A new idea for FATCA reform has been suggested, and discussed by Democrats Abroad. Brockers might like to discuss it also. Is this a workable solution or just another complex piece of patchwork?
A new idea for FATCA reform has been suggested, and discussed by Democrats Abroad. Brockers might like to discuss it also. Is this a workable solution or just another complex piece of patchwork?
If you read closely, though, they still want people to have their taxes up to date, which is a problem IMO. But it’s a start. Looks like they’re possibly starting to wake up. I’ll believe it when I see it though!
My 2 cents….This is a useless waste of time and a smoke screen for the DA to look like they are actually doing something. The banks will still remain responsible for burden of proof thus those with a taint remain a liability. It requires full tax compliance which renders it useless to a great many.
The only way Save Harbour Exemption works is if one single form is sent to the IRS saying; I do NOT live in the US, leave me the Hell alone. (BUT, those that are not tax compliant will be saying “Here I am” for the day when the US decides, naw, let’s go back to the old way).
The RO has a repeal FATCA lawsuit, the DA should have gone after CBT and launched a case challenging Cook v. Tait if they actually wanted to do something worthwhile.
I agree with what Charl says. A bloody smoke screen designed to improve the future election results for the Dems. They, Obama, Pelosi and Reed, concocted this stupid legislation. The key issue here is the change from CBT to RBT. I do not believe that the banks are going to fall for this patch work. They have incurred most of the expenses to bring this about anyway. Change again? I repeat after Charl: I do not live in the US so leave me the hell alone!!
I agree with Eric and Charl. Anything short of outright RBT is useless and still perpetuates the CBT lie, that the U.S. has the right to tax other nations through the surrogacy of its expats.
This is Same Country Exception. Safe Harbor is the Democrat trademark of same concept.
This has been around quite awhile.
In principle, it makes things slightly less bad.
In practice (according to their proposed methodology), it would increase the paperwork for banks and make it worse for them. It would increase the paper load for US persons also.
There is also little discussed about the fact that FBARs still have to be filed anyways. There was once talk that one would send in a paper to FinCen that one is exempting ones self from reporting FBARs. This would require legislation.
The current solution presented is that one brings a paper to the bank to tell them that they are exempted because they live there. Then the bank performs a bunch of work to stop the reporting that it is already in the process of doing. This adds more paperwork to a bank.
DA’s best were not assigned to thinking out what the actual implementation would be.
They could have achieved that objective by proposing that FATCA reporting by non US banks be replaced by OECD GATCA reporting, which is residence based. The banks would have been ecstatic to relieve themselves of one of the 2 required reportings. (and US could continue to refuse to provide reciprocal data—reciprocity is an issue which can be segregated).
They have also not yet proposed that the “United States of Europe” (the EU) should be treated as “same country” because EU citizens are supposed to have complete freedom to act throughout the EU.
Relieving FATCA bank reporting without relieving FBAR personal reporting is fairly worthless to individuals.
The Same Harbor idea remains today at DA, ACA, and AARO. It has not gained acceptance with legislators or executive branch. It was not run through DNC, but it was touted in the DA walk.
There is some thinking at DA now, where they might be able to understand an alternative implementation than the current one.
They still have to sell it to legislators & executive branch.
http://www.ibtimes.com/tax-inversion-restrictions-trigger-foreign-takeovers-us-companies-report-1847778
US passes laws to discourage US companies ‘inverting’ in foreign countries (So US company buys foreign company and becomes foreign). Now to skirt US rules, they do it the other way around. Have foreign company buy US company making the US company now foreign.
These boneheads in DC just don’t get it. Result – US companies are still leaving the US tax system unabated.
When someone puts their assets in the foreign spouse’s name to bypass FATCA, aren’t they really doing an ‘individual corporate inversion,’ in a sense?
What’s the incentive for FFI’s to do this when what they want to do is to decrease their exposure to US persons and the risks and reporting burdens we present to them?
From those of us who have already relinquished/renounced US citizenship…too little, too late. And for the FFIs and those who are still US citizens, more paperwork on top of the existing mountain of forms and data.
Anything less than NO reporting to the US government by permanent expats is unacceptable. I don’t believe I should have to ever fill out any US government form for any reason whatsoever. I don’t live there anymore.
There is no way to “paper over” CBT to make it workable. If the US wants the cooperation of the rest of the world it needs to switch to RBT. (But they don’t really want cooperation; they want obedience.) For those who still file US returns, FBAR should be eliminated because 8938 now covers that ground on the 1040. Just think, an opportunity to eliminate an entire government department and nobody (not even the US government) would miss it. They may eventually change, but not in our lifetimes.
@maz57
The fact that FBAR’s are required on a balance that hasn’t changed in 50 years is enough to make it obsolete!
Seems a convoluted long way around the problem to me. Why do Democrats Abroad and the like shun the real solutions? Why do they want to continue to be *exceptional* from the rest of the world and other countries way of taxing? If I weren’t already out with a CLN in hand to show to my local CANADIAN *foreign financial institutions*, this would push me to making my decision. Spinning of wheels; waste of energy, time and people’s lives..
the American’s can do whatever they want to do.
I WILL NOT FILL OUT ANY FORM THAT GOES TO THE AMERICAN GOVERNMENT!!! period.
I am not about to make it easy on uncle sam to find me. were I to fill out a form identifying myself to uncle sam he would be able with great ease come and find me.
why would I tell someone who I don’t believe has any right to know who or where I am who or where I am?
@Calgary411
I think it’s sadistic what Robert Stack is sending DA out to do. He knows damn well that they aren’t going to get anywhere with the FFI’s, but dangled that carrot out there for them anyway.
Is sad because those within DA who are committed to both the Democratic Party and Americans abroad are going to actually try to accomplish what Stack said Treasury would do, whereas those solely committed to the Democratic Party will be happy to take the brownie points for the other’s efforts regardless of whether they’re successful or not.
I don’t understand the reasoning of Democrats Abroad (DA).
This group actually spent five days and 35 meetings in DC with always difficult to access SFC, House W&M, and Treasury people and talked only about FATCA?
Yes, I too want FATCA and the Canadian FATCA IGA repealed (e.g., our Canadian lawsuit; Republicans Overseas FATCA lawsuit and Rand Paul bill), but why was there no position expressed by DA on the merits of citizenship-based taxation at the meetings?
Also, is it really true that DA “led” a delegation that included ACA, which I do know has been pushing a long time for residence-based taxation.
Anyway, the focus of the more modest SFC submission that some of us will be making is residence-based taxation.
They really didn’t write this very carefully: “Americans abroad will have to file Form 8939 [SIC!] with their tax return” Form 8939 is a prior form for “Allocation of Increase in Basis for Property Acquired From a Decedent”.
Assuming that the Democrats Abroad intend for people to file form 8938 with their 1040, doesn’t that mean an actual increase in paperwork for those with less than $200,000 in foreign accounts who don’t need to fill in an 8938. And this is something to aid the middle class?
@Stephen Kish
I am sure that the non-partisan groups that Democrats Abroad said they ‘led’ would not be happy with the DA’s portrayal of the situation.
@Stephen Kish. “why was there no position expressed by DA on the merits of citizenship-based taxation at the meetings?”
Its because deep down there is the belief that “US Citizenship is the most valued in the World.”
@mettlemen, “I WILL NOT FILL OUT ANY FORM THAT GOES TO THE AMERICAN GOVERNMENT!!!”
Because I think you feel the same way about a number of countries, I think you mean FOREIGN GOVERNMENT.
@Calgary, “Why do Democrats Abroad and the like shun the real solutions? ”
As I have mentioned before, the Secretary has the statutory authority already to exempt FBAR requirements based on dollar amount or country, literally by the stroke of his pen. It is contained in the original legislation and it was expected that he would just that.
@Bubbles…..”fifty years.”
Thats exactl;y why the law was written to give the Secretary the authority to constantly update the FBAR requirements!!!
It is far far easier for Obama and his Secretary of the Treasury to end the FBAR burden than to find executive authority to grant defacto amnesty to millions of illegals.
My Papaw used to have a saying “I wouldn’t trust that one as far as I could throw him.” I have decided that I really don’t care what they do, I am NOT willing to be at their mercy. I am working on the CLN.
small tweaks made in public with much noise and fanfare can be silently reversed with sniper amendments that no will read the way FATCA was passed
I think their “safe harbor” is loaded with sea mines. Beware of Captain Obama and his motley crew of pirates. They’ll beckon you to enter the “safe harbor” but they wouldn’t go there themselves.
“War is peace. Freedom is slavery. Ignorance is strength.” And, “Safe is dodgy.”
“There is no such thing as bad sex”
Same Country Harbor does absolutely nothing for me.
DA won’t get me to vote for D by that visit, but
Although they are restrained by the DNC that owns them, I can’t say that they are doing damage in their visit. THey are somewhere in the positive range effortwise. And they are working from inside the machine.
And they are raising awareness.
I agree with recalcitrantexpat, maz57, and others that RBT is the only valid solution, and that any measure short of RBT is like putting a bandage on a wooden leg!
Concerning reporting of bank accounts, Mark Twain is absolutely right that FATCA reporting by non US banks should be replaced by OECD GATCA reporting, which is residence-based and in an internationally agreed-upon format. FBAR personal reporting should also be removed for individuals with permanent residence abroad. The EU should of course be treated as “same country”, as EU citizens have freedom to act throughout the EU – just as US citizens can work and live in different US States.
Love the way that the onus is on the DA, and expats to prove to Treasury and Mythster Stack’s satisfaction that FATCA is causing banks abroad to refuse services/accounts to US persons living outside the US. And if Treasury and the Democrats in power have refused to respond to the cries of their supporters in the Democrats Abroad so far, then they have no intention of acting anytime soon or at all to help.
Reminds me of how the tobacco companies put the onus on public health officials to prove conclusively that tobacco/smoking caused cancer, and the gas companies did the same when lead in gasoline had to be proven harmful before governments would legislate that it had to be removed because of the loading of lead into our environment – and the serious side effects on the health of children and others.
Doesn’t a democratic government have a duty of care?
Forcing the victims to prove harm – current and future is a diversionary tactic.
And the Democrats Abroad end their paper by stating that they don’t seek to repeal FATCA.
Joe Green of the DA Canada has heard and seen firsthand from Canadians injured by US extraterritorial CBT and FATCA. He knows from DA tax information sessions that many cannot afford the compliance cost of US extraterritorial CBT. He knows the fear and anxiety that the FBAR provisions and threat of bankrupting penalties create. He attended the debate between Kirsch and Schneider. How could he and the others of DA continue to sign their names to position papers like this that support FATCA and only seek to tweak it?
If Treasury has the ability to create Safe Harbour Exemptions for those banking where they live, they had the ability to create that when the problems with FATCA were first raised. Their F’d up UScentric worldview and politicking and self interest is the biggest obstacle to any change. The Safe Harbour also doesn’t help those like aid workers who cannot bank in the country where they are living because it isn’t safe or stable. Or those who live in the EU and are more mobile.
I think they are stringing expats along – maybe only because another election is coming up, and because of the growing negative press and resistance to FATCA. Or because they know that they can just continue to demand more proof and create more hurdles. There is no reason to believe anything that Mythster Stack and the US Treasury says. They were willing to use distortion and extortion and coercion to bring us to where we are today.
Tweaking FATCA is like putting lipstick on a pig. Tweaking doesn’t change its essential wrongs and the base assumptions that see all those living outside the US as criminals in waiting.
Donate to the ADCS legal challenge. Put a puncture in the FATCA plan for world dominion. That is the remedy and recourse I believe in.
Trimming a hangnail on a gangrenous leg.
I believe that if the Safe Harbor is implemented, it will allow politicians on all sides to wipe their hands and say, “We’ve done all we can.” It will be the deathknell for any real reform on RBT or FBARs. Sad to say, but I think people like us have to oppose this effort, not encourage it.
I intend to inform my local DA (of which I am not a member) that this is not a “good start”, but rather a half-baked namby-pamby measure.
Well, here’s my take on it.
1. It’s an Emperor Has No Clothes approach – DA can not, not support the (fool) President that is driving this Jihad against US Persons living abroad.
2. The Safe Harbor/Same Country Exemption will do nothing to solve the underlying issues. No big surprise here, the Demoncrats never actually support a real solution – look at Obama’s approach to trying to limit US companies ‘inverting’. More taxes and penalties and no structural change to resolve the actual issue – same with this proposal.
3. It’s good to raise awareness, but its bad as it confuses the issues and it gives the Demoncrats another excuse to keep CBT and FBAR and apply a band aid at the edges.