Chile Forum

The funny thing is like previous posters have mentioned about not having an account in Chile thanks to the banking system in Chile, we have managed to stay clear of these after the fact goal post moves by the U.S. because it was nearly impossible for a foreigner to open an account anyway.

Well, one of the reality bright spots mentioned the above articles was the IRS only has the ability to bring about 1,000 criminal prosecutions a year. If they define everyone as a criminal, chances are they are not going to be going after the little guys with too much enthusiasm anytime soon. They do however have some pretty big sticks to swing around and make everyone squirm. I am sure however if congress smells blood in the water, they will allocate more resources to the IRS for going after expats.

Being a U.S. citizen with U.S. dollar accounts and bureaucratic life already, not very close. There is very little we do that the IRS does not already have full and complete access to just by virtue of my ties to the United States. Everything we do of any importance in Chile is typically public record anyway, just in the course of doing buisness in Chile. Everything requires a notary, a registry, database, whatever.

I am however rethinking say how we provide certain banking and tax related services or advise, or at least modifying how we handle U.S. clients and those sorts of services. Much of the areas of concern are not even really the core of our buisness anyway, or essential to our clients' projects in Chile.

For example, assisting American clients that want to open bank accounts in Chile or clients that we are for example paying their property taxes and other expenses in Chile while they are out of the country. I can simply require them to use our U.S. accounts, and let the U.S. banking regulators sort the mess out. Most already do that because it is quicker, easier, and cheaper anyway.

I am still in the early stages of determining what needs to be done and talking with our attorneys in the U.S. and here in Chile, but looks like so far there are viable legal work around for us to stay out of any potential entanglements with the U.S. government and still provide services or some sort of substitute service to Americans in Chile.

The firewall / line in the sand I have to draw is providing any service to any particular American or other client that would potentially create a situation that would force us to divulge confidential information about other clients that have nothing to do with taxes or bank accounts. We handle a lot of very sensitive legal work, that has nothing to do with relocation (e.g. divorce, child custody, adoption, inheritance) that even the disclosure that we where hired could be damaging to our clients' cases.

Honestly, anyone coming to Chile with the silly idea that they are going to somehow evade taxes or launder money is just too stupid to be doing it. Chile has a super bureaucracy. I can not go buy over the counter Aspirin at a pharmacy in Chile without creating a super paper trail, let alone engage in any complex financial transactions. Why anyone would think they might be able to keep anything as complex as taxes and banking issues secret in Chile is beyond me, or they are just ignorant of how the hole thing works. People looking to get in to those shady sorts of areas, should be looking at more corrupt and broken countries like you find in Central America or perhaps Argentina. Chile is the wrong country, and we don't do buisness with any client that even smell like they might be playing such a game.

Again, my biggest fear is not actually American clients that are engaging in those sorts of illegal activities or want to play the grey areas of the law, and not telling us. Just because of the nature of our buisness we are in, we have built very complex set of checks of clients to protect us from such people already. My concern is it becoming too expensive from a bureaucracy standpoint to do buisness with Americans. At what point do I say cut American clients altogether as it cost me 10%, 20%, 30% in record keeping and red tape over a comparable European or other foreign client?

I would really hate to end up in a position where I have to charge American clients more money just because they are Americans all else being equal, especially being an American myself. Even if we don't do it, what if everyone else in the World starts charging more to deal with American citzens?