Over at FixTheTaxTreaty! we wanted to know how much FATCA data was being sent from Australia to the IRS, so we submitted a Freedom of Information request to the Australian Tax Office. We found that the numbers were much higher than we had expected. As much as 6%(!) of the non-retirement financial assets of Australian households and businesses was reported to the IRS for 2016, along with A$ billions in interest and dividend income.
by Karen Alpert
FATCA requires Australian financial institutions (very broadly defined) to report account holder details as well as account balance, dividends, interest and other income paid, and gross proceeds from sale or redemption to the ATO for transmittal to the IRS. It is evident from the graphs below that the amount of data going to the IRS has exploded since the initial data transfer of 2014 data (transferred 30 Sept 2015).
Once we had the data, we wrote a blog post and sent out a media release . The story has been picked up by the Sydney Morning Herald .Increased visibility of the sheer volume of data and exposure of local assets to US taxation can only help gain sympathy and support in the countries where we live. With this visibility, we can start to move the conversation to the costs and benefits of FATCA, and a discussion of how to protect the sovereignty of our home countries.
Clearly the IRS must be drowning in data. We would like to get a better idea of the global scale of this data dump. So, we’re challenging the rest of the world to try the same thing. If you live in a country with a Model 1 IGA (where the data goes to your country’s tax authority for transmission to the IRS), submit your local equivalent of a FOI request. Let us know in the comments at Fix The Tax Treaty when you submit your request and when you receive a response. If the response is not easy to analyse, we can help, just email us admin at fixthetaxtreaty dot org.
Thanks, Tricia, for posting this.
Karen: Thank you for your admirable efforts. I will attempt to get this information in my country of residence. I think this kind of information is truly newsworthy and may attract attention.
Do you have a template phrasing the questions asked of the local government? I can be contacted directly by email if necessary.
@Fred (B) — UK, right?
Why don’t we FOIA the same thing from the US Treasury dept and get it by country? We could also include Model 2. Karen, can you let us know what exactly you asked for? Great work here! Patricia, thanks for posting!
Belgium.
Here’s the process we followed in Australia:
The ATO has a page (and a form) for FOI requests: https://www.ato.gov.au/About-ATO/About-us/In-detail/Taxpayers-charter/Taxpayers–charter—accessing-information-under-the-Freedom-of-Information-Act/?page=3
We completed the form asking for
Under Australian law, the ATO had 30 days to respond. While the form details the amounts they can charge for compiling the information, in our case no costs were charged to us.
Greg – getting the same data from the US Treasury is a good idea. Given the data quality issues raised by the ATO (see our original post), it’s probably best to get the data from as many sources as possible.
The reason we’ve issued this challenge is that no one person will know the FOI rules for every country. It makes more sense to split the work up and for each person to work with the local rules and bureaucracy they have become accustomed to. If you don’t know how to make this type of request in the country where you live, ask around or do a bit of research. If anyone has questions they’re not comfortable asking in public, there’s an email address in the post above (or a contact form on our website).
This is exactly the kind of action we need around the world and the kind of indisputable statistics that may turn our cause around. Thank you, Karen, and Fix the Tax Treaty!
This might be valuable to my Congressman who’s concerned about the data dump FATCA is. His office is meeting with Treasury on Friday to discuss FATCA. I wrote today:
“Here’s something that might benefit you when talking to Treasury about FATCA on Friday. A recent FOI request in Australia turned up some interesting information from their tax office about FATCA. There are indications that Australian banks are over-reporting, resulting in “false positive” reporting. Does the IRS really need this data dump to sort through to find US citizens residing in Australia (or anywhere for that matter), when those citizens wouldn’t owe any tax US anyway?”
Thank you Karen and Trish for posting.
Says nothing of how many false-negatives there must be – making the ‘indicia’ method inadequate in rounding up USPersons who might be ‘hiding’ money in foreign accounts.
Karen – thank you so much for your good work in Australia.
The worth of Brock for bringing together the expertise of and passionate efforts of so many past or present USC persons. I always think about what our individual experiences would have been like before the internet. It is powerful to know we are not the only ones!
Thanks also to Tricia for all of her significant commitment and work here at Brock and other places.
All on behalf of all of us and our families, even those who yet do not realize any of the absurdity.
As our own banks through FATCA and we through FBARs pass on private financial information to the US…
https://www.taxconnections.com/taxblog/an-unexpected-refund-from-the-irs-spells-s-c-a-m/?#.WqATNugbPtQ makes one wonder just how the fraudsters got banking information to put this scam in place!
And maybe an FOI regarding this;
“3 The Parties shall, prior to December 31, 2016, consult in good faith to amend this Agreement as necessary to reflect progress on the commitments set forth in Article 6 of this Agreement.”……….
…………………………..
“…ARTICLE 6
Mutual Commitment to Continue to Enhance the Effectiveness of Information Exchange and Transparency
1 Reciprocity: The Government of the United States acknowledges the need to achieve equivalent levels of reciprocal automatic information exchange with Canada. The Government of the United States is committed to further improve transparency and enhance the exchange relationship with Canada by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic information exchange…..”
http://laws-lois.justice.gc.ca/eng/acts/C-10.58/FullText.html
What was the outcome of any “reflection” on any “…progress on the commitments set forth in Article 6 of this Agreement…” regarding reciprocity by the US?
Do I remember correctly that a FOI request with a list of questions re: FATCA was submitted to the Canadian government some time ago and that the government’s response was a total stonewall?
Yes, @maz57, I do believe questions were asked in parliament but answers were not forthcoming. The only Access To Information request re: FATCA I could find is this one from the Office of the Privacy Commissioner:
https://open.canada.ca/en/search/ati?keyword=
What we need is numbers. How many have been ratted out to the IRS and what is the dollar amount involved?
Sorry, we’re model 2. (Taiwan) I wonder if that’s better.
“…ARTICLE 6
Mutual Commitment to Continue to Enhance the Effectiveness of Information Exchange and Transparency
1 Reciprocity: The Government of the United States acknowledges the need to achieve equivalent levels of reciprocal automatic information exchange with Canada. The Government of the United States is committed to further improve transparency and enhance the exchange relationship with Canada by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic information exchange…..”
=================================================
We all knew this for the joke it was and still is. The USG told a bald-faced lie, and our politicians pretended to believe it. Well, either they pretended or they were incompetent at an almost unimaginable level.
Its been several years now since the Canada/US IGA was signed. It seems to me that the abject failure of the US government to make even the slightest bit of progress with living up to its commitment to “achieve equivalent levels of reciprocal automatic information exchange” shows that they signed the agreement in bad faith right from the get-go.
I don’t believe that the US ever had the slightest intention of holding up their end of the deal. If the Canadian government had any balls it would terminate that agreement immediately and tell the US to go pound sand. The ongoing battle with NAFTA and now Trump’s idiot tariffs prove that its pointless even trying to negotiate with people who have such a lack of integrity.
(Actually Canada could exact its revenge by instructing the CRA to send them well garbled data that would take the IRS a hundred years to sort out.)
@maz57 “Do I remember correctly that a FOI request with a list of questions re: FATCA was submitted to the Canadian government some time ago and that the government’s response was a total stonewall?”
Yes, maz57, there was a question from Liberal MP Ted Hsu.
http://isaacbrocksociety.ca/2013/10/26/liberal-mp-ted-hsu-question-121-parliament-of-canada-october-25-2013-fatca/
And yes, maz57, the answer was a total stonewall.
http://isaacbrocksociety.ca/2014/01/28/urgent-q121-ted-hsu-questions-to-parliament-has-insufficient-answers-cross-post-from-maple-sandbox/
@maz
There was also an FOI request put in by Maple Sandbox in 2014. It was of course, before the exchanges began but focused on the process of how the CDN govt approached the IGA. Doing some maintenance on Sandbox so the info is all here at the moment:
Access to Information Parts I-8
Give me a moment………having same problem with these files on both sites………
Ted Hsu’s page (the govt response link does not work)
Ted Hsu’s blog
I am not yet brave enough to send the FOI request to my government, but I’m working on it.
I was thinking of asking for the following and would appreciate comments, notably on whether this is too much to ask for in one request.
Thanks.
– For each year starting in 2014
o Number of bank accounts forwarded to the IRS
o Number of account holders whose information was transmitted to the IRS
o Sum of account balances concerning accounts reported to the IRS
o Other information reported to the IRS concerning above accounts and account holders: income, etc
– Concerning account holders whose information was reported to the IRS
o What information (other than name, identification number and bank account balance) was reported?
o Among account holders whose information was forwarded to the IRS, how many are Belgian citizens (including Belgians who hold another citizenship), and how many are non-Belgian EU citizens (according to the national registry)?
o Among account holders whose information was forwarded to the IRS, how many are resident in Belgium?
o Among account holders whose information was forwarded to the IRS, how many are both Belgian and resident in Belgium?
o Is the account holder who resides in Belgium informed by the government that his/her information has been forwarded to the IRS? If not, does the government respond when asked if personal information has been reported?
o Does the account holder who resides in Belgium have the opportunity to consult the information concerning them and to introduce corrective information?
– How is the information reported by banks to Belgium under FATCA regulations treated?
o If a bank reports an account that is obviously non-reportable under the IGA (balance under reporting threshold, pension account, etc), is that account reported to the IRS anyway? Does the government directly forward the information from the bank to the IRS or does it treat it in any way?
o Belgium, with FATCA, acquires information on Belgian citizens and other residents that it cannot normally automatically access (banking secrecy laws). Is there rigorous compartimentalization of information or does this information find its way into the files of said taxpayers and is it potentially of use to local authorities in the context of taxation in Belgium? In other words, the application of FATCA gives Belgium more information on its own taxpayers that are labelled US Persons than it has on other residents. Is this information used, how, and to what ends?
Would one’s local MP help in submitting a FOIA request? The good news, mine is in opposition now, though wasn’t when the IGA was signed. The bad news is he’s an inconsequential lump of a backbencher.
Local banks (with no international branches) in Denmark are now questioning both new and long-time customers about citizenship/place of birth, and whether they are/were dual nationals as standard procedure at meetings about pension investments, home loans etc. When I asked why, the answer was they had to do it. Everyone gets asked the same questions and has to provide copies of passports etc.
I wonder how many “accidental” USC this will uncover – many dual USC with a non-US birthplace and another nationality may be in for a surprise.
@allou. Yes they are doing the same in almost every country in the world trying to find out if you have any connections to US as US is the most vicious govt to answer to by the banks and their central banks. Well Canadians of course have been the exception as I too was asked by my banks what are your other nationalities? Everyone on CRS forms is being asked too as banks are simply told by govts to provide date to central banks to report all data to respective govts around the world and determine their tax status. Imagine Eriteria finding out how much you have in other countries where you are living at and hold your relatives hostage back home. Yes this in facts happens in Eriteria and they were even told off by UN member countries to stop this nonsense but a giant like US no even one dares.