Golding & Golding – U.S. and International Tax Lawyers

FATCA is the Foreign Account Tax Compliance Act and it is an act designed to facilitate offshore compliance and reporting of foreign financial accounts.

Even though an E-2 Visa is a temporary visa which only lasts two years (although application for renewal(s) is available) it is a work-based visa. Thus, a person who has an E-2 visa may inadvertently qualify to be taxed under the substantial presence test, and subject to US taxation on their worldwide income.

In addition to worldwide taxation, there are also issues involving foreign bank account reporting and foreign financial account reporting.

The following is a brief summary of FATCA law and how it impacts US taxpayers as provided by Golding & Golding:

FATCA Summary

FATCA is the Foreign Account Tax Compliance Act. It is an IRS International Tax Law that is designed to reduce offshore tax evasion and tax fraud. FATCA requires U.S. Taxpayers to disclose unreported foreign bank accounts, foreign financial accounts, and foreign income to the IRS; otherwise the Taxpayer can be subject to extremely high fines, penalties, and outstanding tax liabilities.Unfortunately, most people only learn of FATCA when they receive a letter (“FATCA Letter”) from their foreign bank or foreign financial institution requiring the U.S. Taxpayer to show proof that they are in FATCA compliance.Accounts subject to FATCA compliance include:

  • Foreign Bank Accounts
  • Foreign Savings Accounts
  • Foreign Investment Accounts
  • Foreign Securities Accounts
  • Foreign Mutual Funds
  • Foreign Trusts
  • Foreign Retirement Plans
  • Foreign Business and/or Corporate Accounts
  • Foreign Insurance Policies
  • Foreign Accounts held in a CFC (Controlled Foreign Corporation); or
  • Foreign Accounts held in a PFIC (Passive Foreign Investment Company)

If the Taxpayer cannot show proof that they have complied with FATCA, the bank or foreign financial institution will freeze or even forfeit the foreign accounts.

                                     

Getting into Compliance 

Whether or not you live in the United States or in a foreign country, you may be eligible to enter Offshore Disclosure to try and get into compliance before you are audited or examined by the IRS (and subject to much higher fines and penalties), including possible passport or visa revocation.

Golding & Golding, A PLC

We have successfully represented clients in more than 1,000 streamlined and voluntary disclosure submissions nationwide and in over 70-different countries.

We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.