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Who's FATCA anyway? Should anyone be afraid of FATCA?

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Art, just a re(tired) Fil-Am:
http://research.bworldonline.com/publications/story.php?id=394&title=Who%E2%80%99s-afraid-of-FATCA

Ready or not, Philippine banks registered with the US Internal Revenue Service (IRS) as “foreign financial institutions” (FFIs) under the Foreign Account Tax Compliance Act (FATCA). A few did as early as January but questions over how the US law would affect their operations made most hesitate, even fearful. Some signed up in the next three months but majority did so on May 5 when it became apparent the IRS would no longer give another deadline extension and was set implementing the FATCA more than four years after it was passed.
Many banks’ questions are still unanswered but what is clear is they don’t want to be branded as non-compliant or pay the 30% withholding tax on their US-sourced income.

Now, they need to confront issues on bank secrecy while think of how procedures should be changed --"both at their front end and back end --" to accommodate the requirements of FATCA

Tally J:
Beware! This law also affects certain foreign resident US tax payers.  At a minimum you may be subject to filing two new forms - Form 8938, Statement of Specified Foreign Financial Assets and FinCen Form 14, Report of Foreign Bank and Financial Accounts (FBAR).  I am currently trying to assess the impact of this on me, but as with all IRS information it is slow going.

Lee2:
If a US person never had over US $10,000 or its equivalent in any and all foreign banks, then IMO there is nothing to fear from any and all accounts being reported to the US, as there was never a requirement for US persons in the past to report foreign accounts to the US unless all your foreign accounts equaled over US $10,000 and there still is no requirement that I know of as long as all your foreign accounts stay below a total of US $10,000 in total.

What all this is now, is that the US is insisting on all banks reporting all accounts, thus then having the ability to check them against FBAR reports of the past and FinCEN reports for 2013.

 Who Must File an FBAR  http://tinyurl.com/m9ds7d8
United States persons are required to file an FBAR if:
The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.
United States person includes U.S. citizens; U.S. residents; entities, including but not limited to, corporations, partnerships, or limited liability companies, created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.

Also the withholding can be waved by those who are in good tax standing.

Lee2:
I really do not know what if anything they might do to you for failure to file during those years. Below is what I find when I look it up.

http://www.irs.gov/irm/part4/irm_04-026-016.html

I guess it might be best you talk to an accountant or lawyer who handles those types of matters to get the correct answer.

Gray Wolf:
If you're lucky penalties might only be a warning letter.  See highlights in red below:

4.26.16.4  (07-01-2008)
FBAR Penalties

    The IRS has been delegated authority to assess FBAR civil penalties.

    There are civil penalties for negligence, pattern of negligence, non-willful, and willful violations.

    Whenever there is an FBAR violation, the examiner will either issue the FBAR warning letter, Letter 3800,or determine a penalty.  See IRM 4.26.17 for the Letter 3800procedures .

    Penalties should be asserted only to promote compliance with the FBAR reporting and recordkeeping requirements. In exercising their discretion, examiners should consider whether the issuance of a warning letter and the securing of delinquent FBARs, rather than the assertion of a penalty, will achieve the desired result of improving compliance in the future.

    FBAR civil penalties have varying upper limits, but no floor. The examiner has discretion in determining the amount of the penalty, if any. Examiner discretion is necessary because the total amount of penalties that can be applied under the statute can greatly exceed an amount that would be appropriate in view of the violation.

    Examiners are expected to exercise discretion, taking into account the facts and circumstances of each case, in determining whether penalties should be asserted and the total amount of penalties to be asserted. Because FBAR penalties do not have a set amount, IRS has developed penalty mitigation guidelines to assist examiners in the exercise of their discretion in applying these penalties. The mitigation guidelines are only intended as an aid for the examiner in determining an appropriate penalty amount. The examiner must still consider whether a warning letter or a penalty amount that is less than what would be called for under the mitigation guidelines would be more appropriate given the facts and circumstances of a particular case. For example, if an individual failed to report the existence of five small foreign accounts with a combined balance of $20,000 for all five accounts but the income from each account was properly reported and the taxpayer made no effort to conceal the existence of the account, it may be more appropriate to issue a warning letter rather than assert penalties under the mitigation guidelines.

    FBAR penalties are determined per account, not per unfiled FBAR, for each person required to file. Penalties apply for each year of each violation. As noted above, however, examiners are expected to exercise discretion, taking into account the facts and circumstances of each case, in determining whether penalties should be asserted and the total amount of penalties to be asserted.

    There may be multiple FBAR civil penalty assessments arising from one account. FBAR civil penalties can apply to each person with a financial interest in, or signature or other authority over, the foreign financial account. Thus there may be multiple penalty assessments if there is more than one account owner or if a person other than the account owner has signature or other authority over the foreign account. Each person can be liable for the full amount of the penalty.

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