FATCA Rides 3


FatCatRidesIf you have any money overseas either invested, or in an account, you had best be aware of two IRS reporting programs. FOOBAR – excuse me, FBAR, and FATCA.
Both were developed by Those Who Must Be Obeyed, and both are quite confusing. Additionally, do not confuse either of them with filing your taxes, because they are separate issues. However, FATCA gets filed WITH your taxes, if I have it right, but FBAR doesn’t. FBAR is filed separately, by June 30.
And while you can get an extension for PAYING your taxes from the nice folks at the IRS, you CANNOT get an extension for timely filing of either FBAR or FATCA. You have to do that when you are supposed to, or ELSE. And ELSE isn’t pretty.

So it behooves you to know whether and what applies to you.

The IRS sent a couple of very nice people to Panama to give us a seminar on FATCA at the end of January, and I promised to tell you what I learned. However, we were told everything said in there was “off the record,” so I can’t, not really.  The reason is that anything “on the record” is apparently “tax advice” which should not be disseminated or quoted except by those qualified. Let me assure you that I am NOT qualified, and you should take anything said in this blog accordingly.

But I do have some advice as one US citizen-type human to another: if you had a total of one penny more than $10k (aggregate) in any foreign account, investment, or business, combined, on any single day during the past year, get yourself a tax attorney.

That said, let me give you some good news and a few links to possibly help improve your life for the next 30 days or so.

Good News in General

The IRS is very busy updating their website and trying to make it as comprehensible and understandable and user-friendly as they can. Taxes being what they are, that’s a tough job, so there are still a few issues that need to be resolved. But they ARE trying.

Good News on FATCA

If you aren’t certain whether FATCA applies to you, you might be right that it doesn’t.

To meet the filing requirements, you have to meet three criteria simultaneously:
1. You have to be the right type of taxpayer;
2. You have to have the right type of assets; and
3. You have to have enough of them.

If you don’t meet all three requirements, you don’t have to file FATCA. However, before you start celebrating, please note that these three requirements are surrounded by all kinds of if-this-then-that’s, so you should check ALL the specifics at the IRS website: www.irs.gov And before you go try to do that, let me suggest that if you don’t pull up what you are expecting, try typing in the links EXACTLY. Capital letters vs lower case seem to occasionally matter here. I believe the links below all apply to individuals, except the last one. And by the way, there is lots more information than this available on irs.gov.  Of course, the links below are clickable in any case, so you don’t have to type unless you have other links from elsewhere.

International Taxpayers:
http://www.irs.gov/Individuals/International-Taxpayers
Publication 54, Tax Guide for US Citizens and Resident Aliens Abroad:
http://www.irs.gov/pub/irs-pdf/i1040gi.pdf
FATCA specifics:
The main form for FATCA is 8938. All instructions and forms are at
http://www.irs.gov/form8938
Types of foreign assets and whether they are reportable on Form 8938:
http://www.irs.gov/Businesses/TypesofForeignAssetsandWhetherTheyareReportableonForm-8938
Comparison of FBAR and FATCA (this one IS for businesses):
http://www.irs.gov/Businesses/Comparison-of-Form-8938-and-FBAR-Requirements

Once again, I repeat that I do not represent myself as qualified to give tax advice and nothing in this post should be considered such. The only advice I have is that you should inform yourself and, if you think it might be prudent, get professional help.

And oh, yes – file on time. Be sure to do that.

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Incidentally, my former sister-in-law used to work for the IRS.  She was a really nice woman.  So were the two agents who gave the seminar.  I expect many, if not most of the folks who work there are.  And they aren’t the ones who passed these laws.  Look to your congress people and the “willful violators” of the tax laws, if you want to get cranky.  They are the ones who got us into this.  Also, the (quite primitive) artwork is far less of an opinion piece than it is representative of the fact that I like drawing cats and playing with PhotoShop. 🙂  Although this particular drawing might meet the criteria to be called a “cheap shot.” Sorry.


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