Connect with us


Phuket Gazette Business: US tax regime to scrutinize taxpayer bank accounts



PHUKET: In light of the ‘federal fiscal fiasco’ in Washington DC – to the tune of nearly 17 trillion dollars – the American government is looking to expand its worldwide tax base.

As such, US citizens and green card holders conducting, contracting or controlling business operations in or from countries outside the US, including Thailand, need to ensure consistency and transparency when complying with the latest reporting requirements.

“They’re [the US Internal Revenue Service (IRS)] going after undisclosed, offshore bank and securities accounts,” says John Andes, a US CPA and Thai-American partner with the Bangkok-based accounting firm KMPG Phoomchai Tax Ltd.

Speaking at a US tax update seminar sponsored by Phuket Chapter of the American Chamber of Commerce (AMCHAM) at the Holiday Inn, Patong on March 8, Mr Andes reiterated that all American citizens, regardless of their domicile or residency status, are required to file US income tax returns, report worldwide income and disclose certain information about foreign investments annually.

In addition to increased scrutiny by the IRS for individual income reporting, the Department of Treasury is also putting the onus on foreign banks to disclose certain information about non-US financial accounts held by Americans.

“More stringent reporting requirements and enforcement by the IRS came about after the IRS discovered large sums of unreported money by US account holders in Swiss bank accounts,” explains John.

In last week’s “You can run, but you can’t hide” article, Mr Andes identified two primary options for Americans residing overseas to consider when trying to reduce their US tax obligations – electing a Foreign Earned Income (FEI) exclusion, and claiming a foreign tax credit.

In addition to filing taxes with the IRS, US citizens and resident aliens with financial assets outside of the US and its territories, may also need to file the Foreign Bank Account Reporting (FBAR), using form TD F 90-22.1.

This form must be received by the US Department of Treasury no later than June 30, and there are no extensions possible.

“The FBAR is required for US citizens or resident aliens who had a financing interest over one or more foreign bank and financial accounts, in aggregate, amounting to or more than US$10,000 at any time during the year.”

Mr Andes explained that “having a financing interest in an account” means that the US citizen (or resident alien) was the owner, individual or jointly, or simply had signatory authority over the account, even if he did not control or own the respective funds.

Reportable accounts include bank accounts, insurance policies with a cash surrender value, securities, securities derivatives, or other financial instrument and mutual fund accounts.

Meanwhile, bonds, notes and stock certificates held directly by the person are not FBAR reportable.

The IRS is increasing enforcement of this reporting requirement.

“There are significant civil penalties imposed if it is determined that there was willful failure to file. These can be up to $100,000 or 50% of the aggregate balance in accounts.”

“There are also potential criminal penalties, which can amount to $500,000 and/or five years of jail time.”

US taxpayers who are living abroad on the general tax filing deadline of April 15 get an automatic extension of two months to file.

The taxpayer can file for an additional four month extension (total six months, or by October), using form 4868.

If, however, the taxpayer has an amount owing to the IRS, he must pay that amount by April 15. The extension is only an extension to file, not to pay.

Next week, we’ll conclude with advice and updates about foreign assets and investments.

— Steven Layne


Get more from The Thaiger

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Thailand8 mins ago

Thai mental health officials want psychiatric drugs listed as essential meds

Thailand12 mins ago

2 Thai knights in shining armour aid lost foreign child in Pattaya

Hot News13 mins ago

Chiang Mai’s famous giant panda turns 21 years old

Sponsored18 hours ago

Segafredo Zanetti Coffee teamed up with Bangkok Airways and hosted “Bangkok Airways Surf Festival 2022”

Weather39 mins ago

Category 4 Hurricane Ian hits US state of Florida’s coast

Best of44 mins ago

5 suit tailors in Bangkok that’ll make you look dapper

Weather44 mins ago

Tropical Storm Noru hits northeast Thailand, 1 dead, 2 injured

Join the conversation on the Thaiger Talk forums today!
Patong1 hour ago

American tourist allegedly assaulted outside Patong bar

Thailand1 hour ago

4,000 Evacuated as Typhoon Noru hits Thailand | GMT

Tourism1 hour ago

Thai Airways promotion to Fukuoka, Japan

Hot News1 hour ago

Over 4,000 civilians evacuated in Isaan as tropical storm Noru hits

Road deaths15 hours ago

‘Drowsy’ driver crashes van, killing 3 Laotian workers

Thailand16 hours ago

Is the dream over? China walks back Belt & Road ambitions

Politics17 hours ago

Prasert levels 6-billion corruption accusations at Prayut

Thailand17 hours ago

Thailand News Today | Thai Baht plunges to 38 against USD for the first time in 16 years

Phuket17 hours ago

Phuket dwellers honour 10th Lunar Month

Thailand1 year ago

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

Thailand2 years ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism2 years ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket2 years ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism2 years ago

Phuket Thai food treats you need to try | VIDEO

Thailand2 years ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism2 years ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand2 years ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand2 years ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand2 years ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand2 years ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand2 years ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand2 years ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand2 years ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand2 years ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11