United States citizens living in Abaco and The Bahamas retain their obligations to the U.S. Internal Revenue Service (IRS). In an effort to help Abaconians understand and deal with the upcoming Foreign Account Tax Compliance Act (FACTA) – a new act that steps up enforcement and broadens the net for persons liable to the United States’ tax system – The Abaco Chamber of Commerce is spearheading efforts to educate the public.
Dennis Lightbourne, Chamber President, noted at the recent Abaco Business Outlook that many Abaconians who have dual citizenship with The Bahamas and the U.S. will face increasing pressure to comply with the IRS. This is particularly significant for dual citizens involved with business.
While Mr. Lightbourne noted many Abaconians appreciate the benefits of having two passports, he said that many “Don’t realize that they have responsibilities to two countries.” Dual citizens must file income tax returns with the U.S. Government.
Mr. Lightbourne said that, as he understands it, there is a certain threshold of income that is exempt from U.S. taxation. He continued, “For the vast majority of people it’s not a problem. What happens, though, is when people go over the threshold they are subject to taxes [from the U.S. government].”
He said dual citizens who own a significant share of a Bahamian business must realize that this makes 100% of that Bahamian business responsible for filing and paying taxes the IRS.
“We are trying to get some people here by the end of the year to conduct some workshops just to educate people,” Mr. Lightbourne said on behalf of the Abaco Chamber of Commerce. “I see the Chamber as being a facilitator to allow people here who may have a need to talk to the professionals.”