Re: new US offshore banking rules

by jrm30655 Sun Jan 27, 2013 12:15 pm

hound dog wrote:Jim W. and jrm:

Now we´re all confused. All I really know is that, in 2011, our U.S. brokerage firm and also commercial banker where we domicile our joint checking account rolled into one, told us that, from then on, despite the fact that they had historically allowed us to make the election on tax withholding, if any, for the IRS (and we traditionally since 2001 had requested that no funds be withheld at all) , they were compelled , by U.S. Government decree, to withhold 30% of any distributions from my wife´s IRA accounts because she was a French citizen living in Mexico full time and 10% of my IRA distributions because I was a U.S. citizen living in Mexico full time. Keep in mind that the IRA distributions of which we speak are from IRA accounts held in the U.S. to our joint checking account also held in the U.S. The only thing that sets us apart is that our personal address is in Mexico and our accounts are handled by the brokerage firm under international customer designations.

Had I to do it over again and understood the ramifications of living full time in Mexico insofar as tax implications are concerned, we could have maintained a phony permanent address in Alabama with relatives and never faced this bureaucratic nightmare.

My French citizen wife lived in the United States, made a fine living there and faithfully paid federal income taxes due starting in 1971 and has paid every year since in significant amounts through 2011 so far. Yet, she is looked at as a possible tax cheat because she is a French citizen. I guess we are being penalized because there are so many tax cheats out there. The law abiding citizens or legal permanent immigrants always pay for the behavior of the miscreants in the U.S.

So be it. I´ll not lose sleep over this as I have a really nice tax refund coming my way in a couple of months. To bad they don´t pay a market interest on those funds they steal temporarily from us for a few months . Really makes you miss the land of the free and the home of the brave.

The land of the free is long gone. Hillary told the Afgans "We tax everything that moves and everything that doesn't"

It used to be that if you withdrew from an IRA, you could certify that you wouldn't have to pay any taxes and they would with hold zero. Sometime over the past few years they changed that. That is simply to collect taxes on IRA/401k withdrawals.

The US also slipped in a provision in the HIRE bill a couple of years ago about money going out of the US. Unless the foreign bank had a reporting agreement, the sending bank was supposed to withhold enough to handle any taxes up to 30%. Since banks had no way of knowing, they were setting up to just withhold 30% of any foreign transfers.

It was supposed to start 1/1/13 but it was put off for a year. No one knows what will happen next year.

The US wanted every bank in the world to report on every account held by any American citizen worldwide. Most of the banks told the IRS to take a hike. They weren't in the business of keeping track of American citizens money.

There's something like 168 countries in the world. I wonder what would happen if those countries demanded that every bank in the US report on each foreign citizen using their bank.

by slainte39 Sun Jan 27, 2013 12:32 pm

jrm30655 wrote: Hillary told the Afgans "We tax everything that moves and everything that doesn't"

Good for her!!!