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Be wary of your investments -- the TAXMAN is watching

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  • #91
    The US IRS audited me years back. Why?

    Because my dumb-asz accountant failed to report some $200 I earned while in the States.

    The US IRS audited an acquaintance of mine this year. Why?

    Because he fail to report the sale of some stock transaction.

    So.....

    Originally posted by Super Grover View Post
    ...This is written to caution some who may not be aware that the folks in the tax agency have become very vigilant in tracking money being sent out of Japan. This is not hearsay. I have actual incidents recounted to me in the past few months. Foreign teachers seem to be being targeted.
    Why?

    What was the reason given for these teachers being audited?

    Originally posted by Morton View Post
    Well, I just got audited....

    What reason were you given for the audit?




    Originally posted by edin“ú–{ View Post
    Also consider, if you have a business whether small or large and you buy product from overseas on a regular basis-expect to see the taxmen on a regular basis....
    Sure, I can understand this. I own investment property in the States and have copies of all necessary documents needed to back up my write-offs.

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    • #92
      Ken, why was I audited?

      I guess my local Japanese bank informed the NTA about my overseas remittances. I've sent legitimate savings "home" on a regular basis since I came to Japan.

      What caused me a problem was that the NTA wanted to know where the money was. I had invested it and was still investing it but, and this is a big but, I made a switch 3 years ago. This switch which other OECD countries apparently do not tax (and neither did Japan until 2004) is now seen by the NTA as taking profits. So despite not repatriating the money to either Japan or my home country I was heavily taxed due to a fund switch. All I was doing was trying to protect myself from the economic mess of the last few years.

      To answer your question, I really don't know what caused the audit but I'm guessing it was a mixture of remittances, my turn and a more proactive approach by the NTA. I also have my own business and I'd never been audited in 10 years so maybe it was simply my turn. The NTA have been ignoring us for years now they have been educating themselves and are targetting us. Most (all) of us are quite ignorant about the ins and outs of Japanese tax law so if they look hard enough they will find something.

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      • #93
        If you don't mind my asking (roughly) how much were you sending home each month?
        Last edited by Ken44; 2010-12-18, 07:46 PM.

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        • #94
          Originally posted by Morton View Post
          I guess my local Japanese bank informed the NTA about my overseas remittances. ...
          Yep, that no doubt caused you to get flagged.

          What I do is take out (from the J-bank where my teaching salaries are deposited) 500,000 yen per month maybe 7-8 times a year and deposit it into my Citibank account.

          Next I transfer the money to my US account.

          Other months I take the money to the post office and get a postal money order which I send to my mother in the States. The money is used to help pay for her living expenses and of course I keep copies. This year I sent back $27,000 which is deposited into her account and later given to me (or most of it anywayc)

          My income is such that sending back 5 million yen a year is justifiable and roughly accounted for. (The Japanese have no way of knowing how much I spend on my winter/summer vacations)
          Last edited by Ken44; 2010-12-19, 08:52 AM.

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          • #95
            Originally posted by Ken44 View Post
            If you don't mind my asking (roughly) how much were you sending home each month and was the money being transferred vie a J-bank to your US account back home?
            I'm not American.The money was going straight from my Japanese account to my UK account. I wasn't hiding it, there was no attempt at deception, the paper trail was clear, from me to me.

            I sent money home at most three times a year, normally once. This would depend on things like exchange rate, whether I had things to pay in the UK and the like. As for the amount it wasn't insignificant but not millions of yen either. Both me and my wife have above average incomes so as savings for a couple it wasn't a super large amount.

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            • #96
              Originally posted by Morton View Post
              I'm not American. The money was going straight from my Japanese account to my UK account. I wasn't hiding it, there was no attempt at deception, the paper trail was clear, from me to me.
              Yeah, the J-bank no doubt reported the transfers and the J-tax officials decided to take a look at where the money was going.

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              • #97
                Originally posted by Morton View Post
                I assumed so, too but my accountant told me the reality and the burden of proof is much higher. There is a big difference between tax avoidance and tax evasion. The accountant used a Japanese adjective to describe what is considered tax evation (I can't recall it at present).
                probably ’EÅ datsuzei for evasion

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                • #98
                  Anyone know if a tax audit requires you to declare *old* investments - e.g. more than 7 years (which are still there, going up/down in value, but have not been encashed)?
                  Or can you just say nothing about old investments.

                  The basic idea with offshore investments (which I understood to be perfectly legal) was to *defer* tax payments, not avoid, by postponing encashment till you are "retired", i.e. till you have a low income or no other income (so your tax payments would be lower).

                  Comment


                  • #99
                    Originally posted by O'Hanlon View Post
                    The law on PR got tighter in 2008. Prior to applying, I was told that the benefit was visa renewal every year is eliminated, re-entry permit laws remain unchanged, but disclosure of total assets is required for PR. This is just what I recall being told March 2008. The laws may have changed, so better to check with your local immigration. office.
                    I think a couple of you tried to answer the question, but I have to admit I still don't get it.

                    If I'm planning on being a permanent resident, then I should be claiming all over-seas income now, even though I'm not a PR yet?

                    Or do I just need to start claiming that income once I get PR?
                    Planning to get your PR status (visa change) is irrelevant. 5 years+a day and for tax purposes you are a p.r.

                    Comment


                    • Originally posted by Ken44 View Post
                      The US IRS audited me years back. Why?

                      Because my dumb-asz accountant failed to report some $200 I earned while in the States.

                      The US IRS audited an acquaintance of mine this year. Why?

                      Because he fail to report the sale of some stock transaction.

                      So.....



                      Why?

                      What was the reason given for these teachers being audited?




                      What reason were you given for the audit?






                      Sure, I can understand this. I own investment property in the States and have copies of all necessary documents needed to back up my write-offs.

                      I asked them. No reason given other than they wanted to know about the money transferred.

                      Comment


                      • All of this strikes me as tax legislation that was meant (and sold to the public as) keeping tabs on how the rich move and keep their money, but in reality it's middle class people like us that get screwed. People, through little fault of their own, are losing money to tax and penalties that was meant to help the future of their kids and for their retirement, and is instead going into the river of rapacious government spending.

                        Comment


                        • Sounds like someone should write a book on Japanese tax law and give solid tax advice on how to minimize paying taxes.

                          If some intelligent type would write it in either English or Japanese, I'll get it translated into the other language, lay it out, include all the graphics, graphs, charts, etc, format it for the Kindle, Galapagos, iPad, eReader, Android and Softbank digital book readers, post it in all the big online digital bookstores and only take, say, 10% of each sale for my efforts.

                          There would of course need to be followup editions to keep current of Japanese tax law changes, investment opportunities and the like.

                          Comment


                          • Originally posted by Super Grover View Post
                            I asked them. No reason given other than they wanted to know about the money transferred.
                            Again it was very likely because the J-bank notified the J-tax authorities about their overseas transactions that got them flagged. I will contact Citibank next week but I don't think they report such transactions unless they are very large. (I think 30 million yen.)

                            Comment


                            • Originally posted by Teacher101 View Post
                              All of this strikes me as tax legislation that was meant (and sold to the public as) keeping tabs on how the rich move and keep their money, but in reality it's middle class people like us that get screwed. People, through little fault of their own.....
                              I agree except that people really do need to understand the law esp. if they have a bit of money. I'm just fortunate I haven't been transferring income from my J-bank into my US account or I likely would have been flagged a while back. I assumed you would need to transfer at least 1 million yen to have a J-bank notify the J-tax authorities about the transaction but apparently that's not how it works.

                              In fact I wasn't even aware of the Japanese "world-wide" income tax laws until maybe ten years ago and actually almost told a J-tax official about my overseas investments when I was asked if I own anything in the US.

                              Comment


                              • Originally posted by Ken44 View Post
                                Again it was very likely because the J-bank notified the J-tax authorities about their overseas transactions that got them flagged. I will contact Citibank next week but I don't think they report such transactions unless they are very large. (I think 30 million yen.)
                                Absolutely incorrect on 30 million, sorry. Read my p.m.

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