First, I actually want to apologize for sending you this alert right before Christmas. I wish I had a more upbeat message to share with you. However, I´ve been given the dire task of doing the opposite instead. Please forgive me.
We have just recently been made aware of new reporting guidelines that will be important for our US Mountaineers to know of. Clearly, at this point, the US Internal Revenue Service (IRS), and possibly the Treasury Department too, want to know about EVERYTHING you have…EVERYWHERE. The time of keeping assets out of government´s sight in compliance with the rules of that government appear to be over.
We have periodically alerted our Moutaineers to increasingly strict and intrusive international tax regulations. In particular, we discussed American regulations, since many of our readers are Americans and because, unfortunately, other OECD countries tend to follow the Americans´ lead in this context, as in the context of other matters…
Reporting Instructions for Form 8938
In spring, we updated you on the final rules regarding the US FBAR reporting requirements. Furthermore, in May, we gave you some guidelines and instructions on how to complete the FBAR for your international insurance policies, since a number of questions came up in that regard.
Finally, a few months ago, we alerted you to a new IRS / Treasury form in its draft state: the IRS / TDF form 8938. This form, contrary to the FBAR (TDF 90-22.1), is not a Treasury Department form. It is a joint form of the IRS and the Treasury Department and the form requests information on all of your foreign assets, not just ‘foreign bank accounts´.
In November, the IRS has issued “Instructions for Form 8938“. After quietly releasing a draft version of the new form titled ‘Statement of Specified Foreign Financial Assets´, they have provided instructions that now leave little doubt: US persons will be required to report all worldwide assets subject to exceptions and applicable threshold amounts.
I recommend you take a close look at the actual form and instructions linked here. Also, be sure to read the following article, The Assault on Financial Privacy Goes On, contributed by our friend Kevin Brekke, an editor at Casey Research and a contributing editor to International Man.
Privacy Starts with YOU
We often tell our clients that “privacy starts with YOU”. In order to protect yourself and your assets from the mire of private and public predators, it is paramount that you handle your affairs in a private and confidential manner.
Don´t tell your neighbor, his grandmother and her sister about what you have, where you have it, and how much you´ve been making with your booming business. A bit of understatement and modesty will take you a long way and it is the first and most important step toward asset protection.
Unfortunately, the US government does not merely want you to pay your taxes accurately and on time. They now also want to know what assets you hold nationally and internationally, irrespective of whether any taxes are due or not. Some tax attorneys and practitioners we deal with regularly believe that this may be a precursor to a WEALTH TAX in America. We don´t know, but it certainly should raise your awareness that, based on the latest information, the IRS wants to know of literally any-and-all assets you hold at home and overseas. We shall see.
Nevertheless, Merry Christmas!
I hope that this Alert is of value to you. And, most of all, I hope that despite the news we shared today, you will enjoy a blessed and joyful Christmas Season with your family and loved ones. In that spirit, I wish all our Mountaineers a Merry Christmas and an absolutely fabulous New Year!