Have you received a FATCA letter or been warned of the consequences of being a U.S. person?
WHO: John Richardson, B.A., L.L.B., J.D. is a citizenship lawyer in Toronto and a member of the Ontario Bar.
WHERE: University of London International Hall Meeting Room,
Landsdowne Terrace, London WC1N 1AS UK
150m walk from Russell Square Tube Station
WHEN: Monday, March 2, 2015. 6:30 – 8:30 pm
ADMISSION: Admission £15. Payable in cash on the door please (to cover costs).
Why am I getting letters from my bank all of a sudden?
FATCA became a reality in the U.K. on July 1, 2014. Financial Institutions must search for any indicia of “U.S. Persons.” Although both the definition of “U.S. person” and whether one meets the definition is not always clear, the process is ongoing. In some cases, there is no particular warning – just a letter indicating that they are suspected to be a “U.S. person”. Often one must prove to the institution sending the letter that one is not a U.S. person.
What individuals are U.S. taxpayers? Who is a U.S. citizen?
There are individuals that the U.S. government would define as “U.S. citizens” who:
- do not agree that they are U.S. citizens because they have performed a “relinquishing act” under applicable U.S. laws;
- do not even know that they may be U.S. citizens because they have never lived in the United States
- are citizens and residents of countries that do not allow multiple citizenships
To put it another way: one’s status as a U.S. citizen is not always clear.
I have never heard of these requirements! What determines the income that must be reported to the IRS? What “Information Returns” are required to be reported to the IRS?
- FBAR (Now called FinCen 114)
- FATCA 8938 – Report of Specified Foreign Assets
- 5471 – Information return for Foreign Corporation
- 3520 – Information return for a “Foreign Trust”
- 3520A – related to the 3520
- 8621 – for Mutual Funds
- 8965 – for exemption on ACA insurance
What are the ways I can become compliant?
- Offshore Voluntary Disclosure Program – AKA “OVDP – Not appropriate for the vast majority of people
- Streamlined Compliance – A pre-packaged way to solve past compliance problems
- Obeying the law – filing amended tax returns outside the IRS programs
- Delinquent FBAR Submission Procedures
What costs are involved in renouncing U.S. Citizenship?
- The costs of a total of 6 years (5 years prior to the year of renunciation plus the year of renunciation) of tax compliance and information returns
- The cost of any back taxes and penalties
- a $2350 administrative fee
- possibility of having to pay an “Exit Tax” (which can be the largest problem)
Information presented is not intended or offered as legal or accounting advice specific to your situation.