May 26, 2014
In an unexpected twist, many US citizens living abroad may be required to file W-9’s, even it they are FULLY EXEMPT from FATCA. US citizens living abroad with some foreign Bank accounts, some foreign brokerage accounts, and FOREX trading accounts may soon be getting notices from their banker/broker/FOREX exchange trading firm(s) to prove/certify that the client (you) are exempt from FATCA. Some foreign banks are already asking their US citizen clients to fill out W-9’s … For details on whether you are exempt from FATCA, see: FATCA Fallout for US Expats Living Abroad and ~ FATCA Requirements for Expats with over $50,000 total in Foreign Accounts and Trusts
Unfortunately, even if you are exempt, your foreign bank or brokerage may still have IRS requirements to have you fill out W-9, (July 1, 2014), to certify that you are exempt from FATCA. (US citizens who work as employees of foreign brokerages or foreign banks may also have to fill out a W-9A.)
Here is one good description of the details on this new IRS requirement (provided by the FOREX firm “FCCM”):
“In what cases do I need to submit a Form W-9/W8-BEN/W8-BEN-E to FXCM?
In order to determine if tax withholding is applicable, FXCM must authenticate the residency of its accountholders. For instance, if an account is held by a non U.S. citizen or non U.S. registered business entity, FXCM may require a Certification of Foreign Status, such as Form W8-BEN or W8-BEN-E for the account. Similarly, if an account is held by a U.S. citizen, U.S. resident alien or U.S. business entity, the accountholder may be required to certify his/her tax status by completing a Form W-9.”
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“How will I know what Form to complete?
U.S. citizens or corporations may complete a W-9 form.
Instructions for non-US citizens or corporations can be found in detail here, and are generally outlined below for your convenience:
~ W-8BEN – non-US individual (unless individual falls under below classification)
~ W-8BEN-E – non-US entity (unless entity falls under below classification)
~ W-8ECI – non-US person with claim that income is effectively connected with the conduct of a trade or business in the United States
~ W-8IMY – non-US intermediary, non-US flow-through entity, or non-US trust
~ W-8EXP – non-US government, international organizations, non-US central banks of issue, non-US tax-exempt organizations, non-US private foundations, or governments of US possessions
The outline provided above is not intended to be exhaustive and is not warranted or guaranteed by FXCM as to its completeness or accuracy. For assistance with selecting and completing the tax Form applicable to you, please consult a qualified tax professional.”
“How does FATCA impact FXCM and its clients?
To be FATCA compliant, FXCM must register its own FFIs with the IRS. In addition, FATCA regulations require FXCM to review existing onboarding and withholding processes and enhance them to comply with the regulations.
As part of an enhanced client onboarding process, additional documentation may be requested for clients holding accounts at FXCM. For instance, FXCM may need to obtain tax forms (i.e. W9/W8 series documents) after July 1, 2014, from both new and existing accountholders in order to identify the client’s tax classification.”
Fun, fun, fun, and yes, Daddy is taking the T-bird away, on July 1, 2014.
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Feel free to copy while giving proper attribution: YucaLandia/Surviving Yucatan.
© Steven M. Fry
When I changed my decades old Vanguard IRA account address to my current Mexican address, IRS rules compelled the Vanguard Group to require this U.S. citizen to file a W-9 through Vanguard. .
The Great Hollowing Out soon to begin.
Hey uncle joe,
The Great Hollowing Out started during the Republican Nixon administration overspending, starting up our post WW2 deficit.
The Great Hollowing Out ballooned with Reagan raiding Social Security Trust funds for $150 billion to $225 billion a year to try to cover his doubling of the Administrative branch of the govt, his signing legislation that doubled our deficits, and tripled our National debt.
The Great Hollowing Out took off like a rocket with Reagan’s tax law changes and Bush’s tax law changes that cut taxes paid by the rich to just 14% (vs 27% paid by working people), ultimately shifting $3 TRILLION from the US middle class and lower class to the rich.
Consider that half of Walmarts workers live in poverty, just so the Walton family could build their fortune from $114 Billion to over $140 billion in the last 2 years. Walmart could move ALL its workers out of poverty by paying fair wages, if they only took $14 billion a year in profits, versus the $16 billion they pay-out to the already-wealthy…
Ross Perot was right about the “Giant Sucking Sound”, as Reagan’s and Bush’s changes to banking and investing rules allowed 40:1 margin borrowing, Credit Default Swaps (where I can buy an insurance policy on something I don’t own, and collect the $$ tax free when there is a loss), Naked Short Selling (where Goldman Sachs et al could issue 8 million VIRTUAL shares of Bear Stearns stock – and make $100’s of millions on stock that was never issued by Bear Stearns and yes, Bush allowed it to continue as the Wall Street vultures printed 30 million VIRTUAL shares of Lehman Bros stock in short sales – both causing Lehman and Bear Stearns to collapse).
The Great Hollowing Out became a rocket to Jupiter in the Republican Bush’s and “Conservatives” changes to investing and banking rules that caused a total of $7 trillion of leveraged losses worldwide.
The Great Hollowing Out left the solar system with Republican Bush’s deregulation of banking and investing that has led to a total of over $50 TRILLION in highly leverage debt worldwide… Estimates say that this $50 TRILLION of debt created by “Conservative” policies is leveraged at 30:1 rates on average….
This $50 TRILLION of Republican Bush “Conservatives” policies debt is more than all the world’s GDPs combined….
What “Great Hollowing Out” is left…
that can compare to the rich raiding the Government coffers for the past 40 years?
Funny? or sad,