FATCA in Kuwait – Hello IRS

If you don’t know what FATCA is or never heard of it, then you probably don’t have to worry about it. But if your an American citizen working abroad or have your assets abroad then you are probably very aware of it and some are very worried of it.

FATCA – Foreign Account Tax Compliance Act

FATCA reflects a global trend to increase tax transparency and involves all U.S. persons (individuals, entities, or entities which are substantially directly or indirectly owned by U.S. person(s)) transacting with financial institutions around the globe.

Simply put the banks in Kuwait have effectively opened up details of any person who is holding a US Citizenship and in Kuwait I know the dual Citizenship is not legal but lots of people have it, so now Kuwaiti’s who have had no experience or interaction with the IRS are going to have to get their paperwork together and a very good tax lawyer to get a little creative to make sure they don’t suffer the wrath of the IRS.

When you think of the most powerful US Agency then you think NSA or CIA, they take care of the missions that we know nothing of, but contrary to what people think the most powerful US Government is the IRS. They have more powers to dig into people and in which way they need to get to money owed to the US Government.

And I have heard some Kuwiatis say they will toss the US Citizenship as solution not to pay their back taxes. But that isn’t a solution, if you relinquish the US Citizenship then the IRS will take that into consideration and they will go through your life with a fine tooth comb, aand you will have to pay 3 to 6 years worth of back taxes before you can get out of it. And on top of paying back so many years of taxes your name will be flagged at every US Embassy and Border Station, meaning it will be nearly impossible to get a US Visa and if you do you will be flagged for life as a suspicious character.