Obama Selectively Implements More Than Just Obamacare, At Great Taxpayer Expense http://t.co/VNGVOH0xpf via @forbes – Indictment of #FATCA
— U.S. Citizen Abroad (@USCitizenAbroad) January 18, 2014
This strong indictment from a Washington based lawyer Eileen O’Connor (who once headed the tax division of the U.S. Department of Justice) Includes:
Lost in the bewilderment about the Obama administration choosing which parts of Obamacare it would apply to which people and when, has been that it has been doing the same thing with the Foreign Account Tax Compliance Act (FATCA). The Administration has time and again delayed effective dates that were set in the statute. Nobody is complaining, though, because nobody can comply. Not the government, and not the financial institutions subject to the law.
Embedded in the charmingly-named HIRE Act, FATCA requires any financial institution anywhere in the world to report to the US government the results of any dealings it has with any person or entity subject to US tax laws. Just as nationalizing activities amounting to one-sixth of the national economy was a pretty tall order, so too was requiring global financial reporting.
Another problem with FATCA implementation is the intergovernmental agreements Treasury has been trying to negotiate around the globe. A few are in place; more are in the works.
Under the agreements, the foreign government agrees to require its financial institutions to provide information on US persons either directly to the IRS (a Model 2 agreement), or to the foreign government, which will then provide it to IRS (a Model 1 agreement). To entice foreign governments to enter into these agreements, Treasury has been promising to reciprocate, to the extent allowed by law.
The catch is that the reciprocation is not presently allowed by U.S. law. This is clear from the Administration’s budget request for 2014, the “Analysis and Perspectives” for which asks, on page 202, for the authority to reciprocate.
Rep. Bill Posey, R-FL, wrote to Treasury Secretary Jack Lew last summer, asking him to stop negotiating FATCA-implementing intergovernmental agreements with foreign governments, because his promise of US reciprocation is one on which he cannot deliver. Even if providing this information to foreign governments were permissible under US law, Posey believes doing so would discourage foreign investment in the US, thus depriving the US of capital that would otherwise be available for business formation and growth.
There are currently two great comments – perhaps you may want to add your thoughts.
A couple of days ago I emailed the link to this story to Harper, Flaherty, party leaders and my MP, with quotes about the recommended postponement of implementation until Jan 1 2015 (after the US congressional elections …) as well as the clear statement that reciprocity is not legal on the US side and can’t be guaranteed, therefore making signing an IGA really stupid on the part of any other government. Which point I stressed in my email, as well as noting that if the Republicans keep control of the House after November (a near certainty given gerrymandering if nothing else), Hell will likely freeze over before the House is going to vote for US banks providing account information to foreign governments on their nationals residing in the US, which is the reciprocal sticking-point in Canada’s case at least, I believe.
May I recommend that others might like also to write their MPs and perhaps Flaherty making the same points, with this link, in their own words. It doesn’t hurt to hammer them over the head with these points from lots of directions, maybe they’ll start to pay attention. It might even do some good, who knows.
… It is interesting to note that this article appears in Forbes, a seriously heavy-hitting US financial publication with lots of influence in the business and political communities in the US. Nice hat trick on the heels of the US Chamber of Commerce article a few days ago …
As I said in the close of my letter, the fact that Britain, France and Germany have signed IGAs only proves that even in those countries there can be politicians and bureaucrats who are terminally asleep at the switch. FATCA IGAs are a violation of other countries’ sovereignty and a one-sided “agreement” which amounts to extortion on one side and either bald cowardice or outright stupidity on the other side.
Schubert sorry to say a federal court ruled for the sharing. Some people here, did not realize how bad that ruling was for us.
Quoting from Forbes, you may get on Obama enemy list.
Judge Rules U.S. Banks Must Report to Foreign Countries under FATCA Deals #DATCA
What about the fact that on December 12th the Treasury Department said FATCA will have no more delays? We can only hope that they’ll stick to their word and kill it.
Its extortion – or blackmail. And it is packed in a giftbox with a bow to make it look good.
Another delay would be good not bad, They will not kill FATCA, they will just implement. Then Foreign government will then run to implement IGA. In addition another delay will push it past another congressional election, where they is a slim possibility you may get more anti-Obama senators.
Polly what is your country position on collecting USA taxes.
Switzerland. Up till now I have heard they will not be collecting.
I’m not saying that a delay would be bad. Unless we’re being fed a pack of lies, for the US to implement FATCA now they would have to be completely irresponsible, reckless and self destructive, but unless a delay is in the hope of gaining more opposition to it, why bother leaving more time for the US government to figure out how it can comply?
“The Administration has time and again delayed effective dates that were set in the statute. Nobody is complaining, though, because nobody can comply. Not the government, and not the financial institutions subject to the law.”
Also from Forbes:
IRS Gets Hammered in the 2014 Budget Agreement
“The Internal Revenue Service is one of the biggest losers in the 2014 budget deal agreed to last night by House and Senate negotiators. Under the agreement, the service would get just $11.3 billion, which is $526 million below its 2013 budget and $1.7 billion less than President Obama requested.
According to the House Appropriations Committee, the funding level would be lower than agency spending in 2009. The agreement would also require the IRS to spend more time and energy reporting to Congress on a range of activities…“
Forbes Jan 14, 2014
IRS to run on $526 million below its 2013 budget and $1.7 billion less than President Obama requested — and continue implementation of ACA and FATCA? I sure don’t get it.
…and there is this comment to the article:
Delaying FATCA means not implementing it. I do hold much hope that a Republican will ever win the US presidency, but maybe Hillary, may have more reasonable people on her staff. On a negative side it should be noted that closer connection nonsense and other expat changes occurred while Bill was president.
No more dynastic, corporate controlled, dictators for the USA please! (Hillary Clinton? — Jeb Bush? — Good grief!) Since the USA is hellbent on fascism and dictatorship then it darn well better select (there is no “elect” in “select” because US elections are an illusion) a fresh face to look at on the telescreen after 2016 — it’s the least (and the USA specializes in the lowest common dominator) it can do. Personally I am hoping for a Black Swan event to mix things up a bit more down there. Black Swan events can be positive (50/50 chance).
I just finished reading the TIGTA report. In its conclusion:
“In future reviews of systems development activities for the FATCA, we will continue to consider the adequacy of the new IRM guidelines for RTVM development and implementation. Also, the program-level RTVM should be maintained throughout the requirements management and testing processes to ensure complete functionality of the FRS and long-term successful implementation of the FATCA Program. We believe that the IRS’s corrective action as provided is non-responsive to our recommendation because it does not address the need for appropriate, in-scope requirements to be established and documented in the RTVM at the beginning of the testing life cycle.”
For those more knowledgeable than I am at technology, would a simple acronym of GIGO describe the current state of FATCA systems development?
Calgary 411 and skeptical, the article on the IRS budget slash that I read also highlighted how the agency will no longer field questions from taxpayers beyond the end of the tax season on April 14th and they will only be answering “simple” questions.
It went to talk about the pathetic service taxpayers received last year where the average person spent 19mins on hold and that the IRS only ever answered 6 out our every ten phone calls it received.
And I am assuming they were only looking at taxpayer neglect in the US. The even worse service that expats receive should give FATCA cheerleaders pause. Or maybe not as most of them appear to be parasites of the compliance industry.
The only upside is that even with FATCA going ahead – and I am still not convinced it will this year at least – the IRS can’t deal with in-country tax info let allow a deluge of new info from overseas.
Bernie Sanders is a socialist Senator he is a polar opposite on economic to Rand Paul or the Rep Posey who seem to be corporatist .
“Posey believes doing so would discourage foreign investment in the US, thus depriving the US of capital that would otherwise be available for business formation and growth.”
Paul & Posey opposed Hire & FATCA, Sander supports HIRE &FACTA and wanted to repeal Bush tax on middle class.
Do you support Posey or Sander?
The Republican will never win too many people on Fed benefit.
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