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Opening bank account - IRS doesn't believe our reason for US address is sufficient!

Opening bank account - IRS doesn't believe our reason for US address is sufficient!

Old May 23rd 2013, 1:58 pm
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Default Opening bank account - IRS doesn't believe our reason for US address is sufficient!

Good Morning fellow Expats,

I wonder if someone can help, we have opened a Bank account in the US after arriving on the 29th May. We have our SSN etc. We completed a W88B form at the bank which asked the question 'why are we in the US and need a US adddress'. After some advice from the bank we put in that we had relocated from the UK to the US with work on an L1 Visa and that we intended to stay in the US for the full term of the Visa. We have today received a letter from the bank to say that the IRS does not see the explantion we gave for a US address as sufficient and have put a hold on our account. Help!!! What more do I need to put on this form???? I can't say any more as I put everything on the original and they don't think its sufficient. Can anyone give me some guidance as how to complete this form W88b or W9 so that the IRS can agree.

Thanks everyone
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Old May 23rd 2013, 3:04 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

Can your corporate legal department give you any help with this? I'm just mentioning it because they tend to have a lot more "pull" and a lot more experience, and people don't always think of asking them.
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Old May 23rd 2013, 3:05 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

Originally Posted by DanEmWill View Post
Good Morning fellow Expats,

I wonder if someone can help, we have opened a Bank account in the US after arriving on the 29th May. We have our SSN etc. We completed a W88B form at the bank which asked the question 'why are we in the US and need a US adddress'. After some advice from the bank we put in that we had relocated from the UK to the US with work on an L1 Visa and that we intended to stay in the US for the full term of the Visa. We have today received a letter from the bank to say that the IRS does not see the explantion we gave for a US address as sufficient and have put a hold on our account. Help!!! What more do I need to put on this form???? I can't say any more as I put everything on the original and they don't think its sufficient. Can anyone give me some guidance as how to complete this form W88b or W9 so that the IRS can agree.

Thanks everyone
29th of May??? Form W88B or do you mean form 8-WBEN???

Whatever your bank did, you shouldn't have been required to fill out any government required forms since you are legally working in the US on a L1 visa (that should have been sufficient). If your account is a non interest bearing account, you should have been able to open an account no matter what was your status and whether you had a social security number or not. Close the account if you can and find a bank that does things correctly.

I suspect the problem occurred since the bank gave you forms to fill out that they shouldn't have.
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Old May 23rd 2013, 3:15 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

Hi...as your question isn't related to immigration I have moved your thread over to the US Forum.
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Old May 23rd 2013, 3:24 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

Sorry, I did mean 29th April and a W-8ben form Doh!!! In a bit of a tiz about this. Thanks for your replies, they are really helpful, I have reached out to our attorney to see if they can offer some assistance as well.
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Old May 23rd 2013, 3:30 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

My bank also sent me W-8BEN - twice actually. I ignored it as it didn't apply, and they should have known as they had visibility of my visa when opening the account. In other words, banks make mistakes.

Do they even have any rights to put a hold on your account? I would kick up a huge fuss with the manager of the branch first. In person, not by phone.
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Old May 23rd 2013, 3:50 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

Originally Posted by DanEmWill View Post
Sorry, I did mean 29th April and a W-8ben form Doh!!! In a bit of a tiz about this. Thanks for your replies, they are really helpful, I have reached out to our attorney to see if they can offer some assistance as well.
We all make mistakes. I previously indicated 8-WBEN instead of W-8BEN, duh.
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Old May 24th 2013, 3:21 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

Originally Posted by GeoffM View Post
.... In other words, banks make mistakes. .....
Yes, they do. My bank opened my a/c flagging me as a USC from the point at which I opened it, when in fact I didn't become a USC until more than four years later.

It never caused me a problem, but aside from sloppiness or ignorance of the service assistant who opened the account for me, I don't know how it happened as I didn't sound American back then, and indeed still don't today. At the time I didn't even realise nationality was part of the bank's customer profile.
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Old May 24th 2013, 4:41 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

Originally Posted by DanEmWill View Post
Help!!! What more do I need to put on this form???? I can't say any more as I put everything on the original and they don't think its sufficient. Can anyone give me some guidance as how to complete this form W88b or W9 so that the IRS can agree.
And here is the answer:

You cannot use a US address with a W-8BEN except in very limited circumstances, if you are in the US on L-1 and you plan on staying for more than 183 days then you cannot use that form, it is only for use by non-resident aliens.

You must file a W-9 with the bank, not a W-8BEN. Because you are resident for tax purposes in the US.

When you file a tax return next year you file a dual-status return, don't make the same mistake so many people on here seem to make and get some moron at H&R Block or use Turbotax, read IRS publication 519.
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Old May 24th 2013, 4:43 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

Originally Posted by Michael View Post
you shouldn't have been required to fill out any government required forms
Every person opening a US bank account under the Banking Act must by law declare their status to the bank, the form used is either W-8BEN or W-9.
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Old May 24th 2013, 4:45 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

Originally Posted by GeoffM View Post
Do they even have any rights to put a hold on your account?
Yes, because by law they must perform withholding, which they are unable to do because the IRS has not accepted the tax treaty claim. So the W-9 must be filed with the bank first before they can proceed.

They are a private company, they don't have to open an account for you.
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Old May 24th 2013, 4:59 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

Originally Posted by Steve_ View Post
Yes, because by law they must perform withholding, which they are unable to do because the IRS has not accepted the tax treaty claim. So the W-9 must be filed with the bank first before they can proceed.

They are a private company, they don't have to open an account for you.
So they're able to take money from the OP (I'm assuming) but as the bank cocked up the forms, OP cannot now access their money. Great.
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Old May 24th 2013, 6:37 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

Originally Posted by GeoffM View Post
So they're able to take money from the OP (I'm assuming) but as the bank cocked up the forms, OP cannot now access their money. Great.
I was surprised to find out that US Banks...unlike UK banks...can dip in and out of your account as they wish. Chase deposited money into our account by mistake...a few hours later they took it out. On one occasion they transfered the wrong amount of money to our UK bank account. I was told not to worry they would contact the Nat West and ask them to send it back. Yeah...good luck with that..
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Old May 24th 2013, 7:02 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

Originally Posted by Jerseygirl View Post
I was surprised to find out that US Banks...unlike UK banks...can dip in and out of your account as they wish. Chase deposited money into our account by mistake...a few hours later they took it out. On one occasion they transfered the wrong amount of money to our UK bank account. I was told not to worry they would contact the Nat West and ask them to send it back. Yeah...good luck with that..
Aye, it's all very weird. Had a friend who got laid off, the company finance department had already done payroll so they got paid.

Couple of days later the company pulled the money back because the company then decided they didn't want to pay accrued holiday etc.

Some folks who found out that the money was getting pulled back closed their accounts to try and stop it. The banks still pulled the money and billed the folks later for running a over draft and those who didn't pay it back got debt collectors sent after them.

As for the OP, they just need to do a W9 and should be good to go. Person at the bank was probably trying to be helpful, hearing a johnny foreigner, without realising the OP was considered resident for tax purposes.
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Old May 24th 2013, 7:24 pm
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Default Re: Opening bank account - IRS doesn't believe our reason for US address is sufficien

Originally Posted by Jerseygirl View Post
I was surprised to find out that US Banks...unlike UK banks...can dip in and out of your account as they wish. Chase deposited money into our account by mistake...a few hours later they took it out. On one occasion they transferred the wrong amount of money to our UK bank account. I was told not to worry they would contact the Nat West and ask them to send it back. Yeah...good luck with that..
It can be done, I did it myself once when I was in the UK, when money was credited in error (fraudulent intent combined with procedural error by the bank) to an account at another bank that properly belonged to my customer. The well known British bank that had received the funds sent them back to my employer's account on my threat to take legal action, and I'm not a lawyer, so it wasn't a "solicitor's letter". I know of at least one instance of funds sent voluntarily from the US being intercepted in London and returned too.
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