This just out on the Wall Street Journal Blog, by Christopher Chung.
The U.S. Internal Revenue Service is brandishing a “very big stick,” and it’s called the Foreign Account Tax Compliance Act.
But the government isn’t looking to hit foreign funds and institutions to bring in tax revenue. “[The IRS] would say, ‘We would be thrilled if we didn’t collect a dime under FATCA,” Laurie Hatten-Boyd, a principal at KPMG, said. “They view this as an information gathering regime, not a withholding regime.”
Note: No mention of impacts on Minnow Americans abroad, or immigrants new to America.
@TrueNorth, good on you keeping on your MP’s office. The squeaky wheel gets the grease! Our problem is legitimate, involves our relationship with both Canada and the USA, surely we will not be dismissed. How has the Canada/US tax treaty let us down when my husband and I have to pay the IRS a capital gain on the sale of our home in Canada, a gain that is exempt to all Canadian except us? Somebody dropped the ball here.
*The rules simplify due diligence procedures for certain accounts.
http://www.deloitte.com/view/en_US/us/Services/tax/06ad46bb0c765310VgnVCM1000001a56f00aRCRD.htm
The Treasury Department has modified due diligence procedures around pre-existing accounts to permit FFIs to rely on electronic searches for accounts ranging from $50,000 to $1 million. For accounts with a balance of more than $1 million, FFIs will have to do paper searches that would be limited to documentation, current account files, and certain correspondence. FFIs would also be required to question any relationship managers associated with these accounts to confirm that they don’t have any knowledge that the client is a U.S. person. Searches are not required for accounts of less than $50,000 or for certain insurance contracts or entity accounts of less than $250,000. In many cases, including most instances of new account onboarding, banks would be able to rely on know your customer (KYC) and anti-money laundering (AML) rules they already have in place.
http://www.deloitte.com/view/en_US/us/Services/tax/06ad46bb0c765310VgnVCM1000001a56f00aRCRD.htm
*The rules simplify due diligence procedures for certain accounts.
The Treasury Department has modified due diligence procedures around pre-existing accounts to permit FFIs to rely on electronic searches for accounts ranging from $50,000 to $1 million. For accounts with a balance of more than $1 million, FFIs will have to do paper searches that would be limited to documentation, current account files, and certain correspondence. FFIs would also be required to question any relationship managers associated with these accounts to confirm that they don’t have any knowledge that the client is a U.S. person. Searches are not required for accounts of less than $50,000 or for certain insurance contracts or entity accounts of less than $250,000. In many cases, including most instances of new account onboarding, banks would be able to rely on know your customer (KYC) and anti-money laundering (AML) rules they already have in place.
Another stick in the arsenal.
http://www.huffingtonpost.com/2011/10/06/us-drug-policy-war-congress_n_998993.html?1318006907
There is a much more detailed account of the proposed procedure for existing accounts at:
http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/Tax/us_tax__FFIDueDiligenceProceduresforPreexsitingIndividualAccounts_112211.pdf
It contains a detailed flowchart so you can follow through your exact situation.
My reading is that once you hit one of the boxes labelled “Documentation of non-US status provided” then you can whip out your CLN and move directly to the box labelled “Non-US account no withholding or reporting required”
IRS issued two press releases today, IR-64-2012 and IR-65-2012, relating to overseas accounts and overseas taxpayers:
http://okeh7.blogspot.ch/2012/06/ir-2012-64-irs-says-offshore-effort.html
http://okeh7.blogspot.ch/2012/06/ir-2012-65-irs-announces-efforts-to.html
Here is a related Bloomberg article:
http://www.bloomberg.com/news/2012-06-26/irs-says-offshore-tax-disclosures-have-yielded-5-billion.html
@Innocente, Thanks for posting this!
IR-2012-65 only mentions Expats. I hope it also applies to immigrants.
@Just a Canadian
No, you haul their asses into court for violating the Charter of Rights and Freedoms and any number of Canadian Human Rights Codes
@all- I hope that no one gets lulled into complancey by these new rules and decides to stay on as the play thing of the I.R.S. This seemingly kinder face only serves to hide a mouth full of vicious teeth. Its not what’s on the outside that counts but rather the things that are on the inside that will kill you.
Under citizenship based taxation, never can it ever be said of the U.S. that it does not bear you any ill will. Citizenship based taxation is by its very nature an act of ill intent.
*15. (1) Every individual is equal before and under the law and has the right to the equal
protection and equal benefit of the law without discrimination and, in particular, without
discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.
Managers prepare to Fatca-proof wealthy:
Ex-UBS banker David Scott, as managing partner at Vestra, said his firm intended to register to advise US clients affected by Fatca in the near future.
http://www.efinancialnews.com/story/2012-06-25/vestra-coutts-fatca-wealth
http://www.activistpost.com/2012/06/22-statistics-that-prove-that-american.html
The “American Dream” may be turning into a nightmare but fear not brothers and sisters below the border because your fearless (but actually feckless) leaders have caught a glimpse of what looks to them to be a pot of gold lurking in the offshore bank accounts of American outlanders and American immigrants who were enticed into the homeland by the “American Dream”. It’s easy to go after this “pot of gold” because ordinary Americans have enough to worry about right now (see link above) and are not inclined to concern themselves with the plight of what many of them consider to be nothing better than defectors and in the case of immigrants, suckers. FATCA is a pain and will ultimately be for little monetary gain (unless they crank up the penalties even higher) but as long as American politicians feel confident that there will be little backlash from the voting hordes, it’s a done deal. What a gift a distracted and disinterested electorate is to politicians. And since FATCA is another step towards a one world government, the powers that be that yank the chains of the politicians are rubbing their hands in glee. So it’s a WIN for politicians, a WIN for the powers behind them and a LOSE for the people. This is a tide that must be turned but the question is HOW?
Our only tax liability exceeding the $1500 threshold was in 2008 (when we sold our house and had a taxable capital gain) and would NOT be included in the new framework, unless we are deemed a “higher compliance risk”. What determines a higher compliance risk? A high value FBAR resulting from the proceeds of the sale?
I wonder how many are ‘getting clean’ in order to ‘get out’?