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Be wary of your investments -- the TAXMAN is watching

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  • Originally posted by Ken44 View Post
    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.
    Rubbish. Have a look at the links I posted earlier.

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    • So where in the link spell out the details of this so-called "reciprocal agreement?" This year some Americans living in Japan will be required to submit a 8938 with their US tax return and Japanese financial institutions (in theory) are supposed to report any earnings of US citizens that fall under the guild lines of FATCA to the US. That's pretty much the deal.
      http://www.treasury.gov/press-center...20US-Japan.pdf

      On the other hand if NTA wants my US tax or banking info they's got to dance to a whole different tune.
      Last edited by Ken44; 2013-03-06, 01:09 PM.

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      • ..........
        Last edited by Ken44; 2013-03-06, 12:47 PM. Reason: double post

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        • Actually, what's reciprocal about the FATCA/Japan agreement is the US. will easily pass along tax requests by NTA regarding Japanese who live in the US.

          Just as NTA will freely give the IRS with info. on me should it come to light I may be hiding assets in Japan.
          Last edited by Ken44; 2013-03-06, 01:44 PM.

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          • 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...
            They only need to get an OK from a prosecutor to investigate. They don't have court orders in Japan, everything gets run by a prosecutor for rubberstamping. Annnnd, guess what! The NTA have prosectors inhouse working for them. (i found that out the hard way)

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            • Originally posted by Ken44 View Post
              So where in the link spell out the details of this "reciprocal agreement?" This year (some) Americans living in Japan will be required to submit a 8938 with their US tax return and Japanese financial institutions (in theory) are supposed to report any earns of a US citizens the fall under the guild lines of FATCA to the US government. That's pretty much the deal.

              http://www.treasury.gov/press-center...20US-Japan.pdf

              On the other hand if NTA wants my US tax or banking info they's got to dance to a whole different tune.
              I beg your pardon. I was conflating FATCA with JITSIC. They do overlap but you are right to say the primary purpose of FATCA is for the IRS to recover tax owed by Americans on income generated outside the US. However to implement that they need agreements and to get agreements you have to offer things in return. Hence from the link to the press release earlier:

              "Japan is supportive of the underlying goals of FATCA, and is interested in exploring a framework for intergovernmental cooperation to facilitate the implementation of FATCA and improve international tax compliance. The United States affirms its willingness to cooperate with Japan by collecting and exchanging information under the existing income tax convention on accounts held in U.S. financial institutions by residents of Japan."

              That seems clear agreement for mutual benefit. It dovetails with another agreement and also an organisation with permanent staff known as JITSIC. This was set up for the express purpose of enabling the routine exchange of information to combat tax evasion across national borders. The US is a founder member of JITSIC and Japan joined within a year of it being established back in 2004.

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              • Originally posted by Ken44 View Post
                Actually, what's reciprocal about the FATCA/Japan agreement is the US. will easily pass along tax requests by NTA regarding Japanese who live in the US.

                Just as NTA will freely give the IRS with info. on me should it come to light I may be hiding assets in Japan.
                Well you may be right and that may be the primary purpose but that's not what the press statement said. It said:

                "The United States affirms its willingness to cooperate with Japan by collecting and exchanging information under the existing income tax convention on accounts held in U.S. financial institutions by residents of Japan."

                I would suggest that if they meant "Japanese citizens" living in Japan then they would have said so.

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                • Originally posted by Brown Cow View Post
                  Well you may be right and that may be the primary purpose but that's not what the press statement said. It said:

                  "The United States affirms its willingness to cooperate with Japan by collecting and exchanging information under the existing income tax convention on accounts held in U.S. financial institutions by residents of Japan."

                  I would suggest that if they meant "Japanese citizens" they would have clearly stated so.

                  And I would suggest if they meant to include US citizens this would have been clearly stated.

                  FATCA-Japan agreement is about the US going after its own citizens who may be hiding assets overseas and Japan helping out.

                  The reciprocal idea is the US will help Japan catch Japanese who may hiding funds in the US.

                  NTA can't say, "We'd like to audit this American. He's a resident of Japan so please treat him under the FATCA agreement the same as you would someone Japanese."

                  Not going to happen.

                  I am a resident of Japan but I am still a US citizen.
                  Last edited by Ken44; 2013-03-06, 04:04 PM.

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                  • While in Japan the only authority I answer to is Japanese, if in America the only authority I answer to is me, myself and I !

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                    • Originally posted by BackDoor_Man View Post
                      While in Japan the only authority I answer to is Japanese, if in America the only authority I answer to is me, myself and I !
                      You wish! The USA is becoming the ultimate in nanny states.

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                      • Originally posted by BackDoor_Man View Post
                        While in Japan the only authority I answer to is Japanese, if in America the only authority I answer to is me, myself and I !
                        They for sure have the right to investigate and if deemed necessary audit anybody residing in Japan, to go back 7 years, to demand to be presented with all accounts and assets abroad, and if they find anything suspicious or unusual have the right (and actually do so) to ask the foreign tax authority for assistance.

                        There is one more aspect one should consider, again stated by my tax accountant: While currently chances for small and medium income earners to be investigated/audited are "very small", there is the clear, stated intention by the Japanese tax authority to pay much more attention to foreign income and there is the tendency to extend cooperation and exchange of information between OECD countries. With other words, what has been staying "in the dark" until today, might very well get exposed in the future.
                        Last edited by chainbolt; 2013-03-07, 05:47 PM.

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                        • Originally posted by chainbolt View Post
                          They for sure have the right to tax audit or investigate anybody residing in Japan at any time, go back 7 years, to demand to be presented with all accounts and assets abroad, and if they find anything suspicious or unusual they have the right and actually do so to ask the foreign tax authority for assistance.
                          And that sounds like the true state of play. We went to the office today and sorted out our tax for last year. It was my sixth year so income "in abroad" is taxable for the first time. We added it to the form and it didn't hurt that much. Leave it for five years or so and it would.

                          So, hopefully that puts me a long way down the list of people who might have to explain themselves and I can remit as much money as I please without worrying about it.

                          Others may have a different view but that's how I like to do it. I have better things to do than messing around with the tax authorities.

                          Comment


                          • Originally posted by chainbolt View Post
                            They for sure have the right to investigate and if deemed necessary audit anybody residing in Japan, to go back 7 years, to demand to be presented with all accounts and assets abroad, and if they find anything suspicious or unusual have the right (and actually do so) to ask the foreign tax authority for assistance.

                            There is one more aspect one should consider, again stated by my tax accountant: While currently chances for small and medium income earners to be investigated/audited are "very small", there is the clear, stated intention by the Japanese tax authority to pay much more attention to foreign income and there is the tendency to extend cooperation and exchange of information between OECD countries. With other words, what has been staying "in the dark" until today, might very well get exposed in the future.


                            All of which means if you're concerned you need to understand how NTA goes about accessing your tax/banking information back home.

                            In the case of a US citizen unless NTA has clear documentation you're doing something dodgy it's not going to be easy.

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                            • Originally posted by edin日本 View Post
                              ..., everything gets run by a prosecutor for rubberstamping. ...
                              Yes - rubberstamping - a much better way of expressing what I was thinking...

                              As for the US - the IRS may be required to obtain a court order - but the Homeland Security folks would be working under the same type of rubberstamping process - and BOA is prevented by law from disclosing to the customer that his information has been requested. I wouldn't trust the IRS or BOA to honestly answer Ken's questions.

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                              • Originally posted by Brown Cow View Post
                                ...We added it to the form and it didn't hurt that much. Leave it for five years or so and it would.

                                Well, if the additional tax bite begins to hurt after five years my guess is it's too late.

                                NTA now has you and might easily want to know why should you decide to stop declaring income earned abroad.

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