How does the legal immigration status of a citizen impact banking accounts?
My cousin passed away and his wife was from Japan. She moved back to Japan and didn’t fill out the right paperwork to earn permanent legal citizenship. She was emotionally devastated and just didn’t get the paperwork done in time. So now they won’t let her back in the US. Bank of America is telling her they are going to withhold her funds unless she fill out some form called called W-8BEN. This makes no sense to me she has been treated so badly. Can the bank do something like this
There is no short and easy answer to this. She does have to file with the feds and the state because depending on the size of your cousin’s estate, the Feds will withhold up to 55% of the estate in taxes. It’s to prevent foreigners from inheriting money and taking it out of the country. State inheritance taxes vary by state, but there, citizenship status doesn’t matter.
A few years ago, the a lot of the banking laws changed especially with regard to non-citizens (but also with regard to citizens – basically your banking information is no longer secret).
I’d say hire a good accountant on her behalf or see an estate lawyer. If it’s only a matter of filling out the form, then great, but they will still come after her for the estate tax filings. That’s a must. My advice is to file the necessary paperwork with the IRS rightaway before she incurs fees and penalties.
… and yes, banks do this regularly. They want to see clearance from the IRS that the taxes have been paid.
Lou Dobbs – Problems with the US Legal Immigration System
