They Should Be Heroes
- Author Horace Reichart
- Published March 23, 2012
- Word count 476
There is a group of Americans who ought to be heralded as heroes. Instead, they are fairly vilified and treated mostly with suspicion by US taxing authorities. They are the American citizens who live and work overseas.
It is interesting to note that most consumers of US goods and services reside outside the United States. Indeed, over 90% of our customers are from other countries. US expatriates, most of whom are hardworking Americans are at the forefront of promoting goods and services that tout Brand USA. Without their presence worldwide, the US mission toward globalization and a balanced world economy would absolutely fail.
The US tax code does not treat US expatriates (and, thus, their foreign transactions) as valuable resources though. On the contrary, new changes in tax law mandate that foreign financial institutions abide by poorly conceived new IRS rules or else face huge penalties. The new tax code holds US expatriates up as a nefarious lot – ones whom foreign financial entities would do better to avoid -rather than subject themselves to US reprisals Stateside that they can ill afford.
The ‘criminalization’ of Americans living abroad and new reporting requirements is contained in the IRS’s new Form 8938 or FATCA (Foreign Account Tax Compliance Act) that mandates that Americans declare certain assets (including stocks, partnerships, derivatives) over a certain amount. This is over and above the existing IRS FBAR form (Foreign Bank Account Report) that requires the reporting of all foreign accounts if, in total, they exceed $10,000 at any given time during the year. There are potential substantial fines for failing to file this form (even if no tax is owed).
This is a challenge for individual Americans living abroad and is even worse for foreign financial entities. The United States now presumes to require that every foreign financial institution must register and report on Americans’ ‘activity’ to IRS or face a 30% tax on their securities transactions that originate in the US. The reaction of foreign financial groups has been one of both incredulity and outrage. The reaction of these groups is often to simply make the decision not to do business with Americans. The potential exposure to their institutions is too great.
Indeed, the IRS has and must enforce its necessary task – to collect taxes. In the century of globalization, however, it is far more important to nurture capital, both human and financial, rather than treat it cavalierly as if it were a given. The era of globalization is about networking and the bringing together of disparate resources from many countries, to nurture entrepreneurship and new enterprise. The United States has always been the world’s leader in innovation. How then, will we be able to continue to lead and to thrive if we are effectively hobbling our greatest resource – the Americans who are helping to win the future and who happen to reside overseas?
Bright!Tax © is an online US expat tax preparation company for the 5 million Americans who are living abroad. Our level of online service is over the top and our focus on precision and applying exacting methods takes the worry and the hassle out of filing your US expat taxes. All CPAs. Secure. Precise. Guaranteed. http://www.bright-tax.com
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- 10 essential tax-saving strategies for landlords: Maximise your rental income
- A Comprehensive Guide to Navigating the Process and the Role of Customs Brokers in the UK
- Outsourced Accounting Services for UK Businesses: A Cost-Effective Solution for Financial Management
- Top 8 Self Assessment tax return software
- How to Close a Limited Company in the UK
- Maximizing Your Finances: Unleashing the Power of CPA Services
- VAT penalties – New rules
- TAX-FREE STRATEGIES IN AN UNCERTAIN ECONOMY
- 2022 Energy crisis and failure to connect Reality.
- When Are Corporate and Personal Taxes Due in Canada in 2021?
- You Would Never Have Thought That Having Accounting Internship Could Be So Beneficial
- ACTIVATION OF UAN
- Focal motivations behind getting a Tax direct for Small Business Firms
- Avoiding the flood — tax issues with water rights in agribusiness
- Social security benefits for a family (COVID-19)
- How to use QuickBooks Component Repair Tool?
- Do you want to reduce your taxes for next year?
- Will you be responsible with your tax refund?
- Getting started with QuickBooks Enhanced Payroll in Brief
- Are DSTs Right For Your 1031 Exchange
- Tax Return Makeovers By Kenya Woodard
- Why have all crypto tax attempts failed?
- Are You a Corporation? Know Why Consulting a Tax Accountant Is Vital
- Share capital or share premium for your Dutch company?
- Everything investors should know about 1031 sponsors
- Why is the income tax so high in UK?
- Should I do my own tax return?
- Get More Money Back on Your Tax Return with help from the Tax Cuts and Jobs Act
- Don’t Fall Victim to these 3 Tax Scams in 2018
- Find Out If 72(T) Penalty Free Income Is a Solution for You