As a House companion bill to Senator Carl Levin’s S. 268: CUT Loopholes Act , this HR 1554 Stop Tax Haven Abuse Act by Rep. Lloyd Doggett [D-TX35] contains more FATCA complexity before the ink is dry on the current fiasco. Do a find on FATCA in the text, and it comes up 22 times starting with Sec. 102. Strengthening the Foreign Account Tax Compliance Act (FATCA)
So, they want to “strengthen” something that is not yet in full forces, as if 544 pages of regulations and then all the FATCA IGAs by Treasury isn’t enough! We need MORE!
It has 53 Democrat co-sponsors, and as Tim points out, some of the same ones that support the “Commission on Americans Living Abroad Act”, HR 597. I sometimes think they are clueless as to what they sponsor. With one hand they add complexity and with the other they call for Commissions to study the cumulative effects of their own creation which they can’t see. “Let’s have a Commission to tell us what we have done, shall we?”
Please vote to oppose this bill here, and change the graph which currently, because of the bill’s title, has 68% support right now.
Note: I encourage you to read all the changes in this bill and try to understand what it is they are proposing to do. This is one of the problems with how legislation is created. It becomes very difficult for the average person to understand what is buried in even a small 59 page bill because of the technical manner in which amendment changes are made. If you don’t have the original alongside for comparison you may not fully comprehend what is being done. Effectively, the characterization of the title (Stop Tax Haven Abuse Act) is more important than the actual content for swaying public (and co-sponsor) support.
Additional Note: We should keep an eye on Rep Loyd Doggett, as he appears to be the House clone for the retiring sponsors of FATCA in the Senate, Max Baucas and Carl Levin. (What a legacy they leave, eh?) He has introduced 3 tax bills already this year, and we wonder why the tax code complexity keeps growing.
‘(b) Transfers of Income- For purposes of any United States civil judicial or administrative proceeding to determine or collect tax, there shall be a rebuttable presumption that any amount or thing of value received by a United States person (other than an entity with shares regularly traded on an established securities market) directly or indirectly from an account or from an entity (other than an entity with shares regularly traded on an established securities market) that holds an account, or in any other manner has assets, in a non-FATCA institution, constitutes income of such person taxable in the year of receipt; and any amount or thing of value paid or transferred by or on behalf of a United States person (other than an entity with shares regularly traded on an established securities market) directly or indirectly to an account, or entity (other than an entity with shares regularly traded on an established securities market) that holds an account, or in any other manner has assets, in a non-FATCA institution, represents previously unreported income of such person taxable in the year of the transfer.
(anything transferred from a non FFI is presumed to be untaxed income, ie, guilty til proven innocent?)
GUILTY TIL PROVEN INNOCENT?
‘(c) Rebutting the Presumptions- The presumptions established in this section may be rebutted only by clear and convincing evidence, including detailed documentary, testimonial, and transactional evidence, establishing that–
‘(1) in subsection (a), such taxpayer exercised no control, directly or indirectly, over account or entity at the time in question, and
‘(2) in subsection (b), such amounts or things of value did not represent income related to such United States person.
ditto. ditto. ditto. If foreign, guilty til proven innocent
sec 103–if your Company is registered in Another country and your officers are in USA, it is a USA Company–this meets up with recent media reports
Sec 202: PENALTY FOR FAILING TO DISCLOSE OFFSHORE HOLDINGS.
Notwithstanding clauses (i), (ii), and (iii), for each violation, the amount of the penalty shall not exceed $1,000,000 for any natural person or $10,000,000 for any other person, if–
‘(I) such person directly or indirectly controlled any foreign entity, including any trust, corporation, limited liability company, partnership, or foundation through which an issuer purchased, sold, or held equity or debt instruments;
(If you own a kebab shop in Finland, you are fucked)
SEC. 301. PENALTY FOR PROMOTING ABUSIVE TAX SHELTERS. (massive)
all in all, massive penalties for bankers in Switzerland peddling Products for tax evasion, with massive penalties for normal people living normal clueless lives outside of USA.
Okay, this is yet another example of U.S. citizens abroad being collateral damage in the attempts to attack “Homelanders”.
Here is what I think needs to be done.
There are currently at least three groups who are reading submissions on tax reform or FATCA.
1. Ways and Means
2. TaxPayer Advocate
3. Canada – Department of Finance
This proposed bill is another example of why the U.S. must get rid of citizenship-based taxation and how U.S. citizenship-based taxation operates as an attack on other countries.
We MUST get this idea organized and communicated to all three groups. If this isn’t proof that FATCA is a direct attack on Canada, then I don’t know what is. Time after time I have attempted to point out the interaction between FATCA and the PFIC rules (he is doing that in this bill).
In other words, the time has come to use the words of Congress against them. It is perfectly clear that US persons abroad are not on this idiot’s mind but will be absolutely destroyed by all of this.
So,we need to analyze this from the perspective of how it cripples US persons abroad and is therefore a threat to other countries – the countries they live in.
This character has provided proof of the dangers of FATCA and citizenship-based taxation.
We need to organize this and send it to all three groups.
The problem is NOT citizenship-based taxation per se. The problem is the application of rules designed for Homelanders to US citizens abroad.
Finally, if there is really anybody left who is still “wondering whether to renounce” – I suggest you get the F out while the “getting out is semi-good”.
“Sec. 101. Authorizing special measures against foreign jurisdictions, financial institutions, and others that significantly impede United States tax enforcement” looks like the “hey, why did my credit card stop working” thing last seen as a Carl Levin amendment to the “highway bill”:
“Sec. 102. Strengthening the Foreign Account Tax Compliance Act (FATCA)” looks like basically the same junk that was discussed here last year:
“Sec. 206. Improving enforcement of foreign financial account reporting.” is new, I think (at least, I don’t recall having seen it recycled in any of the endlessly recycled versions of these kinds of legislation that keep popping up) – FBAR penalty hike, on top of what’s already provided for by FATCA:
Small mercy: at least “Sec. 103. Treatment of foreign corporations managed and controlled in the United States as domestic corporations.” only applies to management actually physically present in the US, not “US Persons” (though I’m sure someone will come up with the genius idea of applying it to all US Persons abroad too later)
USCitizenAbroad- you are 100% correct. All three groups must immediately be advised and lobbying efforts started. The insanity of the US government policies and destruction of individual overseas Anericans lives continues.
This is disgusting, but not surprising. If I weren’t an atheist, I’d consider thanking god that I’m no longer a US citizen.
It might be easier and cheaper for them if they just sent the Marines out to shoot all US expats.