A tax agreement reached between the United States and South Korea last
A tax agreement reached between the United States and South Korea last week has drawn the apprehension of Koreans residing in the U.S. who have money and property in their native country.
Reporter Jane Han of The Korea Times‘ English edition explains the deal – the Foreign Account Tax Compliance Act:
Under the agreement, the U.S. Internal Revenue Service (IRS) will receive information on bank and other financial accounts held by U.S. citizens, green card holders and residents in Korea. Starting in July, Korea’s National Tax Service (NTS) will automatically send information to the IRS on accounts with a balance higher than $50,000.
The IRS plans to use this information to track down offshore tax evasion. If money owed hasn’t been reported via the annual tax filing, violators may have to pay up to 50 percent of their foreign account balance.
Koreans in the metro area voiced their ire to the publication, including Connecticut resident Cha Hae-nam, 62: “I have money in Korea that has nothing to do with the U.S. This is money that I made before moving here and now the IRS wants to tax that?”
For some like New Yorker and small business owner Park Bong-joo, 58, the law is only adding to the list of reasons to return: “Hospitals, customer service and just everyday living in general is so much easier in Korea,” he said.
Lawyers are seeing a noticeable jump in the number of visits from Koreans.
Law offices in New York, California and other areas with high Korean population density say inquiries regarding the new tax law and renouncing of U.S. citizenship have increased by at least 30 percent in the past three months.
One man by the name of Jang, 73, who lives in Fort Lee, N.J., is among those inquiring – in his case regarding property he owns in Korea. He has been struggling with the new rule as well as his American citizenship. His story appeared in a separate Korea Times article. Jiwon Choi translated the excerpt below from Korean, in which Jang explains what’s holding him, and likely many others, back from returning to Korea.
If FATCA uncovers his property, he may have to pay a fine of thousands of dollars for not reporting it to the U.S. government. He has $1.8 million in cash from his late parents and real estate in Korea.
“It’s convincing me to go back to Korea and live there very well at-ease because the fine will be a tremendous amount. But I am still hesitant to do that. I have my children and grandchildren here in the U.S.,” he said.
It’s not just Koreans reconsidering their citizenship. Read the original Korea Times article from their English edition, which includes more details on FATCA as well as how many Americans gave up their citizenship or green card in 2013.
By Voices of NY via The Korea Times