Charles Schwab eligibility, FATCA reporting

Finances đź’µ
#1

I am trying to setup a Charles Schwab account as we speak and everything is going fine, but when I get to the end and see:

“By checking the checkbox that follows, you declare the following under penalty of perjury:
By checking the checkbox that follows, you declare the following under penalty of perjury:
1.The number shown on this application is my correct Taxpayer Identification Number;
2.I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the IRS that I am subject to backup withholding as a result of a failure to report all interest or dividends, or © the IRS has notified me that I am no longer subject to backup withholding;
3.I am a U.S. citizen or U.S. resident alien as defined in federal tax regulations; and
4.I am exempt from Foreign Account Tax Compliance Act (FATCA) reporting.”

Everything, except for 4 is true, which means I am not eligible for this account, despite having a US address I can use.

Is there a proper way to deal with this? I wouldn’t want to knowingly falsely declare something under the penalty of perjury.

#2

Huh
That’s language from the W-9 form, but the stock IRS W-9 doesn’t actually say that for (4).

That’s really weird. Why do they even care? It’s not their problem.

I would guess you need to talk to them.

1 Like
#3

I did talk to them. They said that section of the application ONLY applies to Foreign entities (corporations, partnerships, trusts, and estates) and since I am opening an individual account, that would not apply. So, I opened the account and they even applied the promo code soon after that, since I had neglected to mention it in the application.

1 Like
#4

when I established my Chs. Schwab acct I looked into that a little as well; my tax guy told me that the key is to annually report the existence of any foreign account you have, IAW BSA (that is, file file your Treasury/FinCEN Form 114 “Foreign Bank Account Report”). Although the threshold is having $10,000 or more at any time in the acct, it might not hurt simply to file the report annually, as long as you have the acct.

#5

Yes, this applies to all accounts outside the USA. They should be reported in the FBAR if their total is over 10,000 USD. And to be on the safe side, include crypto accounts, precious metals accounts, etc. Better safe than sorry with the draconian penalties in place.