As the world gears up to comply with President Obama’s FATCA mandate, some folks are already talking about how to hide their money from Uncle Sam. An article in the Jamaica Gleaner has raised whether Jamaican credit unions are exempt from the new legislation’s harsh mandates. [Editorial Note – that a Jamaican news source says local credit unions may be exempt certainly doesn’t qualify as reliable tax advice. Taxpayers who try to skirt the law are often caught and with serious consequences. We post this article simply to highlight the many complexities of the new law and how some minds are already working overtime looking for loopholes.]
The Gleaner reports that Jamaica’s FATCA Technical Working Group may seek a waiver for Jamaican credit unions. One of the working group members, Bank of Jamaica, claims that the credit union waiver is being discussed. “It’s an issue we are considering. We are discussing this with the Registrar of Cooperatives … it will depend on whether they can qualify as low risk.,” said Bank of Jamaica general counsel Robin Sykes.”
The credit union exemption may be possible… the Treasury Department may exempt certain classes of financial institutions that have total assets of under $175 million USD. There are additional exemptions for banks that only keep small accounts.
Although we have not examined the possible exemptions, we are sure that someone will; someone with less than honorable intentions. The complete exemptions can be viewed here. A careful reading reveals that the Treasury Department is willing to carve out local banks and credit unions that primarily deal with locals (98%) requirement and smaller accounts. It won’t be long, however, before someone finds one of these smaller institutions and opens a “local” account in nominee name.
If you have unreported foreign accounts and want to understand more about your rights and responsibilities, we can help. There are ways to come into compliance and avoid the serious penalties associated with FBAR violations (FBAR is the Report of Foreign Bank and Financial Accounts). We also help foreign banks, credit unions, brokerage firms and other financial institutions with FATCA compliance issues.
Have questions about FATCA, FBARs and foreign reporting issues? Give us a call. Let an experienced IRS tax attorney give you the peace of mind you need. Most services can be provided for a reasonable flat fee.
Taxpayers with questions should contact attorney Bethany Canfield at or by telephone at (414) 223-0464. Institutional clients should contact the author, Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries are protected by the attorney – client privilege and kept in strict confidence.
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Post by Brian Mahany, Esq.
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