Expat Tax Blog
As a further step to implement the OECD Common Reporting Standard (CRS), the first series of bilateral automatic exchange relationships were established among the first batch of jurisdictions committed to exchanging information automatically as of 2017.
With still a year to go before the first exchanges of information on financial accounts pursuant to the OECD Common Reporting Standard (CRS), there are now more than 1 000 bilateral relationships in place across the globe, most of them based on the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (the CRS MCAA). The full list of automatic exchange relationships that are now in place under the CRS MCAA and other legal instruments can be accessed here.
More jurisdictions will nominate the partners with which they will undertake automatic exchanges in the coming months. The next update on the latest bilateral exchange relationships will be published before the end of 2016, with updates to follow on a periodic basis. In total, 101 jurisdictions have agreed to start automatically exchanging financial account information in September 2017 and 2018, under the CRS.
This wave of activations of bilateral exchange relationships is an important step towards the timely implementation of the OECD-developed international standard for the automatic exchange of financial account information, the CRS, and reflects the determination of jurisdictions around the world to deliver on their political commitment to fight tax evasion.This section shows all bilateral exchange relationships that are currently in place for the automatic exchange of CRS information. The relationships shown included those under the framework of Article 6 of the Multilateral Convention and the CRS MCAA, as well as exchange relationships based on bilateral agreements and the EU framework.
As of October 2016, and with still almost a year to go until the first exchange date on 30 September 2017, there are now already over 1000 bilateral exchange relationships activated with respect to jurisdictions committed to a 2017 timeline.
Activated exchange relationships can be sorted and displayed from both the perspective of a particular sending jurisdiction (“FROM”) or a particular receiving jurisdiction (“TO”). For each exchange relationship, the legal basis and, where appropriate, the effective date and/or the activation date are shown. The number in brackets behind each jurisdiction in the drop-down menu indicates the total number of bilateral exchange relationships that are currently activated with respect to that jurisdiction.
The IRS reminds U.S. taxpayers with undisclosed offshore accounts that they should use existing paths to come into full compliance with their federal tax obligations.
Updated data shows 55,800 taxpayers have come into the Offshore Voluntary Disclosure Program (OVDP) to resolve their tax obligations, paying more than $9.9 billion in taxes, interest and penalties since 2009.
OVDP offers taxpayers with undisclosed income from foreign financial accounts and assets an opportunity to get current with their tax returns and information reporting obligations. The program encourages taxpayers to voluntarily disclose foreign financial accounts and assets now rather than risk detection by the IRS at a later date and face more severe penalties and possible criminal prosecution.
The IRS developed the Streamlined Filing Compliance Procedures to accommodate taxpayers with non-willful compliance issues. Submissions have been made by taxpayers residing in the U.S. and from those residing in countries around the globe.
Original Story at IRS website.
The IRS issued a warning of 2017 tax refund delays for certain taxpayers, urging folks to adjust their tax withholding now. It’s about your 2016 taxes that are due April 15, 2017.
A couple things are to blame. First, a new tax law effective next year requires the IRS to hold refunds a few weeks for some early filers who claim the Earned Income Tax Credit and the Additional Child Tax Credit. The IRS has to hold the entire refund, not just the portion associated with those credits, until at least February 15.
Second, the rise in identity theft is causing the IRS and state tax authorities to spend additional review time to protect against fraud. Additional safeguards will be set in place for the upcoming 2017 filing season.
So what’s the solution if you don’t like the idea of a tax refund delay? Adjust your tax withholding for the rest of 2016, so you get more take-home money now and a smaller refund. Check out IRS tips on tax withholding and a withholding calculator.
Already in 2016, the IRS has issued more than 102 million tax refunds (out of 140 million individual returns), and the average refund is over $2,700. Most refunds will still be issued within 21 days or less, the IRS says.
Original Story at Forbes.
Higher-income workers will pay more in payroll taxes next year to support Social Security. Meanwhile retirees and other program beneficiaries see a scant increase in their monthly benefits.
Nearly 66 million people receive Social Security and Supplemental Security Income payments from the U.S. government.
According to the Social Security Administration, the maximum amount of earnings subject to the Social Security tax would climb 7.3% to $127,200 in 2017 from $118,500 in 2015 and 2016, affecting an estimated 12 million workers. The worker’s share of Social Security payroll tax is 6.2% of eligible wages; someone making at least $127,200 in 2017 would pay an additional $539 over the course of next year.
Employers also pay a 6.2% tax on eligible wages and would pay more, too, though economists generally believe those costs are borne by workers in the form of lower wages. Self-employed people pay the employer’s and employee’s share of the tax.
Original Story at WSJ.
Hundreds of thousands of American citizens by birth live abroad without a Social Security number. Many of them have recently discovered that they have U.S. tax compliance obligations. Most often this news is delivered by a foreign bank that has custody of their money, through ascary letter with the threat of freezing their funds unless they provide proof of U.S. tax compliance.
However – obtaining a Social Security number, even if you have all the required documents, may be a challenge for those living in remote parts of the world, far away from the nearest U.S. Embassy. But people need to catch up with their filing obligations ASAP and they search for a way to file without a Social Security number.
First they learn the acronym ITIN – Individual Tax Identification Number. The Application for an ITIN can be submitted by mail to the IRS along with the completed tax returns. This is the easy and speedy solution. Unfortunately, individuals eligible for a Social Security number are not eligible for ITIN – a tax ID for the foreigners. This option does not work for the US citizens by birth.
Whole story at TFE.