Isn't the US the only country that taxes the foreign income of its citizens, which would probably require that the banks have some paperwork particular to US citizens with accounts?
One of my Dutch banks, a small investment bank, kicked me out because I am on a temp visa in the USA. This means I have to pay taxes here and therefore need to report my Dutch bank accounts with the IRS. They told me the US penalties for not reporting 100 % correctly on my money with them were so outrageous that they preferred to boot me.
U.S. residents, including temporary residents, are considered "U.S. persons" by the IRS and have to report everything. Amusingly this also applies to holders of U.S. Green Cards who aren't actually resident in the U.S.
Canadians working in the U.S. have had fun with IRS because a type of Canadian registered (tax-advantaged) savings account is not recognized by the IRS as a registered savings account but rather a "passive foreign investment company" and IRS loves to make people fill out lots of paperwork. This is apparently because IRS rules haven't been updated in the 10 years since the account type has been created.
Yes. If you're a US person or a US citizen living abroad, you pay income tax in all of your income wherever it is earned. And even most states claim this too. If you live in Colorado and travel one time to earn a consulting fee in New York you must pay New York state income tax on the money earned in New York, and claim it as a credit with Colorado. That means filing IRS forms, Colorado income tax forms, and New York income tax forms.
It's such a bureaucratic clusterfuck for a small business or consultant.
There is this problem in multiple countries I believe.
From what I understand, the US asks you to report what you earn outside of the US but also what you paid as taxes. If the foreign country has a tax treaty with the US you would only pay the difference (in case the US taxes are higher than the foreign).
It might not be the only country, but such taxation practice is definitely not the norm.
Unfortunately, there's little chance of normalizing the laws with international custom, since I can already see the attack ads about tax breaks for the wealthy.
