Unfortionately I don’t know if there will be any way to see the event afterwards but here are the details:
Event in Geneva:
http://www.aca.ch/SCFAS_Fatca_2012_Invite_GE_Final.pdf
Event in Zurich
Debate: FATCA- The worldwide end of Bank Secrecy?
Anyone in Switzerland planning to attend and report back to IBS?
Thank goodness for Jackie, otherwise there doesn’t look to be anyone else at the event that would challenge the idea that US citizens ‘abroad’ are being unnecessarily targeted and treated unethically and punitively by citizenship-based taxation and FATCA. Where is the voice of the individual citizen in all this? It looks to be all academic and theoretical, with additional ‘professionals’ – whose concern is probably not their account holders, or fellow citizens abroad, but rather their own best interests, and the interests of their sector. Do the others even have any idea what the serious impact and life-altering problems could result for the average person living permanently, or born outside the US?
One of the points to be addressed is worded thus:
“Will tax cheats repent and pay vast amounts of money to the state that protects them in an unstable and dangerous world?”
There are those disingenuous claims based on no facts, again – that those abroad actually owe taxes outstanding to the US that are not being paid – and that we don’t live in countries with tax treaties, or are covered by the FEIE and Foreign Tax Credits in many cases. Where are the robust numbers?
It is my home government that has provided me with lifelong services in exchange for the taxes I and my family pay where I live and work permanently. If I fall ill, or am unable to work, it will not be the US who will assist me in the slightest.
How about debating what the nature of the social contract is/should be between those deemed US ‘persons’, and the US?
I noticed the Tax Justice Network will be at the Zurich event. I’m expecting they are tickled pink by FATCA and all the “justice” it entails, and will be on the pro FATCA side.
@badger, That’s also how I felt when I saw the list of groups represented at the FATCA hearing in May. Not even ACA was there. So today, I finally went to my representative’s local office in person. To make things simple,
I restricted my complaint to the FBAR and focused on the personal problems that everyone mentions in this blog. The lady there apparently had
never heard of an FBAR, but she listened to what I said, understood and
seemed sympathetic. I handed her a letter with my comments and she said
that she would forward it to the Washington office, which deals with
laws and regulations (the local office only deals with individual cases). I
hope I get a response this time. If not, next time I’m going directly to
the Washington office. I’m feeling a bit like Ralph Nader and Erin Brockovich.
I just posted a comment in another thread about a document written by J. Richard Harvey. His recent document in support of FATCA (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1969123) is a real eye-opener and should be required reading for anyone interested in FATCA. My comments on his paper are here: http://isaacbrocksociety.ca/2012/01/13/ask-your-questions-about-fatca-discussion-thread/#comment-26717
I would love to see this debate.
Thank you for your efforts @ShadowRaider, and for sharing it with all of us. It will be interesting to see whether your representative follows up in any way. I think that the effort of an in person visit certainly shows them that this is a serious issue – and that for every one who contacts them, there are many more affected. And the fact that they seemed not to know about FBARs just supports what is already well established. FBARs were obscure. The IRS did not do what they promised in terms of ‘education’ on the issue, only enforcement.
Bosses Rein In Banker Who Golfs With Obama
I find it interesting that UBS has put a muzzle on Robert Wolf despite the fact that he has already raised $500K for Obama’s re-election. Could this have something to do with FATCA, or is the timing coincidence? Apparently (if one is foolish enough to believe anything the NYT writes) Wolf has been muzzled for months.
*My nephew just received his GreenCard in the USA. It came together with papers and a letter with information about being a resident alien. No one word about FBARs. It does seem that they are indeed a trap.
@Thatisme, did your nephew use the services of an immigration lawyer to get his green card.
If yes, did the lawyer mention anything?
*I am going to ask him. But when I talked with him he told me that he heard about FBARs talking with some friends in the same situation. Nothing official. I would think that if the IRS wants to be fair, every new citizen by choice and every new green carder should receive a detailed notice about his taxes obligations, including the requirement that they inform their accounts “back home” every year through the FBARS and other forms. I believe that only after this is done the IRS has the moral right to go after the ones who do not report these things. A friend of mine, American Abroad, had an US CPA who did his IRS Return every year from 2001 to 2008. He never told him about FBARs.
*Just read this: http://blog.usa.gov/post/25851853901/how-to-avoid-commons-mistakes-when-applying-for-u-s. I am not sure if applicants to become US citizens are informed about FBARS and other FORMS that need to be filled every year. They should if the IRS wants to be fair..
*I believe that to be honest the USA should:
In the application for citizenship, explain clearly that the person will have to file US income tax living inside or outside the Country. and if living outside the Country will also have to send reports of all bank accounts and applications to the Treasury Department and IRS. And that they will have to pay capital gains to the USA on all property they sell in their country of origin even if they acquired the property before becoming a citizen.
In the application for green card. Inform the person that once he or she receives a greencard they must file US Income Tax regardless of where they will be living and working, And that they will have to report to the Treasure Department and the IRS, every year, all their bank accounts and investments they have in their country of origin. And that they will have to pay capital gains to the USA on all property they sell in their country of origin even if they acquired the property before becoming a citizen.
This will be for starters. Of course Publication 54 needs to updated with the FBARS and all that are not there now.
All Americans should know, before leaving the USA to work abroad, what they will have to be doing every year not only in terms of income tax but also reports to the Treasury.
And to finish, everyone should know the statute of limitations that applies to them if they live abroad and the penalties they will be subjected to for their mistakes. And that they will not have representation.
Perhaps someone would like to write a paper about this.
Fellow Brockers,
This evening I was at the Zurich event. As published in the CFA flyer, there was Jacqueline Bugnion (ACA), Markus Meinzer (TJN), Mark Föllmi (international tax expert), and “Dick” Harvey (Villanova law professor and former IRS advisor). The panel was moderated by Hans-Joachim Jaeger of Ernest & Young.
The actual panel event lasted only two hours, during which time each panelist made a speech (sometimes accompanied by PowerPoint) presenting his or her point of view. Afterwards, there was a general Q&A. I wouldn’t call the event a true debate – each panelist was free to make comments or answer questions without any structure associated with debates. The audience was composed of Big 5 employees, asset managers, bankers, and some private citizens (like myself 🙂 ).
The moderator (Hans-Joachim) started by acknowledging the true costs of FATCA, making several comments about tomatoes being thrown at him when he talks about US tax compliance. Highlights of what he said: He summarized the history of US international tax policy, going into QI and the evolution of FATCA. He said that the EU countries participating in FATCA will be writing some of the FATCA regulations into their national laws. He thinks countries cannot simply ignore FATCA and not do business with the US, since the US financial markets are simply too big. For example, many Swiss pension funds are involved in the US bond market and it will take time before they can switch out or find alternatives. At one point he showed a standard matrix of risks used by the financial industry and pointed out that FATCA creates potentially new, near catastrophic operational risks for FFIs (foreign financial institutions) when their partner FFIs are suddenly deemed “non participating” for having crossed the IRS for some reason or other (maybe for having been found to have helped Americans evade taxes, for example).
Dick Harvey of Villanova university is one of the authors of FATCA. He is a big bull of a man who gives the impression of welcoming confrontation, jumping directly near the front row of seats and pacing back and forth, giving his speech in an articulate, booming voice. His preoccupation is with tax cheats and how to “get them.” He began his speech by looking over the room and acknowledging the tough job that Swiss asset managers have dealing with US clients who are avoiding taxes and hiding their money. (As if the typical client fits that profile.)
He said that having accounts abroad used to be the purview of the ultra-wealthy but now with advances in telecommunications, nearly anyone can move and hide money abroad. Hence tougher regulations are needed. FATCA was meant to extend, but not replace the QI regime, which will continue in parallel. FATCA should “encourage” (his word) FFIs to participate by imposing a 30% withholding regime on US-based income. Statute of limitations will be suspended for not filing FBARs. His major preoccupations were as follows (I’m listing them in his order):
Dick said the US should show the way to world financial transparency by taking unilateral action, and his hope is clearly that afterwards, other States will participate and the entire financial system will become transparent.
Jacqueline from ACA read a prepared speech, and I will not summarize all its points because she eloquently explained all the issues that Brockers are aware of. Dick sitting beside her, she called FATCA a giant bulldozer going after ants, and that it made US clients financial pariahs and potential victims of identity theft. She pointed out that although the IRS considers stories of US persons abroad having their accounts closed “anecdotes,” they are very real and are increasing in number, as are the cases of people renouncing their citizenship. In short, her speech basically relayed anything I would have wanted to say about FATCA and citizenship-based taxation. She did us proud.
Following was Markus from TJN, who began by showing us a short video about how cheating on taxes is wrong for society and the poor. Among the highlights of his presentation: He said tax havens hide a large chunk of the world economy (measured in trillions of dollars), and that a country that chooses bank secrecy is violating the sovereignty of other nations. He called Swiss outrage at FATCA “hypocritical.” Personally, I found him and his arguments to be idealistic.
Lastly, panelist Mark (the tax expert from Switzerland) stood up and said that no one can be against transparency (fair enough), although he saw FATCA as too overbearing. For example, it doesn’t encourage but forces FFIs to comply, and imposes overproportional costs and burdens on FFIs and is currently at 380 pages. Furthermore the IRS has only submitted a draft that so far leaves more questions than answers for those who would attempt to comply with it.
I felt the Q&A period after the presentations was too short, and that many more people in the audience wanted to comment or ask questions but were prevented from doing so because of the time limit imposed (after all, time had to be made for the final hour of drinks and hors d’oeuvres). Jacqueline, Mark, and various audience members all stated the major problems with FATCA implementation, sometimes vociferously, such as practical problems and difficulties for US persons abroad, cost vs. benefit (FATCA is not expected to bring in all that much money after all, compared with what it will cost FFIs), negative perceptions of the US by the world, taxation without representation, etc. Really, I was impressed by the arguments made.
But Dick and Markus didn’t seem very swayed. True, there are problems, both acknowedged. Dick made three statements that stood out. First, he said he and others authored FATCA in the hope it would stop tax evasion, but in the end, “it will be interesting to see what happens.”
Secondly, he mentioned a few times that he fully expected US persons abroad to lose financial services with some FFIs.
He added that one day, when all countries pursue “transparency” (or maybe he meant “citizenship-based taxation?”) the issue with US persons being denied financial services will then end, since FFIs will have to report information on all their foreign account holders to those foreign governments. Although, he said, the time frame for this happening “may be somewhat longer than Jacquline and other US persons abroad would like.”
To me, these statements basically reveal how little we are held in regard by our government. The first statement confirms the US government is performing some kind of experiment by just unilaterally imposing its own tax system on others, our destinies be damned. The other two statements drive home the fact they could care less what happens to our lives or livelihoods in the process of doing this.
Draw what conclusions you like from all this, but to me there’s no clearer evidence we as US persons are in for a heck of a time in the coming years.
@ Wellington,
Thanks for your report. I remain stymied by the callousness of people like “Dick.”
Really, his callousness was/is surreal.
@Wellington..
Well written report, and thanks for doing that…
As far as callousness goes, I think that comes from the “collateral damage” attitude many Americans seem to have about wars and drones too. The Bigger good, is the justifying rationale, and don’t bother me with the details of the casualties, or the pictures on my TV news at 6pm.
@ Wellington
I guess as one of the creators of the FATCA Frankenstein, Dick Harvey would never be able to admit it was a mistake. As curious as I am about how minds like that work, I would never want to look inside his.
@ Just Me: Yes the attitude concerning collateral damage from drone attacks is apt. This struck me during the meeting as well (no pun intended).
@ Em: During the meeting, Jacqueline and others pointed out several times that FATCA is the wrong solution and is a mistake, but this had no visible effect on him (at least, he kept a straight, neutral face, which occasionally reddened). The guy gave the impression of being in command of himself and fully committed to issues he sees as beyond question (such as taxes and transparency). You wouldn’t want to meet him in a dark alley.
Yes, Dick in name, and in style, I would say. These guys are full of certainty of the justice of their cause, and they hate tax competition. They won’t be happy until there is universal high tax rates the world over, with no one able to escape to a lower tax country without BIG penalty. Stalin would have loved them. This again confirms for me, what I have been saying for a long time, that GATCA is what this is all about.
@Thatisme
Hey, thanks for that link to the USA.gov blog. I posted a lengthy warning there. Not sure how anyone finds it or reads it, but just in case, I expanded on what to expect…
Unfortunately, their blog deleted all the spacing I put into it, so now it is one long paragraph. I hate that!
http://blog.usa.gov/post/25851853901/how-to-avoid-commons-mistakes-when-applying-for-u-s
I just clicked on the main link, and it says comments are closed, and my comment is not there, so not sure where it is now.
@Wellington: Thanks for the report, but I gather that this debate served no purpose other than allowing expats to release a little steam.
The 16th amendment is unconstitutional and was never ratified by all the states. This Dick-wad is nothing but a mafia thug stealing from us and should be treated as such. Of course they want “transparency”, that means they want you to have no place to hide “your” wealth from them. I put “your” in quotes because the ugly truth is that they consider it to be “their” wealth. They won’t call you a tax-slave, but that is how they treat you. There are no such things as “tax cheats”, there are only those who successfully prevent these sociopaths from stealing their property.
Callous on the part of this Dick and others: what about the people that lose their residences, jobs and investments in the meantime? Not all of them will be able to bounce back, depending upon their age, profession, health and family situation. They have the right to full economic liberty like anyone else in their country of residence.
@ConfederateH
You are absolutely right. Also, the meeting served no real or practical purpose in the sense of changing things for the better or even as a meaningful exchange of ideas. For me, it was only beneficial in the sense of “knowing my enemy” (in the spirit of Sun Tzu).
Additionally, a quote I once read from Doug Casey came to mind as I watched Dick. To paraphrase, some are drawn to power for the sheer pleasure of doing harm to those who have done nothing wrong.
@ConfederateH: The IRS considers the 16th amendment non-ratification argument as frivilous and would charge you with a crime for making it (and that would be a violation of the 1st Amendment).
More importantly, Article 1, Section 2 provides for proportional representation in the House according to a Census, which is not respected, as Americans abroad are not counted in the Census.
@Wellington – Thank you for attending this meeting and for your synopsis of the proceedings. Your description of Mr. Harvey matches exactly what I was imagining from reading his paper “Offshore Accounts: Insider’s Summary of FATCA and its Potential Future.” He sounded like a pompous windbag in his paper, and it sounds like he lived up to all my expectations in person.
I must admit, I was very depressed upon reading your summary. FATCA has such far reaching implications on a global level and it’s so under-reported. I just feel like FATCA is one of the last hysterical death-throes of what once was a great country.
@JDT, the IRS have become an autonomous freedom raping machine. Asking them for an opinion about the 16th amendment is like asking a drone pilot in Nevada if the 16 year old afghani boy he just murdered was a terrorist.
They are no longer bound by any laws, just like all the rest of the parasites in Washington. Think Justice Departments (Fast and Furious) the executive (Amnesty) and Congress (Obamacare). To them we are merely wealth units waiting for the harvest, like a truck load of swine off to the butcher.