Swiss bank account list audit

[MichaelB]

Wow. If that's the law then it's the sort of law I'd feel un-American NOT breaking. Far as I'm concerned if I've earned money and paid the taxes on it then that's the end of the story. I'm gonna bury it or burn it or buy gold with it and doggon it if I want to take it to Switzerland and stick it in a box then that's what I ought to do. Sounds like the kind of law that might have been enacted sometime in the last 10 years to keep us homegrown terrorists from funding a terrer cell. terrer.

IIRC this regulation was enacted to limit and control the flow of drug money and is part of the same policy that requires banks to report cash transactions greater than $10K (or is it now $5K) and international travelers (regardless of citizenship) to report holding more than $5k in cash when entering the US. It's all about money laundering.

I don't know about companies, but since all American citizens are required to report their worldwide income to the IRS, does it make any difference whether a US citizen is resident or not?

No.

No argument, If you work outside the USA (full time) the first approximately $87,500 is tax free. If you incorporate yourself overseas (in a tax haven) and then work as a contractor in a third country(I believe) you are only responsible for the AMT (not sure) I do not work, but have friends that have set it up this way.

My recollection is that as an independent contractor one must pay US payroll taxes even when living overseas.

My assets are overseas, I live overseas, I have no income and though I must file a return, I do not have to declare my assets, nor are any taxes due.

If you have no income you have no obligation to file a tax return.

 

[MichaelB]

Out of UBS's 52,000 American client accounts the deal reached is for 4,450 account holders info.

The IRS has worked this well - letting it drag on and getting lots of publicity. I bet more than 4450 folks apply for the amnesty program

 

[NYEXPAT]

My recollection is that as an independent contractor one must pay US payroll taxes even when living overseas.

If you have no income you have no obligation to file a tax return.

I was thinking that, but somehow AMT came out of my keyboard!

I think we are still required to file regardless (well I do regardless) so they can add another "goose egg" to my Social Security statement.

 

[NYEXPAT]

The IRS has worked this well - letting it drag on and getting lots of publicity. I bet more than 4450 folks apply for the amnesty program

You are probably right! The 52,000 do not know yet if they are on the list. This is only a drop in the bucket though as most Americans "offshore" in the Caribbean nations, Use SA real estate or repatriate to the USA using foreign nationals.

 

[freebird5825]

The IRS has worked this well - letting it drag on and getting lots of publicity. I bet more than 4450 folks apply for the amnesty program

Heeheeeheeeee...a very interesting game of "chicken", indeed.

 

[Texas Proud]

Wow. If that's the law then it's the sort of law I'd feel un-American NOT breaking. Far as I'm concerned if I've earned money and paid the taxes on it then that's the end of the story. I'm gonna bury it or burn it or buy gold with it and doggon it if I want to take it to Switzerland and stick it in a box then that's what I ought to do. Sounds like the kind of law that might have been enacted sometime in the last 10 years to keep us homegrown terrorists from funding a terrer cell. terrer.

I assume that law does not apply to foreign nationals who work in the US and send their pay home to some other country?

Grumble grumble - what's this country coming to - time was when being an American meant something..

You do have the right to go put it in a Swiss safe deposit box and not report it... because it is not an account with $10,000... what the IRS wants to know is where you are earning income and not reporting it and paying taxes on... and since if you earned money, the income should be listed on your tax return anyhow (sch B)... then checking the box that it is an overseas account is no big deal IMO...

BUT, if you check the box 'NO'... and have an account, you just committed a crime.... so don't have an account... put the cash away and do not earn anything... nothing to report....

 

[Texas Proud]

Most Americans are naive to the fact that the USA is the worlds largest Tax Haven! Millions of foreigners have bank and brokerage accounts in the US because the IRS turns a blind eye on interest and capital gains!

Wrong... the IRS taxes this income also... so no blind eye turned on it...

And you get a withholding on your interest and dividends if you are not a US citizen living overseas with US sources income.... backup withholding IIRC...

 

[samclem]

The IRS has worked this well - letting it drag on and getting lots of publicity. I bet more than 4450 folks apply for the amnesty program

That list of 4450 names is worth a LOT of money--you can bet the 52,000+ folks who are "eligible" to be on it would pay a lot to know if the fickle finger of fate is pointing at them.

I wonder if there's anything preventing UBS from notifying the affected clients? Maybe: "As you may be aware, UBS has reached an agreement with the US IRS to provide certain information they require. As part of this agreement, your name and applicable account information has been provided to the IRS. We are confident our clients are in full compliance with applicable US laws, and that this reporting will not prove to be an inconvenience for them. If you have questions, please contact a tax accountant or attorney. Or, maybe just go right to the attorney if you are a tax cheat. Maybe Tim Geitner can recommend a good one. Thank you for your continued confidence in UBS, where security, discretion, and customer privacy are paramount."

 

[MichaelB]

I think we are still required to file regardless (well I do regardless) so they can add another "goose egg" to my Social Security statement

You only get SS if you pay FICA for that year. You are only required to file if your income exceeds a certain amount.

From IRS Pub 54

Filing Requirements

[FONT=&quot]If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and for paying estimated tax are generally the same whether you are in the United States or abroad. [/FONT]
[FONT=&quot]Your income, filing status, and age generally determine whether you must file an income tax return. Generally, you must file a return for 2008 if your gross income from worldwide sources is at least the amount shown for your filing status in the following table. [/FONT]
[FONT=&quot]Filing Status*[/FONT]

[FONT=&quot]Amount[/FONT]​

[FONT=&quot]Single[/FONT]

[FONT=&quot]$8,950[/FONT]​

[FONT=&quot]65 or older[/FONT]

[FONT=&quot]$10,300[/FONT]​

[FONT=&quot]Head of household[/FONT]

[FONT=&quot]$11,500[/FONT]​

[FONT=&quot]65 or older[/FONT]

[FONT=&quot]$12,850[/FONT]​

[FONT=&quot]Qualifying widow(er)[/FONT]

[FONT=&quot]$14,400[/FONT]​

[FONT=&quot]65 or older[/FONT]

[FONT=&quot]$15,450[/FONT]​

[FONT=&quot]Married filing jointly[/FONT]

[FONT=&quot]$17,900[/FONT]​

[FONT=&quot]Not living with spouse at end of year[/FONT]

[FONT=&quot]$3,500[/FONT]​

[FONT=&quot]One spouse 65 or older[/FONT]

[FONT=&quot]$18,950[/FONT]​

[FONT=&quot]Both spouses 65 or older[/FONT]

[FONT=&quot]$20,000[/FONT]​

[FONT=&quot]Married filing separately[/FONT]

[FONT=&quot]$3,500[/FONT]​

[FONT=&quot]*If you are the dependent of another taxpayer, see the instructions for Form 1040 for more information on whether you must file a return. [/FONT]

 

[bosco]

No argument, If you work outside the USA (full time) the first approximately $87,500 is tax free. If you incorporate yourself overseas (in a tax haven) and then work as a contractor in a third country(I believe) you are only responsible for the AMT (not sure) I do not work, but have friends that have set it up this way.

My assets are overseas, I live overseas, I have no income and though I must file a return, I do not have to declare my assets, nor are any taxes due.

.

I'm not sure I understand exactly what you are saying, but it sounds wrong. I guess it depends upon what you mean by "assets."

If you live abroad and you are a US citizen, you ARE required to report any bank accounts over $10,000 held in any foreign country, whether you live there or not. The penalties for non-compliance are stiff. They also want a report on any currency transfers to or from any other country on transactions over $10,000. If you use an online broker, this is done automatically.

The US is one of 2 countries in the world (the other one is Somalia or Egypt or something) that taxes you on worldwide income, even if you have never set foot in the US in your life. And yes, they want to know all about your "foreign" bank accounts. No matter if the foreign country is Canada and you are a Canadian citizen.

Also, the no taxes on the first $87,500 has also changed a bit. It used to be that you would not owe taxes on the first $87,500 of "foreign" income, assuming you had payed taxes on it to the foreign country. But they have changed how they implement it.

Example: Let's say you earn $50,000 in the US and $45,000 abroad. You might think you owe no taxes on the $45,000. Wrong.

They will look at what you tax bill is on the $95,000. Then they will look at what you would owe had you earned only $45,000. They will subtract the tax from the $45,000 calculation from the amount owed on $95,000. In other words, they stack the foreign income on top of any domestic. Given the progressive nature of the tax schedule, guess who gets the shaft? Not to mention you likely already paid taxes on the $45,000 to the country of origin.

 

[billman]

It makes us Americans that live abroad uncompetitive verses other expatriates. Usually companies have to foot the tax bill and won't bother hiring or sending Americans abroad. All my British, Oz, and South African colleagues don't pay any tax once they are non-residents.

Quite a ridiculous rule to tax Americans on their worldwide income. I am usually in the USA max 10-15 days a year.

I filled out that overseas bank form as well.............Sigh

 

[Dennis]

Update- Aug-2009 they are going after and getting quite a few already comming forward to avoid going to Jail.. some have already gotten sentances..

If have enough at stake? Do like John Templeton did and Leave the country and your citizenship behind..

;-)

Back when in the ARMY in the late 60's, had $ in Japan bank. but Closed it up when came back home in a Duffel Bag..then didn't put it in the bank at home, just used it up over the next yr with a Car and other Things and travel..Did the same when came back from Canada a few yrs later... But it wasn't no $50k-$Million Dollars either..LOL

and after the Drug Dealers as well as other types like that I would assume..

 

[Texas Proud]

It makes us Americans that live abroad uncompetitive verses other expatriates. Usually companies have to foot the tax bill and won't bother hiring or sending Americans abroad. All my British, Oz, and South African colleagues don't pay any tax once they are non-residents.

Quite a ridiculous rule to tax Americans on their worldwide income. I am usually in the USA max 10-15 days a year.

I filled out that overseas bank form as well.............Sigh

Very true!!! When I was in the UK, there was a lot of NZ, Aussies and SA working there... a couple of them were employees of an offshore corp they set up and were the only employee... did 'temp work'.. the company hired a temp from the offshore company and paid them... somehow their taxes were a LOT lower.. not sure how... but the guy who told me about this would not become a full time employee... and had been working for 15 years going from company to company...