Personal bank account in the U.S. opened while on a J-1 Visa: Can I still use it?

Question

The last time I was on U.S. soil was in 2011 on a J-1 Visa. I opened a personal bank account with Bank of America in California. I didn't close it when I left. I still have money in the account and I sometimes use it for online transactions and/or international debit card payments/withdrawals.

If I start funding this account and continue using it to make payments and transfer money to another account in U.S. (e.g. my brokerage account), will I have anything to declare to the IRS?

The funding of this account might come from one or more of these options:

1. foreign bank account under my name
2. foreign bank account under a 3rd party name
3. domestic (U.S.) bank account under a 3rd party name

The 2nd and 3rd scenario would come as a result of some freelancing activity done while I am out of the US (definitely would qualify for Non-Resident Alien status).

Do I need to declare it to IRS? Would I get taxed in U.S. or only in my country of residence?

Answer 1

Do I need to declare it to IRS?

The account? No. You do need to file a form W8-BEN with the bank though and make sure you maintain the correct information on it (it has your address there, so if you move - update it). Your account may be frozen until the form is provided, especially if it has activity on it.

The 2-nd and 3-rd scenario would come as a result of some freelancing activity done while I am out of the US (definitely would qualify for Non-Resident Alien status).

This you do have to report to the IRS. I'm guessing the payer is in the US, and would not know that you're a foreigner. In this case you're liable for taxes (if the payer knows you're a foreigner - they must withhold the taxes on your behalf). The payer will report payments to the IRS, so you have to submit your own tax return for a match.

If there's activity on your account that might be suspicious, it will be reported to money laundering unit in the US Treasury Department, that may come after you through the treaties the US might have with your home country (tax treaty, extradition treaty, etc).

Answer 2

To answer my own question, at least to the extent of my understanding.

Here the IRS says that all income for a foreign person from a US-based company is taxable with 30%. Here the IRS says that this tax should be withhold at source by whomever pays you. In case there is a tax treaty with the country, the tax can even be waived in the US. Of course, if you don't declare it in your home country, the US bank could probably give information requested by the home country authorities.

For the other two cases (when there's no US party involved) I can't find anything on the IRS website, which kind of make sense. If I am using an account in the US just to receive and send money shouldn't imply any tax.

Thanks to @litteadv for pointing me into the right direction.