SOME banks around the world, including in Singapore, are considering showing their American clients the door over fears that a new United States law on financial reporting will make them more trouble than they are worth.儲存倉The upcoming Foreign Account Tax Compliance Act (Fatca), as the law is known, is also angering Americans living outside the US, with some relinquishing their citizenship just to escape the legislation's long reach.Fatca, which comes into effect next July, will require banks around the world to provide the US taxman with contact and financial details on clients who are either American citizens or green card holders.The onerous reporting requirements and threat to bank privacy have already spurred some institutions to review all customer accounts and approach those who are "US persons".These are mostly US citizens and green card holders, said Mr Kurt Rademacher, director of international tax practice at international law firm Butler Snow.The client then has one of two forms to sign. One declares that he or she is a US person. The other is that they are not a US person, which then requires the client to provide proof that he or she has renounced citizenship."What banks are saying is, sign one of these forms or you can't be our client anymore," he said in a recent interview with The Straits Times."There are also banks saying, this whole American client thing is just too hard... There are several large private banks who will not bank American people now."These clients too, are starting to reconsider the value of having an American citizenship or green card, Mr Rademacher said.He declined to give a number, but said Butler Snow has helped many American clients in the past year get their taxes in order and renounce their citizenship."I 迷你倉最平on't think they'll give up citizenship because of [Fatca] in isolation but I think they'll give up citizenship because it's getting harder and harder to be an American and this is just one more compliance burden."A recent CNBC report said 2,369 Americans gave up their US passports or green cards in the first nine months of this year - already more than the then-record 1,781 in the whole of 2011.But the path towards renouncing citizenship comes at a cost. First, the person has to clear his tax debt to the Inland Revenue Service, noted Mr Rademacher.And it is important for Americans worldwide to do this before Fatca comes into effect, he added."Right now there are quasi-amnesty programmes that are available but (only) if you come in before you're detected by Fatca."These programmes say you still have to pay all the taxes that you should've paid and you still have to pay interest on the taxes plus a penalty, but it caps your exposure at eight years."These amnesty programmes also give individuals the guarantee that they would not be criminally prosecuted for tax evasion.There are many American passport and green card holders who have not been fully compliant with their tax obligations, but a substantial share of this group are "accidental Americans", said Butler Snow lawyer Brad Westerfield."These could be people who were born in the US and left when they were two, or individuals who were not born in the US but may have one or two US citizen parents who automatically transferred citizenship to their child," he said."So you might have someone who lived their entire life outside the US and in a lot of cases they may not even have a US passport, but they are now finding out from their banks that they are being considered US persons."yasminey@sph.com.sg迷你倉
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