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Be wary of your investments -- the TAXMAN is watching

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  • Originally posted by Super Grover View Post
    Absolutely incorrect on 30 million, sorry. Read my p.m.
    Yeah, thanks for the p.m.

    I just called Citibank and only transactions over 1 million yen are reported to the J-tax office.

    (0120-110-330 and hit 0 for the operator.)
    Last edited by Ken44; 2010-12-19, 03:19 PM.

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    • Originally posted by Ken44 View Post
      Yeah, thanks for the p.m.

      I just called Citibank and only transactions over 1 million yen are reported to the J-tax office.

      (0120-110-330 and hit 0 for the operator.)
      I have not called them to verify - but US banks report US$3k to the IRS/Homeland Security Administration - so the IRS can be sharing information on these lower value transfers with the NTA too.

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      • Originally posted by TJrandom View Post
        I have not called them to verify - but US banks report US$3k to the IRS/Homeland Security Administration - so the IRS can be sharing information on these lower value transfers with the NTA too.
        I use BOA which only reports transactions over $10,000.

        Where did you get that three grand from?

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        • Originally posted by Ken44 View Post
          I use BOA which only reports transactions over $10,000.

          Where did you get that three grand from?
          It is part of the Patriot Act - which also prevents the reporting agencies from telling you that they have reported - libraries, banks, credit card companies, etc. I wouldn't trust what BOA, or any other bank tells you about what they report/ed.

          For a while, Visa was making more money off of their reporting (US$1/transaction reported) than they were off of other fees. Of course they has significant development and processing costs to do it - but I don't know about the banks - that is, whether they get paid for their efforts. But the salient point is that it was all "top secret" - I was in a position of knowledge at that time.

          Last May - while in the US I watched a CSPAN congressional hearing - where the IRS was being grilled by committee congressmen over "Why will it take as long as two years for foreign banks to come into reporting compliance?" The compliance they were talking about was for foreign banks with operations in the US (Sumitomo, Mitsui, etc.) to report on all US citizen transactions/balances of over $3k (or maybe it was $2k). This was apparently Patriot act as well as IRS compliance (tax).

          The Patriot Act is long and hard to read - but I did so at one time, and suggest you might want to check it out.

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          • Keep the money under 10 grand and if there's nothing suspicious about where the cash is coming from or where it's going you should be fine:
            http://www.ehow.com/video_5103478_tr...port-irs_.html



            From another on-line site dealing with the subject:

            Hey, new here, but actually work for a bank, and, am a teller.

            The rule is, anything over $10,000 in cash, either a deposit or withdrawal gets reported. The form is a called a CTR, if the bank never asked you to fill it out is because it is either electronic or they have all the info in your account to fill it out themselves (which they're supposed to do already on your behalf). They just look up the info in your account, fill it out and fax it to their back office who then reports it. The form itself isn't a problem, neither does it mean you will get audited, its merely a disclosure, if there's a bunch of these in a year and you're not a business, then there may be some questions, however like I said, they can trace the money from your info, your job/business, the account activity so it all gets done w/o the person even knowing.

            The other way to run into this is if you're buying a cashier check or a bunch of money orders for over $3000, the CTR gets triggered and again, if its electronic, you never even see it, it pulls all info from your account and fills it in, no paperwork.

            One misconseption most people have is that it triggers at $10,000 and $3000, however this isn't true, it triggers at $10,000.01 and $3000.01 so stop moving money in chunks of $9900, because that just SCREAMS that you're doing something shady.
            Last edited by Ken44; 2010-12-20, 11:09 AM.

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            • Originally posted by Ken44 View Post
              ...One misconseption ...
              Ken,

              I am a lazy researcher – so only spent 10 minutes or so looking for a reliable reference – but by using Google and this search parameter "Patriot Act" 3,000 transaction reporting, I found many sites that all seemed to reflect the same reporting requirements. It seems that the $3,000 limit is for monetary in instruments – Money orders, travelers checks, cashierfs checks. Here is what Wiki says:

              http://en.wikipedia.org/wiki/Bank_Secrecy_Act

              Monetary Instrument Log (MIL) - Cash purchases of monetary instruments, such as money orders, cashier's checks and travelers checks, totaling from $3,000 to $10,000, inclusive.

              So I am probably wrong on the $3,000 being for all transactions. But then again - maybe not. A teller wouldn't know what the back office is doing - just as in the Visa reporting I mentioned - out of 27,000 employees, only slightly less than 100 knew, and then again - there was that CSPAN program I saw. Either way of course it doesn't matter to me - as I do not launder money, contribute to militant groups, or evade taxes....

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              • Originally posted by TJrandom View Post
                So I am probably wrong on the $3,000 being for all transactions. But then again - maybe not....
                While anything is possible itfs likely the teller is correct. Keep wire transactions around 7, 8 grand, make sure there isn't anything dodgy about where the funds are coming/going and you should be fine.

                Originally posted by TJrandom View Post
                Either way of course it doesn't matter to me - as I do not launder money, contribute to militant groups, or evade taxes....
                Neither do I and I have little to fear from the US IRS as my taxes are in order. As far as Japan is concerned I don't transfer money to the US via a J-bank. I use Citibank and they only report wire transfers over 1 million yen which explains why I've never had any trouble.

                Yes, the taxman is watching.

                He's always been watching

                This thread should be a heads up for many gaijins and I'll make sure when I send back J-postal money order that my mother keeps the deposits under $2500 per shot. I usually send back $5000-$7000 and the money orders are $700 or so each.
                Last edited by Ken44; 2010-12-21, 06:00 PM.

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                • Indeed a very big heads up, which is why I started it. I think it will be very useful for all of us to continue considering and presenting strategies to keep the Taxman away or at least at bay. Along with what I started, I think it will be worth examining in careful detail what sorts of things can happen once some of us decide to return to our various countries. What are the ramifications of staying and going?
                  I mentioned above what will happen to a couple who returns (goes) and one of them unfortunately dies within 5 years. No doubt, 99.9% of people have no idea of this abomination. What else don't we know?
                  Now, what if you are eligible for pension? You have worked here for many years and you want to get your pension. You move. Can that be sent, gotten or what happens? I suppose there is a plethora of rules designed to prevent transfers in spite of treaties/agreements. But I am just thinking out loud at this stage (was planning to bone up on this in another few years).All in all, I think people who are making a decent living here need to be very aware of what is going on as regards taxation and retirement issues.

                  So far this thread has been civilized and informative. I hope it can develop further.

                  SG

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                  • Indeed I've been following this thread with interest and with a little bit of horror too truth be told. I'm not from the US. and I've only ever sent back payments of about 3,000 pounds or so at any one time but I have accumulated a reasonable amount of savings from that in various investment accounts. I don't quite get how money from earnings I already paid tax on here can then be taxed again when interest rates here are virtually non-existent. Then again I haven't transferred any money back to Japan. Anything I have of worth is offshore. I've filled in all the paperwork correctly over the years but now I have a sneaky suspicion, maybe unfounded, that since I'm female and not the 'breadwinner' that gaijin males are having a harder time of things in these new tax investigations. Not that I'm going to be complacent but do you think that the foreign males are having a harder time of things from the tax office or will it be my turn soon enough ?

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                    • As we're coming up to tax returns time, can I get some clarification on something?

                      On the tax return form, are we supposed to state (a) the total amount of savings account bank balances overseas [and which was tax-paid in Japan before transfer], or (b) ONLY any income such amounts earn?

                      Comment


                      • Originally posted by Keeptrying View Post
                        As we're coming up to tax returns time, can I get some clarification on something?

                        On the tax return form, are we supposed to state (a) the total amount of savings account bank balances overseas [and which was tax-paid in Japan before transfer], or (b) ONLY any income such amounts earn?
                        I think the J-tax authorities want you to declare all income earned overseas. The income I earn from rental properties in the US for example has nothing to do with Japan. However, the fact that I am a resident of Japan means they conceivably can come after such income if it were discovered.
                        Last edited by Ken44; 2010-12-21, 09:02 PM.

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                        • Originally posted by renkachan71 View Post
                          Indeed I've been following this thread with interest and with a little bit of horror too truth be told. I'm not from the US. and I've only ever sent back payments of about 3,000 pounds or so at any one time but I have accumulated a reasonable amount of savings from that in various investment accounts. I don't quite get how money from earnings I already paid tax on here can then be taxed again when interest rates here are virtually non-existent. Then again I haven't transferred any money back to Japan. Anything I have of worth is offshore. I've filled in all the paperwork correctly over the years but now I have a sneaky suspicion, maybe unfounded, that since I'm female and not the 'breadwinner' that gaijin males are having a harder time of things in these new tax investigations. Not that I'm going to be complacent but do you think that the foreign males are having a harder time of things from the tax office or will it be my turn soon enough ?
                          Be careful. Hope you are not the first. If I were you, I would be thinking about what to do to mask my loot. Indeed I am thinking about this al lot.

                          The tax you paid is likely less than it would be here, so they would want the difference AND the penalties. It is such a windfall for them, like taking candy from babies -- and they have an insatiable sweet tooth.

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                          • Originally posted by Ken44 View Post
                            I think the J-tax authorities want you to declare all income earned overseas. The income I earn from rental properties in the US for example has nothing to do with Japan. However, the fact that I am a resident of Japan means they conceivably can come after such income if it were discovered.
                            Correct. If they believe that s.o. is deliberately concealing, they can assess whopping penalties. Truly, the latitude the NTA has is scary. It is worse than sarakin. I have been thinking about this exact point: Given that the shady loans industry is regulated, how is it that the NTA can assess more than them? My gut tells me that there is grounds for a class action suit. I would be willing to bet money that there is a nationwide campaign to get money from certain foreigners.

                            BUT, from this post until after the holidays, I want to wish everyone a MERRY CHRISTMAS and a HAPPY NEW YEAR. Fill your days with decent food, laughter and pleasant thoughts!

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                            • Originally posted by Keeptrying View Post
                              As we're coming up to tax returns time, can I get some clarification on something?

                              On the tax return form, are we supposed to state (a) the total amount of savings account bank balances overseas [and which was tax-paid in Japan before transfer], or (b) ONLY any income such amounts earn?
                              You declare the total amount of savings as assets. You declare the interest received on those savings as interest income.

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                              • Originally posted by iago View Post
                                You declare the total amount of savings as assets. ....
                                Yikes! This means that nearly every foreigner in Japan is breaking the tax law...

                                Nearly everyone of us has some sort of bank account / insurance fund / pension fund etc., and I would guess that very few of us declare all that stuff. Irrespective of tax, it is quite a hassle digging up all the paperwork.

                                And if you do declare all overseas stuff, it seems to me that this may like saying to the J tax office "please check me out", probably causing more hassle than keeping quiet about it.

                                So it's a case of risking not declaring everything, or of declaring everthing and having a lot of hassle and paying more taxes.

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