FACTA and More
FATCA another group of letters that only the IRS understands. FATCA stands for the Foreign Account Tax Compliance Act. It’s similar to FBAR (Report of Foreign Bank and Financial Accounts). U.S. law requires that you report on a yearly basis whether you have or control foreign bank accounts that exceeds $10,000. The Treasury Form is the TD F90-1.22. One difference between it and other governments is that can not be extended. The FATCA takes the foreign reporting on step further when comparing it the FBAR rules. The main difference is that it requires Foreign Banks to report the value of the foreign bank account held by U.S. Citizens. Foreign institutions that don’t comply with the FATCA law is subject to 30% penalties.
This week, there were articles on the IRS going after Israeli banks for not reporting income held by U.S. persons (citizens). The FATCA law begin to take effect July 1, 2013. The IRS has been pursuing agreements with foreign countries and banks to report the foreign accounts held by U.S. persons to the IRS. The law was enacted as part of the HIRE Act (Hiring Incentive to Restore Employment). If you have foreign accounts over $10,000, are you reporting the value to the IRS on the FBAR form? Are you ready for FATCA?
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