From China to Chile and from Ireland to Indonesia, Americans abroad have suffered great angst — make that outright fear — and frustration over the past several years from the muscle flexing of the Internal Revenue Service relating to the Foreign Account Tax Compliance Act.
Oh, and India as well certainly needs to be included on any list of countries with occupants having FATCA-related concerns and considerations, as is notably pointed out in a recent article in the Economic Times concerning FATCA and trusts.
The special concern noted in the Times illustrates a sort of reciprocal fear regarding FATCA. That is, the article bypasses discussion of Americans living abroad, focusing instead on Indian families engaging in certain estate planning strategies who have family members residing inside the United States as U.S. residents.
Here is what is disturbing to many families in India — and, by extension, families elsewhere across the world residing outside the United States — who have created trust vehicles to preserve wealth, legally minimize taxes and provide for future family generations: If any family member is staying in the United States, the IRS wants to see detailed information on trust beneficiaries and other details.
“Most families in India are not comfortable with sharing such information [with] the U.S. Internal Revenue Service,” states the Times.
That is certainly a truism and obvious understatement. Is there a family anywhere in the world that wouldn’t automatically cringe from such a prospect?
In fact, notes the article, many affected families are doing all they legally can to implement alternative strategies that can help them “escape the glare of the American tax authorities.”
An additionally noted concern, of course, is that U.S. government pressure has resulted in scores of countries across the globe now requiring domestic financial institutions to share information with their American counterparts. That arrangement can place an individual or family under even more intense tax scrutiny, with both U.S. and local tax officials closely probing financially related information.
Our blog has noted the stringent and myriad exactions of FATCA in prior posts. Persons with questions or concerns regarding this tax legislation can secure timely information and diligent representation when needed from a proven tax attorney.