Money News from Capitol Hill and Brian Dunhill
Dunhill Financial, SPRL located in Brussels devoted to English-speaking expatriates residing in Europe. Brian is part American, educated in Florida and California and licensed in both states, with experience working for such firms as UBS, Lehman Brothers, and A.G. Edwards.The expats wanted to know more about dealing with their finances as residents of France and Brian Dunhill was there to talk about this and help ‘fill in the gaps.’ Brian and his father, Michael Dunhill (who also attended), are the principals in a financial planning firm —
Brian was introduced to me by the folks at Moneycorp (foreign exchange and international currency specialist). He was like a godsend arriving just at the moment when I needed help organizing my financial life so it would make some sense and let money work more for me than me for the money. It was also then that I realized I’m not the only one in town needing help, especially with the new FATCA legislation affecting American expats all over the world, so I asked him to speak about at yesterday’s Parler Paris Après Midi.
About 50 people came to hear what Brian had to say. He held them spellbound for over and hour and then was bombarded with questions. For those who don’t know what the Foreign Account Tax Compliance Act is, it may mean nothing to you if you do not hold bank accounts or other assets outside the U.S., but for those of us who do, it’s a big deal.
It’s a way for the U.S. to ‘crack down’ on tax evaders and recuperate billions of dollars that have been socked away in unreported foreign accounts, more by individuals than by corporations:
The Foreign Account Tax Compliance Act (FATCA) is a United States federal law that requires United States persons, including individuals who live outside the United States, to report their financial accounts held outside of the United States, and requires foreign financial institutions to report to the Internal Revenue Service (IRS) about their U.S. clients. Congress enacted FATCA to make it more difficult for U.S. taxpayers to conceal assets held in offshore accounts and shell corporations, and thus to recoup federal tax revenues. The FATCA is a portion of the 2010 Hiring Incentives to Restore Employment (HIRE) Act.
Here’s what Brian had to say (in a hand-out form):
In 2010, the Foreign Account Tax Compliance Act (FATCA) became law. The law is designed to increase compliance by US taxpayers with reporting requirements for foreign financial accounts. The legislation is extensive and affects both
taxpayers and foreign financial institutions that service
US persons (US citizens and US permanent residents). Key elements of the law include more onerous reporting requirements and higher penalties. Specific include:
In addition to the current FBAR reporting requirement whereby American citizens are required to report to the US Treasury any foreign financial assets worth more than $10,000, the new law requires Americans to separately report foreign holdings exceeding $50,000 to the IRS on Form 8938. Both reporting
requirements are triggered if assets exceed these amounts at any point in the year. The new IRS reporting requirements include detailed information about account holdings and transactions. Penalties for failure to file the FBAR or form 8938 start at $10,000 but can go much higher depending on account size and circumstances.
All non-US financial institutions will be required to make detailed reports to the IRS on accounts held by US persons, or be subject to a 30% withholding on all US sourced payments. The implication of this provision is that non-US financial institutions will either refuse to service US citizens or they will
comply with the strict mandatory IRS reporting requirements.
Any US person who owns PFICs must now report the onerous form 8621 on each separate PFIC investment every year.
The statute of limitations for IRS audit is extended from 3 years to 6 years in cases where more than $5,000 is omitted from gross income and the sum is attributable to foreign assets.
Concurrent to the law, the IRS has announced plans to increase resources devoted to enforcing foreign account reporting compliance and stricter enforcement standards.
All of this implies that virtually all-financial institutions around the world will have to determine which of their clients are US persons and report the holdings and transactions of those clients directly to the IRS.
Democrats Abroad has a lot to say about it — you may want to visit their site for more information.The bottom line for expats is that the foreign banks are now loathe to have Americans as clients — so it’s affecting our ability to open bank accounts or acquire mortgages.
Brian talked about a variety of other topics, too — double taxation, where to bank and invest, managing currency exchange, retirement planning, the benefits and liabilities of dual-nationality and more, then opened the floor to questions — which were many! Taxation is a big concern, naturally, and even though there is a tax treaty between the U.S. and France, it’s confusing!
Brian can help you sort it all out and grow your portfolios. If you would like more information, email him at [email protected] and be sure to tell him I sent you!
You’ll find photos and a full report from yesterday’s session at Parler Paris Après Midi.
A la prochaine…
Editor, Parler Paris & The Adrian Leeds Group
P.S. Tune in to House Hunters International on November 16 at 11:30 p.m. and 2:30 a.m. for “Snapshot of City Life in Paris, France.” Ben and Nicole Miller need to choose between an apartment in central Paris full of photo ops and a home closer to Ben’s job outside the city so he doesn’t need to commute. Watch as I help them find the perfect solution! And be sure to Like our Facebook page