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USA bank account? Be afraid, be very afraid

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For many years, whenever offshore tax avoidance issues are discussed, many South Africans suggested that having a bank account in Delaware or with any USA bank was rather safe from prying eyes. The USA was not tainted as a tax haven despite the Delaware arrangements.
A recent USA court ruling, slapping a USA bank on the fingers for trying to escape the IRS reporting requirements, makes for interesting reading.
This is the IRS way of thanking SARS for entering into signing the FATCA agreement negotiations.
BIG DADDY IS WATCHING – not even your Google account was safe from IRS/USA government. What made you think your USA bank account was safe?
Department of Justice Seal - Department of Justice Action Center
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Monday, January 13, 2014
Court Rejects Banking Associations’ Challenge to
Regulations Addressing Offshore Tax Avoidance

Today the District Court in the District of Columbia dismissed a challenge filed by the Florida Bankers Association and Texas Bankers Association challenging 2012 amendments to the Department of the Treasury’s interest-reporting regulations.  The regulations require U.S. banks to report to the Internal Revenue Service (IRS) information about accounts earning more than $10 of interest beginning in 2013 that are held by non-resident aliens of all countries with which the United States has a tax treaty or other information exchange agreement [Blogger adds: South Africa is included in this list!].  These new reporting requirements help the United States’ ability to comply with requests from its treaty and exchange partners and implement the Foreign Account Tax Compliance Act.

“This ruling advances the Department of Justice’s and Internal Revenue Service’s continuing efforts to pursue taxpayers trying to evade taxes through offshore accounts,” said Assistant Attorney General Kathryn Keneally of the Tax Division.  “The court’s opinion today represents an important step in our commitment to work with our treaty partners to eliminate cross-border tax evasion.” 

The court upheld the regulations’ 2012 amendments, finding that the IRS “reasonably concluded that the regulations will improve U.S. tax compliance, deter foreign and domestic tax evasion, impose a minimal reporting burden on banks, and not cause any rational actor – other than a tax evader – to withdraw his funds from U.S. accounts.”

The court’s decision affirms the IRS’ ongoing efforts to close the tax gap through cooperative measures with foreign governments, including the  2012 amendments. 

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Cross Border Tax and Exchange Control Advisor

Need some guidance on planning your emigration?

you friendly emigration advisor

 H U G O  V A N  Z Y L

CA(SA) M.Com (Tax)  Master Tax Practitioner (SA) TEP

www.hugovanzyl.com 

Tax Connected 
Hermanus South Africa

Hugo van Zyl – Cross Border Advisor, Tax and Exchange Control

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H U G O   V A N  Z Y L CA(SA) M.Com (Tax)  Master Tax Practitioner

www.hugovanzyl.com 

Tax Connected 
Hermanus South Africa

business profile: HUGO VAN ZYL

 

 

 

 

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Hugo van Zyl is a Chartered Accountant with a Master’s Degree in Taxation. With more than 20 years of experience in accounting and auditing, today Hugo has relinquished his private practice as a registered auditor and is a sought-after specialist in local and international tax. His main focus is on cross-border and emigration issues. He nonetheless retains his professional registrations with:

Who are the clients?

Hugo assists individuals or companies, directly in association with several small and medium sized audit and law firms servicing their international client base. These services include

  • cross-border Exchange Control applications for individuals emigrating as well as for small- and medium-sized businesses entering the international market;
  • double tax treaty compliance
  • advice on the legal and compliant use of South African and internationally owned intellectual property, such as trade marks, software licenses and franchise agreements
  • assistance to small and medium sized audit firms with tax advice and to resolve tax disputes including VAT.

His client base includes many fellow South Africans dispersed around the world. Both those who left with nearly no cash as well as high net worth individuals leaving their home country or returning to their roots, or merely departing on secondment to fill appointments as business executives, academics or diplomats.

Using modern technology such as Skype, Box.net and Microsoft Office Live, MSN Chat, FON and other VOIP devices he is able to assist his clients around the world from his office in Brooklyn, Pretoria as though they were together in the same boardroom. From his office Hugo professionally attends to his international clients on a daily basis wherever they may reside or trade.

Lecture circuit

Hugo has travelled far and wide to lecture on Tax to South Africans dispersed all over the world, including Wembley, London where his lecture was presented in Afrikaans! Particularly since the well-publicized Tax and Exchange Control Amnesty of 2004, Hugo has been much in demand on the international lecture circuit for his presentations on offshore and the appropriate business structures necessary to be fully complaint with local tax and exchange control rules. In South Africa he has also trained SARS staff, lectured on Advanced Certificate in Trusts to students of various universities and also to SAICA members covering topics such as VAT, capital gains tax, emigrations, residence basis of taxation and much more.

The man himself

Married, with no children Hugo enjoys travel, good food and wine.

Hugo’s passion and commitment is to add value to his clients and particularly, to serve South Africans wherever they are working or living – be that in South Africa or around the world.

For full information go to www.hugovanzyl.co.za

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