Dominican banks required to report on US citizens' holding

[frank12]

Kimbjorkland is absolutely correct here regarding this issue. Four months ago i was sitting here at the bar with four people who work for the US State Dept. inside the Tax Fraud/IRS division. they actually work for (I'll have to dig up there business card) an independant Accounting agency like Anderson's (Anderson's is out of business but it was something like this). Anyway, what their gorup did full-time was represent the US government in educating the banking industry around the world about the new upcoming banking "Transparent Disclosure" laws that will be implemented in 2012. these four people were only part of a much, much larger group of accountants and lawyers that were flying into countries and meeting the heads of banks throughout South America, Asia, Middle East, and some other places that i've now forgotten. I suffer from Alzheimers and Fistophobia. the leader of this particular group, a woman by the name of??? had already met with the heads of banks of a dozen South American countries as well as china and a half dozen Asian countires including India. She pulled out her purse and gave me about a dozen different foreign notes and gave them to me to hang up around the bar. i didn't have staples for our staple gun at the time so i took them down to the local Colmado and tried to purchase a 12-pack of President Beer with them. after being refused, i then took them home where i tried to pay the rent; even as i speak, they're sitting on the shelf next to the TV, collecting dust.

This accountant/lawyer basically walked me thru what some of compliances that will be required by banks in order to continue doing business within USA after 2012. if you do not comply with the new laws, you will not be permitted to do any kind of business, none, zero, with any US bank, period! in fact, the US will assess fines and infractions on your bank that will make it impossible for your bank to operate outside of its own country.

She explained that this was a good thing becuase, right now, many, many banks around the world are knowingly laundering drug money and funding terrorist organizations in the guise of religious charities, etc. She provided a very long list of things that i never thought of which made the transparency of the banking industry apparently, absolutely neccessary and essential.

However, there are always ways around having your money disclosed to the US government and I brought one of them up, which caused her and her co-workers to discuss them at great length for three days. And here is one of them: If you got your money in a "Finance Bank"--which are numerous on this island--and that finance bank only does business here on this island and does no international business whatsoever--including no wire transfers--then how would the US know where your money is? they saw this as a dilema!

FRank

 

[Conchman]

Whattttt??? I can understand interest earned from a US generating vehicle, but outside the US? So if I open a business in DR ( wouldn't do that just asking) and it made money, that income would have to be reported and taxed? I guess it's kinda like what Charles Rangle was doing. But he was an american entity bringing the money back to the US

There are double taxation agreements with the US and most other countries, which means if you pay taxes on income in one country you cannot be taxed again on the same income. However, if the taxes in one country (lets say on income in the DR) is lower than the income tax in the US, the US government can still tax you the difference (on your Dominican income).

Yes, you are taxed on world wide income, if you are a US citizen. If you renounce your citizenship, you will still be taxed for two or three years after, not sure about details in that law. Its insane.

The intrusion of government in our lives is insane, one day we will wake up in Oceania (Orson Wells), if we're not already there.

 

[frank12]

Wow, this town is small!!!! A customer just walked in who's uncle was one of the team members sitting here on the beach--working for Price Waterhouse Cooper--they were part of a team who are responsible for educating foreign banks around the world in meeting the new 2012 "Transparency laws."

Frank

 

[lafiera]

Yet another excellent reason not to hold funds in a Dominican bank account!

Castellamonte, I hope that you don't live here, we want people who believe in this country.

 

[Fabio J. Guzman]

Legally, a Dominican bank will not obey an American law unless it is converted into Dominican law by a treaty between the US and the Dominican government. This is the legal reality.

As to the other reality. The American government, acting illegally from a Dominican perspective, may well by threats, etc., as many posters have said, force Dominican banks to comply. In that case, however, the foreign depositor will have every right to get their money back from the banks that have violated Dominican law. The banks would be, so to speak, between a rock and a hard place.

If this ever came to happen, Guzm?n Ariza would be happy to act on behalf of any of you, on a relatively low percentage contingency fee arrangement, because I'm certain we'd recover the money. The case against the banks would be a slam dunk.

 

[SKY]

This is good to hear. The US government thinks it runs the whole planet. But that is changing slowly but surely.

 

[Ken]

From The US Consulate On Reporting By Banks

A message recently sent by the Consulate to US citizens registered with it included the following:

"Last week, newspapers in the Dominican Republic reported on the requirement for Dominican financial institutions to report accounts held by U.S. citizens. Below please find information released by the IRS regarding this new reporting requirement. For general information about tax requirements for U.S. citizens living abroad, please see the attached fact sheet from the IRS.



The Foreign Account Tax Compliance Act (FATCA), enacted in 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act, is an important development in U.S. efforts to combat tax evasion by U.S. persons holding investments in offshore accounts.



Under FATCA, certain U.S. taxpayers holding financial assets outside the United States must report those assets to the IRS. In addition, FATCA will require foreign financial institutions to report directly to the IRS certain information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.



For more information, please visit the IRS website at Summary of Key FATCA Provisions. "

The attachment to this message covered a great deal of territory with respect to the requirements of US citizens outside the US with respect to taxes, etc.

http://www.irs.gov/newsroom/article/0,,id=250788,00.html

 

[Criss Colon]

Time To Become A Dominican Citizen!!!!!!!!!!!!!!

Cccccccccccccccccccccccccccccccccccccccccccccccc

 

[Lando calrisian]

Anda el Diablo, que desgracia. Y yo, que iba a meter eso cuartos en el popular. Y ahora, quien me recomienda un "finance bank"?

 

[nas]

Would this affect native Dominicans who are naturalized US citizens?

I thought there was a dual nationality law between the DR and USA. I also understood that a Domincan who became US citizen, upon arrival to the DR he/she would fall back to his/her Dominican citizenship.

If this is true, then shouldn't native Dominicans be protected by Dominican laws?

Assuming I am 100% wrong on this... how about this scenario:

A native Dominican goes back to DR.. He gets all his Dominican papers in order (Cedula, passport, birth certificate), then he applies for a bank account as a legit Dominican...

Would this be feasible?

 

[AlterEgo]

Would this affect native Dominicans who are naturalized US citizens?

I thought there was a dual nationality law between the DR and USA. I also understood that a Domincan who became US citizen, upon arrival to the DR he/she would fall back to his/her Dominican citizenship.

If this is true, then shouldn't native Dominicans be protected by Dominican laws?

Assuming I am 100% wrong on this... how about this scenario:

A native Dominican goes back to DR.. He gets all his Dominican papers in order (Cedula, passport, birth certificate), then he applies for a bank account as a legit Dominican...

Would this be feasible?

My husband is a dual-citizen. As far as his DR bank is concerned, he's only Dominican, they didn't ask for or see his American Passport or Social Security #.

 

[avi8or57]

For those of us here in the DR that are US Citizens with $10k dollars or less in any type of bank account, the tax law does not apply. Am I right? Wrong?

 

[AndyGriffith]

Isn't less than $50K?

 

[Ezequiel]

Would this affect native Dominicans who are naturalized US citizens?

I thought there was a dual nationality law between the DR and USA. I also understood that a Domincan who became US citizen, upon arrival to the DR he/she would fall back to his/her Dominican citizenship.

If this is true, then shouldn't native Dominicans be protected by Dominican laws?

Assuming I am 100% wrong on this... how about this scenario:

A native Dominican goes back to DR.. He gets all his Dominican papers in order (Cedula, passport, birth certificate), then he applies for a bank account as a legit Dominican...

Would this be feasible?

It is feasible because the bank will not know that a person is a duel citizen if that person doesn't tell them. I can go right now an open a bank account in the DR just with my DR cedula and nobody will know that I'm an American Citizen.

 

[Seachange]

Not true.

Today American living in DR goes to bank and shows American passport, among other ID, to open a bank account.

If he had a citizenship in DR or, say for example in Dominica (which coincidentally sells citizenships for $75K +/-), and then he goes to the bank and says 'hola, soy gringo dominicano, aqui es mi passport y cedula dominicano, soy de batay etc', how would the bank know that he's an American citizen? why would the bank report his information to a US bank if they don't know he's American?

On the Dominica passport it will list the passport holder's place of birth.

 

[windeguy]

Your cedula has your place of birth.

It is feasible because the bank will not know that a person is a duel citizen if that person doesn't tell them. I can go right now an open a bank account in the DR just with my DR cedula and nobody will know that I'm an American Citizen.

Take a look at your cedula. Where does it say you were born?

 

[ctrob]

Isn't less than $50K?

And this is in reference to the reporting requirements?

 

[Seachange]

For those of us here in the DR that are US Citizens with $10k dollars or less in any type of bank account, the tax law does not apply. Am I right? Wrong?

It doesn't apply to individuals at all. It applies only to financial institutions. You as an US citizen are required to report all your worldwide income regardless of amount. Financial institutions are required to report aggregate amounts greater the $50,000 but in reality will report all US citizens with accounts no matter the size.

 

[belmont]

It doesn't apply to individuals at all. It applies only to financial institutions. You as an US citizen are required to report all your worldwide income regardless of amount. Financial institutions are required to report aggregate amounts greater the $50,000 but in reality will report all US citizens with accounts no matter the size.

You are wrong. You are confusing "income" with "assets". Under this act all assets, including those that produce no income must be reported. Reporting is by both the institution and the individual. See tha IRS notice below:

Summary of Key FATCA Provisions

The Foreign Account Tax Compliance Act (FATCA), enacted in 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act, is an important development in U.S. efforts to combat tax evasion by U.S. persons holding investments in offshore accounts.

Under FATCA, certain U.S. taxpayers holding financial assets outside the United States must report those assets to the IRS. In addition, FATCA will require foreign financial institutions to report directly to the IRS certain information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.

Reporting by U.S. Taxpayers Holding Foreign Financial Assets

FATCA requires certain U.S. taxpayers holding foreign financial assets with an aggregate value exceeding $50,000 to report certain information about those assets on a new form (Form 8938) that must be attached to the taxpayer?s annual tax return. Reporting applies for assets held in taxable years beginning after March 18, 2010. (Notice 2011-55 provides guidance for affected taxpayers required to file prior to the availability of Form 8938.) Failure to report foreign financial assets on Form 8938 will result in a penalty of $10,000 (and a penalty up to $50,000 for continued failure after IRS notification). Further, underpayments of tax attributable to non-disclosed foreign financial assets will be subject to an additional substantial understatement penalty of 40 percent.

Reporting by Foreign Financial Institutions

FATCA will also require foreign financial institutions (?FFIs?) to report directly to the IRS certain information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. To properly comply with these new reporting requirements, an FFI will have to enter into a special agreement with the IRS by June 30, 2013. Under this agreement a ?participating? FFI will be obligated to:

(1) undertake certain identification and due diligence procedures with respect to its accountholders;

(2) report annually to the IRS on its accountholders who are U.S. persons or foreign entities with substantial U.S. ownership; and

(3) withhold and pay over to the IRS 30-percent of any payments of U.S. source income, as well as gross proceeds from the sale of securities that generate U.S. source income, made to (a) non-participating FFIs, (b) individual accountholders failing to provide sufficient information to determine whether or not they are a U.S. person, or (c) foreign entity accountholders failing to provide sufficient information about the identity of its substantial U.S. owners.

Notice 2011-53 provides the phased-in timeline of key FATCA implementation dates for FFIs. It is important to note that many details of the new reporting and withholding requirements pertaining to FFIs must be developed through Treasury regulations that are expected to be proposed by December 31, 2011. Published IRS Notices accessible from this FATCA internet site provide currently available information and guidance.

Summary of Key FATCA Provisions

Looks like, in spite of your denials, deposits with Banker's Trust will have to disclosed.

A foreign financial institution means a foreign entity that (i) accepts deposits in the ordinary course of a banking or similar business; (ii) holds financial assets for the account of others as a substantial portion of its business; or (iii) is engaged (or holding itself out as being engaged) primarily in the business of investing, reinvesting, or trading in securities interests in partnerships, commodities or any interest (including a futures or forward contract or option) in such securities, partnership interests or commodities. [8] This broad definition includes not only traditional banks, but could also include but is not necessarily limited to, insurance companies, investment trusts, mutual funds, hedge funds and pension plans. [9]

AdvisorFYI ? foreign financial institution

 

[belmont]

Legally, a Dominican bank will not obey an American law unless it is converted into Dominican law by a treaty between the US and the Dominican government. This is the legal reality.

As to the other reality. The American government, acting illegally from a Dominican perspective, may well by threats, etc., as many posters have said, force Dominican banks to comply. In that case, however, the foreign depositor will have every right to get their money back from the banks that have violated Dominican law. The banks would be, so to speak, between a rock and a hard place.

If this ever came to happen, Guzm?n Ariza would be happy to act on behalf of any of you, on a relatively low percentage contingency fee arrangement, because I'm certain we'd recover the money. The case against the banks would be a slam dunk.

Would't the Dominican banks' defense be that the assets siezed or taxxed by the US should have been reported by the depositer under the US code. By saying he lost his money as a result of the Dominican banks reporting is saying the Dominican bank interfered with his commission of a fraud. Are you saying a Dominican depositer seek redress from the bank because his fraud was spoiled? Sort of like, I front you some money that you are going to use to finance a large drug deal. The money get siezed in a raid. I doubt the court will let me sue you to recover my funds which I knew were part of an illegal scheme.