H.R. 2299 “To prevent the Secretary of the Treasury from expanding United States bank reporting requirements with respect to interest on deposits paid to nonresident aliens.”
In the last Congressional Session, Representative Bill Posey proposed 3 amendments to H.R. 4078, “The Red Tape Reduction Act”, which was passed by the House, but died in the Senate.
Posey’s third Amendment, was of interest to us. It specifically was calling for a withdrawal of IRS bulletin 20-2012 . This is an important reciprocity tool that Treasury is promising the world’s governments in their FATCA IGAs as a first step along the way to imposing a full blown domestic equivalent of FATCA (which we call DATCA).
…… to stop the IRS from implementing new misguided regulations expected to lead to billions of dollars of capital flight from U.S. banks to foreign institutions. Despite strong bipartisan requests in both chambers of Congress, the Treasury Department has refused to withdraw the rule, or at a minimum, conduct an economic impact analysis on how the regulation would affect the banks and the economy.
Representative Bill Posey is no ‘Johnny come lately’ to the fight against the FATCAnatics in Treasury. Back in March of 2011, he wrote the White House a letter, signed by the entire Florida delegation, demanding that the proposed IRS regulations requiring reporting of Non Resident Alien Deposit Interest be withdrawn.
It is good to see, that with this new bill, Rep Posey can be just as persistent on the right side of the equation as the misguided Senator Jack Reed is on the left, who thinks emigrants (deemed ‘covered Expats’) shouldn’t be able to return once they renounce or relinquish citizenship.
I think this is a bill we can and should support. I still feel the reciprocity issue is the Achilles heel of FATCA. If this reciprocity tool is totally removed, the governments of the world can no long hide behind the charade that they are signing IGAs to get something back in return.
Of course, I could be wrong, and probably am. That said, I thought I would take this opportunity to move forward and update the history of DATCA events with this post. I have been tracking it here, here, here, here, here, here and here since it first became obvious to me what Treasury was doing .
Recap the DATCA story…. (as much for me as for anyone who happens to bother reading this.) I continue to add to it over time. I have been trying to keep all articles relevant to the FATCA reciprocal information sharing subject as I found them. I coined the term DATCA to reference it, as it is the domestic version of FATCA.
Let’s review. This is somewhat an arbitrary start date for a timeline. If anyone sees any story or discussion earlier than this, that I may have missed, which adds significantly to the DATCA narrative, please let me know.
March 18, 2010 – Hire Act H.R. 2847, signed into law. Hat tip to Mark Twain who provided me with the Money Trail on those that voted for this.
February 22, 2011 – IRS Bulletin: 2011-8 REG-146097-09 was issued: It was a Notice of Proposed Rulemaking; Notice of Public Hearing; and Withdrawal of Previously Proposed Rule making Guidance on Reporting Interest Paid to Nonresident Aliens
March 11, 2011 – A bi partisan letter from the entire Florida delegation, comprised of Reps and Dems was written to Obama to complain about regulations that the IRS was unilaterally imposing on US banks as part of the FATCA rollout effort. However, they did not identify or maybe even understand that one was part of the other.
Another link for this letter.
July 15, 2011 – H.R. 2568 (112th Congress): To prevent the Secretary of the Treasury from expanding United States bank reporting requirements with respect to interest on deposits paid to nonresident aliens. (Thanks to Mark Twain for calling this one to my attention in the comments below.)
September 22, 2011 – There was Ron Paul’s letter to Tim Geithner about FATCA I was not aware of it until posted by recalcitrantexpat on Feb 8, 2012.
September 27, 2011 – The first story that begin to register for me that there was opposition to actions that the IRS was taking. It was in an Accounting Today story six months later: Congressman Tells IRS to Back off on Bank Disclosure
The chairman of the House Ways and Means Oversight Subcommittee demanded Tuesday that the Internal Revenue Service suspend a proposed regulation that would require banks to disclose the amount of interest paid to nonresident aliens.Rep. Charles Boustany, R-La., wrote a letter to Treasury Secretary Timothy Geithner and IRS Commissioner Doug Shulman saying the proposed regulation could potentially drive foreign investment out of the U.S. economy and harm individuals and small businesses by reducing access to capital. He called on the Treasury to provide a cost-benefit analysis detailing the administrative burdens of the regulation before it is approved by the IRS.This is not the first time the IRS has attempted to issue this regulation,” said Boustany. “At the close of the Clinton Administration, the IRS tried to put in place similar reporting requirements. However, after members of Congress, the Federal Deposit Insurance Corporation, and the U.S. Small Business Administration raised strong concerns, the proposal was eventually withdrawn. It is disappointing to see the IRS once again try to impose unnecessary regulations and costs on U.S. banks.
This story also got a mention out of Rosa Eckstein Schechter of Florida here: Congressional Challenge to FATCA Brewing Out of Louisiana Congressman’s Letter to Treasury Secretary Geithner
October 27, 2011 – There was a Hearing held by the subcommittee of Financial Institutions of the Committee of Financial Services about “PROPOSED REGULATIONS TO REQUIRE REPORTING OF NONRESIDENT ALIEN DEPOSIT INTEREST INCOME”
Hat tip to Badger who dug this out here.
January 24, 2012 – Remarks by Emily S. McMahon, Treasuries Acting Assistant Secretary for Tax Policy at New York State Bar Association Tax Section Annual Meeting outlining FATCA reciprocity plans…
…”we see no principled basis on which to require that financial institutions based in other countries collect and provide us with information on U.S. taxpayers, if we take the position that our own institutions should be exempt from similar requirements. To the contrary, we believe that it will be critical to the success of our efforts to implement FATCA that we are able to reciprocate….”
Another Hat tip to Badger who posted these remarks here
February 2, of 2012 – There was a US Treasury Department release of a JOINT STATEMENT FROM THE UNITED STATES, FRANCE, GERMANY, ITALY, SPAIN AND THE UNITED KINGDOM REGARDING AN INTERGOVERNMENTAL APPROACH (IGA)TO IMPROVING INTERNATIONAL TAX COMPLIANCE AND IMPLEMENTING FATCAGeneral Consideration 5 laid out a vision of reciprocity (A DATCA?) that said:
In this regard the United States is willing to reciprocate in collecting and exchanging on an automatic basis information on accounts held in US financial institutions by residents of France, Germany, Italy, Spain and the United Kingdom. The approach under discussion, therefore, would enhance compliance and facilitate enforcement to the benefit of all parties.
February 8th, 2012 – This was my first use of the term DATCA related to the IR-2012-15: Treasury, IRS Issue Proposed Regulations for FATCA Implementation. It was here I begin to identify that some form of a DATCA was going to be a part of FATCA implementation.
April 17, 2012 – It was was reported in Accounting Today that IRS Issues FATCA Guidance on Reporting Interest Paid to Nonresident Aliens
The IRS noted that the regulations would facilitate intergovernmental cooperation on FATCA implementation by better enabling the agency, in appropriate circumstances, to reciprocate by exchanging information with foreign governments for tax administration purposes
May 11, 2012 – Another story surfaced on Accounting Today basically expressing dissatisfaction with what the IRS was doing, and asking again for information.Congress Probes IRS FATCA Interest Regulations
The chairman of an influential congressional subcommittee is demanding information from the Treasury Department on a recent Internal Revenue Service regulation requiring banks to disclose the interest they pay to nonresident aliensCongressman Charles Boustany Jr., R-La., who chairs the House Ways and Means Oversight Subcommittee, has written a letter to Treasury Secretary Tim Geithner asking for more information about the regulation.However, Boustany finds the regulations troubling.
He had written to Geithner last September after the IRS issued a Notice of Proposed Rulemaking and received information in December. However, he said in his new letter that while Geithner’s initial response was helpful, it did not provide all of the information requested.“This regulation could drive foreign investment out of our economy and burden banks with unnecessary reporting requirements, in turn hurting individuals and small businesses,” Boustany said.
In a new letter that he sent Friday, Boustany called on the Treasury Department to provide correspondence and other documents relating to the formation of the opinion that the proposed regulation is not a “significant regulatory action,” as well as other information requested in Boustany’s earlier letter.
May 14, 2012 – The IRS went ahead with their final reg, IRS bulletin 2012-20 which was the first step in meeting the “Joint Statement” agreement of February 2, 2012 and ignoring Boustany’s letter above just days before. It officially created the reciprocal provisions (DATCA lite) in the Model Agreement 1 which was to follow.
26 July 2012 – The US Treasury Department issued the first FATCA model 1 Inter-government reciprocal agreement, (IGA) that contained article 6, promising to provide reciprocity (as in IRS bulletin 2012-20) to countries that signed the agreement. The Actual language said:
United States is committed to further improve transparency and enhance the exchange relationship with[FATCA Partner] by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic exchange.
July 26th of 2012 – The Posey Legislation and amendment 3, which was passed by the House but went nowhere in the Senate. In this legislation they tried to reign the IRS in.
Posey’s third Amendment, which is based on bipartisan, bicameral legislation he introduced with Congressman Gregory Meeks (D-NY) to stop the IRS from implementing new misguided regulations expected to lead to billions of dollars of capital flight from U.S. banks to foreign institutions. Despite strong bipartisan requests in both chambers of Congress, the Treasury Department has refused to withdraw the rule, or at a minimum, conduct an economic impact analysis on how the regulation would affect the banks and the economy.
According to Florida’s office of financial regulation, the regulation could lead to tens of billions of dollars being withdrawn from Florida banks and moved to overseas accounts. Posey said his Amendment would delay the IRS rule until unemployment drops to 6 percent. The House approved this Amendment with a bipartisan vote of 251-165.
Obviously at this point it was clear that FATCAnatics were marching onward with their FATCA IGA reciprocal mission and a larger global GATCA in mind. 
They seem determined to ignore Congress as they went! Their intention or interest mattered not!
Oct 17, 2012 – There was the letter by Congressman Reichart imploring Shulman to answer him about what they were up to. No response that I know of.
January 28, 2013 – The final FATCA fatwa regs are released effective January 28th, and countries are being pressured to sign FATCA IGAs with some measure of reciprocity rather than be subjected to the onerous FATCA Portal of Mordor as released in the 544 pages of regulations.
April 14, 2013 – Obama’s budget released and calls for FATCA reciprocity This is the domestic full blown DATCA they have desired to be imposed on the USFIs. See page 202. It was posted on IBS with additional comments Here Comes DATCA.
April 19, 2013 – Banker Groups Sue Treasury, IRS Over Account Reporting Rule Story from Bloomberg about the attempt to stop DATCA lite without a mention of FATCA. We blogged about what this all means here.
May 23, 2013 – There was an EU Parliament public hearing on FATCA that featured presentation and answers to questions by Treasuries Robert Stack. His answers on FATCA reciprocity were videoed and loaded on You tube here, and his transcript is loaded here. In his answers, he has explained that reciprocity (DATCA) is in the Obama budget, and what that would mean for Delaware Corporate beneficial ownership transparency.
Jun 06, 2013 – Representative Bill Posey introduces legislation H.R. 2299: To prevent the Secretary of the Treasury from expanding United States bank reporting requirements with respect to interest on deposits paid to nonresident aliens
July 1, 2013 – (Update) Representative Bill Posey writes a letter to Secretary Jack Lew calling for a moratorium on FATCA. Here is a download link to the letter, and it was announced and discussed here on ISB
July 19th, 2013 (Update July 28th) Janet Novak at Forbes reports here that the IRS has been quietly filing John Doe requests to USFIs on behalf of Norway which recently signed an FATCA IGA. So, is this the quid pro quo for reciprocity demands? Is this DATCA by another means. See my comment on the story. Further conversations with Janet, confirm, that the DOJ has stated this is the first time they have EVER done this?
January 13, 2014 US DOJ: Court Rejects Banking Associations’ Challenge to Regulations Addressing Offshore Tax Avoidance. Added this comment here. So, DATCA lite looks to be a reality. However, note that reporting on this says….
“The IRS is starting to require the information to comply with international treaties requiring foreign banks to provide similar information about overseas accounts of U.S. taxpayers.”
But of course, all readers at ISB know these are NOT a treaty. They are an Executive or Competent Authority agreement, and if you don’t understand the difference and dubious legal basis for these agreements, the article by Allison Christians is must reading…
Feb 5th, 2014 Reuters reports that the Banking association has appealed the dismissal of the case above. So the fight against ‘DATCA lite’ lives on.
…and that is the End of the of the brief history of DATCA as I have watched develop and recorded it. It is interesting to look back and remind myself how long Treasury has been marching to their own drummer and have been ignoring Congress.
No Way was a domestic reciprocal FATCA (DATCA) ever part of any intention of Congress when this was passed it, assuming they even knew it was in the Hire Act in the first place.
There is nothing in the 2009 Press Release that heralded its coming. If reciprocity had been part of the intention, why wouldn’t they have just created the authority for FATCA IGAs when they wrote FATCA in the first place?
They didn’t provide for it, comment on it or write it into the legislation, because they were only focused offshore and few knew that the Treasury FATCAnatics were about to hijack the mission. I do speculate that a DATCA certainly must have been part of a secret goal of some of the sponsors, as America is the BIGGEST tax haven in the world and the resting place for trillions of dollars undeclared around the world. They wanted to stop that.
Switzerland is a piker by contrast.
This comment by @Badger on another thread is worth repeating:
The IRS has not charged any actual bankster executives when illicit money owned by foreign non-resident depositors is discovered hidden in US bank accounts on a large scale, and it appears that none of these investigations even went to trial. The banks settled, but still made a profit.
“We’re the biggest tax haven in the world,” says Robert Goulder, editor-in-chief of U.S.-based Tax Notes International. “People joke about the Cayman Islands. The biggest haven is an island, all right. It’s either Manhattan or Great Britain.”
Jack Blum, a former U.S. Senate investigator and an authority on offshore tax shelters, says U.S. bankers “sell tax evasion to citizens of Central America, the Caribbean, all over Latin America.” The U.S. government hasn’t put a stop to it, Blum says, because bankers and politicians don’t want to stop the flow of foreign cash into the United States.”
also:
The Global Intelligence Files: Re: US Bank – Dirty Money
WACHOVIA ENTERS INTO DEFERRED PROSECUTION AGREEMENT
How a big US bank laundered billions from Mexico’s murderous drug gangs
So, therein will be the future battle lines be drawn as they progress towards a full FATCA implementation globally. Full Reciprocity is not there yet, but an IRS spokesman said recently, reciprocity is a work in progress, and of course Robert Stack made those public reciprocity statements at the EU Parliament FATCA Hearing. The last blog entry on that hearing is here. Make no mistake about it, that is where the ideologues of Treasury are heading. And frankly, if America is not going to be so hypocritical in its approach to financial transparency, it has to begin at home.
Will they get there? Will they actually pass a DATCA? It all depends if Congress has a spine and resists, or if gridlock effectively stops the Obama! However, I think we underestimate how much our banking system has relied on illicit and ‘dark money’ for liquidity. Are we willing to give it up in an ideological pursuit of Global financial transparency, or GATCA is you wish? What will be the impacts on the US homeland for capital flight if we do? Will your loan not be approved because reserve levels of your local bank are too low, and the DATCA money is no longer resting in your bank? How pure and idealistic do we want to be in our global efforts at fighting tax avoidance and evasion?
Just an aside: If you haven’t read that IRS bulletin 2012-20 that I have linked here, you really should.
It is as much a mission statement of the FATCAnatics as those the NeoCons issued with their Project for a New American Century years ago that laid out their vision prior to our war of preemption on Iraq.
The FATCAnatics of the left are the ideological mirror image of the NeoCons of the Right. The War is just different, but mission the same. Pre-emption in pursuit of ideological certainty. Unintended consequences of unknown unknowns, be damned!
Read this letter. Look at those signatures and compare it to the officials in the first administration of W, and then tell me why you were surprised at our Iraqi invasion!
To me, the FATCAnatics have laid out their mission just as forthrightly as the NeoCons did. There should be no surprises about where they are heading. Yet the media chooses not to read or report on it. I don’t know why they ignore it, but it is what it is I guess!
The Mission Marches on…Others are beginning to wake up to what is happening, but not in the Mainstream media yet…..and now you are up to date for the moment, if you could bring yourself to read this far!
I agree with Calgary 411. Efforts should be directed to achieving
citizenresidence based taxation. Even without IGAs the IRS can go directly to FFIs, unless the countries in which they (FFIs) reside forbid it based on privacy statutes. Reciprocity may deal a blow to FATCA in terms of international agreements, but will it cause the demise of FATCA? Again the IRS can still go directly to financial institutions who will be motivated to comply with the threat of 30% withholding on US investments. They (FFIs) are unlikely to take the high ground and focus on the interests of their customers. They will throw us under the bus for the sake of their financial interests, their shareholders and their fat corporate salaries.@JustMe
Another enlightening episode, this background info would make for a wonderful political thriller film – too bad it is true….
@bubblebustin
I’m guessing around a 4 or a 5. The bigger problem with Canada’s efforts to capitulate on the IGA front seems domestic, because of the large percentage of bona fide Canadians who will come under FATCA’s purview as “US Persons,” and consequent issues with the Charter, data privacy law, etc. Also, some details (but important ones for some Canadian institutions) on Annex II exemptions, on which Washington doesn’t want to budge, still seem to be holding things up, though for how long it not certain Reciprocity, or the promise thereof, doesn’t seem to be the biggest fly in Ottawa’s ointment, compared to other countries.
@Just Me
Yes, that’s always a danger, especially since Congress (especially GOP House members on Financial Services and Ways and Means) are insufficiently (IMHO) focused on the Art. 6(1) “equivalence” request compared to the current NRA reporting. OTOH, since we’ve got so much gridlock, there isn’t much getting through at all, and no favors in particular are being done for IRS/Treasury because of the scandal over IRS treatment of conservative groups. Short answer: I worry about that too, though I think (and hope) the likelihood is quite small. This ain’t 2010.
@Chris
In some cases, you no doubt are right. OTOH, most governments can’t really imagine they will get much revenue from US FATCA reciprocity. Also note that some governments are less concerned by bank reporting than corporate ownership (Cameron’s been on a tear about this), which is in the Administration’s Art. 6(1) request. (“certain U.S. entities held in substantial part by non-U.S. owners”). In addition, for some countries (Germany, and if they think they’ll really get reciprocity, Russia) may consider true reciprocity a matter of sovereign principle, without which the deal won’t be salable politically. (Interestingly, even as a Swiss parliamentary committee approved the (non-reciprocal) FATCA IGA http://www.tax-news.com/news/Swiss_Parliamentary_Committee_Backs_FATCA_IGA____61224.html , the issue of sovereignty and reciprocity was contentious. In light of the recent vote of the Swiss lower house to tank the banks’ deal with the US Department of Justice (a deal the banks were desperate to approve), those considerations may presage a similar fate for the IGA, on pure sovereignty grounds.
@Joe Zinga
Re:
Well, it very well might. Treasury seems convinced they can’t enforce FATCA without the IGAs. (Mark Matthews, former head of the criminal investigation division at the IRS: “The (FATCA) statute as written was wholly unachievable.’” [Patrick Temple-West, “U.S. overseas tax dragnet refocuses on country partnerships,” Reuters, 9/18/12) That’s why they have carefully paced implementation of the nasty 544 pages of regulations as a threat to scare FFIs into pressuring their governments into IGAs. But the pace is slow, which is why they may well delay again past 1/1/14 unless things pick up.
Re:
That’s the threat Treasury wants out there. But it might not work. Not because FFIs *wouldn’t* “throw us under the bus for the sake of their financial interests, their shareholders and their fat corporate salaries” — of course they would. But the question is, *can* they?
As noted in the Administration’s Art. 6(1) request: “In many cases, foreign law would prevent foreign financial institutions from complying with the FATCA provisions of the Hiring Incentives to Restore Employment Act of 2010 by reporting to the IRS information about U.S. accounts.” That’s correct — the main purpose the IGAs are needed, both reciprocal and non-reciprocal models, is to change the domestic law of the foreign country to permit its institutions to comply with FATCA, including abrogation of human rights, privacy, and data protection laws.
As such, if the IGA process lags, *Treasury* will be as scared to pull that trigger on 1/1/14 as anyone else. They don’t know what will happen if they try to enforce FATCA unilaterally against hundreds of thousands of FFIs in almost 200 countries (for which they just don’t have the resources), when in many if not most countries the FFIs *can’t* comply with FATCA however much they’d like to because doing so would violate domestic law.
IMHO, it was stupid in the first place to threaten FFIs of the world with the 30% withholding. That is what is resulting in US persons discrimination all other the world. That alone is causing much more damage than the revenue they might get from any data exchange that might be put in place.
With all the scandals, the conditions were ripe for most countries to accept and work out some sort of data exchange of non-residents. I don’t understand why they chose the imperialist way, instead of negotiations with the EU and other countries to make that happen. Had they done that, I don’t think we would see the discrimination that is currently happening.
If they’re not even ready to share info on non resident aliens, then they should not have opened the Pandora’s box. BTW, if they already have that info, do they need congress’ approval to share it?
If the US is so desperate to get every tax dollar they can, another solution would have been to start taxing non resident aliens accounts.
@Chris
Yes, the US’s behaviour is certainly no way to build a consensus, going in with guns blazing!
@Jim thanks for making me laugh with your comment about whether Canadian banks would throw USP’s under the bus…
I heard from my MP and elsewhere that the Canadian government has been consulting with Mark Matthews. He’s also my lawyer’s ear to the ground in Washington. I trust Caplin & Drysdale only so far though, as they helped the IRS to come up with the OVD’s that completely overlooked US persons living abroad, and also profit from the status quo. These would be the guys to figure out how CBT and FATCA could work best together.
…and a big thanks to you and Just Me in providing us with your pov’s on these ongoing developments.
I hate to sound like a pessimist (I’ve managed to say pretty optimistic throughout this ordeal), but how much steam can HR2299 build? As I understand it, the U.S. is only offering to disclose account info on non-resident aliens. Why would your average Joe American care about a law that only impacts people that don’t live in the US? He may think, big deal, some guy from Venezuela with US bank accounts will get them reported back to his home government.
On the other hand, countries like Canada must disclose account info on Canadian citizens and residents who might be US persons. That hardly sounds like true reciprocity to me.
JustMe, thank you for all the work involved in this post and everything you’ve done. All I can say is, the $25,000 FBAR penalty you paid must be the most expensive $25,000 they have ever collected. If they had treated you fairly from the beginning, all your posts would have been quite different!
Wish you could become the next IRS commissioner!
@GS
Yea, that would be a great job. I could start out day with one, with a Shulman declaration,
“I am not responsible” and then hand FBAR compliance reporting back to FINCEN as too much trouble for too little return and way too much aggravation! 🙂
As for the IRS ‘pound of flesh’ they extracted, they never learn the lessons that successful business do.The worst PR comes from a disgruntled customer who they failed to resolve a problem. The best PR comes from a Customer that they did the right thing for when their product or service failed. Had they done the right thing in response to my first letter to the IRS, and am pretty sure I would not be commenting and blogging here now! 🙂
So, I am getting my $25K back in negative marketing. Doesn’t flow into my pocket of course, but there is a little satisfaction that there might be a little less in theirs. Of course, they don’t know or really care. They are just operate as a mindless blob of bureaucrats working the processing line. Not their problem, and their bosses aren’t responsible. They are too busy spending their government issued credit cards on
wine, women and song.
To bubblebustin: Thank you, Jim for the explanation.
On a dimbulb scale of 1-10, where would you put the Canadian Government, 1 being the brightest of course?
Answer: 15.
“To prevent the Secretary of the Treasury from expanding United States bank reporting requirements with respect to interest on deposits paid to nonresident aliens.”
Really … just interest ? …… and just to NON RESIDENT aliens? For reciprocity it must refer to ALL persons in the US with connections to other countries ! regardless whether such persons have Green Cards or even have adopted US Citizenship ! For reciprocity it must refer to ALL financial accounts, pension plans, insurance, stock brokerage accounts and of course bank accounts …. not merely INTEREST ! For reciprocity ….. there must be penalty of 30% withholding on ALL transfers whether income or capital ! What is this nursery kid gloves stuff ….. how else are the tyrants of the world to know that their diaspora and residents and connected persons have secreted funds in the biggest money laundry in the world ?!? How bout real estate holdings as well !
Am I disgusted …. sure right !
Note this recent update of Letter by Rep Bill Posey to Sec Jack Lew. Will update my timeline and history of DATCA
http://isaacbrocksociety.ca/2013/07/03/breaking-news-for-your-4th-of-july-celebrations/
Is the time coming to learn from the 1960s and DEMONSTRATE ! How ’bout people organizing a “withdrawal from the FATCA system day” when millions withdraw their funds from the banks and other financial institutions in protest … the funds may be redeposited in a week but can you imagine the chaos in the international markets? Such action could bring down Governments !
@nervousinvestor
Just read your comment on July 3rd… It is a point well taken, however, just for clarity, I want to be sure you understand why the limited focus of the bill.
The point of the bill is it is specifically directed at IRS bulletin 2012-20, which ONLY provides for NRA interest reporting. The IRS realizes that it does NOT have regulatory authority to do more than that, (full blown DATCA reciprocity) and of course, the Florida and Texas Banking associations and members of Congress DO NOT think it has regulatory authority to impose EVEN this limited reporting requirement (DATCA lite), but the IRS has ignored their letters in the past to Stop, so that is why the bill. Make sense?
Many thanks for the clarification Just Me.
I have cooled down a touch in the intervening period …. but am still outraged by this whole subject. Imagine what worse would have befallen the Sephardim Jews in Spain had there been FATCA reporting to the Spanish Crown or the Roman Emperors in the two millenia leading up to the sailing of Columbus ! How much easier and more targeted this would have made the Spanish Inquisition. This whole thing is an outright abuse. History is full of circumstances that clearly demonstrate that Privacy Matters and that Transparency in Financial affairs is NOT necessarily a good thing.
@nervousinvestor,
I agree with you
In order to build momentum on attention the latest effort to draw attention to stopping Posey’s call for a Moratorium,, it is important that we email Posey in support of his position.
You can just do it on his web site…
http://posey.house.gov/
Also note these two additional french articles that will require google translate for the non french speaking folks, that’s me!
http://bit.ly/11vJeMY
Bill Posey, “representative” of the Florida Congress of the United States, threw a bombshell: his letter of July 1, Treasury Secretary Jack Lew puts into question the strategy of the U.S. government to implement FATCA. A strategy based on the conclusion of treaties with other countries, including Switzerland, to ensure their cooperation. However, according to Bill Posey, “these intergovernmental agreements (IGA) which have been reached are not authorized by FATCA or even mentioned in the law.” According RepealFatca a very active lobby, the letter of Bill Posey might be a “deadly blow” against the “misguided” law FATCA.
and this http://bit.ly/18IwSDu
The representative of Florida, the obligation of the Treasury is trying to impose U.S. banks to report data from their foreign customers, the model that FATCA requires banks around the world with respect to their U.S. customers is “expensive and cons-productive” The conclusion of the letter is clear: “it is clear that FATCA must be substantially amended or repealed and replaced by a system that penalizes tax evasion without at the expense innocent people.
Congressman Posey Rebukes Secretary Lew On FATCA
(Washington, D.C., Monday, July 8, 2013) The Center for Freedom and Prosperity announces its support for Congressman Bill Posey’s (R-FL) recent letter challenging Treasury Secretary Lew regarding implementation of the Foreign Account Tax Compliance Act (FATCA). In the letter Rep. Posey, a member of the House Financial Services Committee, expressed his deep concerns with regard to efforts of the Treasury Department to burden American banks with unauthorized and costly reporting requirements, and called for Treasury to halt implementation until the administration’s request for additional authority can be vetted by Congress. The letter, along with recent legislation introduced by Sen. Rand Paul to repeal FATCA (S. 887), provides further proof that Congress does not support the Treasury Department’s overreach.
Just updated the timeline in the body of the post to include the July 15, 2011 bill in the House that Mark Twain pointed out, and to add the July 1st 2012, Letter to Jack Lew from Rep Bill Posey
More recognition of DATCA…
U.S. offshore banking industry strikes back at FATCA IGAs – See more at: http://emergingmoney.com/bank/79984/?goback=%2Egde_4822273_member_258397049#sthash.SAKsMDU4.dpuf
Former Deputy Assistant Secretary of State Blasts FATCA
http://bit.ly/14ZDvNG
Few know better than Americans living overseas the punitive and capricious nature of U.S. tax policy. Writing in today’s Wall Street Journal, law professor and former Deputy Assistant Secretary of State Colleen Graffy provided a clear and concise accounting of FATCA‘s destructive flaws from the point of view of an American overseas.
Note: The WSJ article has been posted on other threads
Pingback: The Isaac Brock Society
Interesting DATCA development with a Tip of the Hat to Tim for pointing the article out.
Janet Novak of Forbes, reports….
U.S. Seeks PNC, Wells Fargo, JP Morgan Records To Find Tax Cheats–From Norway
I would really encourage you to read it….
To which I commented…
These FATCAnatics in Treasury are very clever and determined, I will give them that. If they can not get Congress to go along with their FATCA IGA reciprocity plans by imposing a full blown domestic DATCA on USFIs, then they will just use the U.S. Treasury and the DOJ to do the work for Norway to get what they have promised in IGA Article 6.
This was obviously the quid pro quo for Norway signing the IGAs. In exchange for FATCA compliance and as a reward for signing up, we will do the legal hard yards in America to get your ‘supposed’ tax cheats for you.
One BIG difference being, they will ONLY be looking for Norway Residents, and NOT Norway Citizens living in America. Very different that what America demands of Norway, where the U.S. wants all Citizens reported no matter where in the Universe they live, work or pay taxes.
Now, let’s watch and see if they repeat this model for the other 6 IGA model I signers! You would have thought that they would have done this first for the UK, as a reward for being the first signer of an IGA. Maybe the UK in it haste to join up, did not drive as hard of a bargain as Norway?
Of course if Treasury says, as they always do, that they are in negotiations with 70 countries, then you might as well shut down the DOJ from any other domestic work, as the U.S. being the biggest tax haven of all, they have a lot of summons work ahead of them. The USFIs will be doing nothing but responding to endless John Doe requests. That will make them happy!
Jack Townsend has posted on this too…
Reciprocity — the U.S. Issues John Doe Summonses to Identify Norway Tax Cheats
I will post more as I receive it, but obviously if the U.S. insists on such John Doe treaty requests when it makes them, it will have to reciprocate when treaty partners make them. In this regard, historically exchange of information treaty requests have required some identification of the taxpayer. However, as observers of the U.S.-Swiss spat know, Switzerland has recently approved “group requests” — I call them John Doe treaty requests. See Swiss Court Ruling in Credit Suisse Case (Federal Tax Crimes Blog 7/8/13), here.
Have just updated by DATCA timeline in the body of the post above to include recent Norway John Doe development.