Does The HIRE Act Only Pertain To Money Repatriated To The US?
June 28, 2010 by Bob Livingston
I have a question about HIRE (Hiring Incentives to Restore Employment). My understanding is that for now you can transfer money to a foreign bank account, insurance company, etc. I am not sure that I understand where the controls come in. Is it when we take the money out and repatriate it to the US that the 30% is deducted and the bank reports all the data to the USG? And what if the transfer is not to the US, but another foreign bank where one has a residency? Is that reported to the USG also or does the HIRE act only pertain to money repatriated to the US?
Or is it when we make the deposit to the foreign entity that the reporting takes place. I have on your advice recently purchased an annuity through BLS. Has the insurance company already reported this to the USG? Or will they have to do so in 2013?
I would appreciate any clarification you might be able to give me.
The full ramifications of HIRE are still being sorted out but here is what I understand:
The purpose is to identify what Federal government considers recalcitrant account holders (that is those who may try to avoid U.S. tax laws). In fact, the words recalcitrant account holders are found numerous times in the bill. It applies to accounts exceeding $50,000. The controls come when you try to bring your money back into the country. At that time the foreign institution is supposed to deduct the 30 percent and remit it to the U.S. Treasury. It appears as if it applies even if you transfer the money from one foreign bank to another. The reporting of information includes your tax identification number, name, address and account balance or value. The reporting is done on existing and new accounts.
According to Zero Hedge (zerohedge.com): "One thing we are confused about is whether this law is a preamble, or already incorporates, the flow of non-cash assets, such as commodities, and, thus, gold. If an account transfers, via physical or paper delivery, gold from a domestic account to a foreign one, we are not sure if the language deems this a 30 percent taxable transaction, although preliminary discussions with lawyers indicates this is likely the case."