UPDATE: IRS cannot place claims on properties outside US- Harrell
This is according to Foreign Accounts Tax Compliance Act (FATCA) Specialist, KPMG Mr Doug Harrell during a press conference on September 20, 2013.
Mr Harrell was responding to the question as to whether the US government can put claims on property/s of persons resident in the Virgin Islands but are Green Card holders if they are in default the IRS. This has been cited as a major concern to many VIslanders since the FATCA talks have surfaced.
Mr Harrell said FATCA in itself does not impose any taxes on persons as it is a tool designed to "discover people" but it would up to the IRS to deal with taxation.
"In that situation the IRS then sends a notice to that person, they wouldn't then ask for tax returns on that current year, they would ask for taxes on back years am sure. And what happens if you do have a problem with tax liability and you don't have the money to pay it, it's my understanding the IRS cannot put claims on properties outside the United States," explained Mr Harrell.
However, he added that if the US wants to collect due monies they would find means of doing so. "This was never meant to scare anyone.... But the IRS has no jurisdiction to place a lean on property that is outside the United States," he noted.
In some sections, FATCA was referred to as a 'political time bomb' and a retrograde step at US imperialism.
"Those are personal opinions and I have a very hard time repeating anyone's personal opinion," Mr Harrell said when asked to address those claims.
Further asked if he agreed or not with the claims, Mr Harrell responded, "I have no comments. I have my personal thoughts about FATCA but I don't think it is relevant here," he added.
See previous story posted September 23, 2013:
Administrative costs will go up with FATCA – Neil M. Smith
- Giving up Green Cards is not as simple as some persons may think – FATCA specialist KPMG Mr Doug Harrell
ROAD TOWN, Tortola, VI – It was made absolutely clear that with the implementation of the Foreign Accounts Tax Compliance Act (FATCA), the Virgin Islands Financial Services will have added financial burdens on its hands with having to employ additional human and other resources.
This was told to reporters at a press conference at Central Administration Complex on September 20, 2013.
The press conference was called to give a feed back on the two-day “Talk About” FATCA, which featured presentations by FATCA specialist, KPMG Mr Doug Harrell.
Financial Secretary Mr Neil M. Smith was a part of the panel that responded to questions fielded by reporters.
“It (FATCA) will affect the financial services industry in that we expect that the administrative costs will go up,” said Mr Smith. Mr Harrell agreed with Mr Smith and added that this would more than likely be the case for other countries that are into financial services.
“The world is moving towards a place where it will be expected that there will be automatic continuous information sharing between all the governments of the world on the citizens of other countries … and FATCA is basically the first step in that multi-international sharing of information. So that’s where we are moving,” said Mr Smith.
Agreement reached with US
As it relates to the controversial agreement and discussions between the US and VI governments on issues surrounding FATCA, Mr Smith said he feels an agreement has been reached but not yet released.
“At this point I would say that depends on the US government but we have been negotiating with them for some time and I think we have come to an agreement, but you know, bureaucracy, and the US have a very large one.”
Giving up the Green Card not that easy
Mr Harrell touched on the issue of persons opting to give up their Green Cards and assured that once they do they would not have any hope of getting it back ever again. “…and I have talked to many persons about it, it’s a personal decision, that’s a very individual decision. Obviously there are some values to that US passport and that Green Card and once you give it up I think it’s is very clear that you are never going to be getting it back,” said Mr Harrell.
He also said while some persons would choose to give up their Green Card, they would have to file tax returns for at least five years “…because there is a test to determine if you are giving it up for tax reasons,” said Mr Harrell.
“… and one prominent test is your income tax liability for the prior five years. It’s not as easy as just going and giving it up, you will still have to produce some income tax returns in order to take that step,” he added.
Mr Doug Harrel expressed the opinion that FATA was originally aimed at Americans living in America with off-shore bank accounts but noted it now ultimately applies to Americans living anywhere in the world.
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27 Responses to “UPDATE: IRS cannot place claims on properties outside US- Harrell”
But I taught Doc smith say Fraser was wrong on FACTA..
This law is a nightmare law. I think that those who will be affected by it should do as much research as they can and get proper independent advise. Remember, Mr. Harrell works for KPMG their interest is to get as many clients as they can, not necessarily what is best for all Virgin Islanders that are affected by this. The enormous costs of complying with this law has caused many banks in other parts of the world to get rid of American clients and not bother with the burden of having Americans on their books. Google 'Toxic Americans' you will see what I am talking about. This law is a serious overreach of the American government that was designed to catch the 'big fish' but its actually hurting those who are honest and hard working.
If you are affected by this law, please don't just hesitate and wait until you think the government might do something. Get off your butts and go and find a solution that will be in your best interest.
http://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-(FATCA)