Be careful if you are at Suretrader....

S

swimtrader

Suretrader is now making all US traders fill out a Foreign Account Tax Compliance Act (FATCA) and W-9 (email went out ao all traders today). When you complete this the US Agencies will know you have/had a foreign account. If you did not also complete an FBAR form with your income taxes for the year you had an account at Suretrader I feel bad for you...the penalty is ridiculous. Please consult your own accountant and attorney....don't take legal and tax advice from the internet.

http://www.irs.gov/Businesses/Small...t-of-Foreign-Bank-and-Financial-Accounts-FBAR
 
elliots11 said:
Does this have any effect on the pattern day trading rule circumvention? Can someone get in trouble for that?
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Again, you shouldn't take legal and accounting advice from the internet but I can't see how you would get in trouble for PDT. When US citizens were able to have non-US FX accounts people did not get in trouble for having foreign accounts that offered higher leverage.

However, I would definitely be calling my accountant tomorrow morning and ask them about FBAR and FATCA.

Don't mess with the IRS (ask Al Capone!!) and Suretrader is forcing US traders to now be on the IRS radar.
 
I was asking out of curiosity as I am considering opening an account with them. I agree the IRS will just come and take what you have.
 
FATCA is ridiculous, tons of paperwork, and it gives them to right to tax the funds you have in your account and the gains you have on trades.

I know some other prop shore firms dont require this. I would never open an account at a firm that makes me fill that out
 
WOW...had no idea Suretrader was an offshore brokerage firm. If they are forcing traders to complete a FATCA form it means that Suretrader is FATCA compliant. That is good for them and probably necessary if US citizens have accounts with them. What this means for you is that the IRS can at any time ask Suretrader for the names and account details of anyone that has an account with them.

So at this point the IRS will match up the names of people who Suretrader says has an account versus the people who completed a FACTA and FBAR form. If you didn't file one prepare for an audit and probably a huge fine:

https://www.bragertaxlaw.com/what-are-the-penalties-for-failing-to-file-a-foreign-bank-accoun.html

You might think you are to small to be on the IRS radar but they love to go after the low hanging fruit. Something like this is open and shut....either you filled out the form or you didn't.

There is nothing wrong with having an offshore brokerage account like Suretrader or a bank account in a Swiss or Cayman bank. You just have to realize that you need to inform the IRS about it because the financial organization will. And if you are hiding this account the IRS will assume you are hiding others.
 
elliots11 said:
So many people are going to get in trouble with this. There is always a catch when trying to beat the system.
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I agree that a lot of people are going to be affected by this ....but I don't think people were trying to "beat the system". I just think that the US is cracking down big time on US citizens having offshore accounts and not reporting them. At first the IRS just asked people to self report offshore accounts using the FBAR. Now they are strong arming firms such as Suretrader to hand over all the names of their clients so they can see who is supposed to fill one out versus who didn't. I don't know how far back they are going to go but I keep reading 2004. So if you have/had an account at Suretrader or an offshore bank and didn't file an FBAR I would take steps to correct that immediately!!!

The rule is if all your offshore accounts are over $10,000. This is probably not a big deal if you have under this amount in a bank account, but a brokerage account is a different story. Let's say you have $5,000 in an account like Suretrader and you get in a position that is going your way. Are you going to exit the position because your balance is near $10,000? And then you can't trade again until they wire you money out. That is no way to trade!

http://www.internationalman.com/articles/cruel-and-unusual-is-the-only-way-to-describe-it
 
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