Tax-Expatriation

More on FATCA Driven IRS Forms, specifically including IRS Form W-8BEN-E ~ It’s All About Information and More Information

Posted on November 5, 2014 Updated on November 6, 2014

The lives of United States Citizens and Lawful Permanent Residents living outside the U.S. has necessarily become more complicated due to FATCA. 

Previous posts discussed unintended consequences of FATCA.  See, Part 2 – Unintended Consequences of FATCA – for USCs and LPRs Living Outside the U.S.

Also, see, Part 1- Unintended Consequences of FATCA – for USCs and LPRs Living Outside the U.S.

– One of the most significant unintended consequence, is that the U.S. federal government (the IRS, the Treasury Department, or Congress) never initially even contemplated USCs and LPRs living overseas.  In other words, the group targeted were U.S. resident individuals who were evading taxes through foreign financial institutions.  I say this, based upon extensive conversations I have had with ex-government officials and some government officials who were involved in the original policy discussions.

Also, see FATCA Driven – New IRS Forms W-8BEN versus W-8BEN-E versus W-9 (etc. etc.) for USCs and LPRs Overseas – It’s All About Information and More Information*

Currently, the IRS has revised or created the following new tax forms as a result of FATCA (all in the English language), which can be located at the IRS website at FATCA – Current Alerts and Other News:

Importantly, none of these forms are in other key languages such as Spanish, French, Mandarin, Cantonese, Portuguese, etc.  Imagine the daunting nature of completing these complex forms just in English when English is your first language, let alone completing them when you speak little to no English.

As the financial and account information of U.S. citizens and LPRs at financial institutions worldwide is now being collected to be reported in 2015 to the IRS under FATCA, a better understanding of FATCA forms is required.  A follow-up post will specifically discuss how financial and account information of non-U.S. shareholders and owners of foreign corporations, companies and foreign trusts will also indirectly be reported to the IRS, when there is a “substantial U.S. owner.”

A detailed discussion of how and when this information will be released to the IRS will be explained in a follow-up discussion of a passive “non-financial foreign entity” (“NFFE”) which will typically be a foreign corporation (non-U.S.), companies and foreign trusts.

This information is set forth and requested in Parts XXX and XXIX on the last page of IRS Form W-8BEN-E on page 8.  These items are highlighted here in yellow reflecting the information requested.

A follow-up post will explain what is a “passive” NFFE and what information is required to be reported per the form.  For a better understanding of the importance of signing a document “under penalty of perjury” see  Certifying Under Penalty of Perjury – Meeting the Requirements of Title 26 for Preceding 5 Taxable Years.