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Wednesday, March 12, 2014

Uncle Sam wants YOU and the government of Israel is going to help him get you

If you're an American citizen living in Israel, the IRS wants to try to put the squeeze on you to pay for Obamacare, and the government of Israel is going to help them.
The agreement will be an alternative to the provisions of the US Foreign Account Tax Compliance Act (FATCA), which requires non-US financial institutions to sign the agreement directly with the US authorities to send them information about American customers.
As "Globes" has reported, the new agreement will be reciprocal. "The agreement will include an option under which, subject to certain conditions, information will be sent from the US tax authorities to the Israeli tax authorities about the income of Israeli residents in the US," states the document.
The document predicts that the agreement will boost Israel's tax revenues, because the Tax Authority will obtain information about Israelis' financial assets in the US. It cautions, however, that the amount of these revenues cannot be estimated. 
It seems, however, that the sharing of information between Israel and the US is not equitable. While the Israeli authorities will automatically send the US all information about US persons, the US authorities will only send information to Israel in special cases. Israel is not the first country to sign such an agreement: the US has similar agreements with the UK, Denmark, France, Japan, and Spain, and more countries have expressed a willingness to sign such agreements in the future. The agreement with Israel will include provisions for protecting the information's confidentiality and for restricting its use by the IRS, due to privacy concerns. 
If you're a US citizen living in Israel, you have a choice. You can give up your American citizenship. There's been a lot of that since President Hussein Obama took office. But if you need to travel to the US for any reason, you may not want to give up that citizenship after all. There's recently been an 80% increase in rejections of applications from Israelis for US tourist visas.

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