FATCA-agreement with China?

[Lu]

Moderator note: Thread split from here.
 

Remember, though, that if you don't close these accounts and are, or ever become, subject to reporting your foreign bank accounts to the U.S. Federal government, then these small inactive accounts will turn into a nagging hassle.

On the other hand, if you don't report them, it seems highly unlikely to me that the US government would ever find out about them. They can hardly go around calling all banks in China whether they have an account in your name. Not that I want to promote keeping money secret from the government...

[889]

"They can hardly go around calling all banks in China whether they have an account in your name."

 

If that subject interests you, then you ought to learn about FATCA agreements, the purpose of which is to obligate non-U.S. banks to report the identity of their U.S-citizen or resident account holders to the IRS.

 

Here's the FATCA agreement with Hong Kong, for example:

 

http://www.fstb.gov.hk/fsb/topical/doc/HK-USIGA.pdf

[gato]

Mainland China is not among the FATCA agreement countries yet, and probably won't be any time soon to due PRC concerns about "national security".

http://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCA-Archive.aspx

But you should close old accounts if at all possible. You'll need to go to the original account opening city to the close the accounts.

[889]

"Mainland China is not among the FATCA agreement countries yet, and probably won't be any time soon to due PRC concerns about 'national security'."

 

Could you fill us in on the basis for that statement, if any? As the document you linked to states, the U.S. and China reached "agreement in substance" on FATCA procedures last year.

 

http://www.china-briefing.com/news/2014/06/30/china-agrees-fatca-compliance.html

[gato]

I didn't know about the announcement from a year ago, but I still wonder why they have not signed the actual agreement yet a year later.

Judging from the tussle between the US and China over accounting audit papers in the last few years, China does treat financial information as a national security matter.

http://www.wsj.com/articles/sec-big-four-accounting-firms-in-china-settle-dispute-1423237083

SEC, Big Four Accounting Firms in China Settle Dispute

Deal Over Refusal to Turn Over Audit Documents Lifts Threat of Suspension

The settlement follows a judge’s ruling last year that the accounting firms had violated U.S. law when they refused to give the SEC the audit-work papers about some Chinese clients the SEC was investigating. Even though the clients’ securities traded in the U.S., the firms had argued they were prevented from sharing the work papers by strict Chinese laws that treat such documents as akin to state secrets

[889]

" . . . but I still wonder why they have not signed the actual agreement yet a year later."

 

If you look at the detail involved in a FATCA agreement, Annex I in particular, you'll see that the wonder is that the negotiations ever come to a conclusion.

 

That and the general rule that discussions over just about anything always drag on forever unless there's a real deadline of some sort.

[Xiao Kui]

if you have those accounts, but there is less than $10 in it, why would the US care? Sorry, I'm obviously very ignorant about this topic!

[889]

If at any time during a year the total value of your non-U.S. accounts exceeds US$10,000, then you have to make an FBAR filing disclosing the existence and maximum amount of each non-U.S. account, no matter its value. That's the law, and the penalties for ignoring the law are draconian. "Why should they care" isn't really a relevant question when you're dealing with the IRS and the Treasury Department.

 

Further, note that regardless whether you meet the US$10,000 test, you should be disclosing the existence of a non-U.S. account at Line 7a of Schedule B, Form 1040. And, if you've got substantial amounts in your non-U.S. accounts, there's also Form 8938 to file with your Form 1040.

 

(Note the deadline for your 2014 FBAR filing is June 30, and it cannot be extended.)

[Xiao Kui]

Further, note that regardless whether you meet the US$10,000 test, you should be disclosing the existence of a non-U.S. account at Line 7a of Schedule B, Form 1040. And, if you've got substantial amounts in your non-U.S. accounts, there's also Form 8938 to file with your Form 1040.

 

Thanks, i honestly thought they would just close these accounts of mine since I was a foreigner and they were almost empty. this is good to know.