Q&A Regarding Irish Banks & FATCA Data Transfers

Written by in Individual Tax on

Q. Are the banks in Ireland writing to some of their customers about FATCA requesting TINs

A. Yes. Banks and other financial institutions in Ireland are routinely contacting customers about FATCA/CRS compliance and requesting a Taxpayer Identification Numbers (TIN), especially where a customer may have U.S. citizenship, U.S. tax residency, or another foreign tax connection. This is a legal compliance requirement under Irish and international tax-reporting rules.

If you were born in the United States, you are a U.S. citizen unless you formally renounced your citizenship. Thus, you are a U.S. taxpayer, entitled to a social security number, and subject to IRS income taxation on worldwide income regardless of where you live.

The Irish Revenue Commissioners state that financial institutions must collect and report information including foreign TINs for reportable accounts under FATCA and CRS.

Example:

This is happening both:

  • when opening new accounts, and
  • for older (“pre-existing”) accounts where the bank identifies indicators of foreign tax residence or U.S. status.

There are also many recent reports from Irish customers receiving emails or letters from banks requesting FATCA declarations or TINs. Some customers initially thought the requests were scams, but banks confirmed they were legitimate compliance exercises.

For U.S.-linked customers, the requested TIN is usually:

  • a U.S. Social Security Number (SSN), or
  • another IRS-issued TIN.

Banks can restrict services or ultimately close accounts if required FATCA/CRS documentation is not provided, because they themselves face regulatory obligations.

Q.  What is a TIN

A.  A TIN is an IRS acronym for Taxpayer Identification Number. For a person this is your U.S. social security number or ITIN (Individual Taxpayer Identification Number) if you are not a U.S. taxpayer. You must use your social security number if you have both. You must get or use your social security number if you are or are entitled to get one.

  • If you were born in the United States, you are a U.S. citizen unless you formally renounced your citizenship. Thus, you are a U.S. taxpayer, entitled to a social security number, and subject to IRS income taxation on worldwide income regardless of where you live.
  • If you were ever issued a green card, you are entitled to get a social security number.

For more detail see  www.seytaxgroup.com/ssnrules

If cannot locate your social security number or need to apply for one, please contact the Social Security Administration (at www. https://www.ssa.gov/ ) or the U.S. Embassy in Dublin:

Q.  What are the banks doing with this information

A.  It will be sent to the IRS for U.S. citizens and green card holders (‘U.S. taxpayers’).

Irish banks are mainly using the information for tax-reporting compliance under FATCA (for U.S. taxpayers) and CRS. They are not using it to calculate your taxes or automatically deduct tax for the IRS.

What typically happens is:

  1. The bank identifies whether you are a U.S. citizen or U.S. tax resident or green card holder (FATCA)
  2. They collect identifying details such as:
    • your TIN/SSN (U.S. social security number)
    • address,
    • date of birth,
    • account numbers,
    • balances,
    • interest/dividend income.
  3. The bank sends the data annually to the Irish Revenue Commissioners.
  4. Irish Revenue then exchanges the information with the relevant foreign tax authority:
    • for U.S. persons to the IRS under FATCA,The information reported can include:
      • account balance,
      • interest earned,
      • dividends,
      • gross proceeds from asset sales,
      • account closure information,
      • identifying details and TINs.
  5. Banks also use the information internally to:
    • classify accounts as “reportable” or “non-reportable,”
    • satisfy anti-tax-evasion rules,
    • avoid penalties or sanctions from regulators and foreign tax authorities,
    • maintain access to U.S. financial markets.

    For U.S.-linked customers specifically, FATCA exists so the IRS can detect offshore accounts and compare foreign account data against U.S. tax filings. The report itself usually does not include full transaction-by-transaction statements; it is more of an annual account-information report.

    If someone refuses to provide the requested information, banks may:

    • flag the account as undocumented,
    • still report it based on available indicators,
    • restrict services,
    • or eventually close/freeze the account in some cases.

    Q. How does this affect me

    A.  U.S. citizens and green card holders (‘U.S. taxpayers’) are required to file tax returns (if they exceed annual income threshold) with the IRS even if they do not work in the USA. This applies even if you are working and filing taxes in another country. There are no tax treaties or exceptions to this. Earning below the threshold for the Foreign Earned Income Exclusion does not relieve you of this obligation.

    U.S. taxpayers are also required to report foreign financial accounts (if the cumulative total exceeds $10,000 on any day in the year). There are severe penalties if this is not done timely.

    A green card holder – unless properly revoked – may also have these obligations. An expired green card is not properly revoked for IRS purposes, even if not effect for U.S. immigration. The U.S. tax and immigration systems are not the same.

    For more see:

    It has been estimated that over 70% of U.S. taxpayers overseas are not compliant and there are numerous ways to resolve these issues – normally without having to pay any fines or penalties or taxes – although there are cases where the IRS taxes on income are different to your local rules – see:

    Q. I did not file my U.S. taxes – what can I do

    A.  Contact us today.

    We have over 14 years’ experience bringing U.S. taxpayers into compliance.  We are accredited in Ireland (tax advisor) and United States (CPA, tax attorney) with offices in Dublin (Ireland) and New York.

    You can contact us at

    • https://ustax.cpa/contact-us/
    • www.seytaxgroup.com
    • info@seytaxgroup.com
    • Irish Office:
      • Sey Tax Group
      • Morrison Chambers
      • 32 Nassau Street Suite 35
      • Dublin 2 Ireland D02KW64
      • Tel         (01) 6834100
    • New York Office:
      • Stephen P Casey ESQ.
      • 14 Wall Street 20th Floor
      • New York NY 10005-2123
      • Tel          (212) 204-8600
    •  Certifications:  
      • Chartered Tax Adviser (Ireland)
      • NY Bar – ID 5589049
      • WA  CPA – ID 31411

                                 

    All this information (above) is not specific to your facts and circumstances and must not be relied upon. None of this information (above) is advice. This communication does not constitute any form of legal or contractual or any other relationship. You should always seek specific advice from a competent professional having made a full disclosure of all pertinent, or material, facts, or information.