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Be wary of your investments -- the TAXMAN is watching

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  • Well, you are clearly privy to a lot of information that I am not. Perhaps you could share your sources for the benefit of other Americans?

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    • Originally posted by Ken44 View Post
      Why?

      Because with regards to US citizens NTA would need to file a request with the US Internal Revenue Service and explain why they want to see a particular return.

      And I don't buy the idea that NTA anymore than the IRS will go through the hassles of contacting a foreign tax agency without a very good reason.
      I believe there is a boilerplate document That would have a spaces to insert the name of the suspected tax dodger, the alphanumeric code of the tax law/agreement the perp is accused of breaking, a place for the investigating officer's name and off it goes. A week later the IRS, Revenue Canada or the Grand Hall of the Inquisition of the Kingdom of Karedonia replies with a data packet containing all of your banking info for the country in question.

      All the NTA needs to make use of it is to get notification from your bank that you've transferred in excess of \100K outside the country. Remember that the banks, Western Union etc always ask those nitpicky little questions?

      Comment


      • Originally posted by Ken44 View Post
        No they aren't. What they are basically saying is the two countries are in agreement to exchange information should it become necessary.

        In order to obtain tax info. on a US citizen NTA still needs to submit a request along with a reason.

        Such information is not readily exchanged between the two countries and I seriously doubt either would do so without good cause.

        The idea that NTA would contact the IRS and attempt to audit someone on a "hunch" is far-fetched to say the least.

        There are NTA staffers in a variety of countries, just as there are IRS staffers stationed in foreign jurisdictions. This is mentioned earlier in this thread.
        There are of course random audits. I had one of those in Canada a long time ago when my income was actually rather low. But you are right, contacting on a hunch, I doubt it. It is extremely easy for them to ask for data at the intergovernmental level. To get info from a foreign bank, the NTA must have a court order.
        Without going into great detail, I know now that the CCRA in Canada is starting to put the screws to Cdn. banks in offshore jurisdictions. Should one buy a Canadian stock or fund, when it is sold, the bank MUST withhold 25%. However, if the client seeks to have a reduced tax rate (it might be possible), s/he must provide the bank with his/her particulars (the bank then forwards the info to CCRA). Voila, more tracking is being forced on the banks. In this way, it obviates the need for a court order.

        Comment


        • Originally posted by Brown Cow View Post
          Well, you are clearly privy to a lot of information that I am not.

          That's because how NTA and the IRS exchange information is of concern to me.

          I suggest anyone worried the IRS is providing personal information/tax returns to foreign agencies without careful consideration and proper security contact the IRS direct.

          1-800-829-1040
          Last edited by Ken44; 2013-03-04, 03:38 PM.

          Comment


          • Originally posted by edin日本 View Post
            I believe there is a boilerplate document That would have a spaces to insert the name of the suspected tax dodger, the alphanumeric code of the tax law/agreement the perp is accused of breaking, a place for the investigating officer's name and off it goes. A week later the IRS, Revenue Canada or the Grand Hall of the Inquisition of the Kingdom of Karedonia replies with a data packet containing all of your banking info for the country in question.

            All the NTA needs to make use of it is to get notification from your bank that you've transferred in excess of \100K outside the country. Remember that the banks, Western Union etc always ask those nitpicky little questions?


            If NTA has good reason to suspect you're doing something dodgy then yes, you're sure to get audited.

            Comment


            • O.k. so I just got off the phone again with the IRS and was told....

              If NTA wants a copy of my tax returns they need to submit a 4506T which I must sign.

              I then asked can't NTA request a copy of my tax returns without my knowledge?

              The answer was no they need my **signature.

              FATCA, pertains to sharing banking info and not my tax return.
              http://www.irs.gov/Businesses/Corpor...forUSTaxpayers

              I didn't ask what steps NTA needs to access my U.S. BOA account but I don't have much money anyway.

              My concern was my US return.

              So fu-k NTA.



              **I found it strange NTA can't do so without my signature but didn't press the issue.

              The fact that my tax information is not readily given was good enough.

              Comment


              • Originally posted by Brown Cow View Post
                If overseas income is targeted then foreigners will come under more scrutiny by dint of the fact they more commonly have overseas income. In fact, it is reasonable to suppose that most resident foreigners have overseas income and inheritances.
                Exactly, and the tax office knows this. How would I look for "targets", if I have limited resources? I would look for long-term residents with a "considerable" income in Japan, but never have declared any income abroad.

                But then I guess, they are more interested in the really big fishes, like this one reported today at NHK and everywhere:

                Real Estate Tycoon Nabbed For Allegedly Evading Tax

                TOKYO (Kyodo)--Tokyo prosecutors arrested on Tuesday Japanese real estate tycoon Genshiro Kawamoto on suspicion of dodging over 800 million yen in corporate tax.
                http://e.nikkei.com/e/fr/tnks/Nni20130305D05JF714.htm

                800 million yen dodged? I guess to go after such people makes more sense for the taxman than hunting a 6 MJPY per year foreign English teacher.

                Comment


                • Originally posted by chainbolt View Post
                  Exactly, and the tax office knows this. How would I look for "targets", if I have limited resources? I would look for long-term residents with a "considerable" income in Japan, but never have declared any income abroad.

                  But then I guess, they are more interested in the really big fishes, like this one reported today at NHK and everywhere:



                  http://e.nikkei.com/e/fr/tnks/Nni20130305D05JF714.htm

                  800 million yen dodged? I guess to go after such people makes more sense for the taxman than hunting a 6 MJPY per year foreign English teacher.
                  A big fish like that may come along once a year. So, for the other 11 months the little nebbishes at the tax office have to check all the tax returns of the small fry for anything that may turn up.

                  Comment


                  • Originally posted by chainbolt View Post
                    Exactly, and the tax office knows this. How would I look for "targets", if I have limited resources? I would look for long-term residents with a "considerable" income in Japan, but never have declared any income abroad.

                    Just got off the phone with the Bank of America.

                    For NTA to access my BOA account information they will need a court order.

                    So.... I don't know about other countries but it's not easy at all for NTA to snoop around the overseas accounts/tax returns of Americans living in Japan.
                    Last edited by Ken44; 2013-03-06, 04:39 AM.

                    Comment


                    • Originally posted by Ken44 View Post
                      Just got off the phone with the Bank of America.

                      For NTA to access my BOA account information they will need a court order.

                      So.... I don't know about other countries but it's not easy at all for NTA to snoop around the overseas accounts/tax returns of Americans living in Japan.
                      Doesn't the NTA have a blanket court order in place that covers all bank accounts? And if not - just how hard do you think it would be for the NTA to obtain a court order? I suspect it would be a a very minor process...

                      Comment


                      • Originally posted by TJrandom View Post
                        Doesn't the NTA have a blanket court order in place that covers all bank accounts? And if not - just how hard do you think it would be for the NTA to obtain a court order? I suspect it would be a a very minor process...


                        O.k. so I called BOA again (I'm in the States) and was again told NTA needs a court order as does the IRS.

                        I then asked what are the procedures to obtain such a order and was told it depends on where the request is filed (not sure what that meant. I thought it would go through the Fed. court.) In any event accessing someone US bank account without the account holders consent is not easily obtained.

                        Now, since I was told the IRS also need obtain a court order I called the IRS and asked what they had to say.

                        I was told in the event of possible tax evasion the IRS is required (as well as NTA) to provide proof of wrong doing before a court will grant access to a US bank account.

                        I then asked is the filling procedure fairly straightforward and was told that depends on the amount documentation the IRS (or NTA) can provide that tax fraud is being committed.

                        Again I don't know about other countries but this business of "Humm..... I'll bet the gaijin is hiding something. He's been here for years... let's run an audit" just isn't' going to fly without proof in the United States.
                        Last edited by Ken44; 2013-03-06, 10:04 AM.

                        Comment


                        • I can't help but wonder if you are asking the right questions. If you are then the FATCA agreement and the official announcements are all just window dressing. In fact the NTA can't get anything at all without a court order. The US is not agreeing to the routine and automatic sharing of information at all.

                          For example, you asked the IRS if the NTA could see a copy of your tax return and they said no. Or at least not without your consent. However, the NTA wouldn't be asking for that. All they would ask for is the bottom line. How much your income was and how much tax you paid.

                          BoA and other banks/investment house presumably report details of interest and dividends earned by their account holders to the IRS every year. Often they will do so because they have deducted tax at source and are passing the money to the IRS. It has to arrive with a name attached. They don't grant the right to "access" accounts or give details but they do report how much people have earned.

                          According to the FACTA agreement the member countries agree to share that sort of information on a routine, on demand, basis in order to fight tax evasion for mutual benefit. That doesn't mean they can examine tax returns or go through accounts with a fine tooth comb but it does mean they can find out quickly and easily what your income was from various sources and how much tax you have paid on that income. In theory anyway. Perhaps you are right. The US is declaring one thing in public but doing another in practice. I kind of doubt it on this though.
                          Last edited by Brown Cow; 2013-03-06, 10:20 AM.

                          Comment


                          • Originally posted by Ken44 View Post
                            O.k. so I called BOA again (I'm in the States) and was again told NTA needs a court order as does the IRS.

                            I then asked what are the procedures to obtain such a order and was told it depends on where the request is filed (not sure what that meant. I thought it would go through the Fed. court.) In any event accessing someone US bank account without the account holders consent is not easily obtained.

                            Now, since I was told the IRS also need obtain a court order I called the IRS and asked what they had to say.

                            I was told in the event of possible tax evasion the IRS is required (as well as NTA) to provide proof of wrong doing before a court will grant access to a US bank account.

                            I then asked is the filling procedure fairly straightforward and was told that depends on the amount documentation the IRS (or NTA) can provide that tax fraud is being committed.

                            Again I don't know about other countries but this business of "Humm..... I'll bet the gaijin is hiding something. He's been here for years... let's run an audit" just isn't' going to fly without proof in the United States.
                            Well, we can put one in the Plus column for the USA!

                            In Canada, a court order is also required to access personal info. As for cooperation between our governments, I would say there is tacit agreement based on my firsthand tale of woe.

                            Update: a number of posts earlier in this thread, I wrote that there is a 25% withholding tax imposed by the CRA (Canada's IRS or NTA) on income derived abroad (offshore to be exact -- whether it is applied more broadly, I do not know) from Canadian registered companies. I got clarification. This only applies to dividend income, not capital gains.

                            Comment


                            • Originally posted by Brown Cow View Post
                              I can't help but wonder if you are asking the right questions....For example, you asked the IRS if the NTA could see a copy of your tax return and they said no. Or at least not without your consent. However, the NTA wouldn't be asking for that. All they would ask for is the bottom line. How much your income was and how much tax you paid.
                              Sorry but the IRS doesn't work that way.

                              NTA would still need to submit a 4506T to obtain my tax info.
                              http://forum.gaijinpot.com/showthrea...=1#post1308176



                              Originally posted by Brown Cow View Post
                              BoA and other banks/investment house presumably report details of interest and dividends earned by their account holders to the IRS every year. Often they will do so because they have deducted tax at source and are passing the money to the IRS. It has to arrive with a name attached. They don't grant the right to "access" accounts or give details but they do report how much people have earned.
                              Again this all falls under my tax info and a 4506T will need to be submitted.
                              Originally posted by Brown Cow View Post
                              ...
                              According to the FACTA agreement the member countries agree to share that sort of information on a routine, on demand, basis in order to fight tax evasion for mutual benefit. That doesn't mean they can examine tax returns or go through accounts with a fine tooth comb but it does mean they can find out quickly and easily what your income was from various sources and how much tax you have paid on that income. In theory anyway..
                              Yes, but I am not required to submit a Form 8938 because it doesn't apply to me.
                              Go read the rules again
                              http://www.irs.gov/Businesses/Corpor...forUSTaxpayers

                              Originally posted by Brown Cow View Post
                              ...The US is declaring one thing in public but doing another in practice. I kind of doubt it on this though.
                              Look at the 8938 It's FOREIGN assets. Not U.S.
                              http://www.irs.gov/uac/Form-8938,-St...nancial-Assets
                              Last edited by Ken44; 2013-03-06, 11:11 AM.

                              Comment


                              • Originally posted by Brown Cow View Post
                                ...According to the FACTA agreement the member countries agree to share that sort of information on a routine, on demand, basis in order to fight tax evasion for mutual benefit.
                                Mutual benefit?

                                FACTA was implemented for the sole purpose of the US government to track down additional revenue.

                                The FACTA agreement between various countries and the US basically requires non-US financial intuitions to report earnings/holding of US citizens.

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