This Is an Urgent Campaign to Repeal FATCA ALERT!
Support the Paul Amendment to Repeal FATCA!
November 29, 2017
This week the Senate version of the tax reform bill will come to the Senate
floor. The Campaign to Repeal FATCA has learned that Senator Rand Paul
(R-Kentucky) plans to offer as a floor amendment his bill S. 869 to repeal
the so-called “Foreign Account Tax Compliance Act (FATCA).
The Campaign to Repeal FATCA is asking everyone immediately to contact your
Senators with this simple message:
“Support the Paul Amendment to Repeal FATCA!”
You can find the contact information for your state’s two Senators
here. Given the partisan divide
in the Senate, it is especially important to contact Republican Senators. If
your state has one from each party, contact the Republican first!
Here is a suggested draft message you can use via the email contact. (NOTE:
If you are contacting a Democratic Senator, please delete the sentence in
red referring to the Platform.):
Dear Senator [Name]:
As your constituent, I strongly urge you to support the floor amendment to
be offered by Senator Rand Paul to repeal the so-called Foreign Account Tax
Compliance Act, or FATCA. Despite the claims of its sponsors when it was
passed in 2010, FATCA is a failure in its supposed aim to recover offshore
tax assets hidden by “fat cats.” Instead, it has imposed massive costs on
middle class Americans, violated Americans’ privacy without probable cause,
and led to a huge increase in U.S. citizenship renunciations. The 2016 GOP
Platform called for the repeal of this wrongheaded Obama-era law – and the
Republican Party should keep its promises! Please support the Paul Amendment
to repeal FATCA!
[Name, location]
In addition, if you represent an organization, please issue a statement in
support of the Paul Amendment to repeal FATCA and send it to Senate offices
and distribute via social media.
Time is of the essence. Thank you for your help at this critical moment!
Nigel Green and Jim Jatras
Co-Leaders, Campaign to Repeal FATCA
Further information points on why FATCA must be repealed follow:
The GOP called for repeal in its 2016 Platform. “The Foreign Account Tax
Compliance Act (FATCA) and the Foreign Bank and Asset Reporting Requirements
result in government’s warrantless seizure of personal financial information
without reasonable suspicion or probable cause. Americans overseas should
enjoy the same rights as Americans residing in the United States, whose
private financial information is not subject to disclosure to the government
except as to interest earned. The requirement for all banks around the world
to provide detailed information to the IRS about American account holders
outside the United States has resulted in banks refusing service to them.
Thus, FATCA not only allows ‘unreasonable search and seizures’ but also
threatens the ability of overseas Americans to lead normal lives. We call
for its repeal and for a change to residency-based taxation for U.S.
citizens overseas.”
FATCA fails in its stated purpose of recovering tax revenues. On enactment
in 2010, FATCA was scored as raising about $800M per year. According to
Texas A&M law professor William Byrnes, actual recoveries are closer to
$100-200M per year and falling. FATCA will soon cost more than it brings in.
FATCA is an indiscriminate violation of privacy. FATCA data reporting
requires no probable cause or even suspicion. Unlike domestic 1099s and W2s,
no taxable event is required. Compliance burdens fall disproportionately
upon people of moderate means, few of whom are engaged in evasion or owe any
tax. Foreign banks’ denying services to Americans leads to increased U.S
citizenship renunciations.
FATCA is costly. Estimates of global compliance spending rely on aggregation
of per-institution costs: millions for each small bank, hundreds of millions
for a big one. One projection puts cumulative cost at $58 to $170 billion.
This is an order of magnitude greater than any recoveries from FATCA.
FATCA relies on Obama-era Executive overreach. Because of other countries’
privacy laws, FATCA is unenforceable without so-called “intergovernmental
agreements” (IGAs) invented by Tim Geithner’s Treasury Department. The IGAs
are not authorized by statute or submitted to the U.S. Senate as treaties.
FATCA threatens our domestic financial industry. Reciprocal “Model 1” IGAs
promise “reciprocity” from U.S. domestic banks. This threatens massive
FATCA-like costs on U.S. banks and consumers.
Keeping FATCA on the books risks future harm. The OECD, which for years has
sought to extinguish personal financial privacy and create a worldwide
financial data fishbowl, has praised the IGAs as a “catalyst” to that end.
If FATCA remains on the books, the next Democrat Administration and Congress
may press reciprocity on domestic American financial firms to create a
global FATCA – or “GATCA.” This is the opposite of what the GOP Platform
promised.
Transparency is when citizens monitor government.
When government monitors citizens, that’s tyranny.
BB – sorry! Getting a bit obsessive here. 🙂
No prob, plaxy. Have a good weekend, you and everyone else. I’m going to distract myself by immersing myself in Christmas decorating and partying. Cheers.
Fred(B) – “EU antidiscrimination laws will no longer be avoidable. The banks will be sued for closed accounts of EU citizens based on birthplace (ILLEGAL), and what’s more, there is a right to a bank account (at least in France).”
I do think it might be possible to bring a case on birthplace discrimination. It could be expensive though, which may be why no one has yet tried.
As for a right to a bank account – I don’t know about French law. The EU only guarantees the right to a “payment account” (money in, money out).
“The banks will be between a rock and a hard place and the US will be forced to either not enforce the withholding, or do so and raise hell.”
Or the banks would dump all customers born in the US or with other indicia.
“The EU might then have to take up the matter (in lieu of individual countries) and threaten retaliation. ”
What would be the reason for that, and what would they be retaliating for? The banks are US Persons, their FATCA obligations are a result of their US connections and activities. If they look like going under en masse and taking the economy with them (again), no doubt they would be bailed out (again). And no doubt they know that.
“Let the situation blow up and it will have to be resolved. Of course, it might not be and we might suffer more. Ok, then I’ll switch to cash & gold.”
That wouldn’t be a good outcome in my view. But if you want to have it as a fallback, maybe you should look at bitcoin? 🙂 After the bubble bursts, and bought through European exchanges only. {joke}
It would be different if an IGA signatory country (Canada, say, as a result of victory in the Charter case) were to withdraw or threaten withdrawal. That might lead to renegotiation, res-country accounts excluded, no more birthplace witch-hunts. All of which would be a big improvement, from my point of view. Not so much fun as gee-ing the EU on to sock one to America, but maybe more realistic. 🙂
Calgary 411. There is no way anything further is going to happen to you or your son. There is nothing more you need do. Take a step back. You renounced. You are not American. He was born in Canada. He wasn’t registered with US consulate. As far as US is concerned he is no different than 30 million other Canadians. I know you are concerned because you told them about his RDSP. You shouldn’t give it another moment’s thought. You are done with them. Take heart.
Ah, he was born in Canada? Absolutely agree with DoD – no need to worry. A Canada-born Canadian citizen is safe.
Plaxy — IGAs just serve to make life under FATCA+CBT possible for all – the US, banks, other countries and USPs. If they blow up, the whole mess becomes truly radioactive and unmanageable. Huge issues with privacy, discrimination, withholdings… in a word: chaos. This would force, I believe, a reckoning. And this is why I hope it happens. That said I’d be even happier with a simple switch to a simple version of RBT, or maybe just a new ID card with Timbuktu as a birthplace rather than N.Y.
Thank you for responding, DoD.
What I require is complete legal assurance and/or assurance from the GofC that my son and my daughter will be able to be the only beneficiaries of my modest estate. I NEED assurance that the law firm that will be the executor of my modest estate and the trust company that will seamlessly carry out monthly the disbursements from my son’s discretionary trust for his expenses (that discretionary trust which at this point in time in Alberta, without a Henson trust type provision, will be only funded by my estate and the RDSP of which I am the holder / my son the beneficiary. He would no longer be eligible for provincial disability coverage, AISH, the biggest part of which is the safety net for his medical, dental, etc. needs. From whom can I get this? Will I get that assurance from those sources I feel are required to ease my mind (and can do no more after my demise)? Yes, I need a guarantee. I am sorry to be so rigid. I simply have found nothing in writing, a definite process on what will happen, to appease my busy mind.
(One lawyer that deals with estates for families with family members with disability who I believe knows my situation well, asks me if there were a way that my son COULD renounce that US-defined USC, would such a renunciation take place — would I want it to? My answer was that second to my stance that my son is Canadian only and never registered as a US Birth Abroad, if renunciation could be made possible without requisite mental capacity on the part of my son, I would rather he had NO connection to any US-deemed acquired citizenship (which I have been advised he automatically acquired, as discussed endlessly here, from the moment of birth to me the year before I became a Canadian citizen). I want a claim to USC, a choice for his needs, the same as I had to become a citizen of Canada and I would prefer that choice to not cost another cent, looney or any of the US$ I have already spent on my release from exceptional USC CBT consequences — most of it to the US tax compliance industry.
Plaxy —
http://unia.be/en/articles/accord-between-unia-and-a-bank-to-terminate-a-lawsuit-claiming-discrimination-based-on-nationality
I discovered FATCA when Deutsche Bank Belgium threw me out in 2014.
In 2016, following a complaint (not by me, I regret to say) to the Belgian anti-discrimination agency (UNIA), DB agreed to “once again offer the “US Persons” customers the same services they had received prior to the termination in 2014”. This would also apply to new USP customers. Note the term “same services”. Meaning DB was once again ready to provide all sorts of accounts, investment vehicles, etc, to USPs (in exchange, of course, for US taxpayer info to be transmitted to the Belgian Gov’t).
I don’t see how the outcome would have been different without an IGA, except that banks would have to deal directly with the IRS. So yes, the banks would be in a bad position, and you can bet their lobbyists would be hard at work finding a solution, perhaps along the lines of what you suggest, (excluding accounts of local residents, for instance, a kind of SCE, right? Not enough but still a relief of sorts).
Bitcoin, ha ha! Reminds me of a bridge I have for sale 😉
Fred (B) – I certainly agree with you about wishing for a US-free ID!
And I also agree with you about being happier with RBT, TTFI or whatever they want to call it. Roll on the day…
“…the banks would be in a bad position, and you can bet their lobbyists would be hard at work finding a solution, perhaps along the lines of what you suggest, (excluding accounts of local residents, for instance, a kind of SCE, right? Not enough but still a relief of sorts).”
Not lobbyists for the banks – lobbyists for the wealthy expats of East Asia and beyond, who don’t like FATCA any more than you and me, but have a better chance of doing something about it.
Banks are for fining – not listening to. 🙂
It would certainly be more satisfying if FATCA change was forced on America (e.g. through Canada or another country forcing renegotiation).
But if America initiates the change for reasons of its own – that’s ok with me. As long as it’s a change for the better not the worst.
Has anyone renounced and didn’t filed 8854?
@Jagz
Yes. Plenty have.
If you have no US financial or family ties, you don’t necessarily need to bother with the exit tax piece. Similarly, no need to be compliant for X years and so on. Just buy your CLN to solve your banking problems.
A former Green Card holder not born in the US shouldn’t have a problem with banking, as long as they make sure there’s no “un-cured” indicia. They can’t get a CLN and don’t need one.
@plaxy
Except, apparently, in Japan, where the bank will carefully check the dates of all your international travel, available via your government ID, to determine that you must somehow still be a US person.
Incidentally, it’s possible to live and work in the US for years using only visas, and avoiding green cards for just this reason. Or so I am told by a Canadian on another forum.
That’s the combination of CRS+FATCA+spy-D card I suppose.
CRS+FATCA+US birthplace landed me with the question “Have you paid taxes in the US in the past two years?” despite my CLN. But when I refused to answer and refused to give my SSN there was nothing they could do. Might be different elsewhere.
@plaxy
Who asked that question – and sorry if I’ve forgotten, but which country?
A bank where I’ve had an account for many years – so long that they didn’t have me down as US. Then one day when I logged in I was taken to the due diligence screen, purely routine I’m sure.
It’s the result of Model 1 IGA due diligence plus CRS (Wider Approach) due diligence.
Place of birth: US
Are you a USC: No
Have you paid US tax in the last two years and if so give SSN
As it was impossible to get to my account without answering, I gathered CLN plus passport, went to the nearest branch, and complained very loudly in front of horrified waiting customers. They wouldn’t even look at my CLN but they apologized and unblocked the account.
That’s interesting. The “have you paid US tax” question seems completely unjustified by any FATCA or IGA requirements, completely out of the blue.
It’s not clear from your message – were any of those fields pre-filled (i.e. it already showed US birthplace)?
Did the combination of US birthplace plus “no” to US citizen and US taxes questions resulted in an error, or did you simply stop at that point and march into the bank?
I’m currently doing some work for a Canadian bank (a smallish regional one) and am going to dig up some inside dirt on how seriously they take compliance – not very, I expect. The customer info section on their internal software includes a flag for US citizen, not US person. Nobody seems to understand the difference. I already know the answer but I’m going to ask about validation of new customers.
Noninymous – “It’s not clear from your message – were any of those fields pre-filled (i.e. it already showed US birthplace)?”
No.
It happens because FATCA requires birthplace, and then CRS (Wider Approach) wants to know what countries you’re tax-resident in – expecting a person born in the US to say “US”. If they don’t, then the software asks further questions trying to nail the person on their supposed US tax-resident status. Or so it appears. Another bank, running a different software suite, might not ask the question.
“The customer info section on their internal software includes a flag for US citizen, not US person. Nobody seems to understand the difference.”
Yep – FATCA looks for USPs, CRS looks for US-tax-residents but doesn’t specify a standard way of identifying such a creature. The combination is incoherent.
Ah, now I understand. The wording is bizarre – you can’t equate having paid US taxes in the past two years with US tax residency.
If you’re willing to disclose, which bank was this?
The generic Canadian government CRS form (to be used by banks, in lieu of a W8 or W9) is good in this respect. It simply asks if you are “tax resident” in Canada, in the US, or in any other countries. It does not attempt to define tax residency, which means that US persons who do not fully understand CBT or green card requirements may answer “incorrectly” and not identify themselves.
“Ah, now I understand. The wording is bizarre – you can’t equate having paid no US taxes in the past two years with US tax residency.”
And you can’t equate not having paid US taxes in the past two years with US tax residency. It’s not the right question. There is no right question.
Correction:
I said:
“And you can’t equate not having paid US taxes in the past two years with US tax residency.”
I meant to say:
“And you can’t equate not having paid US taxes in the past two years with no US tax residency.
@Nononymous: Incidentally, it’s possible to live and work in the US for years using only visas, and avoiding green cards for just this reason. Or so I am told by a Canadian on another forum.
Yep, E-2 treaty investor visa is the usual route for this. Renewable pretty much indefinitely as long as the investment is in place and you’re actually managing it. Stay for as long as you like, leave when you want, no exit tax, no silly I-407 “we’ll keep taxing you forever even if you can’t live here anymore” trap like the one that caught Topsnik in Topsnik v. Commissioner.
US media occasionally write stories about it which totally miss the point:
http://money.cnn.com/2012/08/06/smallbusiness/visa-entrepreneurs/index.htm
“Have you paid US tax in the last two years and if so give SSN”
Yes I paid US tax during my visit. It was mostly state and local sales tax, but the feds get part of phone bills because telephones are a luxury (excise tax).
SSN:
https://www.random.org/integers/?num=1&min=0&max=999999999&col=5&base=10&format=html&rnd=new