# FATCA and joint checking accounts



## llopis (Aug 15, 2014)

Quick situation explanation: I'm a Spanish citizen and lived in the US for 27+ years. My wife is a US citizen. We moved to Spain last year and I gave up my US residency.

I've had a checking account (cuenta sin nómina) with ING for a while and this week we added my wife as another user of the account. As soon as we did that they blocked the account  and sent us a message telling us about FATCA and that we need to fill out a W9 for her.

I get that US citizens get to pay taxes in the US even if they're residents abroad. What I'm curious about is what happens in a joint checking account like this (technically it's not even joint, but she's an authorized user). Are they going to start taking 30% of all money that goes into the checking account even if it's under my name instead of hers? Somehow the bank wasn't able to answer that question!


----------



## Bevdeforges (Nov 16, 2007)

No, the W-9 is just to get her US SSN so that the bank can report year-end balances on the account to the IRS. She should report the account as a joint account, but I think she may be able to report the joint holder as "NRA spouse" with out having to report any sort of ITIN or SSN for you.

The banks don't (at this point, anyhow) report the earnings on accounts with a US person as signer, and if your wife files a US tax return (assuming she earns over the threshold for filing as married filing separately) she would not declare more than half of any interest earned on the account. She would be taxed as a US citizen/taxpayer and not at the 30% non-resident rates - but it's not up to the Spanish bank to do any sort of withholding for US taxes.

But so far at least, there is little or no evidence that what the foreign banks report is "matched" in any way to any income tax returns filed.


----------



## Nononymous (Jul 12, 2011)

I believe that FATCA reporting will include interest income, in addition to year-end balance. However, it's not clear whether banks are reporting all accounts associated with a US person, or just those that exceed a threshold balance. So there may or may not be reporting in this case, depending on how much money is in the account.

Basically, if you don't want the IRS to know your financial affairs (as a non-citizen and former resident) then you need to keep joint accounts to a minimum, because your wife is exposed to US scrutiny.

As Bev mentioned, there is no withholding to be concerned about. FATCA is purely a reporting mechanism; the IRS has no ability to touch money outside the US. In fact, should your wife decide to stop filing tax returns or otherwise misbehave, the IRS has no ability to collect any sort of penalty against her in Spain (but US assets would of course be vulnerable).


----------



## Bevdeforges (Nov 16, 2007)

It may depend somewhat on the "bilateral agreement" between the US and your country of residence, but in connection with the European privacy regulations, I recently received a form from my bank here in France documenting exactly what they had reported to the IRS for 2017. It was quite literally just the account numbers (NOT of the "tax free" savings accounts which are exempted from reporting under the bilateral agreement with France) and the year end balances.

I would very much expect that all the banks in Europe may wind up having to notify their customers this year of what information is being shared with the IRS under FATCA - at least for the 2018 tax year. But at this point it doesn't seem to include interest or earnings information.


----------



## Nononymous (Jul 12, 2011)

Okay, then it may depend on the country, and IGA. I have seen that listed as among the data transmitted, but I can remember from where.


----------



## JustLurking (Mar 25, 2015)

Nononymous said:


> Okay, then it may depend on the country, and IGA. I have seen that listed as among the data transmitted, but I can remember from where.


The US/France FATCA IGA certainly _strongly_ suggests that interest and dividend income should be reported by French banks to the US under FATCA. From Article 2:


> 2. The information to be obtained and exchanged is:
> a) In the case of France with respect to each U.S. Reportable Account of each Reporting French Financial Institution:
> ...
> (6) in the case of any Depository Account, the total gross amount of interest paid or credited to the account during the calendar year or other appropriate reporting period ...


The above is common boilerplate and found in most (perhaps all? -- I am *not* going to read all of them!) Model 1 IGAs, so all banks in Europe are going to have to tangle with this.


----------



## Bevdeforges (Nov 16, 2007)

OTOH, there is also the new European General Data Protection Regulation (GDPR) which states that there is a right of access to the data being transferred outside the EU. I have no idea why my bank sent it out, but just recently, they sent out a mailing about FATCA, with a sheet claiming to state what information they had sent regarding my accounts for 2017. It consisted of only the taxable accounts, and only the y/e balances. 

I've thought that perhaps we could take advantage of this right of access to at least know for sure what the banks here in Europe are reporting. But at least here in France, the various tax-free savings accounts are specifically exempted from having to be reported in the bilateral agreement.


----------



## Nononymous (Jul 12, 2011)

There does seem to be a bit of an issue with banks going above and beyond the call of duty to report more than is required. Also the related issue of not telling customers what was reported.


----------

