US Affiliates with foreign bank accounts

[Steve S]

For US citizens with foreign bank accounts there is a little known IRS form you should become familiar with, if you are not already. It is Form TD F 90-22.1. This form must be filed by 6-30-10 if the aggregate balance of all foreign bank accounts exceeded $10,000.00 at any time during 2009.

What makes this form unique is that the penalties for failure to file this form are spelled out right on the face of the form. Following is an excerpt from the form the just might raise a few eyebrows:

Disclosure of this information is mandatory. Civil and criminal penalties, including in certain circumstances a fine of not more than $500,000 and imprisonment of not more than five years, are provided for failure to file a report, supply information, and for filing a false or fraudulent report. Disclosure of the Social Security number is mandatory.

Folks, this form is a big deal. The IRS is going after those it believes are trying to avoid paying their taxes by hiding their money offshore. You may have heard about our governments' running legal battles with the Swiss. If you have a foreign bank account(s) you may want to double check your statements to make sure that you are not required to file Form TD F 90-22.1 or that you do file it while you still have a couple of weeks to do so.

 

[dominique]

Good point, a lot of tax preparers have no idea about this and it is very important.

 

[Steve S]

True enough Dom. That is why as CPAs we are required to take 40 hours of continuing education a year. Some of the better courses can cost more than $500 for 8 hours. I have spent upwards of $3k some years to meet the requirements. Of course, you can cheap out and get 40 hours of continuing ed over the internet for about $300. Unfortunately I know some individuals who do just that. But, I prepare tax returns for US citizens living in the UK, Canada, Australia and Iraq among other places. So, I have to go the expensive route to stay informed. One of the questions you should be asking your tax preparer is how they keep up with current changes in the tax code.

 

[Steve S]

One thing I forgot to mention is that as a US citizen it does not matter where you live to be subject to the filing requirement for foreign bank accounts. If you live in the UK, for example, you still need to file the form if your aggregate foreign bank account balances exceed the threshhold.

 

[bonustreak]

I am really surprised that since your a cpa you had no idea where to set up an offshore bank account to collect your earnings... anyway hope you have found luck in that pursuit. My Mom retired from the IRS after 35 yrs and she has always taught us you never ever mess with Uncle Sam they will always catch you in the end. I myself would rather pay my due taxes then spend anytime in jail thats for sure.

I think my accountant needs to take a few new courses that bastard always screws up but this time it was for the good, I over paid and got some bucks back last week ..wooot!!

 

[Steve S]

Bonustreak:

I know where to get an offshore company incorporated and bank accounts set up. However the cost is rather high. I am looking for more cost effective alternatives. Another consideration is the business we are in. I have been up front with all of the banking contacts I have made. They simple do not want customers involved with gaming industry in any way. Were it not for that, I would have not needed to ask anyone else where to set up a foreign bank account. Further, I had accounts set up at HSBC in Jersey. However, do to the increased regulation from our government, they closed my accounts and are not opening any new ones for US residents. Many of the Swiss banks are closing the accounts of US residents as well. Same with many other banking options.

I have been turned down by UBS in Zurich, Credit Suisse, HSBC Canada, Royal Bank of Canada (although if you live the right state they will set up an account for you), Cayman National Bank, Bank of Cyprus and a few others. I am still pursuing other options and have several inquiries out there. A client of mine may have an solution for me in South America.

I contacted the banking option that you provided to me and have determined that it is not a workable alternative for me. For one thing, they will not allow you to wire your money back to the US. Therefore, you are stuck making daily withdrawals from an atm. The current daily withdrawal limit would mean that I would never be able to withdraw all of the monies owed to me. In addition, I feel that daily cash withdrawals would bring a kind of scrutiny I do not wish for. Making a cash withdrawal every day could make it appear that I was involved with drugs or money laundering. I am looking for something clean and direct.

 

[bonustreak]

Umm that is odd because I wire to my Corp account in the US all the time from there. Sounds like maybe you should consider moving out of the USA...

 

[lots0]

I just read an article about US ex-pats renouncing their citizenship due to the draconionian US Banking laws.

According the article(I can't find the link) ex-pats filing to renounce their US citizen ship will have to wait up to 10 months to get an appointment to file because of the huge back log of people renouncing their US citizenship in Europe and Asia.

Most are renouncing because European Banks are refusing to do busines with Americans because of the US laws.

 

[Steve S]

Bonustreak:

Are you for real?

If you desired objective was to convince me not to post on this forum, than congratulations! Mission accomplished.

I joined AGD because I was told that this was a place where affiliates could come together to discuss current issues, ask for and receive assistance and in turn offer assistance to others. As a super moderator you presumably are representative of the depth of knowledge, professionalism and the willingness to help others as it relates to the forum as a whole. It would seem that I was misinformed and that I likewise misjudged this forum.

It is also apparent that you are not taking my requests for assistance seriously. Comments along the lines of - I can’t believe you did not already know that – and - maybe you should consider moving out of the USA - indicate that you are not trying to help me at all. I can go anywhere and get smart-assed answers like these. I don’t need to waste my time on AGD or you for that matter. I came here looking for help and instead received sarcasm and bullshit.

I quit CAP because I will not tolerate cheats and liars. I also cannot tolerate idiots who waste my time. Please remove me from your membership rolls and delete my account.

Andy, please accept my apology for this. In all of our past dealings you have been nothing but professional, knowledgeable, polite and you really seem to care. But, c’mon man. This is one of your moderators? Seriously?

 

[Guard Dog]

I'm on vacation, but let's not be hasty and get rid of your account. You have I have had several discussions and I have always VERY MUCH valued your input. You are a good guy, Steve, and I would prefer to keep you at AGD if at all possible.

I don't believe Bonustreak meant any harm, but was mostly being sarcastic/joking. If you know her, you would know that.... but we can't all expect to know other's humor.

My apologies and I will return Monday.

-Posted from HTC phone on Sprint Network

 

[bonustreak]

I don't believe Bonustreak meant any harm, but was mostly being sarcastic/joking. If you know her, you would know that.... but we can't all expect to know other's humor.

Umm yeah totally!! It was a joke and it was towards our country and the joke it has become with banking here and nothing against you personally if anything I have been trying to help you as far as I knew..

I am sorry that my pm was not of any help to you and I am sorry I cannot help any further but hopefully someone here on the forum can.

 

[greek39]

The IRS is going after those it believes are trying to avoid paying their taxes by hiding their money offshore.

Excuse me I know very little regarding U.S tax law. But if I had 10 Million in a offshore bank account say Cyprus. I do not import cash but choose to leave it in Cyprus what law am I breaking other than not reporting. Would these funds be taxable?

IMO I don't think so because it never hits my current country. It remains offshore never to enter my current country.

Not hiding anything. Maybe the IRS would just like to know just in case one decides to import those funds.

JMO

greek39

 

[TheGamblingGuru]

Steve, stick around dude. Bonustreak did not mean anything in her posts toward you personally. She's also a great gal to know in this business as well. She has helped many in the past here and other places. I think if you maybe knew her a bit more you would see that her comments to you were not meant in a negative way,,
____
____

 

[lots0]

Excuse me I know very little regarding U.S tax law. But if I had 10 Million in a offshore bank account say Cyprus. I do not import cash but choose to leave it in Cyprus what law am I breaking other than not reporting. Would these funds be taxable?

IMO I don't think so because it never hits my current country. It remains offshore never to enter my current country.

Not hiding anything. Maybe the IRS would just like to know just in case one decides to import those funds.

JMO

greek39

Money earned by US citizens in a foreign country, even when the US citizen resides outside the USA, are taxable at a very high rate, actually there are several different taxes that apply... Including income tax.

The US is also requiring banks outside the US, to comply with US laws when doing business with Americans. This is why so many non-us banks are now refusing to do business with Americans, no matter where they live.

As far as Steve's problem.

@ Steve; Are you using a LLC? or just trying to use your own name on the bank account?

If you are using your own name on the account, I would suggest you set up an LLC (limited liability corporation) and open a bank account in the name of the LLC and set your self up as an employee of the LLC, that draws wages/salary. Once you do that, you should not have too many problems moving money.

In America people get the shaft, while corporations get whatever they want...
Become a corporation, it will make your life in this business much easier.

Be sure to talk to a lawyer that practices in the state you live in about setting up the LLC.. it will save you from a lot of stress and problems.

//added The states differ a lot in their LLC regulations. Some states are better than others to set up the LLC in.

 

[HBKKH]

This thread turned into a Drama thread. Great entertainment