Guest Post: Don't Forget - The Deadline To Come Clean Is This Thursday
Submitted by Simon Black of Sovereign Man
Don't Forget: The Deadline To Come Clean Is This Thursday
Are you a US taxpayer? Do you have at least $10,000 in overseas
accounts? It’s time to put those annual disclosure statements in the
mail… and quickly. Let me explain.
Each year by June 30th, US taxpayers are obliged to report all
foreign financial accounts in which they have either a beneficial
interest or signature authority, so long as the aggregate value of all
the accounts exceeds $10,000 at any time during the calendar year. The
form is known as the FBAR.
You must accurately disclose the highest value of each account during
the previous calendar year on your FBAR… so make sure you go back
through your bank and brokerage statements to check.
Let me give you a few examples:
Iggy Noramus is a US citizen who keeps all of his money in the United
States. He happily watches the value of his dollars depreciate and
completely ignores important warning signs like the Treasury Department
confiscating pension funds to make up for their budget shortfalls. Iggy
does not need to file the FBAR.
Guy Sharpe is also a US citizen who took action in 2010 to set up a
foreign bank account in Hong Kong after reading an issue of Sovereign
Man: Confidential. He only funded the account with $1,000, figuring
that he just wanted to have an overseas account ready in an emergency.
Guy doesn’t need to file the FBAR either.
Dee Pockets is a US citizen with four overseas accounts. One personal
account in Switzerland has just over $1 million, one business account
in Singapore has $5 million, one small account in Belize has just $50,
and a Cayman brokerage has $250,000. Dee must file the FBAR and declare
each of the four accounts.
Goldie Bugg is another US taxpayer who established an account in 2010
with GoldMoney; she opened the account with only $8,000 at the
beginning of the year, but the market value of her gold peaked at
$11,500 during 2010. Goldie must file an FBAR as well.
The gold ruling is new this year, and we first reported this back in
March. The Financial Crimes Enforcement Division (FinCEN) made it quite
clear that any gold held in the custody of another firm or individual
constituted a foreign financial account and needs to be reported on the
Frankly I’m starting to believe that this was part of a larger
movement to recast gold as a ‘financial instrument,’ subjecting precious
metals to regulation, control, and potential confiscation.
Given what we’re seeing now with so many brokerages cutting off their
OTC gold contracts, this hypothesis is becoming more credible. I’ll
have more on this working theory in another letter.
For now, make sure that you get your FBAR’s filed in time. The
Treasury Department changed its language in the instructions this year,
spelling out that they expect to receive the report by June 30th, which
is this coming Thursday.
only takes a few minutes to fill out (assuming you have the
information), and the instructions are self-explanatory. Consult your
tax advisor with any questions.
If you don’t have a foreign bank account yet, you really ought to consider it for four key reasons:
1) A foreign bank account often makes it much easier to diversify out
of the dollar. If you believe that, excluding some short-term rallies,
the dollar’s long-term trend is lower, you can easily hold foreign
currencies in a foreign account.
2) Foreign banks are often much stronger, not these quasi-zombie
banks propped up with deceptive accounting rules and public funds we see
in the west. Singapore, for example, has never had a banking failure,
ever. I’ve even recommended one bank in SMC that keeps 100% of deposits
in cash equivalents.
3) Banks overseas are typically much more innovative. In the west,
banks think they’re being innovative when they get a Twitter account. In
Asia, you can sign up for the next big IPO from an ATM. You can send a
worldwide wire transfer from your mobile. You can denominate accounts in
different currencies and precious metals.
4) Foreign banks are not controlled by your government. Get sideways
with a bureaucrat in your home country and see what happens to your
assets; there are dozens of agencies and courts out there, whether at
the state, local, or federal level, that can freeze you out of your own
money with a single phone call.
They can’t do that if your money is offshore. Capital controls, fear
and intimidation tactics, frivolous lawsuits, etc. have limited impact
on offshore accounts. It’s often possible to apply through the mail, and
I’ve seen some banks with account minimums as low as $0.
If you have any savings at all, I strongly urge you to consider
moving at least a portion of it overseas for the reasons I outlined
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