If you’ve recently received a FATCA letter from your bank, you may be wondering what it is and what it means for you.
FATCA, or the Foreign Account Tax Compliance Act is a U.S. law that requires financial institutions to report information about American customers’ accounts to the IRS.
It’s likely because your bank has determined that you are a U.S. person based on the information you provided when you opened your account. You may have a U.S. passport, a U.S. place of birth, U.S. parents/ siblings, or other ties to the U.S.
Your response may now be similar to that of the founders of Americans Overseas: total disbelief (it can’t be true!), anger (how can they do this?), fear (am I going to get fines or pick up other problems?), and panic (what should I do?).
You are definitely not alone, Americans Overseas receives daily messages from people who are going through the same thing and are indignant. We are here to help you with information and possible solutions.
If you’re not a U.S. person, you can simply provide your bank with proof of your non-U.S. status and they will not have to report your information to the IRS. However, if you are a U.S. person, your bank will be required to report information about your account to the IRS, including your name, address, account number, and the balance of your account.
Note: if you were born on U.S. soil or from a U.S. parent you might be considered as a US citizen. Also if you have an (expired) Green Card you are considered a US citizen for tax purposes.
While it may be inconvenient to have to provide your bank with additional information and your TIN/SSN, FATCA is designed to help the IRS track down Americans who are evading taxes by hiding money in overseas accounts. So if you are a U.S. person with an account at a foreign financial institution, it’s important to comply with FATCA and provide your bank with the information they need to properly report your account details to the IRS.
We, the founders of Americans Overseas, were born in the Netherlands and obtained our American nationality through our (American) mother. When we heard about this for the first time around 2013, we were in total disbelief (it can’t be true!), anger (how can they do this?), fear (am I going to get fines or pick up other problems?), and panic (what should I do?).
It is (unfortunately) true that there is an additional American tax levy. But there’s no information from the local government, and when approached, the consulate referred us to the IRS, and the IRS was impenetrable.
That’s why we started this initiative to help people from all over the world by providing proper information to avoid unnecessary panic, and offering help free of obligation and free of charge.. If needed, we have a network of affordable professionals (accountants) who can help you with your tax obligations.
If you have more questions about SSN or CLN you can contact us us at Americans Overseas.