FATCA and Australia – Part 1 of 2

1,187 thoughts on “FATCA and Australia – Part 1 of 2”

1. The Canada – US IGA has same clause in Due Diligence section Annex 1 pg 20/21 regarding ELECTING to notify it’s US indicia customer. I assume all the IGA”s are the same worldwide.

   The first sweep is the electronic $50,000 – $250,000 bracket prior to June 2014.

   3. If any of the U.S. indicia listed in subparagraph B(1) of this section are
   discovered in the electronic search, or if there is a change in circumstances
   that results in one or more U.S. indicia being associated with the account,
   then the Reporting Canadian Financial Institution must treat the account as
   a U.S. Reportable Account unless it ELECTS to apply subparagraph B(4) of
   this section and one of the exceptions in such subparagraph applies with
   respect to that account.

   4. Notwithstanding a finding of U.S. indicia under subparagraph B(1) of this
   section, a Reporting Canadian Financial Institution is not required to treat
   an account as a U.S. Reportable Account if:
   a) Where the Account Holder information unambiguously indicates a
   U.S. place of birth, the Reporting Canadian Financial Institution
   obtains, or has previously reviewed and maintains a record of:
   (1) A self-certification that the Account Holder is neither a
   U.S. citizen nor a U.S. resident for tax purposes (which
   may be on an IRS Form W-8 or other similar agreed form);
   (2) A non-U.S. passport or other government-issued
   identification evidencing the Account Holder’s citizenship
   or nationality in a country other than the United States; and
   (3) A copy of the Account Holder’s Certificate of Loss of
   Nationality of the United States or a reasonable explanation
   of:

   So I ask the question, why obtain a CLN?
   The banks are electing to not notify its potential US reportable customers.
   So there no chance to defend yourself.

2. @George

   Friendly time zone indeed! I’m in Belgium.

   “You do know that when they piece together FBAR reports with FATCA reports and find mismatches that Uncle Sam is going to persue DOJ litigation against banks worldwide in the Swiss Model. The banks bought the rope to be hanged with.”

   Yikes, yeah, I thought of that, people like me filing FBARs before their bank finds them (note that I would have stayed well under the radar had I a non-US birthplace) may indeed be a problem for banks. Well, not much sympathy from us, eh?

   Nothing going on in the EU it seems? I did exchange an email with Dutch MEP Sophie int Veld. She suggested I write an op-ed in a local paper and contact my MEPs…

3. @All

   Do we have a date when the US is going to do reciprocity to other countries?

4. @Fred, I thought you were in D, I am in GB.

   I think we need to wait until the poker is hot in the EU.

   I am under the radar but my young kids are not…….and I have a bonafide relinquishment…

   If the Charter Challenge works in Canada we have something to work with.

   Like Calgary in Canada, I am in this all the way for my kids having been very stupid having spent a spell in the USA with them all being born there.

   Anyways because of IBS, none of us are alone………..

5. @AU, “Do we have a date when the US is going to do reciprocity to other countries?”

   After ten minutes of uncontrolled laughter………….NO…..well NEVER.

6. @AU There is no date on reciprocity. A Haydon P. Perryman believes this will undo FATCA as a year later countries of the world will still waiting for “reciprocity” and start to wonder why. The word implies like for like. Yet there is no requirement for US banks in the US to ferret through their account lists for nationals of other countries, no procedure for new account opening to find out nationalities of other countries. Therefore, the US can not possibly reciprocate. The US banks have and will resist extra regulation.

   Here is what I like to say: just imagine “Billy Bob” in Alabama being asked under penalty of perjury if he is a US citizen. He might likely say CSA, or Confederate States of America. This will bring new energy to desperate groups in the US out to resist the UN taking control of America. And that was reasoning behind the “Oklahoma City Bombing.”

   It is noted that the US could lose many hundreds of billions in investment if they did this. Haven’t you heard that the US is called the largest tax haven in the world with states like Delaware known to not ask questions of account holders. German to English translation: https://translate.google.com/translate?sl=de&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fwww.welt.de%2Fwirtschaft%2Farticle131288881%2FUS-Steuerabkommen-Fatca-ist-eine-Einbahnstrasse.html&edit-text=

7. Explicit target of US Person.
   The share offer is for Australian citizens / residence / jurisdiction only. Fair enough, but the exclusion highlight is glaringly obvious regarding the US person as opposed to the rest of the civilised world.
   http://www.babybuntingshareoffer.com.au/offer/

   By proceeding you confirm that you are a resident of Australia accessing this website from within Australia and you represent, warrant and agree that:

   you are not a “U.S. person” (as defined in Regulation S under the United States Securities Act of 1933, as amended) nor are you acting for the account or benefit of a U.S. person;
   you will not make a copy of the Offer Document available to, or distribute a copy of the Offer Document to, any such “U.S. person”; and
   the State and Territory and postcode provided by you for your primary residence in Australia is true and accurate

8. @Alby,

   Should email the share offer to treasury and the part about US Person.

   Have you heard back from the minister yet?

9. @Alby

   Translation:

   “By proceeding you confirm that you are a resident of Austria accessing this website from within Austria and you represent, warrant and agree that:

   you are not a Jew (as defined in Regulation S under the German Securities Act of 1933, as amended) nor are you acting for the account or benefit of a Jew;
   you will not make a copy of the Offer Document available to, or distribute a copy of the Offer Document to, any such Jew; and
   the State and District and postcode provided by you for your primary residence in Austria is true and accurate.

10. By proceeding you confirm that you are a resident of Australia accessing this website from within Australia and you represent, warrant and agree that:

    you are not a “U.S. person” (as defined in Regulation S under the United States Securities Act of 1933, as amended) nor are you acting for the account or benefit of a U.S. person;

    Regulation S of the Securities Act of 1933 says:

    (k) U.S. person. (1) “U.S. person” means:

    (i) Any natural person resident in the United States;

    (ii) Any partnership or corporation organized or incorporated under the laws of the United States;

    (iii) Any estate of which any executor or administrator is a U.S. person;

    (iv) Any trust of which any trustee is a U.S. person;

    (v) Any agency or branch of a foreign entity located in the United States;

    (vi) Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person;

    (vii) Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; and

    (viii) Any partnership or corporation if:

    (A) Organized or incorporated under the laws of any foreign jurisdiction; and

    (B) Formed by a U.S. person principally for the purpose of investing in securities not registered under the Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in §230.501(a)) who are not natural persons, estates or trusts.

    Source: http://www.ecfr.gov/cgi-bin/text-idx?node=17:3.0.1.1.12&rgn=div5#sg17.3.230_1802.sg14

    This is not the same thing as a US person for tax purposes. I don’t see anything in there about US citizens living outside the US.

11. @foo
    I agree with translation, I had looked it up as well.
    It’s the highlighting target of a US person within the front page of the share offer that’s is offensive.
    Other country’s in the selection options including USA simply state legal restriction prevent allowing access to website.
    I haven’t seen such a blatant exclusion of US person in a share offer before. Why not simply state this share offer is for Australian jurisdiction citizen residents only.

12. https://tax.thomsonreuters.com/media-resources/news-media-resources/checkpoint-news/daily-newsstand/newly-signed-caas-facilitate-fatca-data-exchange-between-u-s-u-k-australia/

13. @Alby the Australian restriction on share offers has been around for awhile. You just have not noticed. @Foo thanks for sharing that definition of US person different for Australian share offers then for US taxation.

14. @AU
    We don’t expect MP to proactively reach out to us. We will be in contact.
    We are strategising a qualified opinion to seek clarification from the government relating to the circumstance of US born Australian Citizens residents and the current tax treaty in place.

    Question. Now that Transfer of data has occurred to the US, what will the IRS do with the data. And how will the IRS conduct it’s enforcement in Australia to recover any liability.

15. @Alby enforcement issue with many Canadians is that they have US resident relatives and worry/wonder if need to go back to care if sick/etc. Supposedly US could extradite.

16. @Alby….you need to think it through based on what they do already and on persons status.

    1. Homelander with account in OZ. They will do a matching check to see if the earnings was declared pretty much regardless of the amount. If there is a tax deficiency they will get a bill.

    2. US Person in OZ with a data transfer social security number. They will look for filing history and if a return is on file was the income declared, if not declared assess tax,

    3. US Person in OZ with data transfer social security number but no tax returns on file. At first blush they will prepare a Substitute Tax Return based on a single tax payer with no deductions. If that generates a tax they will send a bill.

    4. US Person in OZ with no social security number transferred in data whose amount of interest or dividends or stock sales creates no tax liability because its so low because investment returns and bank interest rates are so low…….likely to hear nothing.

    5. US person in OZ with or without SSN who has an account balance greater than $10,000 with no FBAR history on file may get a letter asking where is Mr. FUBAR.

    Conclusion? Minows in OZ with account balances less than $10,000 US and interest/dividends/stock sales less than the amount that would generate any US tax are probably not going to hear a thing.

17. @JC, ” Supposedly US could extradite.”

    A whale maybe, a minnow….nope.

    “if need to go back to care if sick/etc.”

    Maybe border harrassment, lien on USA assets.

    @Alby, “And how will the IRS conduct it’s enforcement in Australia to recover any liability.”

    The USA has a mutual collection treaty with only five countries and OZ is not one of them.

    There is also an OECD collection treaty that the USA has signed but they “reserved away” the mutual collection part. OZ’s only obligation is to allow the USA to send letters to collect as in use the Australian Post to collect.

    As I have looked over some of these IGAs and the implementating guidance locally. I really really think the USA would have preferred to get data reports with all the below $50,000 accounts filtered out!! The deal that countries made with their banks to have all accounts reported is going to put pressure on the USA on what to do with it all.

    Thinking further….I think the USA would have been in a better FATCA position if they required full reporting on homelanders but on expats did not receive reports unless an account was greater than $200,000 with earnings over maybe $5,000.

    Would there have been outrage if there was no expat reporting on accounts less than $200,000 or accounts with less than $5,000 in earnings for expats?

18. Shopping today met 2 shopkeeper staff both American. One over here in Australia for 3 years so far and the other born in the US and adopted over here at age two. I told them about our “OMG moment” of tax liability and referred them to http://isaacbrocksociety.ca/fatca-and-australia/#comments
    I am sure many that are told say “stuff that it’s not fair I ain’t playing”.
    I actually believe the Federal government should be sued.If everyone WAS formally aware MANY people would complain but maybe the IRS is really not trying to let everyone know. It is not rocket science ie. all US passport holders / citizens on flights told to sign IRS documentation and hand in upon landing (under the threat of purgury). As many Americans travel on a US passport this would quickly make many aware I believe a shot would be heard around the world VERY loud as many of the 8.7 million string would stand up and be counted regarding being the ONLY westernized citizens feeling like they are being screwed.
    Is MISINFORMATION a constant “tactic” ?

19. @JakDac, the last UK census showed something like 170,000 born in the USA but only 120,000 had US Passports so thats 50,000 saying “I am not a US Person.”

    The US only gets around 30,000 returns from the UK and I would think most are military or corporate relo cases.

    Most of the “non compliant” I run into are in denial and still do not believe me even after Boris Johnson!!

    I honestly think that most US politicians and non US IGA countries are not currently planning on dolphin with the tuna net BUT the compliance people are going to heard the dolphin into the net.

20. It’s hard to believe something so incomprehensible.

21. @George, @Bubblebustin

    I’ve just finished watching the full DVD set of “Winds of War”, the sweeping book by Herman Wouk about the lead-up to World War 2 that was subsequently turned into an epic television miniseries in the early 1980’s. I was especially struck by the portrayals of denial of reality by certain characters, particularly some of the Jews. Knowing how history unfolded, it was dreadful to hear them casually and repeatedly dismiss the possibility of war and to tragically underestimate the logical consequences of their intransigence, even as their treatment in pre-war Nazi Germany steadily worsened.

    I am well aware of how sensitive some of our readers are to the drawing of any kind of parallels between this horrific period in history and what we face today. However, I believe there are some important and quite relevant lessons to be learned by considering the psychology and social dynamics of oppressed groups, and how they react to deteriorating circumstances, like the gradual imposition of ever more onerous laws and policies, and the incremental removal of ever more rights and freedoms, until one day it is simply too late to escape some terrible destiny.

    In this regard, I do have a great concern for those who simply deny that such fates are possible, who refuse to inform themselves, or who allow others to make life-altering decisions for them, when instead they must seek the courage and wisdom from within to make the right choices for themselves – to take personal responsibility for their own lives and for those of their families. These are the lessons of history we need to remember now.

22. @Deckard1138

    I vaguely remember the series.

    In the end we’re talking about people, and where there are people there will be those in positions of power who behave oppressively for their own preservation or to further some ideology. To deny the parallels between any events where groups of individuals are marginalized for their mere existence is to pay disrespect to those who’ve suffered at the hands of those oppressors, regardless of how extreme their suffering was or is.

    I’m not sure how it will play out for a nation to create policies designed to suppress mobility, specifically to wage war on its diaspora, but at the very least it works toward annihilating any American civilian presence in the world. For a nation that claims to be the world’s champion of freedom, it’s must look pretty ridiculous to other nations that current ideologies create some of the least free people in the world.

    Coincidently, I just caught this comment on Facebook:

    “It’s not about taxation. Eritrea has citizenship taxation but it is a manageable form of taxation. The Eritrean version is NOT a form of “life control”. The U.S. version (if and when fully understood) will control every aspect of your life and make it impossible for you to have any kind of life outside the United States. You might reflect on this and then perhaps on how lucky you are to no longer a U.S. citizen. To put simply: U.S. citizens abroad simply do NOT have the level of freedom that citizens of other nations do. To put it another way: your loss of U.S. citizenship opens the “door of opportunity” for you.”

23. Thanks, Deckard.

    I’ve just pulled of my book shelves to re-read Volume 1 and Volume 2 of Herman Wouk’s *War and Remembrance*. Because, I agree with you that

    … there are some important and quite relevant lessons to be learned by considering the psychology and social dynamics of oppressed groups, and how they react to deteriorating circumstances, like the gradual imposition of ever more onerous laws and policies, and the incremental removal of ever more rights and freedoms, until one day it is simply too late to escape some terrible destiny.

    In this regard, I do have a great concern for those who simply deny that such fates are possible, who refuse to inform themselves, or who allow others to make life-altering decisions for them, when instead they must seek the courage and wisdom from within to make the right choices for themselves – to take personal responsibility for their own lives and for those of their families. These are the lessons of history we need to remember now.

24. @Deckard1138

    I see it as almost paralyzed complacency on the part of the US mainland citizens. Most don’t/won’t see the way things are degrading because that would mean doing something about it. They’ve enjoyed world-status (being so completely convinced of their “stature” by gov’t as to never question the ol’, “We’re #1! shtick”), eagerly gobbled up the Walmart specials, & embrace their world of convenience…Sure, most people are doing it tough, but hey, that’s the price you pay, right?

    Yes, rights have been removed, and massive FUD has been spread, but it’s all for the common good- who knows what evil lurks beyond the USA border? Besides, if you actually like living outside the USA, that’s suspicious in itself- you might be one of those “disloyal/unpatriotic people” who could be dangerous…

    Because, security.

    “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.” B Franklin

25. Ben stirs up our REAL issue and how weird out of ALL countries the reality of what is happening to us. “No taxation without representation” is a slogan originating during the 1750s and 1760s that summarized a primary grievance of the American colonists in the Thirteen Colonies, which was one of the major causes of the American Revolution. In short, many in those colonies believed that, as they were not directly represented in the distant British Parliament, any laws it passed affecting the colonists (such as the Sugar Act and the Stamp Act) were illegal under the Bill of Rights 1689, and were a denial of their rights as Englishmen.

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