The US Government Accountability Office has released an 83 page Report to Congressional Committees, “Foreign Asset Reporting: Actions Needed to Enhance Compliance Efforts, Eliminate Overlapping Requirements, and Mitigate Burdens on U.S. Persons Abroad”. Thanks to JC for posting this link on the Media page.
Related Brock post: April 2019 Report From GAO is evidence of how #FATCA and Foreign Asset Reporting is viewed in the Homeland by USCitizenAbroad.
Sounds like some recognition of problems of FATCA for persons overseas.
April2019: FOREIGN ASSET REPORTING
Actions Needed to Enhance Compliance Efforts, Eliminate Overlapping Requirements, and Mitigate Burdens on U.S. Persons Abroad
“Specific effects of FATCA implementation contributing to decisions to renounce U.S. citizenship included reduced access to foreign financial services and employment or promotion opportunities in a foreign-owned company—as identified above from our document reviews, focus groups, and interviews—and burdens in meeting FATCA reporting requirements.”
https://www.gao.gov/assets/700/698133.pdf
Emphasis on enhance compliance efforts. Trying to read this bureaucratic gobbledegook is liking wading through treacle.
It’s clear they have no intention or ability to do the right thing which would be to abolish FATCA. The first priority of a civil servant is to preserve his or her fiefdom. Hence the never ending recommendations for further study. All roads lead to renunciation.
@ Portland
I too detected an emphasis to enhance compliance rather than emphathy for the “more than 20” (21 maybe?) “U.S. persons living overseas” they interviewed about the impact of FATCA on their lives. Would it even register on them that some of these persons would actually be citizens of other countries who have been deemed (unjustly and illogically IMHO) to be U.S. tax residents? I rather think the “officials from IRS, other federal agencies and organizations” and “selected tax practitioners” — all of whom view taxes as bread-and-butter issues (THEIR bread and THEIR butter) — were listened to the most. So someone got paid to write an 83 page, dull sounding, no fury, report signifying nothing’s going to change enough to help much but at least a need was perceived for a report to be written.
The other take away is that minnows have nothing to fear from FAtCA or FBAR. there were 375 people who reported more than a billion dollars in foreign accounts. 350 of them were US residents. The IRS and FINCEN didn’t appear to know what to do with them.
Meanwhile, HSBC has all charges dropped by the “justice department” after admitting to money laundering activities to congress!
Disgusting, TWO SYSTEMS OF JUSTICE FOR US whatever s / citizens / green card holders / certain non residents!
https://www.nytimes.com/2017/12/11/business/dealbook/hsbc-us-charges.html
https://www.rollingstone.com/politics/politics-news/outrageous-hsbc-settlement-proves-the-drug-war-is-a-joke-230696/
Looks like Trump got FATCA’d
https://www.nytimes.com/2019/04/29/us/politics/trump-lawsuit-deutsche-bank.html
Following
The best way to eliminate FATCA if the US government will not do it is to get foreign governments to not accept a foreign tax law over their own banking laws.
Would this be enough for Trump to try to get rid of FATCA?
@polly
I doubt it. If FATCA were overturned, then the US would be pressured into joining CRS or be labelled as a tax haven, at the moment most countries have reluctantly accepted FATCA in lieu of CRS which enables Delaware etc to continue secret corporate accounts.
It’s CBT that needs to go to solve the problems of Americans living abroad.
So, more than 20% of the 8938s filed in 2016 came from nonresident taxpayers, who constitute roughly 1.5% of US citizens and 0.51% of US tax returns filed in 2016. And remember, nonresident taxpayers have significantly higher filing thresholds for form 8938.
Comparing numbers in the GAO report to IRS statistics of returns filed we can compute the percentage of returns filed with form 8938:
US Residents: % with 8938
Married filing jointly 0.41%
Other 0.10%
All residents 0.21%
Nonresidents:
Married filing jointly 9.79%
Other 12.36%
All nonresidents 11.50%
All US taxpayers 0.27%
This fiction that the local accounts/businesses/investments of US citizens living abroad are “foreign” is creating a clearly excessive compliance burden!
@ Steven & Karen
I am not sure I understand.
Under FATCA wouldn’t Trump’s foreign Corporate accounts with Deutsche bank be reported to the IRS?Does Congress not have access to IRS information?
Is there a difference from Congress having access to the information rather than IRS?
Is it just the volume and scope of the information that is in question. Couldn’t the IRS be asked to do an audit by Congress?
Isn’t it beyond the legal Fatca agreements for Deutsch bank to hand over anything more than the balance of Trumps accounts unless there is a criminal investigation and an information sharing agreement between the two governments to allow the bank to do so?
I remember Obama ordered a much criticized IRS inquiry into the right wing T party movement back around 2013.
@Steven Arvey
That link does not seem to be FATCA related. There is nothing to suggest that the accounts in question are located outside the US.
@Heidi
I do NOT think that Congress has access to accounts at the IRS relating to specific taxpayers. That information is supposed to be strictly contained within the IRS on a need to know basis. Similarly though with perhaps less rigor, the Board of Directors of your Bank are not supposed to have access to the details of your individual accounts. That detail is supposed to be protected by the Management and Staff of the Bank. Of course Loan Applications above certain levels will necessarily be briefed to the Board (or a committee thereof) who will either recommend or deny the application. Just sayin’
BTW I see that my last posts were posted as nervousinestor. I apologize for that error.
What a stupendous waste of time, money and nervous energy. Billions spent by FIs and governments for useless information. They wont get rid though and won’t be able to fix it. Too many jobs at stake. perhaps it’s a good thing the crazy republicans want to starve the IRS
@nervousinvestor
I am just surprised that rather than risk an EU banks refusal to cooperate citing EU privacy laws (unless fraud was suspected), Congress didn’t go the route of Obama as in his prompted IRS audit of the TParty , however that was done!
@Portland
Yes, ‘the mother of all time wasting’
Lets hope they are drowning in their useless information that will glean them nothing and is uncollectible even if assessed.
My take-away is that if you suspect you are going to be FATCA’d, make sure you give the bank a faulty TIN. (I.e. made up number, transposed digits, wrong number of digits, etc.) A bad number apparently stops the process dead in its tracks and befuddles the system.
And no, they won’t ever give up on FATCA because they are stuck permanently on stupid. But hey, its their money to waste; our job is to help them waste it.
Heidi – Agreed.
nervousinestor – My posts have everything to do with FATCA, thank you. And if you look into it, the accounts in question are in the subsidiary offices of Deutsche Bank, Cyprus, where Russian Oligarch Billionaires & Trump are seemingly connected. It will get ugly. If you live in the USA, I hope you realize the mass surveillance that has been in place since 2002 and was ramped up in 2004, Hint, look for “Prism” and that all txt’s (VOIP) phone calls, emails & communications, (ISP and everything that goes through it,…..) is recorded. They already know, the procedures must be followed for “Legality” that is what is coming. In fact a judge threw out a case recently, just in case you have any doubts about my posts, please refer to this: https://www.eff.org/deeplinks/2019/04/judge-dodges-legality-nsa-mass-spying-citing-secrecy-claims
@Steven Arvey
That link does not seem to be FATCA related. There is nothing to suggest that the accounts in question are located outside the US.
Cross-referencing the earlier thread on this report http://isaacbrocksociety.ca/2019/04/01/brock-project-april-2019-report-from-gao-is-evidence-of-how-fatca-and-foreign-asset-reporting-is-viewed-in-the-homeland/
Thanks, Karen, I should have mentioned that in the post itself — I’ve added it now.
This was my comment on the American Expatriates Facebook Group:
It appears that the GAO has gotten the message of the impacts of FATCA from denial of local financial services, to denial of promotions, to impacting renunciations; and with inclusions of letters from foreign governments on behalf of their accidentals.
That all is good. Yet the tone is that all that is needed is a little adjustment, a little negotiation, and it all will be good. Nothing in there that it is all deeply wrong, or the comparison of if financial accounts or promotions were denied to U.S. resident citizens.
There is also a story in there that the USG had a little chat with financial institutions in Switzerland, and the USG thinks from this that the action greatly alleviated the problems. Not!
Just solve the FBAR and 8938 duplication and all good! There was an acknowledgement in there that they were getting lots of 8938 when it was not required, but did not say for what type of accounts. Good to know they are having problems with paper returns – my overseas tax adviser says that they can not lodge electronically so I have to mail.
No mention of the ADCS FATCA lawsuit, or acknowledgement of the impact of the wrongness of existential US government threat of 30% withholding against overseas banks.
@steven arvay
You might be new. Old Brockers know that I am Not a US person AND that I live in Jamaica.
I am fully aware that there is illegal tapping of all communications being done. 5 eyes and all the rest. Contrary to the law in my country and contrary to any measure of morality. That is why I financially supported the Canadian Litigation effort in a modest way.
I will look back at your link again; it struck me however that the assumption was that accounts with Deutsch Bank are necessarily located outside the US. They are not.
Anyway, be sensitive if you wish. I am not bothered.
One love.