One Way US Taxes Affect the World

        One aspect of US tax law deals with the subject of American citizens who have taxable income in other countries. This was directly addressed in 2010 by the Foreign Account Tax Compliance Act. The goal was to keep US Taxpayers from being able to hide money overseas. This is accomplished by making foreign banks responsible for reporting all accounts held in the name of US citizens to the IRS.
          The United States has a citizenship-based tax system. This means that an American must pay US taxes on their income, no matter where they live. This is similar to the way US based corporations are taxed. However, there are many people who inherited this citizenship from a parent, or were born in the US and raised in another country but feel they have no real ties to this country. Their income is still subject to US taxation. For many of them, there are years of penalties and interest that have accumulated over a lifetime.
          These fees can come from the IRS when they become aware of the individual. They will also come from their bank. Foreign banks do not want to be considered an accessory to Tax Evasion, so they will fine customers who do not comply. These situations can wreak havoc on their credit and turn lives upside down. If you feel this describes your background, it would be best to reach out to a Tax or Legal Professional to find out what your options are.

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