Who is a U. S. person ( or has U.S. indicia) according to the IRS

For U. S. tax filing purposes the following are consider U. S. persons 

A citizen of the U.S., including someone born in the U.S. but living in another country, who has not renounced or otherwise relinquished their U. S. citizenship.

A lawful resident of the U.S., including a U.S. green card holder

A person residing in the U. S.

Someone spending a specified amount of time in the U.S., potentially including “snowbirds” who spend winters in the Florida or other warm climes.

A green card holder who never formally handed in their green card upon leaving the U.S. (even though the green card in no longer valid for U. S. immigration purposes).

The child of a U. S. citizen provided a parent lived in the U. S. period for a specified time period (with some exceptions, see T Dott comment)

All of the above would be affected by FATCA. Financial Institutions will also look for indicia including:

A U. S. place of birth

A current U.S. residence or mailing address ( including a U.S. PO Box)

A current U.S. telephone number

Standing instructions to pay amounts from a foreign (meaning non U.S.) account to an account maintained in the United States

A current power of attorney or signatory authority granted to a person with a U.S. address

A U.S. “in-care-of” or “hold mail” address that is the sole address with respect to the account holder

Special note

Others affected by FATCA include any non U.S. person who shares a joint account with a U.S. person or otherwise allows a U.S. person to have signatory authority on the account.

Any business or not for profit organization that allows a U.S. person to have signatory authority on a financial account.

 

47 thoughts on “Who is a U. S. person ( or has U.S. indicia) according to the IRS

  1. @pacifica777

    I have been told this before and have also been told that within the FATCA legislation itself non US citizen spouses are to be concidered US Persons. Having not yet been able to find that in the legislation, I am prepared to conceed that my spouse is not a US Person.
    Yet, there are many references to such persons being US Persons. Is this just panic talk?

    Another question. In The Japan Times this past Wednesday there was an article on the requirement to file income tax returns to the IRS. The article stated that as long as the US citizen spouse did not have a joint account with their Japanese spouse, then the US citizen was not required to report their Japanese spouses financial information. This contradicts much of what I have read and especially the IRS questionnaire I read last year. Can you help me clarify this?

    • @ Japan T,

      (1) Re non-citizen spouses and FATCA, here’s a link to the “Statement of Mutual Cooperation and Understanding between the US Department of the Treasury and the Authorities of Japan to Improve International Tax Compliance and to Facilitate Implementation of FATCA.”

      The definition of US person is on page 5 and does not include spouse of a US person.

      http://www.treasury.gov/resource-center/tax-policy/treaties/Documents/FATCA-Statement-Japan-6-11-2013.pdf

      (2) Re “The article stated that as long as the US citizen spouse did not have a joint account with their Japanese spouse, then the US citizen was not required to report their Japanese spouses financial information.”

      That sounds correct to me. You do not report an account held by your Japanese (non-US) spouse – except if your spouse holds the account jointly with you (US person). Here’s the link to the FBAR instructions:
      “BSA Electronic Filing Requirements for Report of Foreign Bank and Financial Accounts (FinCEN Form 114)”
      http://www.fincen.gov/forms/files/FBAR%20Line%20Item%20Filing%20Instructions.pdf

      Here’s a couple of excerpts about who has to file:

      Page 4 “Who Must File an FBAR. A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the caldndar year. See General Definitions, to determine who is a United States person.”

      page 5 “General Definitions … United States Person. United States person means United States citizens (including minor children); United States residents; entities, including but not limited to, corporations, partnerships, or limited liability.”

      (3) I’ve not seen or heard of (prior to your comment) an IRS questionnaire such as you describe, so I can’t shed any light on that.

  2. I keep reading that non US citizen souses of US citizens are US Persons solely because they are married to a US citizen, even if both reside abroad.

    Can anyone direct me to the legislation, rule, instuction or practice of this?

    Additionally, last year I ran across an IRS form (electronic) that asked for all sorts of financial, emplyment and other personal information of those residing with a US citizen abroad. I was not then able to abtain a copy of this questionnaire. Anyone familiar with this?

    • @ JapanT,

      A person doesn’t become a US person automatically by marriage (thank goodness!) Here’s IRS’ list of who is a US person.
      http://www.irs.gov/Individuals/International-Taxpayers/Classification-of-Taxpayers-for-U.S.-Tax-Purposes

      “United States Persons
      The term ”United States person” means:
      A citizen or resident of the United States
      A domestic partnership
      A domestic corporation
      Any estate other than a foreign estate
      Any trust if:
      A court within the United States is able to exercise primary supervision over the administration of the trust, and
      One or more United States persons have the authority to control all substantial decisions of the trust
      Any other person that is not a foreign person.

      Foreign Persons
      A foreign person includes:
      Nonresident alien individual
      Foreign corporation
      Foreign partnership
      Foreign trust
      A foreign estate
      Any other person that is not a U.S. person”

  3. @Duke: There is a difference between “not required to ask” and “must not ask.”  As BC Doc pointed out, RBC is already asking city and country of birth on applications for an investment account.

    Is anyone willing to do an application, see if you are denied and file a privacy or human rights complaint if you are?  You don’t need a lawyer for that. I would do it, but I really need to focus my attention on the legal challenge right now.

    Someone told me last week RBC is asking the same question on applications for mortgages, but I have not checked that out. Could someone do that and post it here?

     

     

  4. Hi Duke, Your point is the same question I’ve raised with RBC. Regarding the question of birthplace on the W-8BEN form, the reply I received was that it’s an outdated form– blame was pushed onto the IRS (“the IRS asked for it”). I still don’t have a response to why they’re asking for the country of birth on the new acct application (for a RBC Direct Investment account). If/when I do, I’ll post the response. I’m with you– I consider them asking to be an invasion of my privacy.

  5. But Lynne, there is no requirement for them to ask your place of birth in the IGA or the Bank Act. Therefore no reason for the birth place question to be there. Therefore an invasion of privacy

  6. @Duke:  One could also say they are going to file a Human Rights complaint under the Human Rights Commission.

    The problem is the Implementation Act prevails over all other laws except the Income Tax Act.  The Interim Privacy Commissioners said at Finance Committee “it is (her) view) that the Privacy Act would prevail, but Keddy insists the Privacy Commissioner gave the “green light” to FATCA.

    There will soon be a new Privacy Commissioner who does not seem to consider privacy very important. I will try to do another post on that later.

     

  7. If a bank asks your place of birth, tell them you are going to file a complaint with the privacy commissioner.

  8. The only way a bank will know not to report on a person will be to verify their birth place. Thus Canadian banks will be compelled to collect the birth information of ALL customers.
    The cost to financial institutions and other organizations will be massive: collecting, storing and safeguarding personal information in a manner that complies with Canadian privacy laws; periodically (annually) updating customers’ ID information; and answering Access to Information requests from the (hopefully) great many customers who ask their bank to disclose whether, when and to whom the bank disclosed customer information. Of course the cost will be passed on to bank customers; and all taxpayers will also foot the bill for the tax department to receive, sift through, and report Canadians’ information to the US.

  9. @Calgary: The United States won’t be happy until they have declared the whole world “US persons” for tax, data collection and control–but not for immigration.

  10. Besides the convoluted formula, there is also the statement:

    “You will be considered to have been present in the US on any day that you were physically in the US, whether you are present for the entire day or only part of the day.”

    What does happen for truck drivers that cross regularly? Good question!

    …and with the “Entry/Exit Initiative” beginning June 30, 2014, both Canada and the US will implement the final phase of the Entry/Exit Initiative of the Perimeter Security and Economic Competitiveness Action Plan in which both countries will share information on people entering and leaving the respective country.

    In other words both countries will, for the first time, be able to independently determine the number of days spent in each country. What this means for Canadian snowbirds is that they must be much more vigilant than they have in the past about counting and reporting their days in and out of each country. Starting next year, both Canada and the US will both know, in real time, which country snowbirds have been in and for how long.

    The “lax” count of one country counting those crossing one way and the other country counting those crossing the other way is over — it, as all else we are seeing at the border, is getting more and more automated. Data collection supreme.

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