Tuesday, November 17, 2015

Nonresident Alien Interest Earned Shared With Other Countries by IRS

IRS now automatically exchanges tax information with many countries.  Under this exchange, IRS shares information on the amount of deposit interest paid to nonresident aliens.  The list of countries has now reached 34.  This type of interest earned by nonresident aliens is not taxable to the United States, but it may be taxable to the alien’s home country.  US banks have sued IRS to overturn the reporting requirements, but have been unsuccessful so far.

The countries IRS automatically shares this information with are:  Australia, Brazil, Canada, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Guernsey, Hungary, Iceland, India, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mauritius, Mexico, Netherlands, New Zealand, Norway, Poland, Slovenia, South Africa, Spain, Sweden, and United Kingdom.

Other countries with which IRS has tax information sharing include:  Antigua & Barbuda, Aruba, Austria, Azerbaijan, Bangladesh, Barbados, Belgium, Bermuda, British Virgin Islands, Bulgaria, Cayman Islands, China, Columbia, Costa Rica, Croatia, Curacao, Cyprus, Dominica, Dominican Republic, Egypt, Greece, Grenada, Guyana, Honduras, Hong Kong, Indonesia, Israel, Jamaica, Japan, Kazakhstan, Marshall Islands, Monaco, Morocco, Netherlands island territories: Bonaire, Saba, and St. Eustatius, Pakistan, Panama, Peru, Philippines, Portugal, Romania, Russian Federation, Slovak Republic, South Korea, Sri Lanka, St. Maarten (Dutch part), Switzerland, Thailand, Trinidad & Tobago, Tunisia, Turkey, Ukraine, and Venezuela.

As part of this exchange program IRS receives information regarding interest income earned by US taxpayers.  Naturally this information could be used by IRS to match with foreign bank account reporting (FBAR).

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