Liberty and justice for all United States persons abroad

The Isaac Brock Society

1,012 thoughts on “FATCA Discussion Thread (Ask your questions) Part One”

  1. Pingback: The Isaac Brock Society - Only 11 Reasons Why FATCA Should be Repealed?

  2. A Charity Finance Group blog in UK becoming concerned about FATCA which gave Roger and I an opportunity to post comments.  Roger’s is showing…

    FATCA: The facts (plus a few observations)
    However, there are other worrying aspects to consider and in November we held a fact-finding meeting with HMRC, eleven charities and a lawyer to better understand how FATCA could affect the sector.  We identified three main areas:

    1.       Banks may require a FATCA number from charities wanting to open a bank account, obtained by registering with the IRS.

    2.       UK charities with US ‘connected persons’ (e.g. a trustee who is a US citizen) will have their details passed to HMRC by FFIs, who will in turn pass these to the IRS.

    3.       Charities with operations overseas will have to pay attention to how the provisions will affect them, particularly with regard to partners and banks used. 


  4. What, me worry about FATCA ??

    Now mutual funds are waking up to the dangers of FATCA for them…

    The other 99.997%

    Fund managers still have to worry about the other 99.997% of accounts. Firms can’t just assume that these shareholders are not FFEs – at least not until the IRS says they can. Everyone’s awaiting the final regulations for word on that issue.

  6. Want a laugh? If you hear IRS announce that Pakistan signed an FATCA IGA, consider this via @npratc http://n.pr/V9QTe8  Not a chance!  Does this sound like a country you would want a reciprocal agreement with?  

  8. Tax lawyer Stuart Schabes co-presented “FATCA – 2013 and Beyond” at The Perfect Storm: US Tax Legislation and IRS Compliance 2013, a program hosted by Philip Stein & Associates and ERM.

    and then another example of the Fatca Compliance Complex doing the IRS marketing effort and trying to sell a product…

    Data Challenges for FATCA Compliance
    and finally, from a Libertarian blog…
    Meet FATCA, it Turns Every Financial Institution on the Planet into IRS AgentsThis is a repeat of Andrew F. Quinlan’s Forbe’s Op Ed piece which got a separate posting here on Nov 20th.  It is a keeper.   

  9. How is this for a vacuous story?

    Why More and More Americans are Choosing to Migrate Overseas
    Here is the entire subject of taxation covered in two sentences.   Not one mention of Citizenship taxation, FATCA, FBAR or the IRS offshore Jihad…

    Taxes

    Many citizens who denounce their citizenship do it because of taxes. The United States does not have the highest taxes in the world, but they are certainly not low. So many people would rather move to a lower tax country where they can enjoy their wealth more or re-invest it.

    I can not comment, but maybe someone else can.

  10. @just me

    I don’t see a link to the story about American migration…

    I lose interest when writers use the word denounce instead of renounce, but many here have in fact denounced US citizenship because of taxation, lol!

  12. Here is my submission:

    FATCA and US extra territorial taxation in Canada. Canadian media is asleep at the wheel while the government of Canada decides whether to hand over private banking information of so-called “US-persons” in Canada, violating Canada’s privacy code (PIPEDA), Charter rights (esp. article 15), and the human rights codes of the individual provinces. The United States has successfully picked the pockets of hundreds of Canadian citizens already while the government of Canada has been too timid to stop the thievery. The United States budget deficit widens and therefore they are looking far and wide to find new sources of revenue. Canada, the neighbor to the North, has one million “US persons” whom the United States consider to be tax cheats, despite their having paid all their taxes legally owing in Canada where they live. This is problem threatens to destroy the global economy through increased mistrust and American unilateralism. Why isn’t the media on top of this story? Are they missing the tax War of 2012? See Isaac Brock Society for more information.

  14. Thanks for the Globe and Mail piece, broken man on Halifax pier!

    My reply is:

    How I hope this will be a hot topic in 2013 as it was certainly hushed in 2012:

    The likely surrender of Canada’s sovereignty with FATCA, the fact that the media has ignored this history-changing issue, and that Canadians don’t seem to care!!

    Canada’s Finance Minister James Flaherty met with provincial Finance Ministers on Monday, Dec. 17, 2012. Was there decision, or even discussion, on Canada standing strong and refusing to surrender to the United States the Country’s sovereignty and privacy laws in signing an Intergovernmental Agreement to circumvent that law and the rights of 3% of its citizens and residents? This will be to comply with the US extra-territorial Foreign Account Tax Compliance Act (FATCA).

    If the media does not adequately highlight this important story to the Canadian public, it is complicit. It will be a huge part of this problem. Continuation of Canadian media’s ignoring or hushing this issue is, in my view, obstructionist.

    A FATCA information session took place at the University of Toronto on December 15. Those attending are among the first Canadians to come to the realization that Canada is under attack; its financial system is threatened with a 30% deduction of transactions coming from the US if they do not release to the US all accounts and transactions of US Persons in Canada. The IGA that it was reported by the G&M that Canada will sign by the end of the year, but now likely delayed, will enable confiscation of “USP” Canadian legal bank savings and pensions and the ability to send to a foreign government, circumventing the direct transmission from Canada’s financial institutions to the United States to the transmission of this data first to the Canada Revenue Agency and then CRA transmission to the United States.

    Should this not be a wake-up call for ALL Canadians, a matter of ignoring the Canadian Constitution and the Charter of Rights and Freedoms?

    Many who have been paying attention are fearful for ourselves, for our families, for other “US Person” families and for the country we now call home – Canada. Here is a summary written for a local newspaper by one concerned, courageous Canadian, David Querbach. With his permission:

    The next time you open a bank account or buy a mutual fund, you’ll probably be asked “Are you a U.S. Person?”

    Perhaps you were born in the United States, or one of your parents was. Maybe you worked in the States for a while, but never gave back your green card. Or maybe you even just spend four months a year in Arizona or Florida. If any of these apply, the United States considers you a “U.S. Person” who is required to file income taxes with the IRS each year. If so, you’re in good company; about one million other Canadians are in your situation too.

    So why are the banks asking this question? It’s because of a recent U.S. law called the Foreign Account Tax Compliance Act, or “FATCA”. FATCA was originally intended to help the IRS find untaxed money hidden in offshore accounts, but its implications are much wider.

    FATCA attempts to force every financial institution in the world to search its records to identify accounts of U.S. Persons, and then to report to the IRS each year the account numbers, the balances, and the total deposits and withdrawals. FATCA requires this reporting regardless of any privacy or discrimination laws in the country where the account is held.

    Under FATCA, should a foreign financial institution (like your local bank) fail to comply with this demand for information, the United States will deduct 30% of any payments made from anywhere in the U.S. to that bank or to its clients. This deduction applies not only to income, dividend or capital gain payments, but also confiscates 30% of returned principal as well.

    Yes, you read that correctly. FATCA confiscates 30% of any money flowing out of the U.S. to a bank and its customers if the bank fails to turn over your private account information to the IRS.

    Keep in mind that we’re talking about money in accounts held in Canadian banks, by Canadian citizens or landed immigrants, resident in Canada, on which taxes have already been paid to the Canadian government. But the U.S. doesn’t care about this. If you’re a U.S. Person, the IRS considers your accounts “offshore”, and considers any money in them to be illegal obtained, unless you file with the IRS.

    Our Minister of Finance has said, “Canada is not a tax haven. No one moves to Canada to escape taxes”, yet U.S. persons here are treated by the U.S. as tax cheats, even though in most cases (due to various tax credits), they don’t owe any tax even if they do file.

    Obviously, releasing private banking information to anyone, especially a foreign state, violates all sorts of laws in Canada. This has put the banks in a pretty tight spot — either they stand up to the IRS and get nailed with a 30% “deduction” on everything coming out of the States, or they roll over, give up your private information, and get prosecuted here.

    Actually, the U.S. Treasury seems to know this won’t fly, so it’s trying an end-run — it’s right now negotiating an agreement that would require the Canadian government to pass laws forcing the banks to give the information to the Canadian government, which would then pass it on to the IRS. Minister Flaherty has said that he hopes to finalize the agreement by the end of the year.

    To put it bluntly, the U.S. government is pushing the Canadian government to create two classes of Canadian citizens and residents. The first class: those who have a right to private banking information, and a right to not be discriminated against because of their national origin. The second class: Canadian citizens and permanent residents who are also U.S. Persons, who would lose these rights.

    What’s worse is that even the selection of the people for the second class (in other words, who is a “U.S. Person”) is made in a foreign capital, not by our elected representatives in Ottawa.

    Yes, the Government of Canada could probably pass laws making this discrimination legal, but it would remain highly offensive to Canadian values to discriminate against Canadian citizens and permanent residents based solely on their national origin.

    All you have to do is substitute China, Syria, or Iran for the United States to see the implications. Once Canada has thrown its dual Canadian/U.S. citizens under the bus, how can it say “no” when China comes calling?

    The Canadian government must tell the Americans that while we fully support the fight against offshore tax evasion, we will not sacrifice the hard-won Charter rights of our citizens and residents.

    Canadian laws should be made in Canada, and the Canadian government needs to stand up and protect Canada from this incursion by a foreign power.

  15. Just another example of Roger C using an article at the Washington Times to bring up the FATCA story…

    http://www.washingtontimes.com/news/2012/dec/19/obamas-secretary-of-commerce-mia-empty-cabinet-job/.

    I quickly posted one in support, but due to the links, it is in moderation and may not come out.   That said, I may put it up on Congressman’s web site, as Roger reports…

    Congressman Terry (R,NE) is one of a very few congressman in Washington whose website email facility, I discovered by trying, does not block messages from persons who do not reside within the boundaries of his district.  In fact his is the first I have found that does not block them.

    I sent him a copy and paste of my comments on this article he wrote for the Washington Times, pointing out that I am one of the hundreds of thousands of US citizens that, because of our ridiculous tax laws, gave up living abroad selling American exports because I could not survive. I handed over a $1 billion market for US exports and the 10,000-15,000 jobs they created to our foreign competitors on a silver platter when I came home. 

    He may never see it, but hopefully one of his staff members will at least read it. 

  16. I put something together for the Globe & Mail and I see calgary411 is making good use of what I call David Querbach’s “consumer alert”. I’ve been using it too — that and other ideas I get from everyone here. I’m not much of a writer so I need all the help I can get. Sometimes the FATCA farce and US tax enslavement in general raise my outrage meter so high that my head gears just spin hopelessly and I can’t get any words to appear on the computer screen which say what I want them to say … but I’ll keep trying. This was my submission:

    The USA has a dirty little secret called citizenship-based taxation. It is the only nation in the world (other than Eritrea) which taxes all of its citizens, no matter where in the world they live. Now this nation with its dirty little secret has become so emboldened by its self-perceived exceptionalism and its unopposed, world-wide hegemony that it has proclaimed that every financial institution in every country of the world must report to the IRS yottabytes of detailed financial information on everyone who the USA deems to be a US person.  Even non-US persons who are connected financially to a US person will have their financial data compromised (e.g. a Canadian spouse holding a joint bank account with his/her American spouse, both longtime residents of Canada). This incredibly insane piece of US legislation is called FATCA and FATCA IS WHAT CANADIANS NEED TO WATCH IN 2013.

    Canada is currently negotiating a FATCA inter-governmental agreement with the USA and if sovereign rights and reason do not prevail then Canadian earned, Canadian taxed and Canadian saved wealth will be seized by our debt-ridden neighbour to the south. (Americans living in Canada seldom owe US taxes but the penalties for innocent foot faults on the complex US tax forms are absurdly high.) The unfortunate victims of this brazen overreach by the USA will watch helplessly as FATCA expediates the flow of their made-in-Canada wealth into the coffers of the IRS and expropriates their private financial information to fill the databanks of the IRS. And they aren’t the only ones to suffer from this fiasco because Canadian financial institutions will have to spend hundreds of millions of dollars to become FATCA compliant and these costs will be passed along to everyone in Canada. If the Globe and Mail is not FATCA literate (it is a complex topic), it could benefit by reading the posts and comments at isaacbrocksociety.ca.

  18. @Em

    You are selling yourself short. Very good submission. I have already borrowed from it for a tweet!  Thanks for making that computer screen of yours work so eloquently.  Well Done!

  19. FATCA Leads Banks To Turn Away US Customers

    FATCA was always going to prove a controversial measure imposed by Congress to track down the assets of US taxpayers in tax havens around the world.

    But one unintended consequence of the Foreign Account Tax Compliance Act (FATCA) is that foreign banks are opting not to register with the Internal Revenue Service (IRS) because it would mean spending millions of pounds in compliance measures.

    Many are now increasingly opting for the cheaper course of asking US customers to bank elsewhere.

  21. From Mexico…

    FATCA: U.S. imposes extraterritoriality

    Google Translate:  Mexico can be a laboratory for the results of that regulation.

    Wonder how that other Laboratory experiment has worked out for Mexico, the War on Drugs?

    Notice that Jim Jatras is quoted.

    Mexico signed the intergovernmental document last November, which for the U.S. Jim Jatras, lawyer at Squire Sanders, was a mistake.

    “The most affected may be those with strong ties to the U.S., Canada, Mexico, the European partners, Southeast Asia. Institutions and governments can begin to see Mexico as an example of what can happen and reconsider bilateral agreements, “said Jatras to Apro.

    This attorney http://www.repealfatca.com created the website, a campaign to roll back the legislation.

  22. JD Supra Law News: “The Perfect Storm: FATCA – 2013 and Beyond Gearing Up”

    http://www.jdsupra.com/legalnews/fatca-2013-and-beyond-24519/

    From the presentation (pp 331-32) in PDF format:

    “Israel is moving closer to reaching an agreement with the US:

    -Israel Tax Authority director general Doron Arbeli met with IRS Action Commissioner Steven Miller last week

    -Israeli banks reportedly prefer a Model 1 FATCA agreement (the soft model)

    -The banks would only deal with the Israeli authorities

    -But the banks would have to share the identity of their clients

    -Under a FATCA agreement, the US will also give information to Israel

    -At this point in the negotiations, the US will be required to give less information to Israel than Israel gives to the US”

  23. @John Brown

    Thanks for digging into that one, and pulling out some quotes.  I had posted the link, but nothing much more.  Might reference your comment over on the Israel thread.

  25. http://barrasso.senate.gov/public/index.cfm?FuseAction=PressOffice.PressReleases&ContentRecord_id=917773ef-a298-58f9-de12-c1f7def6fd00&Region_id=&Issue_id=

    I have a feeling that Barasso has gained an overall understanding–he sees it in connection to the health care fundraising.

    “To get all this information, the
    Internal Revenue Service will have to develop new layers, additional layers of
    red tape for businesses and for families—new forms, new filing procedures, and
    new instructions.

    “And it’s going to have to come up
    with some way for taxpayers to resolve any discrepancies—and there are going to
    be a lot—between what their tax returns may say and the data that the insurance
    companies report. 

    “It’s also clear that a lot of
    Americans are going to be defending themselves against audits. 

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