Although much of the information on the Sovereign Society's website is to entice you into becoming a member or signing up for paid services they also provide a wealth of free information that I believe is invaluable. Much of the information is targeted at U.S. citizens who in many cases are not aware of all the draconian measures the U.S. government is regularly instituting to keep tabs on its subjects. This particular link provides some timely information for those U.S. citiznes living in Panama, especially with the tax information exchange agreement being implemented in the near future. Dual Citizen Panamanians should also take heed of this information as being a U.S. citizen has some significant drawbacks. There are still areas that one can invest without having to report and it is spelled out clearly at their website.
Here are some excerpts:
Reporting Laws You MUST Know
Whether you’re a U.S. citizen or resident, or a foreigner doing business in the United States, here’s what you need to know about reporting your offshore investments.
The Bank Secrecy Act effectively ended bank secrecy in the U.S. It requires you to file a report each year acknowledging any “foreign bank, brokerage, or ‘other’ financial accounts” you hold.
There are three separate reporting requirements:
1. You must acknowledge foreign accounts with an aggregate value exceeding $10,000 each year on Schedule B of your federal income tax return.
2. June 30 is the deadline for filing a Foreign Bank Account Report (FBAR) form with the U.S. Treasury. This form – cryptically named “Form TD F 90-22.1″ – gives the Treasury a bird’s-eye look at any foreign bank, brokerage or other financial account you held during 2010.
3. If you hold more than $50,000 of assets outside the United States, a special reporting regime has gone into effect, and it could apply to your 2010 tax returns. A law passed in 2010 requires Americans to file a new IRS form along with their income tax return that discloses any foreign financial assets valued more than $50,000. The IRS recently released a draft copy of the form (Form 8938), but it’s not clear whether the additional disclosure will apply to 2010 tax returns. I’ll know more about this requirement soon and will discuss it further down in Panama.
These reporting obligations apply to any American. The tax penalties for failing to comply are draconian! You could end up paying a $10,000 fine per unreported account. Far worse, if you “willfully” fail to file the FBAR form, you face fines up to $250,000, five years imprisonment…or both. Penalties are doubled if you violate any other U.S. law. Failure to file the form authorized in the 2010 law may be punished with a $50,000 fine.
Recent Comments