That is from the IRS Manual...The question was what actual information is reported to the DR Gvt. A lot of people have no sense of the DR Tax Code, let alone the U.S. Tax Code for that matter. One needs to understand both and the actual processes taking place vs. what is written in the manuals.
- Thread starter live_for_life
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A home brought for $150,000 or less in the DR, a USA citizen does not pay taxes?
That is from the IRS Manual...The question was what actual information is reported to the DR Gvt. A lot of people have no sense of the DR Tax Code, let alone the U.S. Tax Code for that matter. One needs to understand both and the actual processes taking place vs. what is written in the manuals.
Fine. You asked what sort of information the DR Government can be exchanging with other governments, not the other way around
and I was just trying to be responsive with that particular question, as best I could, since the IRS keeps the actual content of exchanges under TIEA's secret. Frankly, I doubt that the Dominican government is going to share the details with taxpayers or the general public; I am certain the IRS won't.
But if you have the answer to your new question about what is shared by other governments with the DR government, or know how to obtain such information, please share it with us. :tired:
Exactly. Thank you for answering the question. My point was that a lot of things are written into the laws in DR, but rarely enforced or adhered to. Not that this will continue indefinitely, but realize that the DR Tax Code is not the U.S. Tax Code. Look at both for the answer.
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engineerfg
Guest
Yes but what you've just identified *is* security by obscurity.
Bottom line, if you're being audited in the United States, the TIEA could get used to dig for information here in Rep.Dom. You could argue, well I'm not big enough fish for them to fry, okay but that's still a gamble, and who knows maybe the IRS flunky that gets your file is dominican american and picks up the phone and calls around.
There are countries however that don't have a treaty in place, or similarly, there are countries that have treaties in place, but where the laws state that the directors or beneficiaries of companies or trust do not need to be disclosed or registered at filing (such as TCI).
Bottom line, if you're being audited in the United States, the TIEA could get used to dig for information here in Rep.Dom. You could argue, well I'm not big enough fish for them to fry, okay but that's still a gamble, and who knows maybe the IRS flunky that gets your file is dominican american and picks up the phone and calls around.
There are countries however that don't have a treaty in place, or similarly, there are countries that have treaties in place, but where the laws state that the directors or beneficiaries of companies or trust do not need to be disclosed or registered at filing (such as TCI).
The point is 'dig up information'. What information is collected by the DR Gvt.? Is interest income taxable in DR? What does it say in the DR Tax Code? Have you guys read it? The treaty is set forth between governmental taxing authorities for the sharing of tax information. In certain instances, informational reporting can only come from third parties as a result of the Tax Code. That is certainly possible, but it is not what is in the purview of the Treaty.
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engineerfg
Guest
The post from the IRS manual above summarizes what kind of data they could dig up. The problem with tax authorities in our countries are that they're heavy handed and irrational. For example they could do something like this:
1. Get access to your dr bank account
2. See that there seems to be a steady stream of deposits worth 1K
3. Assess you $12K/annum for extra income, AND, assess you for an extra $200K income for the house that you bought to generate the 1K/month of rental income. They would assess you and give you 30 days to pay the taxes, or prove them wrong in court.
It's annoying, I'm not entirely sure how the IRS does 'lifestyle' audits, but the Canadian and British tax authority which I am familiar with play games like this, if they smell something fishy, they'll do a back of the envelope calculation to show that you MUST be concealing income to be able to afford your current lifestyle. etc. and assess you and compel you to prove them wrong in court.
the bastards!
1. Get access to your dr bank account
2. See that there seems to be a steady stream of deposits worth 1K
3. Assess you $12K/annum for extra income, AND, assess you for an extra $200K income for the house that you bought to generate the 1K/month of rental income. They would assess you and give you 30 days to pay the taxes, or prove them wrong in court.
It's annoying, I'm not entirely sure how the IRS does 'lifestyle' audits, but the Canadian and British tax authority which I am familiar with play games like this, if they smell something fishy, they'll do a back of the envelope calculation to show that you MUST be concealing income to be able to afford your current lifestyle. etc. and assess you and compel you to prove them wrong in court.
the bastards!
It's not a treaty, Andy. It's an executive-level agreement. Treaties have to be ratified by Congress. The DR has a TIEA with the US, but not a tax treaty. The DR does though have a full-fledged tax treaty with Canada.
Thanks for the correction-that is correct. Tax treaties are more in regard to the level to which income will be taxed between countries. For example, interest and dividend income might be taxed in the U.S. at a 10-15% rate vs. the statutory 30% rate when a tax treaty is in place.
'Lifestyle audits' that's a good one. Has anyone checked lately what is the interest rate on cash? I am laughing off my chair right now-they probably owe me money back this year with all the exemptions in the code. Remember, the supposed TIEA that you guys are hooting and hollering about will take a request to a 3rd party in DR as the government does not collect that type of information. Again, read the code.
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engineerfg
Guest
Can you clarify what you're trying to say AG? You don't think uncle Sam would interact with for example BanReservas and ask for your account data?
Of course, they will interact with all 3rd parties and TIEA's override any bank secrecy provisions. Even the Swiss Parliament affirmed this in the UBS case. That is the reality. The point I am making is that there is a difference between tax avoidance (legal) and tax evasion (illegal). Reading the code and understanding the legal text is what is necessary. I will be perusing this TIEA between DR and the US, not all agreements between countries are one in the same even when using the OECD model.