Things seem to be really heating up there. More fror Haaretz.
The impression I get is Israeli banks are probably at this point violating Israeli law. It is interesting the different responses from country on this issue.
In a move that some tax lawyers are calling a blatant violation of customer privacy, two Israeli banks are requiring current and prospective account holders with American citizenship to furnish portions of their U.S. tax returns, Anglo File has learned. Those who refuse to do so risk having their applications denied or existing accounts frozen.
For several months, two Israeli banks – Bank Leumi and Bank Hapoalim – have required customers to sign a waiver authorizing the banks to review a series of financial disclosure forms. One such form is the Schedule B – which shows dividend and interest income, including the names of all financial institutions paying out dividend and interest income – and a supplementary form known as a Foreign Bank and Financial Accounts form, or FBAR, for Americans with at least $10,000 in foreign bank accounts.
*I wonder if this will have an impact on how US-Israelis voted or wish they had voted? At least it is better than having their accounts closed, but it seems more demanding than what US-friendly banks in Switzerland require.
Israel may become a “battlefield state” for FACTA. To consider:
– as many as 300,000 Israelis are also US citizens – and many of these are also dual Israel citizens
– there is considerable joint venture business activity between Israelis and the US – especially in high technology, medicine, and finance
– many Israelis also emigrate to the US while maintaining close economic ties to Israel
– dual Israel-US citizens were reported by Haaretz to be reluctant to renounce US citizenship – see:
http://www.haaretz.com/weekend/anglo-file/american-israelis-buck-trend-of-growing-citizenship-renouncements-1.287502
– Israel is an advanced democratic state with robust public debate
– this is just a guess, but due to historic precedent, Israelis may have an above-average sensitivity to issues such as financial privacy and bank account closure
Finally Israel has lot of political clout with the US. In the recent Presidential Debate on foreign policy, Israel was mentioned 34 times – while Canada was not mentioned once.
Romney wins in a landslide in Israel: 85%
http://blogs.timesofisrael.com/romney-wins-in-a-landslide-at-least-in-israel-what-it-means/
The article doesn’t mention it, but I think FATCA and taxation are at least part of the reason.
*Shadow Raider,
FATCA and taxation may be a part of the equation, but as IsraelNationalNews puts it, the main reason is that Romney is an unconditional lover of Israel’s apartheid in the nation of Palestine:
Israel could become an awesome nation if it abolished apartheid by recognizing the nation of Palestine along its internationally recognized borders. But, this won’t happen because America loves apartheid too (including Obama)! The 2 presidential candidates mentioned Israel 34 times because they recognize that about 75% of Americans in Israel would rather tell America to go to hell than to recognize and accept the nation of Palestine
*Censorship at Huffingtonpost concerning Israel is quite disturbing. They allow for some to go as far as advocating genocide against Arabs or Muslims, but delete harmless posts which make mention of some innocent but less known facts with no bias leanings.
This just posted by John Brown on Israel on the Ask your FATCA question thread.
“Israel is moving closer to reaching an agreement with the US:
I just stumbled across this website for the Association of Americans and Canadians in Israel (AACI).
It may be worth trying to network with these guys. They seem to be lobbying for issues similar to ACA and are in the same FATCA boat as everyone else.
http://www.aaci.org.il/articlenav.php?id=2
@John Brown.
I forwarded that to ACA and asked the question… Thanks for posting it.
@John Brown..
Did a search for FATCA on the AACI site, and this is the most recent reference to FATCA I found. http://www.aaci.org.il/articlenav.php?id=389 Doesn’t look like they advocate a position, like ACA, but maybe I am missing something. There is a lot to go through, but it isn’t something on a front page, or anything like that! Information provided is in more of a newsy format.
Also, on their informational links, they do list American Citizens Abroad, and Canadian Citizens Abroad. http://www.aaci.org.il/template.php?section=LN
from @John BrownDecember 27, 2012 at 9:50 pm
Haarezt.com: “Lawyers: New tax rates will spur Americans in Israel to renounce U.S. citizenship”
http://www.haaretz.com/weekend/anglo-file/lawyers-new-tax-rates-will-spur-americans-in-israel-to-renounce-u-s-citizenship.premium-1.490478
From the article:
Your Taxes: US gives FATCA to the world and Israel By LEON HARRIS01/03/2013 05:26The Treasury Department has already concluded a bilateral agreement with the United Kingdom.
From bubblebustinJanuary 7, 2013 at 12:20 am
Israeli bank seizes funds from the accounts of a USP who refuses to sign privacy waiver with the bank:
http://www.liveleak.com/view?i=1bd_1357500120
*Just Me, this is just unbelievable! So, the bank is punishing the Israeli, thanks to the US, while having no policy and not reporting the interest earned to the client? Thank G-d I’m no longer a US citizen.
This from @Mark Twain
http://isaacbrocksociety.ca/2012/01/13/ask-your-questions-about-fatca-discussion-thread/comment-page-32/#comment-136122
IRS ramps up audits of taxpayers in Israel
Accountants warn financial reviews by U.S. authority here are at an all-time high.
Reuters Thu Jan 10, 2013 5:22pm EST
Israeli bank nudges US clients toward IRS tax disclosure program
* Bank Leumi sends letter to U.S. customers about IRS program
* Seen as sign that U.S. tax crackdown wider than Switzerland
* At least three Israeli banks seen under U.S. investigation
By Lynnley Browning
Jan 10 (Reuters) – Bank Leumi, the largest commercial bank in Israel, has urged U.S. clients to disclose information about their accounts to U.S. authorities, who are investigating Leumi and many other foreign banks over possible tax avoidance by Americans.
The Long Arm of the #IRS and #FATCA comes to Israeli shores. What does #AIPAC Think? http://lnkd.in/cz_X6J
Regarding this story: Israeli bank nudges US clients toward IRS tax disclosure program
I just emailed Lynne Browning, who is the Journalist at Reuters. If patterns of acknowledgement hold true, I will not even get a form letter response.. 🙂
Here is what I said.
Dear Ms Browning.Very interesting development, and I appreciate you reporting on it.
Israeli bank nudges US clients toward IRS tax disclosure program
There have been a couple other recent stories about the IRS, FATCA and Israel that gets you wondering. What are the possible political impacts when Israelis understand that the IRS offshore jihad is landing on their shores? It is impacting long term U.S Citizens who are resident there and not just Americans back in New York and Florida.
Given the special relationship between the US and the Israeli State what happens when they begin to realize they are importing more than just ‘bunker buster’ munitions from America? Along with defense comes the long arm of the IRS. Is this America recovering some of the cost? What does the State Department think of IRS actions? What does AIPAC think?
In addition to the stories that Reuters has reported, here are a couple other links I have seen recently:
IRS ramps up audits of taxpayers in Israel
FATCA, Stanley Fischer – complaint asks release of $250,000 seized of “US Person” by Israeli Bank HaPoalim
I would like to point out one minor issue with your story, but still important I think.
You write:Under the voluntary disclosure program, Americans can tell the IRS about undisclosed income from offshore accounts, and in return possibly get reduced fines and penalties. About 38,000 Americans have taken part in the program since 2009, bringing in $5.5 billion in back taxes.
In actuality, we do NOT know the make up of the 38,000 “Americans”, where they live or what their status was inside that broad IRS definition of “U.S. Persons”. Example. What portion were non resident Americans living overseas and what portion were were those living on US shores? How many were dual citizens, or Greencard holders either on US homeland shores, or resident abroad? How many were new immigrants to America that knew NOTHING about the FBAR or offshore reporting requirements? That would be very interesting to know, don’t you think? The IRS has released no stats on this, and as far as I know, no journalist have asked the question.
Also, what was the Minnow to Whale ratio? Who were the target rich living in America and who were the benign actors who inadvertently got caught up in this jihad due to lack of general awareness of FBAR and offshore income tax reporting? That has NEVER been asked of the IRS, or explored by a journalist. I do note your quote, and appreciate you including it. I think in it is a BIGGER story for a good investigative journalist to dig into. “These people aren’t tax-evading millionaires – they’re mom and pops caught in the crossfire,” Dorot said.
Finally, of the $5.5 Billion reported, we do NOT know what portion were Taxes or what portion were Penalties. Of the total, I have to think that a significant portion was penalties and not taxes as reported. What portion of the total will be re-occurring tax revenue in the future? Will that be offset by the increased renunciations of U.S. Citizens living Abroad?
I would highly recommend that you read the most recent National Tax Advocates 2012 report to Congress that was just released.
I would focus your attention on MSP 8 and MSP 15.
MSP 8: The IRS’s Offshore Voluntary Disclosure Programs Discourage Voluntary Compliance by Those Who Inadvertently Failed to Report Foreign Accounts
MSP 15: Challenges Persist for International Taxpayers as the IRS Moves Slowly to Address Their Needs
or this analysis by respected Tax scholar, Jack Townsend. TA Report Identifies IRS’ OVDP / OVDI As Problem (1/9/13)
Thanks for your interest and continued reporting on FATCA and the IRS offshore jihad. I think very few Americans really understand the implications of these offshore efforts. They are many unintended consequences and much collateral damage from one good intention to stop Tax evasion by Homeland Americans. The effort has gone badly wrong, IMHO. FATCA, in this regard, is actually the worst law ever. Most Americans know nothing of it. The Israelis are now finding out.
Sincerely,
Great email, Just Me. Thanks again for mentioning the immigrants’ story, a word that I hoped Nina would have used in her report, but infortunately did not. That would have helped understand the magnitude of the issue and non compliance within the US.
Hopefully, she’ll be heard this time and they’ll start implementing some of her proposals.
@Christophe
I take it back, what I said about not expecting acknowledgement. I DID get a response, the first of many that I have sent to her.
Sorry about the spacing on the above post. It was a copy and paste, and I didn’t notice the problem until after the edit period.
Happy to include references to immigrants, as I continue to think this is a totally neglected story.
“Israeli investment houses to report on US citizens’ accounts”
“TASE tells brokers: We’re examining FATCA’s provisions and their “significance.
15 January 13 13:20, Irit Avissar and Lital Istamati
“….Sources inform ”Globes” that, two weeks ago, the Tel Aviv Stock
Exchange (TASE) notified its members that they should prepare to
implement FATCA at their institutions.”…….”The rules could be problematic for many, given the contradictions in US
regulations between and Israeli laws, and the heavy operating costs
involved in implementing the provisions.”
………”Israeli banks have been ready to implement FATCA for some time, even
though it contravenes banking confidentiality rules. After lobbying by
the Association of Banks in Israel, the Ministry of Finance intervened
and established a committee to deal with the matter.”…..
Bank Leumi urging U.S. clients to disclose account information to tax agency
http://www.haaretz.com/business/bank-leumi-urging-u-s-clients-to-disclose-account-information-to-tax-agency.premium-1.493790
US citizenship renunciations are going to fly in Israel.
IMO, Israel will fully embrace FATCA. They receive too much foreign aid from the US to resist. Israeli dual citizens will be thrown under the bus, which seems already to be happening.
U.S. Foreign Aid to Israel
http://www.fas.org/sgp/crs/mideast/RL33222.pdf
“Israel is the largest cumulative recipient of U.S. foreign assistance since World War II. To date, the United States has provided Israel $115 billion in bilateral assistance.”
“For FY2013, the Obama Administration is requesting $3.1 billion in FMF to Israel.”
@ FromTheWilderness
So basically what the US government extracts from duals in Israel (before they scramble to get their CLNs) it will return in aid and armaments to the Israeli government. Sweet deal … as always. Canada, on the other hand, will get nothing in return except perhaps another trade deal to fatten the corporate wallet. After all, Harper hearts corps more than he hearts people.
@FromTheWilderness
Yes, they are about to find out how much those Bunker Busting Bombs cost! 🙂
*Re: Just Me’s above comment of 7 Jan,
Joseph Zernik, the subject of the above-mentioned article, posted a comment today on the FATCA thread regarding the seizure of his account and inability to open an account at another bank there.
I’m having a problem linking the exact comment. You can click on the link, then scroll down to the comment at 3.33 pm today.