Tim has provided the link to the hearing yesterday in Washington DC, with Jim Butera representing the Florida Bankers Assn against the Treasury Department.
Separate post.
I found the level of expertise to be quite amateurish. That the judges were asking the plaintiff and defendants for their opionions. And the defendant’s answers are quite ridiculous.
Also, here the Texas bankers discuss the case here.
Listening to that was an exercise in frustration, but that I suppose is how the wheels of justice turn. One judge said that he’d read somewhere that US citizens are taxed by the US no matter where we live. This bodes well for the argument that any reasonable person would not know about their obligations to file US tax, when a judge asks for clarifications about it! Either he or another judge asked the defendants lawyer whether the same obligations apply to citizens of other countries. I wanted to throw my iPad when Mr Weiner was allowed to completely skirt answering the question.
I do like how one of the judges expressed concern about the lack of reciprocity for other nations though.
Being clueless about law, I have no idea what any of this means in the big picture!
I will add this is no “regular” American court and these are not “regular” American judges. This is the US Court of Appeals for the District of Columbia which is considered the second most important court in the United States after the US Supreme Court.
http://en.wikipedia.org/wiki/United_States_Court_of_Appeals_for_the_District_of_Columbia_Circuit
While it has the smallest geographic jurisdiction of any of the United States courts of appeals, the D.C. Circuit, with eleven active judgeships, is arguably the most important inferior appellate court. The court is given the responsibility of directly reviewing the decisions and rulemaking of many federal independent agencies of the United States government based in the national capital, often without prior hearing by a district court. Aside from the agencies whose statutes explicitly direct review by the D.C. Circuit, the court typically hears cases from other agencies under the more general jurisdiction granted to the Courts of Appeals under the Administrative Procedure Act. Given the broad areas over which federal agencies have power, this often gives the judges of the D.C. Circuit a central role in affecting national U.S. policy and law. Because of this, the D.C. Circuit is often referred to as the second most powerful court in the United States, second only to the Supreme Court[1]
A judgeship on the D.C. Circuit is often thought of as a stepping-stone for appointment to the Supreme Court. As of January 2013, four of the nine justices on the Supreme Court are alumni of the D.C. Circuit: Chief Justice John Roberts and Associate Justices Antonin Scalia, Clarence Thomas, and Ruth Bader Ginsburg. Justice Elena Kagan was nominated by Bill Clinton to the same seat that Roberts would later fill, but was never given a vote in the Senate. In addition, the Reagan Administration put forth two failed nominees in 1987 from the D.C. Circuit: former Judge Robert Bork, who was rejected by the Senate, and former (2001–2008) Chief Judge Douglas H. Ginsburg (no relation to Ruth Bader Ginsburg), who withdrew his nomination after it became known that he had used marijuana as a college student and professor in the 1960s and 1970s. Before the 1980s, Chief Justices Fred M. Vinson and Warren Burger, as well as Associate Justice Wiley Blount Rutledge, served on the D.C. Circuit before their elevations to the Supreme Court.
If this is about the banks complaining that they can no longer keep their South American drug cartel millions- there is no way they can win. It would make America look like a laughing stock in the whole world.
@ Tim
That’s interesting but what I’d like to know is do you think the bankers’ case is getting through to those judges? I personally wanted to gobsmack ’em (judges) and throttle the treasury guy. Of course I realize that this is about protecting the interests of the U.S. bankers — implementing costs, capital flight, etc. — but if they win, we benefit, so I’ve got my fingers crossed for the plaintiffs.
Oops, that should be “capital flight” not “capitol flight”. Although I’d like to send DC on a one-way flight to another galaxy.
@Bubblebustin, The judge said that he read that the US taxes foreign income of US citizens even if they don’t live in the US. He then asked if other countries also taxed foreign income. He didn’t specify foreign income of citizens not living in the country, he just said foreign income. Mr. Weiner said that the US wouldn’t be sharing this information if the other countries didn’t tax foreign income. So he answered the question, saying yes. This is correct, most countries do tax foreign income. The difference, as we all know, is that they only tax foreign income of their residents, while the US taxes foreign income of its residents and of its nonresident citizens. They should have clarified this, but they didn’t.
The problem that I see in this entire hearing is that everyone always referred to citizens, and countries taxing their citizens. They asked if the banks are asking the nationality of nonresident aliens, so the US can report the correct information to the each respective country. Apparently no one realized that nationality is irrelevant, the US is going to report information based on residence, which can be easily obtained from the person’s address. This is all very irritating, especially because they mentioned the term “nonresident aliens” all the time, not realizing what it means.
In sum, I wanted to shout “it’s not citizens, it’s RESIDENTS!”
I also want to point out that the US is only going to report accounts of nonresident aliens to other countries. It will not report accounts of US citizens even if they are residents of the country requesting the information. Meanwhile, it expects other countries to report the accounts of their own residents if they are US citizens. So the US is not willing to concede its jurisdiction based on citizenship, which is abstract and exceptional, but it expects other countries to concede their jurisdiction based on residence, which is concrete and the international norm.
@EmBee
1. Remember their are some political considerations here. The Florida and Texas Bankers are trying to defeat Non Resident Alien reporting not FATCA even though the two are closely related.
2. My hunch is the Florida Bankers will get at least one judge to agree with them and rule against the IRS. The big question is whether they can get two judges and win the case. I don’t know at this point. I will say all three judges have VERY Conservative reputations and one in particular was the author of the infamous Starr report on Bill Clinton’s relationship with Monica Lewinski.
3. What disturbed me is none of the parties seemed to actually be discussing the legal issue at hand which is the legality of the imposed regulations under the Administrative Procedures Act. The one thing I can take from this is the fact the IRS attorney did not seems to indicate they are not very confident in their legal case.
http://en.wikipedia.org/wiki/Brett_Kavanaugh
@ Tim
“The one thing I can take from this is the fact the IRS attorney did not seems to indicate they are not very confident in their legal case.”
I guess you are saying they are confident in their legal case. Why? Or are they confident they’ve got the right judges?
@EmBee
Well one issue the IRS seems to be more interested in protecting the anti injunction than FATCA for reasons I don’t quite understand. While I don’t want to go into detail of what the anti injunction act the net effect of the judges ruling for the IRS on this basis would do little other than essentially force the Bankers to refile their lawsuit at a different time and place while not at all resolving the underlying issues of the case.
Also we are probably about two months or slightly less until we have a ruling. So I suspect a lot of water will flow under the bridge by then. Hopefully we will start to have a flow of documents from the ADCS lawsuit in Canada.
@ Tim
Thanks for trying to make this more understandable. All I can say is good luck to Mr. Butera … he’s going to need it. I hope the judges are squeaky-clean tax filers. It could be a concern for any judge facing an IRS lawyer.
Thank you for the clarification, Shadow Raider. I wish it was you up there talking to those judges!
Basically- if the bankers win this case, no matter how much it could benefit us, it would make America openly criminal and corrupt. It would be a legal statement that America is allowing itself to be a tax haven while forbidding other countries to do the same. There would be no greater hypocrisy.
As an aside- I just read last night in some stupid magazine that the disc with names of hidden accounts at HSBC includes famous celebrities like Elle McPherson, Gad Elmaleh, Valentino, Flavio Briatore, Diane von Fürstenberg,Joan Collins, Phil Collins, and a few sultans, arms salesmen, a cousin of Assad, and Arlette Ricci ( of Nina Ricci).
The disc was stolen in 2007. It had the names of 999,950 innocent persons on it.
It was purchased by various governments.
It used to be that we complained about communist dictatorships doing something like that.
@MarkTwain
How come “innocent”?
Do you mean that you and all the others are assuming that every person that has a bank account outside USA is assumed guilty until proven innocent?
@Polly – EVERYONE needs to be considered innocent until proven guilty of a crime. Then further … not all law breaking is morally wrong. Did Jews who smuggled some of their wealth out of Germany in the 1930s and 1940s commit moral crimes? I say NO ! Neither were Cubans or Jamaicans or multitudes of Central and South Americans and Eastern Europeans and so on who smuggled whatever they could out of Cuba or Jamaica or other countries that imposed immoral laws. If a North Korean today managed to smuggle funds out of North Korea and bank same in another country … should that person be labelled a criminal and have their bank account reported on back to North Korea ? Of course not ! Therein is the nonsense of FATCA and GATCA. This goes way beyond reasonable taxation … goes way beyond CBT vs Residence … this goes to fundamental freedoms.
Well, the article said that Gad Elmaleh had already come clean with the french government and paid his dues. I dont know whether Diane von Fürstenberg is paying taxes on that account to America either, where she resides. And of course the jews during Hitler`s regime, or any corrupt regime, had good reason to hide their money. But that certainly doesn’t mean that 995000 people who had accounts at HBSC were all innocent.
MarkTwain and Nervousinvestor – I think that if America judges that it is OK for Fla bankers to keep their South American monies, that then the world will be under the thumb of a truly corrupt country. I was actually hoping that all those shell companies in Delaware and Wyoming would have also been cracked one day- that America would come through on cleaning up its OWN house. That is what I was hoping for US tax reform too. We want RBT because it is moral too. RBT can be more easily accomplished if America gets its own tax dodgers within its own boarders because those monies are missing in the treasury. IF America is blowing its horn about tax evasion, then they need to clean up their own house too- in fact in my opinion, before they went after everybody else. So what I am saying is that if the Fla bankers win, then it could be very BAD for us and the rest of the world. It wont mean that FATCA is doomed- it will mean that American reciprocity is only undermined even more.
Just listened to the recording… good grief, what a lot of waffle. Amateurish indeed. The bankers could not cogently state their case. The judges did not know any background. And the government shill sounded entirely clueless — I’d accuse him of evasion and obfuscation except that nobody could fake that level of ignorance. No participant even knew when FATCA took effect.
And this is how laws are debated in the US. Sheesh. Any Brocker could have done a better job than these folk.
If this represents the current state of American jurisprudence, just one short rung beneath the Supreme Court, then that country is indeed finished. I heard more cogent, better prepared debates when I was in grade eight. The United States has become a pathetic caricature of itself – it can’t even conduct a basic court case any more.
I sure hope Jim Bopp is well prepared and cleans their clocks.
This decision should be due soon, no?
This may further refer to this case:
http://www.procedurallytaxing.com/d-c-circuit-majority-opinion-in-florida-bankers-not-consistent-with-supreme-courts-direct-marketing-decision-part-1/
August 17, 2015
http://www.cadc.uscourts.gov/internet/opinions.nsf/D721EA0BE95BBED585257EA10052EDE5/$file/14-5036-1567856.pdf
http://www.ipbtax.com/publications-296.html