Americans abroad — frustrated by the uncertainty of what FATCA will do to their financial lives, and facing repeated delays of the IRS’ promises to bring some clarity through proposed regulations — are increasingly turning to the politicians of the places where they live in an effort to get some answers. In the past week several government officials at the national or supranational level have brought up the issue of FATCA, in response to concerns expressed by constituents — both dual citizens who elected them, and banks and other institutions for whom FATCA amounts to yet another extra-territorial unfunded mandate by the US. A number of scholars have also released draft papers about FATCA and FBAR. Here’s the roundup for the past week or so. If you see any more, leave them in the comments:
- Canadian MP Hoang Mai (NDP/Brossard-La Prairie, Quebec) submitted a written question in the Canadian parliament on 27 January, requesting that the Canada Revenue Agency clarify a long list of questions regarding the effects of FBAR and FATCA on Canadian citizens and financial institutions. You can thank Mr. Mai on Twitter (@hoangmai_npd) or by e-mail, web contact form, or letter. As of 7 February, his question remains on the Order Paper.
- The Taipei Economic and Cultural Office in Boston, Taiwan’s unofficial consulate for the northeastern U.S., organised a FATCA seminar on 28 January together with the Taiwan Chamber of Commerce of New England and Paul Tierney of local law firm Connolly and Tierney. Out of all countries in Asia, Taiwan seems to be paying the closest attention to FATCA, a fact reflected in Taiwan’s media coverage of FATCA. (29 January, Republic of China Overseas Compatriots Affairs Commission press release).
- Cayman Islands premier McKeeva Bush announced that he will make another official visit to the United States in March to discuss FATCA with the IRS. In public comments earlier in the week, Bush was quoted as stating, “Through our dialogue with the IRS we have been assured that whatever system that is employed by the U.S. will be fair and that the Cayman Islands and U.S. dual citizens will not be given less preferential treatment than any other person.” And with IRS assurances plus $10, you can buy yourself a decent lunch. (3 February, Cayman News Service Business Edition)
- European Union Commissioner for Taxation, Customs, Anti-Fraud, and Audit Algirdas Šemeta will update the EU Tax Policy Group on discussions with the U.S. regarding the application of FATCA in the EU. Mr. Semeta is also on Twitter: @ASemetaEU. (6 February, European Commission press release)
A small sampling of the many private sector reactions to FATCA: A report by Russian finance portal banki.ru finds that few Russian banks have made any preparations for FATCA; most banks in question refused to make public comment on the issue. The Association of Canadian Pension Management sent a letter to Canadian Finance Minister Jim Flaherty stating their view that Canadian pension funds should be classed as “deemed compliant” under FATCA due to their low risk of tax evasion, in order to avoid an “onerous and costly burden”. And our own Jefferson D. Tomas points to a debate on Swiss TV about FATCA.
Finally, three law professors — all of them American homelanders — have also released draft papers about FATCA or FBAR in the past week:
- Georgetown law professor Itai Grinberg released a draft paper “Beyond FATCA: An Evolutionary Moment for the International Tax System“. Unfortunately, it mischaracterises FATCA as an issue of taxation of “an elite class of potential non-payers who have the sophistication to utilize foreign institutions” while entirely ignoring the fact that many ordinary U.S. citizens conducting ordinary financial activities for ordinary lives in foreign countries also make use of foreign institutions as well as foreign tax-advantaged savings and self-employment structures — structures intended for use by unsophisticated taxpayers, but on which U.S. laws impose an increasing series of reporting burdens of which FATCA is only the latest iteration.
- University of California Hastings College associate law professor Susan C. Morse released a draft of a paper to be published in the Villanova Law Review: “Ask for Help, Uncle Sam: The Future of Global Tax Reporting“. Her abstract echoes comments by Acting Assistant Treasury Secretary Emily McMahon in suggesting that the U.S. will need to provide reciprocal incentives to foreign governments to gain their cooperation with FATCA. She goes even further than McMahon, amusingly suggesting that U.S. administrators of FATCA “could consider side payments to non-U.S. governments to induce them to support the FATCA project.” Her abstract evinces no indication of any concern for the effects of FATCA on Americans abroad. I have not been able to read the actual paper because of issues downloading from SSRN.
- Another Villanova Law Review paper of interest comes from Indiana University law professor Leandra Lederman, about the effects of the OVDI, entitled “The Use of Voluntary Disclosure Initiatives in the Battle Against Offshore Tax Evasion“.
We should tweet, write letters, or otherwise make public and private expressions of support for politicians looking into FATCA. If you feel able, you may also wish to contact the authors of draft papers who ignore the effects of FATCA on Americans abroad and calmly and succinctly express your concerns to them. I’m neither calm nor succinct so I’m holding off on that last step for now.