Law Offices of Connie Yi, PC - estate planning
Tell Us About Your Case

For the safety of our community, clients and staff, we have suspended all in-person meeting effective March 17, 2020. All consultation meetings will be via Phone or Zoom Video Conferencing. Please contact us at 925-484-0888 or email us directly at [email protected] to schedule the consultation.

Bay Area Estate And Tax Planning Law Firm
Estate Planning
Trust Administration and probate

Overseas banks balk at Foreign Account Tax Compliance Act

| Dec 15, 2012 | Uncategorized |

There has been some controversy surrounding the Foreign Account Tax Compliance Act that many people in San Francisco may have heard about. The new law forces overseas banks to share with the Internal Revenue Service very personal information on American customers whose bank accounts have more than $50,000 in them. Not only does this law demand a lot of banks that may not even operate in the United States, but it also violates many countries’ privacy laws.

IRS and tax issues are extremely tricky and it is no surprise that dealing with tax law gives many people panic attacks. From an audit to tax litigation, trying to clear your name with the federal government can be difficult to do alone. Working closely with a tax lawyer is one of the best ways to reduce the risk of overpaying and fighting inappropriate tax issues with the IRS. In the case of overseas money, a tax lawyer may be able to provide some insight into what the government can and cannot divulge.

One of the countries that have taken particular offense to the requirements of the Tax Compliance Act is China. Recently, the deputy director general of legal affairs at the People’s Bank of China has argued that it violates China’s privacy laws to release clients’ information. Though he was quick to say that these were his own opinions, not those of the Chinese government or his bank as a whole, he did point out that the U.S. should limit how far it tries to affect financial institutions outside of its borders.

The punishment for financial institutions that fail to report this information to the American government will be prohibited from doing business in the United States, according to the Tax Compliance Act. Overseas banks will also need to take into account the cost of complying with the Act before ultimately deciding how best to proceed.

Source: Reuters, “China central bank official slams U.S. tax dodging law,” Michael Flaherty, Nov. 28, 2012

Archives

FindLaw Network

Recent Blog Post

Is estate planning necessary for young people?

Misconceptions exist about the relationship between age and estate planning. Yes, older people may prioritize estate planning for reasons related to advancing age and health concerns. That does not mean only older California residents benefit from the process. Young...

What are the responsibilities of a fiduciary?

Residents of California may want to learn more about the role of the fiduciary and their responsibilities. Because fiduciary duty may be a requirement among certain professions, clients and professionals should know more about what this is. The meaning of fiduciary...

5 factors to consider when choosing a guardian

For parents, one of the biggest reasons they decide to create an estate plan is to ensure their child will be cared for no matter what. It isn’t easy to think about a tragedy where a child may lose both their parents before they turn 18, but parents have to plan for...

View More Blog Posts