Author Archives: swisspinoy

Earlier today, the Handleszeiting posted a wonderful article critical of America’s treasured national origin discrimination titled:

Amerikanische Bürger: Herkunft als Hürde
American Citizens: National Origin is a Hurdle

Shortly afterwards, this was picked up by Die Welt with a much more fitting title:

Fiskus vertreibt US-Bürger aus der Schweiz
The Treasury is ethnically cleansing US citizens from Switzerland

Then, America woke up and immediately the title changed, shifting the blame:

US-Bürger in der Schweiz geben ihre Pässe ab
US Citizens are turning in their passports

The article mentions that the US embassy in Bern refuses to be honest and transparent about the number of Americans who are turning in their passports.

Laut Schätzungen der amerikanischen Gemeinschaft haben letztes Jahr 700 bis 900 US-Bürger in der Schweiz ihren Pass abgegeben.  Die Botschaft in Bern will diese Zahl nicht kommentieren.

According to estimates made by the Amerian community, around 700-900 American citizens in Switzerland gave up their passports last year.  The Embassy in Bern does not want to comment on this number.

Rejecting US threats, the National Counsil tossed “Lex USA”.  The big question now is if the US will follow through with its threats of destroying 18 banks, and how many innocent people will be harmed in the process.  Yesterday, Postfinance expressed great fear that it might be the target of US wrath since it is one of the last banks which still accepts US clients living in Switzerland.  My best guess is that the US needs to use Switzerland as a scape goat to scare the world into joining FATCA, since FATCA would otherwise fail.

The general view in Switzerland seems to be that if some banks did wrong, then they should be held responsible for their actions without the parliament being involved, while those in favor of Lex USA generally feared the American blackmail.

A lot of commentary that I have read so far in the US seemed to lean more in favor of Switzerland.  There were a few calls for war, kicking Swiss out of the US or prohibiting Americans living in Switzerland from having a local bank account, but otherwise many individuals showed an interested in respecting personal privacy and resisting foreign powers.

The votes can be seen here.

This new American chocolate which does not melt is a bit like #LexUSA, containing inside secret materials.

— Marie P Bender (@mariebender) June 19, 2013

June 4, 2013 by Ellen Wallace

“Entrapment” by the IRS resulted in “ruinous penalties” for ordinary Americans

GENEVA, SWITZERLAND – American Citizens Abroad (ACA) has provided evidence “of the arbitrary and questionable IRS (US tax office) management of the Overseas Voluntary Disclosure Programs” (OVDP) to members of three US Congressional committees working together to investigate IRS abuses, ACA said Tuesday 4 June.

The Geneva-based international group says that the 2009 OVDP in particular was “extremely prejudicial to Americans living overseas who sought to become compliant with their taxes due to errors or omissions under the OVDP. Believing they could come back into the system by simply filing the appropriate paperwork and paying any outstanding tax burden, these individuals were later told they would be hit with a standard penalty of 20% of the highest value of their bank accounts over a five-year period.”

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America is threatening the Swiss government to quickly agree to unspecified conditions if it doesn’t want for Swiss banks to be destroyed.

Die USA beharren darauf, ihr «Programm» zur Bereinigung von amerikanischem Schwarzgeld erst nach der Zustimmung durch die eidgenössischen Räte zu veröffentlichen.
http://www.aargauerzeitung.ch/schweiz/so-will-widmer-schlumpf-den-us-steuerdeal-retten-126669898

Translation: USA is insisting on revealing the details of their “program” to clean American black money only after Swiss councils approve it.

Das Angebot gilt laut «NZZ am Sonntag» nur für 120 Tage. In dieser Zeit müssen die beteiligten Banken die Daten an die USA übermittelt und eine Busse ausgehandelt haben… Eine solche Busse könnte vor allem kleinere Banken an den Rand des Abgrunds und darüber hinaus bringen.
http://www.nzz.ch/aktuell/schweiz/die-sommersession-als-sondersession-fuer-die-lex-usa-1.18091798

Translation: The deal, according to “NZZ on sunday”, is only valid for 120 days.  In this time frame, all involved banks must deliver data to US and negotiate a settlement…  Such fines could push small banks to the edge and beyond.

«Um es ungeschminkt zu sagen: Ohne Programm ist keine Bank vor der Willkür eines US-Justizbeamten geschützt.»
http://www.tagesanzeiger.ch/schweiz/standard/Powerplay-um-den-Bankendeal-mit-den-USA/story/26002848

Translation: To say it nicely, without the program, no bank will be protected from the high-handed action of US justice agents.

“Wir wollen mehr Fakten. Dabei lassen wir uns nicht drängen – weder vom Bundesrat noch von den Medien.”
http://www.finanzen.ch/Nachrichten/CH-Steuerstreit–Breite-Kritik-und-Suche-nach-Alternativen-Zus-434619

Translation: We want more facts and we won’t let ourselves be pushed around – not by the federal council and not by the media.

«Kein vernünftiger Politiker im Parlament kann einem Gesetz zustimmen, dessen rechtliche und materielle Auswirkungen unbekannt sind»
http://www.tagesanzeiger.ch/schweiz/standard/Dringlichkeit-fuer-Notrecht-ist-nicht-gegeben/story/13684308

Translation: No sane politician in the parliament can approve a law whose legal and material impact is unknown.

Die Schweizer Regierung möchte den seit Jahren schwelenden Steuerstreit mit den USA ein für alle Mal beenden… Die Amerikaner wollen erst nach einem Beschluss bekanntgeben, zu welchen Konditionen Vergleiche möglich sind, also wie teuer es für die Banken wird… Die USA seien zu keinen weiteren Zugeständnissen bereit… Laut Schweizerischer Nationalbank könnten hohe Geldbußen kleinere Institute sogar in den Ruin treiben
http://derstandard.at/1369362360940/US-Datenhunger-laesst-Schweizer-Bankmitarbeiter-zittern

Translation: The Swiss government has for years been wanting to end the swelling tax conflict for once and for all with the USA… Americans only want to reveal the conditions and how much it will cost banks following approval… The US is unwilling to compromise… According to the Swiss national bank, high fines could ruin small banks.

“Sicherheit hat man bei den Amerikanern nie. Wie diese mit anderen Ländern umgehen, das hat mit einem Rechtsstaat wenig zu tun.”
http://www.cash.ch/news/alle/nzzaschsteuerstreit_cvppraesident_darbellay_bezeichnet_loesung_als_einseitig-3070865-448

Translation: One can never trust Americans.  Their treatment other nations has little to do with a constitional state.

Die Regierung in Bern solle sich lieber verstärkt an der Erarbeitung internationaler Standards im Rahmen der OECD beteiligen. Ein solcher Standard müsse die Steuerhinterziehungsfrage lösen, aber auch den Schutz der Privatsphäre berücksichtigen.
http://www.handelsblatt.com/unternehmen/banken/josef-ackermann-schweiz-muss-die-us-forderungen-erfuellen/8290528.html

Translation: The government in Bern should rather be more involved in creating international standards in the framework of the OECD participants.  Such a standard should solve the tax evasion question while also taking privacy protection into consideration.

Eine Ablehnung würde zu US-Klagen führen, was Ammann zufolge das Ende mehrerer Schweizer Banken bedeuten würde.
http://www.welt.de/newsticker/bloomberg/article116757815/Schweiz-stimmt-US-Gesetz-wohl-zu-es-droht-schlimmeres-Schicksal.html

Translation: A rejection would lead to US lawsuits which, according to Ammann, would mean the end of many Swiss banks.

Warning:  Please read the first two comments to this post before accepting at face value the advice of Medic Blog (the editor).

After entering OVDI/P, American expats later learned that such was only meant for tax cheats and not for them.  Now, it seems that the same may also apply to soft/quiet disclosures.   Are soft/quiet disclosures considered to be a “trap” to punish those who filed old FBARs as being “tax cheats”?  Is there anything that an American expat can do without being accused of being a “tax cheat”?

May 31, 2013

…John and Mary made the mistake of amending their past tax returns and filing their old FBARs. On these returns, they were required to put down account numbers and bank information.John and Mary fell into the  IRS’s trap. Now the IRS has all the information it needs and if audited, the burden of proof is on John and Mary that they did not commit a willful violation of FBAR. A willful FBAR penalty is 50% of account value. And this can be assessed for multiple years.

What John and Mary must do right now about their soft/quiet disclosure

If John and Mary amended their tax returns and filed delinquent FBARs, they have provided the IRS with all the information they need to identify their tax accounts for a possible soft disclosure. Essentially John and Mary have raised their hands and said “WE ARE TAX EVADERS, HERE IS ALL OUR INFORMATION. PLEASE COME AND PENALIZE US AS MUCH AS YOU CAN.”

Then, it is just a matter of time before they will be faced with the most expensive and lifestyle changing bill of their entire lives.

 Get into the OVDP — now!

Read more at Medic Blog

At what point does this become a human rights violation, or better yet, under which conditions is this not a human rights violation?  In relation to Eritrea, the only other nation in the world with a diaspora tax, such behavior is considered as being a human rights violation.

On the basis of NRK information about harassment of Eritrean citizens in Norway, the Norwegian authorities consider taking this up with the Eritrean authorities as a possible violation of human rights, says Imerslund to NRK.

Source: Asmarino Independent

the collection of the 2% tax collected by the Eritrean government from Eritreans in diaspora as extortion is unlawful.

Source: Human Rights concern – Eritrea (HRCE)

23.05.2013

Expatriation

US-Bürger geben ihren Pass aus Steuerfurcht ab

By Markus Gärtner

The EU has made the flight of paying taxes its top theme.  The problem is, however, that a growing number of US citizens are handing in their passports to their consulates outside of their homeland with the task of being disposing hassling taxes…

[bla bla bla glamour, rich, tax evasion, false figures, bla bla bla (no time to translate nonsense during my lunch break)]

…The rapidly growing number of Americans handing in their passports can be explained, according to the experts, with FATCA since 2010.  By 2014, Americans living abroad will have to file US tax returns or face draconian penalties.  When reporting their [local] accounts via FBAR, unlisted details will be slapped with a 27.5 penalty on the highest balance of one account over 8 years.

Escaping from this tax trap is becoming ever more difficult, since FATCA forces [local] banks to disclose their data through bilateral agreements with the US, else pay a 30% penalty on their US earnings.  Switzerland and America signed such an agreement in February.

Part 2: Aggressiveness of US justice.

This is the reason why a large number of Americans in Switzerland returned their US passport.  Yet, many dual citizens in Hong Kong also returned their us passport.   The Chinese Morning Post reported about Chinese in the mainland, who gained a US passport as the “ultimate symbol status”, later returned to China and were shocked to discover that they were still taxed by the US.

For Americans living abroad, it has become more difficult to live outside of America since they are being rejected by multiple banks who fear IRS sniffing.  “The foreign banks are so appalled over US policy, that they don’t want to have any more US customers, causing many Americans living abroad to be sleepless at night”, said Francisca Mordi, the vice president and tax expert of the American bankers association.

Result: Americans abroad are not only returning their passports, but they are mobilizing their organizations.

A professional association for Americans abroad in Geneva, the Americans in Switzerland sent a 10 page letter to the US Congress last fall, listing the problems Americans abroad were facing as a result of FATCA.

“It is mainly the jihad against foreign accounts”, stated Phil Hodgen, a tax lawyer in Pasadena, California, which is responsible for the large number of renunciations.  Hodgen knows that a growing number of wealthy investors in the middle east have advised their children to renounce us citizenship if they wish to inherit the family company.

US authorities are putting banks under pressure…

[talks about financial institutions]

… FATCA has made it more difficult to attract top managers and well paid specialists overseas, they argue.  The double-taxing of expats combined with increased IRS pressure has made it more difficult to recruit talents needed for international expansions, and this in a time when the US economy is suffering with growth in developing countries.

Manager Magazin Online

May 20, 2013 (AP)
In 1959, nearly 5,000 Japanese-Americans had their U.S. citizenship restored after renouncing it during World War II.
Fosters Daily Democrat

What captured my interest in this little piece of history, is the common argument that an individual who renounces U.S. citizenship may never again be a U.S. citizen and that there are only one or two rare situations where such was not the case.  Not so. Of course, one who renounces US citizenship might never want to be a US citizen. However, all is relative and times change.  Nothing is consistent.  Currently, it is just as American-patriotic to renounce US citizenship, under the given circumstances, as it was for Japanese-Americans to do so during WWII.  There is nothing wrong with it and one shouldn’t refuse to renounce due to the belief that such is irreversible.  However, one should always keep in mind that Americans may not want for individuals with American heritage to live in America if they, for whatever reason, stopped playing the citizenship game for a while.  But why would anyone want to be a US citizen under those circumstances?

On this issue, I find three questions to be relevant:

• Is America worthy of your citizenship?
• Does America appreciate your citizenship?
• Does America want for you to be a citizen?

If the answer to any of these three questions is “no”, then it is unnecessary or undesirable for one to be a U.S. citizen.  Yet, If the answer to all three is “yes”, then a restoration might make sense.  Time will tell what will become of this.

BEIJING, May 18 (Xinhua) — After six years in the United States, and having secured a “green card” for permanent residency, Chinese novelist and former TV starlet Wang Yang has decided to move back to China.

“America is good, but it will not give me what I need,” she says.

Wang will soon start work with a TV drama crew in Beijing on an adaptation of her latest novel “Yang Jia,” or “Marrying Across the Ocean,” depicting a Chinese woman’s love story in America.

While Wang personally wrestled with whether to settle away from China, her protagonist also goes through a similar decision-making process. Crucially, unlike many previous stories with similar topics that venerate foreign cultures when depicting Chinese lives abroad, Wang’s novel has been credited with providing a more truthful, contemporary picture.

It has made a difference by putting experiences across Chinese and U.S. cultures on an equal footing, according to literary critic Mu Gong.

Wang and “Yang Jia” are therefore emblematic of a re-balancing of assumptions on the desirability for Chinese of expatriate life. Foreign residency is starting to lose some of its luster for Chinese, with greater opportunities in their increasingly invigorated home country.

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By SEN. RAND PAUL Posted 05/16/2013 06:14 PM ET