FATCA and the accidental Kenyan

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FATCA and the accidental Kenyan

Post by Rock Private Office on Wed Jun 26, 2013 6:43 am

The Accidental Kenyan, is an editorial originally published by the Vancouver Sun. It highlights the problems with FATCA legislation in the US. It’s a clever piece and well worth reading.

The original article is no longer on the Vancouver Sun website, but it can be found on the Isaac Brock website here: [You must be registered and logged in to see this link.]

FATCA, stands for the Foreign Account Tax Compliance Act. The law requires foreign financial institutions to disclose account details of US citizens to the IRS. FATCA defines foreign financial institutions extremely broadly and it is being interpreted to include banks, brokerage firms, insurance companies, trust companies, retirement plan administrators, mutual fund companies, and so on. The result is that existing accounts are being closed by some institutions and new accounts are not being opened for US citizens.

The penalty to the individual for failure to report foreign accounts can be as high as the greater of $100,000 per year or 50% of the high balance for each year the account is unreported. That means that a $100,000 account could generate penalties of a half million dollars or more because the IRS can back date three years.

If you are an American who has been living outside the U.S for a number of years, you may have significant tax liabilities to the IRS through no fault of your own. FATCA dramatically increases the chance of getting caught.
Rock Private Office
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