There's an article on the Geneva Lunch site about new arrangements for tax which may be of interest to our American members.

It is kind of you to post any links that may be helpful, so please take the following as well-intended: the article is simply negligent and wildly inaccurate in its description of the US tax code. There have been no substantive changes in the past few years, nor even in the "FBAR" (bank account) reporting requirements. (I've been filing that form for over seven years now - the requirement to file is not "new").

As an example, the author writes: "If you are a US citizen with a foreign company or partnership you have to file not just individual but corporate taxes and the penalty for failing to do so is $10,000 per year." Well, that is simply not true; you do not file "corporate taxes" in either case. Further, the penalty cited is not for non-filing of tax returns, but for non-filing of certain information returns.

Quite simply, any US citizen who has been filing an annual tax return and related information returns does not face any "new" issues or problems or taxes. Any citizen who has not been filing is an idiot, and doesn't deserve a lot of sympathy.

Last, but not least, the articles are a (perhaps predictable?) apology for UBS, with a charming omission of little details (UBS officers smuggling diamonds, advising on sham Hong Kong companies, conspiring to defraud the US Treasury, etc), and a brazen (and quite false) suggestion that UBS may not have realized it was breaking US law.

I am new to this board - call me an idiot (please don't) but I never paid any attention to the US tax amnesty for Sept 23rd. I didn;t think it applied to us since we are Swiss.

Ok, my husband is swiss born and when we married years ago I became swiss too. My husband had money in Switzerland for 40-50 years and never declared anything to the USA. We of course pay taxes in USA and Swiss too since we have a little income and an apt.
We have been in Switzerland for the past 5 months and didn''t read anything about this tax amnesty sept 23rd.
Since we are here we became Swiss residents since we are retired and we love it here. Yesterday on Yahoo I saw this Sept 23rd deadline.
We want to do the right thing and declare the little money we have here however I don't know how to declare it by Sept 23rd. I read tons of websites and I can only find one way to declare and that was to submit amended US tax returns for the past 6 years and then apply the Foreign tax credit.
My question - is there any way to declare by Sept 23rd without doing the tax returns right away. Our US accountant is on vacation and it would be impossible.
We realize we need a lawyer immediately but want to know if there is any other way to declare. We are not going back to the states until year end.
Alfons (wife)

PS....meant to mention we also have a US passport and only became swiss residents this year

Alfons, You cover a lot of issues, not the least of which is whether or not you have a tax liability at all. (From your post, it isn't clear that you have any tax problem.)

I believe there is a lot of FUD (fear, uncertainty & doubt) being spread; US tax law and reporting requirements have not changed substantially in recent years. So, first constructive suggestion: don't panic. Secondly, be sure you need an attorney (an accountant might be a lot more plausible); they are expensive, in every country.

However, to focus on your question: place a call to this IRS hotline +1 215 516 4777 to ask for details, or just call the US Embassy in Bern (which will have IRS staff somewhere onsite). AFAIK, the hotline will answer your queries without asking for your identification (but if not, you could have a local accountant or attorney make the call).

Please post or PM if any of this is not clear, or did not answer your query.

Further reading (from a quick Google search):
IRS voluntary disclosure practice
IRS FAQ on the current 'amnesty'
Further links from an attorney's website

The cited journalist is neither a jurist nor an accountant. Hence, the language is imprecise.

The substance is that taxpayers must disclose all global assets, including shares/investments in any company, partnership, etc. That is Swiss Law and apparently US Law, too.

The offense is non-disclosure of assets. The new development is the IRS determination to rigorously enforce US tax laws. And the IRS offers a last chance to confess...

Goldtop, You are quite diplomatic ("imprecise"), but I will stick to "flat-out wrong." (See the example I cited above; however you might try to make that statement more precise, it is still completely wrong.)

No, that is not US law. US taxpayers are required to report taxable income, in some instances to report non-taxable income, and in some instances to report foreign bank accounts and shareholdings (but only when those exceed a specified threshold). That has been true for many, many years.

However, there is no US law or regulation that requires a citizen to report "all global assets" or "investments in any company." (If you can find anyone who disagrees with the preceding sentence, please ask them to cite the law or regulation.)

Respectfully, I disagree with both sentences. First, there is nothing on this earth "new" about the IRS' determination to enforce tax laws. I can understand the motive of attorneys seeking new clients to hint at urgency, but the simple fact is that neither US tax law nor IRS policy has changed substantially over the past few years. The news media's attention has changed, for sure, but the underlying reality has not. On the second sentence, the IRS has long had a "voluntary disclosure" policy which is a de facto amnesty, and it continues after the current "amnesty" expires.

Thank you for correcting me. I was wrong in drawing parallels between Swiss tax law and US tax law.

Comparisons are difficult, since few people really have much experience with two different tax codes. In principle, they are all the same (you earn an income, and the government wants some of it.) Once you adjust to the idea that "your income" is "yours and theirs", everything else is just details.

www.democrats.ch has organized tax briefings for freaked-out US residents abroad who might have forgotten that their country tax global income (at home, tax cheats are hounded especially if from CH/linked to CH, but this american site states that most US citizens residing abroad are tax cheats) and published the recomms on their website. Enjoy !

Thanks for the link; it certainly has entertainment value. It is difficult not to wonder about the motives (or, more simply, the IQ level) of some of the people writing these articles. The statement on the link you provided that "the majority [of US expatriates] is presently non-compliant" is absurd, and not supported with evidence or facts of any sort.

Thanks so much. I called and then did panic as it seems we need to declare by Sept 23rd and our tax returns from 2003 need to be amended. My delay in replying here was all the running around to get the papers we needed.

I contacted an English speaking Treuhand and she is assuring me not to panic as the penalties will not be much since we are not talking big money. We have an appointment today.

I am glad we are doing it the right way - can sleep better that way.
By the way, this is a terrific board that I just discovered!
Alfons

I just called the embassy in Paris, which has IRS staff there. They were very helpful.

This is what I've found out:

• You must report all of your accounts - including retirement accounts on this form
• If any balance goes above $10,000 US for even one day, you must include that account on the FBAR form
• This is completely unrelated from your tax returns
• If you don't have all of the info for all of the years, at least file the ones you do have on the FBAR form and file other years as you can

No comment on how all of this makes me feel....

With the hope that you remain calm....

First, I would urge you to find a US tax accountant; call the US embassy in Berne, and if they can't help the US embassy in Paris posts a list of US accountants (licensed US tax attorneys or CPAs) in Paris. If your returns are not very complicated, you could even find a CPA in the US, perhaps in your home state.

It is not realistic to believe that any Swiss professional is competent to prepare US tax returns (unless that person has several years' experience working in the USA); the nuances of language, and the manner in which laws are written (and how you should research those laws) are too different from one country to another.

Secondly, you need to be sure if the "amnesty" really applies to your situation; please see the link above to an attorney's website, or here for further links.

The IRS program is aimed at people who have not declared foreign financial accounts (and the earnings from those accounts), or a reportable interest in foreign companies (the emphasis is on "reportable" interest, which is generally a 10% or higher ownership). Please be sure that applies to your situation. From your initial comments, it sounded as if you merely have unreported income to your Swiss husband. If so, it is not certain he owes tax at all; for example, the US grants a tax credit (not a deduction) against Swiss income tax payments.

For (a minor) clarification: You must report all accounts (as you wrote), if the aggregate value of all accounts is over $10k etc etc. (The $10k threshold is not per account...see the instructions here.)

Well, the reporting requirements (form TD-90) have existed for at least 15 years, so...how do you feel?

Presumably you'll agree it is less intrusive than a country (FR or CH) that can demand a list of all your worldwide assets (not merely financial accounts), in order to impose a wealth tax ?

Yes, accurate, my mistake.


I'd prefer not to be taxed by a country I don't live in.

And as you say, they can demand. And they don't hold the power that the IRS does.

I agree, completely !

I'm the author of the article as well as editor of GenevaLunch, so I'd like to reply to some of the points made here.For a start, the three-part series has as its new peg a highly emotional and non-partisan meeting of 200-plus people in Geneva. It was clear that more information was needed. We've since been asked by American Citizens Abroad if they can reproduce these "excellent" articles and been thanked by several accountants and lawyers who refer to them as "first class", "very helpful" and extremely useful."
Motivation: it's a subject that interests and worries many, many Americans because it's been hard to find information on the current situation. Journalists have the same range of IQs as other groups, thanks.
Language: Our job, as a group of very experienced journalists (I worked for several years for Time, Business Week and the International Herald Tribune, am now editor of GenevaLunch) is to research information thoroughly and present it in a way that people who are not specialists can understand. So no, we don't use industry jargon, and sometimes that means we err on the side of imprecision, but that is not the same as incorrect, and I stand by the correctness of the information.
blonaybear: Thanks for the link, and we can see by the way the articles are being passed around, that a lot of people have indeed found them helpful.
jwalker: To say "The majority is non-compliant" is disingenious on your part - you might have instead quoted this: "The size of the group of non-compliant taxpayers outside the US is difficult to judge, but three tax consultants (see Ed. note below) have told GenevaLunch their experience shows the number is large." You could have noted that the article was about a large and very emotional meeting in Geneva, organized by American Citizens Abroad, Republicans Abroad and Democrats Abroad. And that although this is a direct quote, the reason the source could not be cited more precisely is that the meeting had extraordinary rules: no one's name can be used. There were 200 witnesses to the statement.
pabcbc: No, I didn't say most people are tax cheats: that's your interpretation, but not everyone's. People angry over double taxation do not consider themselves tax cheats.
jwalker: parallels between Swiss and US law - anyone obliged to file both these taxes has plenty of experience comparing them!
goldtop: from one of the articles (and an example of a real case was provided by one of the tax consultants presenting): "The FBAR requires you to list your accounts if 'You have financial interest in, signature authority, or other authority over one or more accounts in a foreign country, and the aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.' Note there is a link to the IRS document, in our GL article and repeated here.
jwalker: Yes, there is something new about IRS enforcement, which is why the Democrats, Republicans and ACA joined forces to have the meeting. And the details are in the articles.

I appreciate the article, it was very helpful to me.

I was having coffee with a few American women yesterday, and not many of them knew about FBAR, and some of them have lived here for a while. Clearly not a random sample of any signifigance, but the truth is, if you've lived abroad for a while you may not be attentive to these requirements. Not an excuse, but it's what happens. In particular, if you are a US citizen married to a non-US citizen and you share a joint account with your spouse, you may need to report such accounts if you meet a certain threshold.

It does seem that people certainly require reminders. Given the financial situation in the US, I can imagine that the IRS would want to step up enforcement. I also perceive an increase in the ability to share information between the USCIS and IRS and other government organizations, which suggests that it would be easier to enforce.

I could not attend the meeting - I was in the US, but I've sent the links around to several of the US citizens that I know here.

The IRS regulations are murky. I once read a study about tax filing - several accountants or tax advisors did the same return - no one arrived at the same exact result. How precise is that? If US citizens are to file regularly, I would think that accessible information helps compliance to some degree. To present this information to the public, language should be simplified by necessity, and this requires rather more skill and intelligence than less.

So anyway, I appreciate the article and the effort by people who put this together.

Ms Wallace, In reply to your comments:

Then why won't you provide support for your statements? Let's start with the example I cited above: You wrote in your article: "If you are a US citizen with a foreign company or partnership you have to file not just individual but corporate taxes and the penalty for failing to do so is $10,000 per year."

There's no imprecision in what you wrote. It's just not correct.

You do not file "corporate taxes" in either instance you stated. Further, the penalty cited is not for non-filing of tax returns, but for non-filing of certain information returns. (If you disagree, please cite the IRC to support your claim.)

I assume you meant to be insulting, though since you can't spell "disingenuous", I'm not sure. In any event, I didn't "say" that, I quoted you (accurately and in context). There would be no reason to quote the second statement ("the size of the group"), since the size is irrelevant to your (unsupported) claim that "the majority is non-compliant." Please don't change the subject!

You are changing the subject, again, from my comments about your articles. I never wrote that IRS enforcement has not changed.

The glaring error in your 3-part series is your repeated claim that the tax "rules" and "filing requirements" have changed.

You wrote:
"The Rules Have Changed for Citizens" [headline]
"The Rules Have Changed for Americans".
"the IRS (US tax authority) has imposed new rules"
"US citizens...living outside the US should be aware of new tax rules"
"News of changes to US tax filing requirements"

Those statements are precise, clear, quoted in context .... and are wrong.

Please tell us which "rules" and "filing requirements" are "new" or "have changed". You didn't cite a single new rule in your articles, nor in your post here. Please tell us (by IRC or CFR section)? I don't think you can do so...and I think you know it.

As I pointed out, the filing requirements (tax and FBAR) have not changed for many years; the form TD-90 is at least 15 years old, and the requirement for a US citizen to file tax returns is many decades old.

So, rather than a constructive article to help the few Americans who might be innocently unaware of the filing (FBAR) or tax requirements, your articles clearly set out to stir up fear and uncertainty.

Journalism...at its worst.