Added, May 3rd: from Professor Allison Christians’ Tax, Society & Culture blog: Tax, Society & Culture, Allison Christians, Marco G.: “FATCA non-delay delay”
The below notice will require some very close reading by a great number of people.
-Notice 2014-33; 2014-21 IRB 1
Originally announced, AGAIN, on a Friday, when it will get lost in the weekend news.
Reuters, May 2, 2014: Foreign banks get transition period on U.S. tax evasion law
From “innocente” and George:
US Treasury and the mythical Bob Stack blinked today, “U.S. Treasury gives relief to banks for anti-tax evasion law”…
from Jim Jatras:
Interesting news today!
Treasury seems to want to have its cake and eat it too: delay FATCA yet again (since it clearly would be a mess on July1) without appearing to do so. It’s a transparent sign of weakness, stalling for time to get more unconstitutional pseudo-treaties signed. It might actually make things worse. Who knows.
from Just Me:
This is akin to declaring all the IGAs non complete as being a done deal, and so added to the count.
and reply back …
I think this is aimed more an individual FFIs being able to take more time to comply, so as to drive more countries into IGAs – which is the only way they can really enforce this. That’s the paradox: foreign governments (like Canada’s) sign IGAs because their banks are terrified of FATCA, but if they didn’t sign them, FATCA would collapse and there’d be nothing to be scared of.
There’s one born every minute . . .
Here is a summary of the 5 areas of relief…
http://profwilliambyrnes.com/2014/05/02/treasury-provides-temporary-relief-for-five-areas-of-fatca-compliance-notice-2014-33-of-may-2/
@Brockers, I think this is a tool that needs to be brought to the attention of the MPs in opposition.
The cons will say they need to ram this down your throats because they are running out of time.
But shazam, there is a reprieve!! They can now take their time, no need to rush.
From the link Just Me provided. Clear as mud to me but I guess those clever FFI managers will be able to suss it out … well maybe. Mythter Stack (thanks for that bubblebustin) strikes again.
@George – you are precisely correct. Per the IRS release, there are 29 deals that are not done but they are treating them “as if” done (at least for now). This means that FI’s from those countries can register with the IRS and limit their compliance to agreeing to abide by the IGA as and when. Pretty hard to argue that July 1 means anything. Per this release, ALL Canadian FI’S are at liberty to sign up with the IRS as if Canada has an up and running IGA. Even if our IGA is not approved for some time, they are still OK. July 1 just became meaningless in fact.
As well, this kind of boosts our argument for an amendment to the statute to carve out Canadian citizens and permanent residents from the definition of US Persons. If 29 countries can be treated “as if” they are on side, how likely is it that the US treats Canada as globally non-compliant just because our implementing statute carves out a group (Canadian citizens) they (the US) never said they were after? The IGA is still there, unamended. How is the US going to say they don’t like our implementing statute when they are not even going to ask for an implementing statute on their side for their anemic set of half-commitments? Not bloody likely.
I guess the banks will have to recruit officers responsible for keeping up the good faith…
From the Article:
“Treasury said the new relief was needed in part because multinational banks with branches in some unnamed jurisdictions are prohibited from registering for FATCA by their local government.”
There you go. Watch phrase of the year: Prohibited from registering for FATCA by their local government. A word to our government, if you please.
And what exactly is meant by a ‘soft transition’ in 2014-2015!
You know when the vicious wolf , baring his teeth and about to attack suddenly slinks off, is it because IT is threatened or is it because it is backing up to take a better run at ya?
Interesting approach by Treasury – and a couple of thoughts come to mind (1) the ‘good faith’ aspect allows for the continued use of FATCA against for example, Russia, as an economic sanction, (2) the ‘Transition’ period of two full years (if I am reading this correctly) takes a lot of pressure off countries to rush to enter an IGA, and also, more importantly, raises the possibility for the Republicans to win the Senate keep the House and defund FATCA. Frankly, one solution that could be in the cards is for FATCA reporting to be limited to US Residents (not expats) as that would be consistent with similar efforts of other countries. Anyway, I take this ‘extension’ as an opportunity to further fight this law and hope that the Republican’s take the Senate.
More explanations from the Big members of the FATCA Compliance Complex….. Deloitte…
Notice 2014-33 Provides Limited Transition Relief for FATCA and U.S. Withholding Coordination Rules
I’m thinking this is a good thing! 🙂
We have it on “Good Faith” that FATCA is now dead and we are wasting our lives away here even talking about it. Another 6 months delay. No foreign government is going to take this increasingly complicated regime seriously and most are just responding to the bully by making promises they cannot and have no intention to keep. It’s amazing how much money FFI’s, compliance scum, traitorous governments are wasting on this rusty old CBT. The great news is that the Dems will lose the Senate in the Fall and FATCA will be defeated at home. The delay is best for Harper as he gets 6 more months of lying and deception to show Canada what he is made of (hint: http://aht.seriouseats.com/images/20081211-mcd-cheeseburger.jpg ) What really needs to be defeated is CBT. Moses once said “Let my People Go y’all” or was the The Village People? I say Adolph Obama has lost. Viva Putin
Oooops ANOTHER REVISION UPDATE TONIGHT
(Reuters) – The U.S.S.A. Treasury Department said on Friday that the Internal Revenue Service (IRS) this year and next and forevermore will take into account “good faith efforts” by foreign banks to comply with a new U.S. anti-tax evasion law set to take effect on July 1 but will extend the implementation date till after 2020 or after the rebuilding of the country, destroyed by Russia and China and increasing levels of radiation from Fukishima Dachi. The IRS is now just asking that any leftover patriotic American people and pets to please send any spare change to them in fact an advertising campaign is being launched in the coming months by a grass roots pro Obama group. But wait, here is a way to remove Obama’s face and substitute it with pictures of clowns or the back end of your favorite donkey and you can then deceive the public into sending you their spare change instead of to the IRS
Excerpts from “Banks Get Break on New Tax-Evasion Enforcement” in today’s WSJ:
1) “A former IRS adviser who helped write the Fatca legislation, J. Richard Harvey, said the delayed enforcement ultimately could help the regulatory effort, by helping to avoid a failed launch.
“If the first several months are a disaster, it could lead to calls for its repeal,” said Mr. Harvey, now a Villanova University law professor. “By signaling they will ease enforcement, they are hopefully taking some of the pressure off the initial implementation.” ”
2) “Already, the law’s requirements have led some global banks to drop U.S. customers. In a letter reviewed by The Wall Street Journal, Deutsche Bank is asking U.S. clients of its operations in Belgium to close their accounts with the German bank and transfer them to rivals in a move to comply with the U.S. rules. The bank said it regrets having to terminate client relationships in what it called a consequence of Fatca implementation.
The bank said in its letter that because “it is no longer allowed to use Internet, email, phone or fax to serve retail clients” who are U.S. taxpayers with accounts in European branches, a business relationship is untenable in countries where it has only a limited number of branches. Deutsche Bank is organized in Belgium in a way that compels clients to use online banking and call centers for their daily banking needs since it has only 34 branches in the country, said a bank spokesman.
Treasury officials said Deutsche Bank is misinterpreting the rules, adding that the law doesn’t prohibit banks from providing online banking or phone services to customers.”
I saw the first mention of FATCA in a mainstream newspaper today, in a Guardian Money section article warning that stockbrokers are collecting client information that is effectively a survey of sources of investment funds and tax information of the sort the IRS routinely requires. Clients of the brokerage firm, mainly small investors with ISAs, will have their accounts frozen if they do not comply. In the middle of the article is a note that FATCA is coming into force on July 1, to reveal who the Americans hiding money for tax purposes are. Not a related story, oddly. British nationals are closing their brokerage accounts and moving money, apparently, but if one firm is doing this, they all will, sooner or later. But who is requiring it? Not disclosed. If this is the British branch of an American firm, then it could certainly be related to FATCA issues. HMRC and the IRS working together? I’ve filed a W8-BEN with my broker, but it wouldn’t help in this case. If this spreads, there will be thousands of outraged people in the UK, not that it will make any difference.
Deutsche Bank Belgium turfed out its USP customers two days after Belgium signed a FATCA IGA. WSJ: “The bank said in its letter that because “it is no longer allowed to use Internet, email, phone or fax to serve retail clients” who are U.S. taxpayers with accounts in European branches, a business relationship is untenable in countries where it has only a limited number of branches.”
Besides Germany, Deutsche Bank (DB) offers retail banking in the Netherlands (18 branches), Poland (100), Italy (270) and Belgium (34), and possibly other European countries. Why has DB targeted its USP customers in Belgium when its Belgian branch network is more dense than in the Netherlands and Poland, measured per capita? Will DB also chase out its USP customers in the Netherlands, Poland and possibly Italy soon?
I will never figure out why these countries are negotiating with terrorists. The USA is threatening every country in the world and they just crumble to their feet. Has the world not figured out what this really is? Most of these IGA’s are not legal in most cases and mean nothing when it really comes down to law. The USA has gone mad and become terrorists. The very thing they claim to be fighting. Unless the world grows strong against these kind of activities, the cowering in fear will continue. Lets hope Russia and China put their resources together and remove the failed US dollar from our lives. Canada can rebuild if this happens and we might feel short term pain, but in the end, at least we did not work with terrorists.
@nativeCanadian,
Re: ” The USA has gone mad and become terrorists. The very thing they claim to be fighting. ”
Yup. And people living lives in other countries, paying taxes where they live, along with immigrants to USA who built up savings in their home country and knew nothing about FBARS, are all cheating USA out of money that belongs to it.
USA is sociopathic; it is, what it accuses everyone else of being.
I just watched the Finance Committee from Thursday. I will be writing and posting a huger reference to BE’s comments. The biggest one is that there are no Canadians in Canada. You are all DUALS and can be given back to your own country or “origin” for prosecution if you break one of their laws while living in Canada. This was made clear by his remark “the laws of Canada will MAKE SPACE for the IGA” Make space?? Does this mean when driving down the 401 speeding, I can just tell CanadianCop that our laws will make space for me to break the law?? What the hell is LAW anymore in Canada???
@Rev Susi
Actually, that UK brokerage company used FATCA as an excuse to force customers to provide a lot of information that was basically marketing data.. I got an e-mail complaining about what the firm was doing from Motley Fool earlier this week. Apparently the brokerage company was saying that it needed all the questions answered for compliance purposes but these questions included things like how much people were planning to invest in the upcoming year and if they might be coming into an inheritance. The IRS asks a lot of questions, but that certainly is not one they are forcing companies to ask! The questionnaire was described as being really massive and the firm was having all of its customers answer it. It is obviously not just the tax lawyers and consultants who are trying it on in the run up to FATCA. That company has been in trouble with the law before and has now decided to leave the UK market with its tail between its legs.
@Native Canadian and @WhiteKat:
What the sociopathic US has planned under FATCA and these non treaty IGAs is nothing compared to what they really want done and Paul Krugman in an article at the NYT makes it clear what they really seek, and goes quite pointedly to the heart of the matter planned over at the OECD which would be the organization that would implement such that Mr. Krugman advises.
The article is a cynical tongue-in-cheek assessment of Mr. Krugman’s article and rightly so in my view:
http://www.breitbart.com/Big-Journalism/2014/04/30/nuclear-option-Tripping-over-income-inequality-with-intellectual-shoelaces
From the article:
“But what is truly shocking here is that nobody in the New York Times stable of diversity seems to remotely grasp what “conservatives” find so offensive here. It is not that people don’t see the vast inequalities or that people somehow oppose level playing fields.
Quite the opposite. People realize that those in power use governments to pick winners and losers, therefore obliterating level playing fields.
And with the small-time grifter governments we now have so shamelessly tossing $225,000 to columnists who shamelessly promote the power of said governments, just think of the universal atrocities that some new global IRS would cause.”
This is a serious two pronged attack on ordinary people no matter the borders.
IF they don’t get quite what they want via FATCA and IGA they have another even more evil and insidious financial octopus waiting in the wings and even now being promoted via the NYT and the likes of Paul Krugman.
“2. soft-enforcement transition … for good-faith actors.”
CBT enforcement extortion makes the US the international champion bad-faith actor. Anyone up for a unilateral tax treaty override?
And this is who Brian Ernewein hopes will be a good-faith actor?
@Rev Susi:
Your Comment:
“Clients of the brokerage firm, mainly small investors with ISAs, will have their accounts frozen if they do not comply. In the middle of the article is a note that FATCA is coming into force on July 1, to reveal who the Americans hiding money for tax purposes are. ”
This freezing of investment accounts is already happening in Canada.
This is just an attempt by the USG/IRS to make FATCA/IGA to seem ‘kinder and gentler’ than it really is. In short a PR stunt to keep things moving forward and people will warm to the idea FATCA is somehow OK and acceptable.
The nightmare scenario for the IRS is the Charter Challenge succeeds and it’s going to bog down the efforts to make this stick.
The other nightmare is using the 30% sanction (oops withholding tax) after 1 July. People with money have powerful friends in their respective governments and could slow down implementation considerably if the USG resorts to this sanction. They know that that full well.
Collect the money for the Charter Challenge.
@Publius, Furious AC. The problem is that the questionnaire went to all clients, not just those with US indicia, and all clients were threatened with frozen accounts if they didn’t respond. So what were people advised by the Fool? And are the frozen Canadian accounts all nationalities, or just US Persons? I can’t imagine a business doing this, if they want to stay in business! Unless all brokerages do the same thing. Of course, you wouldn’t have to tell the truth, I suppose.
If foreign governments don’t sign agreements, what is to stop the US from deciding the banks in the country are non compliant and withholding 30% of their US source income? I must be missing something.