Vista California online Form 8938 2021-2025

Vista California online Form 8938: What You Should Know

What is Foreign Account Tax Compliance Act (FATWA)? FATWA: Federal Law That Makes it Illegal to Misrepresent Your Residence In the last few years, US citizens, foreign residents, and tax evaders who fail to file US returns, report income, or provide required information can be prosecuted for violating the Foreign Account Tax Compliance Act (FATWA). FATWA is a federal law signed by the U.S. President on July 26, 2010, which has become part of the US code and is enforced by US tax authorities. The law was implemented as a response to a growing awareness of the increasing number of wealthy individuals abroad using offshore tax havens for financial accounts, such as funds intended for political purposes. The financial secrecy of certain institutions, such as financial brokers who manage wealthy clients' accounts, allowed them to conceal assets and financial activities. These secret accounts have served the interests of tax-dodgers in the US for far too long. The Obama White House website states: The law applies to the United States financial institutions as well as to foreign financial institutions. FATWA will require American financial institutions to share information about their American customers' bank accounts and other financial transactions with an IRS database. The United States will be able to impose withholding duties on any transactions between American citizens and foreign financial institutions. How the Law Will Work FATWA will only affect US citizens or persons who are in or had US accounts. The US government has announced that only certain US persons will be impacted by the law. It also says you're not required to disclose anything about US accounts to the IRS, but you can. To qualify for the program, you'll have to prove that you are a US citizen or foreign resident. You'll also be required to report all your assets, including your money held in accounts in the United States and all your income or gains earned abroad. If the amount of your income from foreign sources and your total foreign financial accounts (including the financial accounts of foreign people and institutions) exceeds certain specified limits, you may be required to pay a 10% penalty. The IRS also has issued an “alert” to certain institutions warning of the new requirement. How to Report or Pay the Penalty Once you know you have to report or pay the penalty, you can follow the steps outlined in the “FATWA Notice” issued by the Financial Crimes Enforcement Network (Fin CEN) on their website at .

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