Updated on by
A Law Passed In 2010 May Require That You Pay Taxes On Money Scammed From You!
Yep, FACTA Can Do That!
The Foreign Account Tax Compliance Act (FATCA) 2010 is an initiative of the United States Government to promote tax compliance and uncover tax evasion by its citizens/residents and US owned (legal) entities. The Act requires that Foreign Financial Institutions (FFIs) provide information to the United States Internal Revenue Service on monies received or accounts maintained for citizens/residents of the US outside the U.S.
As stipulated by FATCA, a 30% Withholding Tax will be imposed on US sourced income paid to any FFI if the FFI fails to comply with FATCA or on an account holder that fails to provide information to determine whether or not they are a US taxpayer (such an individual/institution is termed a Recalcitrant account holder). If the 30% is not imposed, the U.S. Citizen or Resident are responsible for that payment to the IRS.
In compliance with this Act, Foreign Financial Institutions are required to provide information to the United States Internal Revenue Service on individual and corporate customers who qualify based on the following criteria:
Corporate Customers, who are:
- Individual shareholders who qualify under the above conditions and with a minimum of 10% shares in companies who execute transactions with Diamond Bank
- Corporate organizations incorporated in the United States with a minimum of 10% shareholding in companies execute transaction with Diamond Bank.
Individual Customers, who:
- Are US citizens, have US passport or green card
- Have US place of birth
- Have US residences or mailing address
- Have US telephone numbers
- Have standing instructions to transfer funds to US based accounts
- Have Power of attorney or signatory authority granted to person with US address; or
- Are in care-of or hold mail addresses that is sole address of account holder
The IRS has indicated that money sent via Western Union or Money Gram may qualify for this withholding. Additionally, money sent for the purpose of evasion of taxes, such as to receive a cash payment from a foreign bank may be considered criminal evasion as well.
Additionally, few may know this, but a U.S. citizen or resident that sends money to a foreign criminal entity may also be charge with being an accessory by the U.S. Department of Justice.
The long and the short of this is?
Don’t Send Money!
Latest posts by SCARS|EDUCATION™ Editorial Team (see all)
- SCARS|EDUCATION™ Psychology of Scams: Reciprocity Rule & Scams - January 18, 2020
- SCARS|EDUCATION™ Special Report: Fighting Cybercriminals In A Connected Future World - January 18, 2020
- SCARS|EDUCATION™ Scam Alert: Australian Bushfires and Scams - January 12, 2020
- SCARS|EDUCATION™ Psychology of Scams: Screen Time, Sleep Deprivation, and Romance Scams - January 12, 2020
- SCARS Announcement - January 4, 2020