Foreign Bank Wants You To Sign a FATCA Non-Compliance Statement? (Golding & Golding)

Foreign Bank Wants You To Sign a FATCA Non-Compliance Statement? (Golding & Golding)

Foreign Bank Wants You To Sign a FATCA Non-Compliance Statement?

Unfortunately, the enforcement of FATCA, coupled with the inherent fear that many Foreign Financial Institutions have about being out of compliance with U.S. FATCA Reporting laws has left many U.S. Account Holders in jeopardy with the IRS.

Some of these foreign banks and investment firms are trying to put the burden of their non-compliance with FATCA and U.S. reporting back onto their U.S. Account holders — and the issue is only becoming worse as FATCA enforcement increases.

The Fear of FATCA is a Global Issue

In trying to save their own hides, these Foreign Financial institutions and Offshore Investment firms are requiring the U.S. Citizen or U.S. Person account holder to acknowledge their own non-compliance in writing, to the bank — or else the institutions are refusing to release the funds to their customers.

We have had multiple clients contact us in the last few months with this same issue.

Example of The Foreign Bank Shifting the Burden Back to You

The situation goes something like this: Your foreign financial institution realizes it has a U.S. account holder (You). The institution has not properly reported your account holder information to the U.S. government via FATCA (Foreign Account Tax Compliance Act).

Non-Compliance Statement

Once the bank realizes that there is an issue, they immediately freeze your funds, or limit access pending your cooperation.

Instead of sending you a FATCA Letter, the Institution requires that you first send them a written statement indicating that you never told the bank that you were a U.S. person — and then they will release your funds.

This is not the same as a FATCA Letter

With a FATCA letter, the Foreign Financial Institution asks you to confirm whether you are U.S. person. If you are a U.S. person, the bank wants you to sign and submit a W-9 form. If you are not a U.S. person, they want you to sign and submit a W-8 BEN.


Oftentimes, our clients opened up their foreign accounts some 10+ years ago. When they first opened the account, they may not have even been a U.S. Citizen or Legal Permanent Resident. And, because it was before pre-2010 – FATCA was not around yet. And, FBAR enforcement (originated in the 1970s) was not an enforcement priority.

It is not fair for these for Foreign Financial Institutions to now turn around, and say that because the customer did not proactively submit any statement to the institution stating that the customer is a U.S. person (especially when the bank did not request any such information), that the burden is on the customer — if he or she wants access to their money.

First Get into Compliance with the IRS

If you are out of compliance and have money overseas that may become frozen, it is very important that you find an experienced Offshore/Voluntary Disclosure Counsel to get you into compliance — sooner as opposed to later.

The IRS recently stated that even though they are low on man-power and woman-power, their focus will remain on traditional tax crimes – and they specifically included international tax enforcement as part of the enforcement priority list.

What if I am Out of IRS Compliance?

When you have not met your prior year IRS foreign bank account compliance obligations, your best options are either the traditional IRS Voluntary Disclosure Program, or one of the Streamlined Offshore Disclosure Programs.

We Specialize in Safely Disclosing Foreign Money

We have successfully handled a diverse range of IRS Voluntary Disclosure and International Tax Investigation/Examination cases involving FBAR, FATCA, and high-stakes matters for clients around the globe (In over 65 countries!)

Whether it is a simple or complex case, safely getting clients into compliance is our passion, and we take it very seriously.

Be Careful of the IRS

With the introduction and enforcement of FATCA for both Civil and Criminal Penalties, renewed interest in the IRS issuing FBAR Penalties, crackdown on Cryptocurrency (and IRS joining J5), the termination of OVDP, and recent foreign bank settlements with the IRS…there are not many places left to hide.

Golding & Golding, A PLC

We have successfully represented clients in more than 1000 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.