The Foreign Account Tax Compliance Act is a law that passed in 2010. It requires all non-US banks to exercise due diligence by taking affirmative steps to see which of their account holders may be US persons. The letter and request for IRS Form W-8 are both parts of the FATCA process.
Banks must look through their records to see if there are any "tells" that an account holder may be a US person. For instance - wires in or outbound to the US, or accounts with US addresses and/or US phone numbers.
Many non-US persons may be incorrectly "tagged" as a US person. For instance, someone who worked in the United States on an H1-B Visa between 2003-2008, but then left the US, might be the kind of person a foreign bank would assume is still a US person.
They are fearful about being shut out of the US capital market.
Yes, but there may be consequences. Your bank will likely forward your name to the IRS as someone it suspects of being a US person. From our experience, many international audits are commenced because of information the IRS receives from banks.
Yes. Contact us for a free, confidential consultation. Many times, the final tax bill is not as large as our clients first fear. If we are able to get ahead of the IRS, we stand the greatest chance to reduce or mitigate penalties. Call us at 888-727-8796 or email us at firstname.lastname@example.org.
We invite you to review success stories and case studies of clients of ours.