# Ausrtalian bank account for tax credit



## MadTurboCow (Jan 15, 2021)

I am completing the 1040, schedule 1 and 2555 for the first time on behalf of my US born daughter (19). The 1040 ends up with a tax refund (because of the Recovery Rebate Credit) so I have to provide direct deposit information. Question 35b asks for a routing number which I am very reluctant to just drop in an Australian BSB. I would be happy for them to send a cheque but no option to request that.

What are options for getting payment in Australia? Thanks in advance.


----------



## Nononymous (Jul 12, 2011)

If the earlier stimulus cheques are anything to go by, it will not work with a non-US bank. Best bet is to quickly set up a (free) Transferwise US dollar account, which will have a proper US routing number, and use that for direct deposit. Then transfer the money to Australia at your leisure.

I know we've had this conversation before, but if your daughter is an Australian citizen, why on earth would she want to come into US tax compliance? She can pretty easily ignore all this if she has no plans of moving to the US. I would not give up my anonymity vis-a-vis the IRS for an $1800 stimulus benefit.

PS on edit: Regarding FATCA, the fact that she identified herself to her bank as a US citizen doesn't compel tax compliance; she could also close the account (without giving the bank an SSN) and open a new account with a different bank but take care not to disclose US citizenship.


----------



## Moulard (Feb 3, 2017)

As far as I am aware the IRS does no international bank transfers, so the option is a cheque or direct deposit into a US bank Account.

Australia's Bank-State-Branch number system is different to a US routing number format in any event.

Most Australian Banks are likely to accept the cheque because it is effectively a Bank Cheque. But depending on your banker of choice fees could be quite high.


----------



## MadTurboCow (Jan 15, 2021)

Nononymous said:


> If the earlier stimulus cheques are anything to go by, it will not work with a non-US bank. Best bet is to quickly set up a (free) Transferwise US dollar account, which will have a proper US routing number, and use that for direct deposit. Then transfer the money to Australia at your leisure.
> 
> I know we've had this conversation before, but if your daughter is an Australian citizen, why on earth would she want to come into US tax compliance? She can pretty easily ignore all this if she has no plans of moving to the US. I would not give up my anonymity vis-a-vis the IRS for an $1800 stimulus benefit.
> 
> PS on edit: Regarding FATCA, the fact that she identified herself to her bank as a US citizen doesn't compel tax compliance; she could also close the account (without giving the bank an SSN) and open a new account with a different bank but take care not to disclose US citizenship.


Great, thanks for this information. The reason is because her Australian banks know she was born in the US and then froze her account until she provided her SSN. We wouldn't do it otherwise. If we opened another account, they would still want her place of birth details.


----------



## Nononymous (Jul 12, 2011)

MadTurboCow said:


> Great, thanks for this information. The reason is because her Australian banks know she was born in the US and then froze her account until she provided her SSN. We wouldn't do it otherwise. If we opened another account, they would still want her place of birth details.


As I said previously, giving an SSN to her bank does *not* mean that she must file US tax returns - the IRS doesn't really do anything with that information, and unless she has a sizeable amount of money in the account (over US$50k) it probably doesn't get reported anyway. Right now her filing would be quite simple - and she'll collect a bunch of money from the stimulus benefit - but if she stays in Australia and lives a halfway normal bourgeois existence, she'll possibly run into grief later on with the Super or other investments. Think long and hard about whether this is a smart thing for her to do. (My own dual-citizen child, the same age, absolutely will not file or declare their US person status to banks. I've coached them well!) Your daughter should contact the good folks at fixthetaxtreaty dot org for advice before committing to the path of compliance.

Also, are you absolutely certain that Australian banks ask for place of birth? Or is it simply a citizenship question that one is free to answer as one sees fit? In Canada the ID requirement is only a drivers license, which does not include birthplace. It's rather easy to BS one's way past the FATCA police.


----------



## MadTurboCow (Jan 15, 2021)

Moulard said:


> As far as I am aware the IRS does no international bank transfers, so the option is a cheque or direct deposit into a US bank Account.
> 
> Australia's Bank-State-Branch number system is different to a US routing number format in any event.
> 
> Most Australian Banks are likely to accept the cheque because it is effectively a Bank Cheque. But depending on your banker of choice fees could be quite high.


Thanks, I would happily take a cheque but there was nowhere to request a cheque. It just said direct deposit.


Nononymous said:


> As I said previously, giving an SSN to her bank does *not* mean that she must file US tax returns - the IRS doesn't really do anything with that information, and unless she has a sizeable amount of money in the account (over US$50k) it probably doesn't get reported anyway. Right now her filing would be quite simple - and she'll collect a bunch of money from the stimulus benefit - but if she stays in Australia and lives a halfway normal bourgeois existence, she'll possibly run into grief later on with the Super or other investments. Think long and hard about whether this is a smart thing for her to do. (My own dual-citizen child, the same age, absolutely will not file or declare their US person status to banks. I've coached them well!) Your daughter should contact the good folks at fixthetaxtreaty dot org for advice before committing to the path of compliance.
> 
> Also, are you absolutely certain that Australian banks ask for place of birth? Or is it simply a citizenship question that one is free to answer as one sees fit? In Canada the ID requirement is only a drivers license, which does not include birthplace. It's rather easy to BS one's way past the FATCA police.


Hi Nononymous. Ok, I hear you and agree that she wouldn't have to provide a real SSN. However we have also made the decision that she will renounce her US citizenship. It costs over $3000 (Australian) so the tax credit will help pay the crazy costs. So we just thought we would do everything legitimately. Then also one day if she does visit the US again, they won't bail her up somewhere for overdue tax returns. Hope that explains our thinking but as always, open to suggestions.


----------



## Bevdeforges (Nov 16, 2007)

If you don't provide a bank account number, then they will send a check. (Though for the Covid relief payments there is talk about sending "pre paid debit cards" instead. Though that's more convenient for overseas use than a paper check.) But you don't get to specify what you want other than the direct bank deposit. 

The Transferwise account works just fine and they'll give you the appropriate bank codes - AND notify you by e-mail when you get a deposit! 

Also, don't give much/any thought to getting "caught out" for failure to file while visiting the US. There are plenty of legitimate reasons why a US citizen would not need to file, so unless there is some reason the IRS would happen to know for sure that she owes big tax amounts, they won't come looking for her. OTOH, if she plans to possibly relocate to the States, it would be a good idea to do the Streamlined thing from overseas before heading over there.


----------



## Nononymous (Jul 12, 2011)

If she's serious about renouncing, then filing this year to collect the benefit is a good idea, as it's a once-in-a-lifetime chance to make the US government cover the cost of its own stupid fee. She isn't the only one with this idea.

Being caught for not filing tax returns when visiting the US isn't a real concern - there are no compliance checks on entry, or even passport renewal, and as explained above, lack of returns on file is not in itself evidence of tax evasion. If access is a concern, renouncing is probably the greater risk - in theory she should be treated no differently than any other Australian, but an extra-patriotic customs official might be unhappy with the situation.

Still, if she wants to make a clean break, this is the year. The returns will be simple, the renunciation fee will be partly or wholly covered, and she won't need to lie to her banks to avoid FATCA.


----------



## MadTurboCow (Jan 15, 2021)

Bevdeforges said:


> If you don't provide a bank account number, then they will send a check. (Though for the Covid relief payments there is talk about sending "pre paid debit cards" instead. Though that's more convenient for overseas use than a paper check.) But you don't get to specify what you want other than the direct bank deposit.
> 
> The Transferwise account works just fine and they'll give you the appropriate bank codes - AND notify you by e-mail when you get a deposit!
> 
> Also, don't give much/any thought to getting "caught out" for failure to file while visiting the US. There are plenty of legitimate reasons why a US citizen would not need to file, so unless there is some reason the IRS would happen to know for sure that she owes big tax amounts, they won't come looking for her. OTOH, if she plans to possibly relocate to the States, it would be a good idea to do the Streamlined thing from overseas before heading over there.


Thanks for the info. My wife eventually stumbled on some comment somewhere that said if left empty, then they send a cheque/check but thanks for the confirmation. Yes, I think we will use the refund to do the renounce and wash our hands of it. There was some websites talking about getting the citizenship-based taxation repealed but I won't hold my breath. Thanks again.


----------



## MadTurboCow (Jan 15, 2021)

Nononymous said:


> If she's serious about renouncing, then filing this year to collect the benefit is a good idea, as it's a once-in-a-lifetime chance to make the US government cover the cost of its own stupid fee. She isn't the only one with this idea.
> 
> Being caught for not filing tax returns when visiting the US isn't a real concern - there are no compliance checks on entry, or even passport renewal, and as explained above, lack of returns on file is not in itself evidence of tax evasion. If access is a concern, renouncing is probably the greater risk - in theory she should be treated no differently than any other Australian, but an extra-patriotic customs official might be unhappy with the situation.
> 
> Still, if she wants to make a clean break, this is the year. The returns will be simple, the renunciation fee will be partly or wholly covered, and she won't need to lie to her banks to avoid FATCA.


As per my last message/response to previous poster, yes we will do the renouncing and use the recovery cheque/check to mostly pay for it. Crazy that they charge so much to renounce citizenship. Thanks for your advice. The daughter says that she has no plans to go back to the US other than maybe a holiday one day and she has no plans to try to be president 😄. But who knows what happens down the track. I had to wait months and jump through hoops to get a working visa many years ago so I thought it would be nice if she had US citizenship in her pocket. She says she will be happy to stay Australian for life. Thanks again.


----------



## Nononymous (Jul 12, 2011)

There's talk of another $1400 coming soon, so one could potentially turn a small profit on the deal.


----------



## MadTurboCow (Jan 15, 2021)

Nononymous said:


> There's talk of another $1400 coming soon, so one could potentially turn a small profit on the deal.


Excellent! Will keep our fingers crossed.


----------



## Bevdeforges (Nov 16, 2007)

MadTurboCow said:


> There was some websites talking about getting the citizenship-based taxation repealed but I won't hold my breath.


There has been such talk for decades now. I wouldn't place much faith in it. (Especially given the problems they are dealing with right now over there.)


----------

