From Just Me:
FATCA and citizenship taxation.
There are lots of comments, and mine will get lost, but here is what I added for what it is worth….
Well, it pains me to say that your list is pretty comprehensive and on point.
If I were to add just one, it would be this…
FATCA and the domestic equivalent which I call DATCA. Total world wide bank account surveillance!
FATCA is the acronym for Foreign Account Tax Compliance Act which was part of the 2010 Hire Act. It is designed to turn the entire worlds financial Industry (not just banks) into IRS data collectors and report account information on all “US Persons” around the world.
US persons includes more than just citizens, it is Green card holding immigrants too!
This new reporting requirement is added on top of the current Foreign Bank Account Report (FBAR) form that the IRS is using as its penalty tool of choice for assessing draconian penalties on Expat citizens who have bank accounts in the countries they are residing, but innocently failed to fill out the administrative form. You have probably heard it as “Tax Cheats hiding money off shore”, but that qualifies as the top 10 mischaracterizations in the press for the past 3 years!
In response to this act, the IRS has used it’s regulatory authority to attempt to impose a similar data collection requirement on all US banks of non US resident deposits in America. (DATCA) They are supposed to submit this data to the IRS, presumably to distribute to the tax offices of 192 countries around the world!
Stunning when you think about. I guess the IRS thinks that what is “good for the goose, is good for the gander”, and the comedic irony of this, is now some in Congress are opposing the unilateral IRS action of the IRS, when they probably voted for the HIRE act that started this whole thing.
Google this, from Accounting Today. “Congressman Tells IRS to Back off on Bank Disclosures”
If you have never heard of FATCA, then I would encourage you to read James Fallows trilogy at the Atlantic which is now called the FATCA chronicles. Google these titles:
Fatca: The Menace You’ll Hear About in 2012
The Fatca Menace!
The Fatca Chronicles: Tales From China, Canada, and Estonia
The freedom of Americans to conduct business and have accounts overseas is being seriously eroded, and has very detrimental impacts on Expats abroad. It is an export job killer, but that is another story for another time!