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.”

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“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.”

http://www.fxcmmarkets.com/legal/fatca/

“Onboarding” (?)

Fun, fun, fun, and yes, Daddy is taking the T-bird away, on July 1, 2014.

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