What you should know about FATCA

As of the publication of this article, roughly 110 countries either have FATCA  (Foreign Account Tax Compliance Act) agreements in-place with the United States or are in discussions. Thus far, Suriname has not yet signed an agreement. But it is probably just a matter of time before FATCA comes to Suriname.

The first clue is when local banks begin handing out W-9s to U.S. citizen account holders. This is an indication that local government has had significant internal discussions, and have briefed the banks to prepare for FATCA. The key information on a W-9 is the social security number. When banks in Suriname begin transmitting account information along with a SSN, the IRS will be able to easily pursue U.S. citizens and green card holders for not reporting foreign earned interest.

Technology is making the world a lot smaller. Computers will be able to instantly flag many delinquent taxpayers. Prior to FATCA, expat tax returns were largely based on an honor system. With FATCA, the IRS has the ability to electronically reconcile expat tax returns with foreign bank account information. It may take the IRS several years to actually pursue someone, but that is clearly not a desirable situation. Along with penalties for not reporting interest income, there may be penalties for not filing the FBAR or Form 8938 (if applicable).

Our best guess is that Suriname will become a FATCA-compliant country within the next 2 years. For U.S. expats in Suriname, it’s a good idea to get compliant before FATCA becomes effective.

 If you would   like to submit a tax-related question, please email us: info@holaexpat.com. Responses   are provided by John Ohe (IRS Enrolled Agent and Chartered Financial Analyst). Disclaimer: The answers provided in this article are   for general information, and should not be construed as personal tax advice.   Tax laws and regulations change frequently, and their application can vary   widely based on the specific facts and circumstances involved.

 

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