Telling your Congressman or your media contact that you are “Collateral Damage” has no effect. Your Congressman doesn’t give a sh_t—because you are not collateral damage—you are the target.
This article is a cross post from: http://samuelclemmons.wordpress.com/2014/10/27/the-real-intent-of-fatca-you-are-not-collateral-damage-you-are-the-target/
The term “collateral damage” shows up in all the articles, all the pleas to Congress, and in the Talking Points of Lemmings Abroad. It’s not really a damaging label—unless you believe it to be true and don’t plan otherwise.
Let’s stop talking about FATCA’s “collateral damage” and start discussing real intent. FATCA is the enforcement tool to collect IRS taxes and penalties from non US residents receiving no standard government services (schools, roads, education, or social welfare). FATCA talking points contradict the administration’s own statements upon FATCA intentions.
FATCA funded the 2010 Jobs for Mainstreet Act–a domestic jobs bill. It purports to collect $8.5-$8.9 billion of tax and penalties over ten years, by identifying previously-undertaxed US citizens overseas. It demands the world’s banks to aggressively identify their residents who are US citizens, forwarding their identities to the IRS for taxation and penalties.
FATCA aggressively enforces the US’ globally-unique taxation system, which uniquely taxes-up its non-resident US citizens to the highest of the tax rates of their residence country or US. This includes any previously under-taxed non-US retirement products, unemployment benefits, home sale gains, and anything above $95,000 earned in countries like UAE (UAE’s high corporate tax eliminates personal tax).
Few of the 7.6 million US citizens overseas have known of their IRS filing obligations. FATCA’s draftees knew from a 1998 GAO report that only 380,000 had filed from overseas. FATCA’s revenue gain depends upon locating the remainder whom are targeted for retroactive taxation and penalties.
Who are they looking for? In the case of Sweden they are looking for people suspected to be:
Swedish citizens living in Sweden whose parents birthed them in that country.
Swedish citizens living in Sweden with one parent who is a citizen of that country.
Swedish citizens living in Sweden who have a visa to that country, who have not filled out the form I-407 to cancel that visa.
Swedish citizens living in Sweden who are citizens of that country
Swedish residents having lived many years in Sweden who are citizens of that country
Swedish citizens living in that country who still have bank accounts in Sweden to support their summer houses and rented homes in Sweden (like Erin Woods)
But, there are no persons in that country who have sent their money to SWeden to avoid taxation—-that is ludicrous.
A larger percentage of FATCA’s gain is expected not from taxes and penalties, rather from gains from draconian penalties for the obscure Foreign Bank Account Report FBAR form. This is a unique form outside the IRS tax system, requiring US persons overseas to electronically declare overseas assets to the Financial Crimes Enforcement Network (FINCEN) by June of each year. Those expats identified to have not yearly reporting themselves to this crime-website may receive yearly fines up to the greater of $100,000 or 50% of their asset values.
What Americans might believe that he is required to report yearly to a crime unit? Even fewer than those filing with the IRS. In fact, neither were there FBAR instructions in IRS pub 54 for expats during the period 2004-2008.
The FBAR form was initiated in 1970 to locate bad guys in USA avoiding taxation by sending illicit money to some mysterious country—perhaps via diamonds in toothpaste tubes. Robert Stack’s mythical Untouchables character (Elliot Ness) would have been thrilled with FBARs. Even without evidence of wrong doing, draconian FINCEN penalties are available to bankrupt or imprison badguys.—the ones the talking points call “FATCATs”.
In 2001, 5% of legal reporting of US residents filing foreign income were residents of USA 1. . It’s impossible to estimate the number of US residents illegally nonfiling—the ones that FBAR and FATCA should be after. There are certainly far less FATCATs than the existing prison population and far fewer than the 7 million unknowing US citizens overseas.
With greater faith in the inherent honesty of Americans than of talking points, you will find that the real FATCA revenue target is US citizens overseas. Most of these have simply been unaware of these obtuse IRS policies and FINCEN crime regulations. FATCA is actually a direct outcome of a 1998 GAO report to Congress, finding that less than 400,000 tax returns were filed overseas, and implying that further enforcement would create new revenue.
With less faith in talking points, you will see that FATCA and FBAR are not police tools for specific investigations in specific countries. You will see FATCA as a blanket suspect tool forced upon all honest countries. Should the public believe that criminals inside USA are sending their money to Finland, Sweden, or Australia in order to avoid taxation?
Let’s look into statements made by FATCA implementer former Treasury Secretary Gheitner “We are working very closely to try to meet the ‘Congressional intent’ (of FATCA) to make it harder for American Citizens overseas to avoid U.S taxes without putting undue burdens…..” 3 Treasury official Mark Mazur’s says: “It is also important to note that FATCA’s requirements are the same for all American taxpayers—expats are treated no differently. All citizens are required to comply with United States’ tax laws and FATCA is a tool to enforce them….” 4
Looking at the statistics and statements, it becomes obvious that “FATCAt” is a talking point used for labeling US citizens overseas as cheaters (guilty til proven innocent). Whereas these humans are actually unknowing of the IRS’ bizarre taxing-up concept of its own productive citizens far away from government services.
The next question the 2010 Congress asked was “Does it matter?” They answered that although this citizenship-based taxing-up is an international anomaly; laws are still a laws even if they are not known, not followed, not explained, have draconian punishments, and are not fair. FATCA was then passed with talking points directed towards FATCAts assumed to be domestic tax cheats.
The Talking Point “Collateral Damage” has been used for four years now. And it has done nothing to improve your situation.
Allowing the media and Congress to get off with the “collateral damage” talking point will not further the objective of getting the US government out of your family finances. You need to think higher and smarter. Formulate your argument on a higher plane. Acknowledge that Carl Levin, Chuck Schumer, Nancy Pelosi, Bill Nelson, Chuck Grassley, and the Junior Senator Obama Barack have made you their target for funding their jihad on your family finances.
You can’t vote against those people. However, they can take your family finances away from you. They can call you a Tax Evader, a Traitor,, and a FATCAT—this increases their election chances with their Homeland voters. It has the potential to use your finances to subsize their Jobs for their Mainstreet–for about another 9 hours.
Let’s be honest. FATCA’s intent is to tax-up US citizens living outside USA. You are its target. When you accept this truth, you can better formulate your forward strategy.
This article is a collaboration.