will be interesting to see if Bancomer asks me to fill out the W-9 because my checks are all deposited NOB unless I write a check to myself for deposit here.

Here's a little tidbit from wikipedia:

Effect on "accidental Americans". The reporting requirements, including penalties, apply to all U.S. citizens, including those who are unaware that they have U.S. citizenship. Since the U.S. considers all persons born in the U.S., and most foreign-born persons with American parents, to be citizens, FATCA affects a large number of foreign residents who are unaware that the U.S. considers them citizens.

Which reenforces my statement about "how would you know"?

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  • 1 year later...

Yes, our bank has. Why?  we don't file income tax because we have no income to report...we are retired....live off of the interest in the bank...neither of us work ... I have no problem with this...but just wondering why all of a sudden....

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It is not just U.S. citizens getting the W9 forms.  I am a Canadian citizen with no property or direct investments in the U.S., no ties to the U.S., have never lived in the U.S. and both of my parents were Canadian citizens.  I did however work for a U.S. based employer and had stock options in the company years ago but exercised then prior to my retirement.  I recently received a W9 form from my Canadian bank - TD Canada Trust - with instructions to complete it and return it to the bank.  I complied reporting $0 from U.S. sources but thought it was a very strange thing for me to receive.  The arm of the IRS is very long!

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"If you don't fill out a W-9 duly requested by an employer, partner or other entity duly entitled to your taxpayer ID information, you may be penalized $50 for each instance. You may also be subject to backup withholding, which means the payor will withhold 28 percent of your check and forward the proceeds to the IRS. If you file a false statement that results in no backup withholding, and you are not exempt from the backup withholding requirement, you may be subject to a $500 penalty per incident. If you falsify information, you may be prosecuted for criminal behavior, and even imprisoned."

The fine for not filling out the form is $50   Not much of a penalty

So basically the law says the bank must withhold 28%  of interest earned if you don't fill out the form. Anyone know if Mexican banks are withholding funds? If they have no US taxper id number what would they do with the money.. hold it in escrow?  

With the level of interest banks are paying now, unless you have millions of Pesos the interest is minimal so 28% of what?

Also the question is are Mexican banks "duly entitled" to US taxpayer identification?  If so under what Mexican law or regulation?

 

 

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  • 2 weeks later...

The other day we requested the forms necessary for my niece to sign so that my husband and I can put her on our joint checking account with Actinver. My niece lives and works in the US. Along with the forms required by Activner, I was given a W9 form that my niece is to sign. It is a FATCA requirement. If she doesn't sign it then, I am told, she can't be added as a third holder on our account.

It's a requirement that the US government is imposing on banks all over the world if they have foreign clients. Our bank account at Actinver is modest.  It's still an annoyance to have to give up more and more info to the government. My niece's social security number is also required. This makes a lot of us squeamish.

Lexy

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All banks report to Hacienda which has a direct sharing agreement with the IRS.  Mexico is one of the places that has the highest level of agreement with the U.S. on this.  Some places leave it to the individual banks to report.  Here your information goes to the IRS via Hacienda.

 

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1 hour ago, Mainecoons said:

All banks report to Hacienda which has a direct sharing agreement with the IRS.  Mexico is one of the places that has the highest level of agreement with the U.S. on this.  Some places leave it to the individual banks to report.  Here your information goes to the IRS via Hacienda.

 

https://translate.google.com/translate?hl=es&sl=es&tl=en&u=http%3A%2F%2Fwww.sdpnoticias.com%2Feconomia%2F2014%2F04%2F01%2Fdiscrepancia-fiscal-sat-monitoreara-tus-cuentas

 

Tax Discrepancy: SAT  can monitor your bank account

mar 1 abr 2014 12:38

The Treasury [SAT] can enter the bank records of any person to know if they spend or earn more than they declare.

"MEXICO CITY Since this year the Secretariat of Finance and Public Credit (SHCP) monitor bank accounts, credit cards and investments belonging to individuals in order to check whether they spend or earn more than they declare to the treasury.

Example: If a freelancer declared income 5,000 pesos a month, but your statements report payments to credit card transactions for 20,000 pesos a month, this could be the subject of a notice from the Tax Administration Service (SAT) for clarification of where are the resources.

This account monitoring, which allows the SAT access to bank records of any person, happen under the aegis of the figure known as Tax Discrepancy. 

This scheme also allows the authority to register in the Federal Taxpayers Registry (RFC) to play an informal economic activity to charge them taxes they generate.

It is noteworthy that the SAT may obtain information from third parties such as bank accounts, travel agencies, department stores and by their own means, this in order to check for discrepancies between expenditures and statements."

 

Not only can SAT access your bank account information on a whim but they can also access your personal accounts for credit cards and investments etc.. No judge or court order to deal with in Mexico as they do NOB.

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This is not the same as their sharing agreement with IRS.  I think it is described as a level 1 agreement which is country to country hence the banks here don't ask for W-9s.

At least that is how it has been explained to me.

 

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I have a bank account in France that is tax exempt because I do not live there and the interests are frankly too small to report but it is over 10000 doolars. I have not reported the account because I am not a US Citizen or a green card holder and the money is part of an inheritence and not subject to taxes except for the nothing interest I get. The account is in my name only and in France we have the right to keep inheritence separte even in the case of community property. I just got a request from the bank to send them a copy of my tax return which I file jointly with my husband in the US..That should get ineresting since we have reported the Mexican accounts  which are joint accunts but no the French one.. We will see what happen..

 

 

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On 5/4/2016 at 4:04 PM, bmh said:

erson I have a bank account in France that is tax exempt because I do not live there and the interests are frankly too small to report but it is over 10000 doolars. I have not reported the account because I am not a US Citizen or a green card holder and the money is part of an inheritence and not subject to taxes except for the nothing interest I get. The account is in my name only and in France we have the right to keep inheritence separte even in the case of community property. I just got a request from the bank to send them a copy of my tax return which I file jointly with my husband in the US..That should get ineresting since we have reported the Mexican accounts  which are joint accunts but no the French one.. We will see what happen..

Did the person preparing your tax return refer to the US/Mexico Tax Treaty? Tax on your Mexican interest has already been paid to Mexico and is payable only to Mexico. It can be filed with the US but with a Treaty Exemption so that more tax is not paid to the US

On 5/4/2016 at 4:04 PM, bmh said:

 

 

 

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