Taiwan Stamp Seal (Chop), Parents & IRS Offshore Reporting
The IRS has very onerous reporting and tax rules when it involves foreign assets, accounts, investments and/or income. In several Asian countries such as Taiwan, it is common for an individual to have a signature stamp or seal. The stamps are used in lieu of an individual having to be physically-present to sign a document
Taiwan Stamp Seal (Chop) & U.S. Tax
While the use of the stamp document is convenient, especially for Asian parents when they have children residing outside of Taiwan — it can turn into nightmare for a Taiwanese/U.S. person who unknowingly had accounts or assets opened in his name, or income attributed to him (or her).
Example of Taiwan Stamp Seal & U.S. Tax
Here’s a very common situation we doing often: Jeffrey resides in the United States, but his parents reside in Taiwan. The parents are reaching retirement age and want to open up some bank accounts for Jeffrey, as well as placing him as a signatory on their own accounts.
Jeffrey’s father was an investment banker and he uses the new account and the signature stamp to generate significant amounts of income…in Jeffrey’s name. The Stamp is also used to transfer money in and out of the bank account — as well as to open new bank accounts.
Taiwan FBAR & FATCA Reporting
FBAR and FATCA or two the most common international reporting requirements for U.S. persons who have foreign accounts, assets and income. Unbeknownst to Jeffrey, his family has been generating significant amounts of income under Jeffrey’s name.
While Jeffrey has not technically signed any documents, his signature card has been used hundreds of times, for various transactions over the past 10 years.
Since the accounts, assets, investments, and income have not been reported to the IRS, Jeffrey is out of compliance and could face significant fines and penalties — unless he resolves the issue.
Golding & Golding: About Our International Tax Law Firm
Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure.
Contact our firm today for assistance.