Dual citizens catch a break on US tax disclosure
(CNS): Caymanians who are US citizens or green-card holders have been given a bit more time to come clean about their assets to the US tax man as a result of the disruption caused by Hurricane Irene this weekend. Taxpayers who need to apply to the offshore voluntary disclosure initiative (OVDI) of the US Internal Revenue Service (IRS) now have until 9 September to submit their request to participate in the programme to address their past failures to report taxable income to the authorities. There are three processes that people should take in advance of 9 September if they elect to apply for this programme, which includes the pre-clearance process, an OVD letter and requests for extensions.
By obtaining this pre-clearance from the IRS’s Criminal Investigation division, officials from the financial services secretariat said taxpayers would be able to find out if they are already under investigation and therefore ineligible to participate in the OVDI.
“To request pre-clearance, use the procedure outlined in FAQ 23 of the OVDI FAQs at www.IRS.gov. Fax your pre-clearance request at least 24 hours in advance of 9 September in order to leave time to receive a fax reply indicating if you are preliminarily eligible to participate. Due to the anticipated last-minute rush, it’s best to submit this document as soon as possible before the deadline,” officials advised in a release this week, adding that any information submitted by someone already under investigation could be incriminating.
“Therefore, a person who learns from the pre-clearance process that he or she is already under investigation is advised to seek the advice of a qualified US tax lawyer before submitting additional information to the IRS,” the secretariat said.
Once pre-cleared, tax payers need to submit the Offshore Voluntary Disclosures Letter (OVD Letter) using the format available in FAQ 24 with the taxpayer’s name, address, date of birth and social security number, and as much additional information as possible. And send it to Offshore Voluntary Disclosure Coordinator, 600 Arch Street, Room 6404, Philadelphia, PA 19106.
After that people can request a 90-day extension of time to submit the remaining OVDI materials and payments as outlined in FAQ 25.1 and requests for an extension need to be sent to Internal Revenue Service, 3651 S. I H 35 Stop 4301 AUSC, Austin, TX 78741. ATTN: 2011 Offshore Voluntary Disclosure Initiative.
“There is no guarantee that a request for an extension will be granted. Nevertheless, it is anticipated that the IRS will not want to turn away taxpayers whose submissions indicate a sincere desire to make a full and complete disclosure and pay all amounts that are due,” the secretariat stated, adding that the information was being provided as a public service and does not purport to serve as tax advice.
Category: Finance
I think the post at 22:34 is referring to persons who have been investigated by the IRS and owe taxes, but decide to not pay up and try to renounce their citizenship. That individual could possibly be banned from travel to the US.
If an individual renounces their citizenship without any issues with the IRS, all they need to do is apply for a tourist visa, or as mentioned above, travel with their UK passport; however, individuals traveling to the US on a UK passport cannot travel if it is an emergency situation, so it is still best to apply for a US visa.
Thanks, I had to scroll all the way down to see the 22:34 commenter. Why didn't you reply under his/her comment? Easier reading.
Pay up for all those who want the USA benefits. This is the problem with most of the world people always want everything for nothing. Give unto Ceaser the things that are Ceaser's. In all things be honest, if you owe it pay it. The USA should take away every thing that these tax dodgers own in the USA and stop them from entering the USA until they pay all the taxes owed.
what a stupid comment!
Let the tax dodgers enter the US. Just don't let them leave until they have paid up!
Do you know how this works? They want you to give them the information so that you do there job for them.
Now, for me, I am going to go hard for this…I am filing starting la st year but I ain't given them a british penny. My investment entail things wiser than Cayman; I love Cayman but I would never trust Cayman Gov't with my money ..it is run like a business itself.
I have went as far as securing Caricom citizenship..find me in the mountains of Saint Lucia white boy stacked up with US credit cards, loans and US sham businesses abounding. When the US tries to pull the plug so do I. They hold me a some sort of bail at MIA I pull my corporate bridge loans meet the bail and then maybe $1 million or $2 million on top to keep me sipping cold beverages on hot beaches for years to come.
Oh and you will not see me in target or wal mart with the masses of "dreamers" or Obama supports; try Hong Kong or UAE in high end shoppes.
My spirit I have is the kind that made America great. This spirit is so great the US has been sailing on the back of this type of years but not on my back as they would all say.
It is easy to pick on the people that don't really vote…isn't it..they forgot the type that don't live in USA are smart ones for waking up from a bad dream,
Shouldn't the headline really be "Tax Dodgers catch a break". Those who have been honest and paid their taxes did not catch any break. The Cayman Government, if it means what it says about not being a tax haven, should offer up a list of names of these criminals immediately.
Ok, I have a question, not clear on this…Does it mean that an American expat working in
Cayman will be made to pay U.S. income tax on his earnings in Cayman?
Or is it more Americans living in Cayman with large bank accounts?
As an American expat working in Cayman, I am expected to pay U.S. income tax on my earnings in Cayman. However, there is an allowance which, to me, seems quite generous as I don't make nearly that much money and therefore have not had to pay taxes in a few years. I am expected, however, to file taxes and I do.
Yes. Correct. US citizens have their worldwide income taxable. Always has been. Always will be. IF, you are on bonafide resident of a foreign country (like Cayman on a W/P) The fiorst $80,000 of your income is non taxable. BUT, yuu must FILE or the exemption is not valid. Call the experts at KPMG. They know but all the lines may be jammed. PS: I do not think it will be too many years before the UK and Canada have the same law.
Americans no matter what country they work in have to at least file with the IRS anually, and depending on the amount they earn (or what they tell the IRS) some do actually pay tax
Income tax on earnings. Exemption can be applied for for first 90k or so.
I remember standing in the visitors line at Miami International Airport, people whom I thought were Caymanian smirked at me as they quickly made their way through the citizens line. I wonder what they are thinking now?
Some of them,for all you know could have been thinking about your roll over policy and certain immigration laws – how stupid they are!
That’s a good reason to keep a second citizenship? As far as I know the rollover policy or another immigration laws in the Cayman Islands would do nothing to cause a person to retain dual citizenship just so they can get through immigration upon entry into the USA quickly. My my what a price to pay for the extra 15 minutes of shopping time in Miami. I hear some people being asked to pay up to 25% of their worth.
19:23 You know what they need to stop using the Cayman Islands for stepping stone. They want Cayman status here, only to straddle one foot across the ocean between yaw and miami. Ever hear about wanting their cake and eat it too. Da wha una get, need keep una ass in one place.
They can kiss my…. [you know what]! I was raised here all my life AND IM GONNA DIE HERE!!! Yes, I got U.S. papers, but I have never lived in the U.S.! Now I don't want the papers and they are telling me that I will have to be taxed 10 years if I decide to give my citizenship. Unbelievable! Well…. they can bark all they want, because I promise you this that they are not getting one cent from me. I never live there and I want no part in helping a lazy ass welfare state! The IRS is a bunch of crooks!
You do realise, of course, that your name will go in the computer and you will no longer be able to travel to or through the US. If you can live with that, fine.
That is incorrect! I have family members who recently gave up their US citizenship and have traveled to the US on their UK passports at least 3 times since. Please get your facts straight before confusing others!
22:34 Cuba got better doctors than USA, and the flight only cost 250.00 with 30.00 dollars a day hotel bill. Japan will soon show USA who is world oleader.
so why did u ever bother getting US papers???? Did they twist your arm or something??? I just hope I never run into you in Walmart or Target…one day you will regret it because your favorite ship is sinking so remember this day and what I just said……
Don’t be stupid. A lot of people had their parents applying for US citizenship for their kids – they thought they were doing them a favor by giving them more options for the future.
I think taxing people overseas is pretty ridiculous but that is the US policy. No one to blame here, just need to get this cleared up.
Don't listen to advice given on a website for people that don't even want to pay $.50 for a newspaper. You should only have to pay tax if you made over USD $80K any of the years between 2005 – 2010. If you're under that bracket (or even a little over), don't worry just go see a tax specialist but do it today. There's tones of information you're going to need to gather within a very short time period.
I'm not a tax attorney or tax specialist and I personally would recommend consulting one – it isn't going to be cheap but I've had a few moments in my life where I’ve regretted putting things off for too long. It isn't worth it, go in and speak to someone about this TODAY, get your facts straight and get this behind you.
Remember, you can't renounce until you get your tax information straight – and one day you're going to pass away then your kids are going to inherit your tax problems when they inherit your estate and the tax that comes along with it.
Btw, if you've inheritted land and you're worried about being taxed on that – you're only taxed if the land was inherit from a person with US citizenship – meaning Dad was a US citizen and left it to you.
Be smart, act now.
Unfortunately youhave no choice. US law is clear on this and Cayman is committed to assisting them. The only thing you are going to be able to kiss is your bank account goodbye. You should get some advice quickly, and probably renounce. There is nothing new about any of this … except that you have now been caught.
08:28 You wait and see, dinn,t you read in the bible where David killed Goliath with a rock and sling shot. Well not all times the biggest is the fittest. I see it is time all those persons who naw born yaw but gaw status ya, need to come on board thisship with us, it is high time you you see where USA is heading. All un board or man over board.
Renouncing does not relinquish your obligation to pay the taxes and fines you owe the IRS. It just means that from that point forward, you won't have to file.
I too am a US citizen but i choose to comply because if you don't, Uncle Sam will stap you with fines that could literally bakrupt you. Be careful and think carefully before deciding whether or not to comply.
08:28 If you think there is an American alive who can dig Caymanian out his Crab Hole yaw, then I tell him come, because I am sure he will be drinking Tortuga Rum the next day on seven mile beach and singing where have all the money gone..
18:05 I take off my hat to you, because I can hear you are a real grassroot, sunhat, wompers foot Caymanian. You are absolutely correct. Give them Sh%%%t, let them go and sit down, they only want to squeeze the life out of us. If every Caymanian born yaw and them gaw paper yaw who do not reralize what USA is doing, then you need to change your caps for a straw hat. Plant cassava and breadfruit, batla and plaintain, because soon come they going want to take the very money you have in the bank. Buy property and plant frut trees because it will all soon be survival of the fittess.