FATCA and Australia – Part 1 of 2

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

1. Re Nightline piece on US Expat tax Geoff Martz is waiting for head staff to return from overseas

2. @Emily.
   This was suggested:
   Gov Participant in US Tax Bullying of Australians

   Sounds news hooky to me. As never reported before. I believe this introduces the topic and issue quite well. The Australian government is a participant in the “bullying” as it signed a Tax Treaty with the US that did not preclude the bullying or exclude from US tax for Australian residents certain areas such as superannuation, franking credits, US tax on Australian home etc. Also, more recently the FATCA IGA, the change of privacy laws for its introduction with waiver in case of international treaty; disregarded discrimination aspects of singling out one nationality; the ATO website which is supposed to accurately indicate tax obligations says only that tax treaties prevent double taxation, and nothing that the tax treaty with the US guarantees aspects of double taxation and nothing about all the reporting and US tax returns etc that the Australian-US tax treaty via Australian law obligates on Australian resident US persons.

   “Superannuation” might be a good one to include as that is in the news quite a bit.
   Gov Ignores US Threat to Superannuation

   What could not be a news hook in pointing out Australian government omissions for its superannuation policy, allowed to be upended (intervention into the internal affairs/policies of Australia) by the US – a foreign country.

   You have some quotes from tax experts. For individual stories this may help as you may use the articulation of these stories/letters and may use fictitious names (unless you have approval to use them), but you may reference as submitted to the US Senate Finance Committee Workgroup on International Tax Reform:

   Submissions to the US Senate Finance Committee on Tax Reform (that were ignored). From Australia: 14 individuals: 12 mention super, 11 complexity, 1 disability. I am in there under Joe Citizen.
   http://isaacbrocksociety.ca/fatca-and-australia/comment-page-19/#comment-6697603

   Perhaps you might suggest here some angles, titles that you believe are “almost there” and then we may provide some input.

   As you know a major aspect is the “terror” of it all from an all powerful entity – US – in pursuit of unreasonable, unjust, and unfathomable tax and compliance of Australian residents who are US persons.

   Gov Allows US Tax Terror of Australians

3. Also Australian SMSF Self Managed Super Fund are not advised for US persons as the interpretation is PFIC Passive Foreign Investment Corporation, as SMSF need to be set up as a company, same with trusts. I believe the PFIC treatment is US tax on annual gain (as in unrealised gain) as ordinary income. And as the SMSF is Australian source there is no credit against Australian tax for any US tax paid on them. It all boggles the mind.

4. Again copy and paste hopefully useful emails

   “Martz, Geoff” ,
   adam_carasso@finance.senate.gov,
   Kelly O’Dwyer ,
   J.Hockey.MP@aph.gov.au,
   Josh Frydenberg ,
   “Billson, Bruce (MP)” ,
   Jonathan Lachowitz ,
   Wood@woodllp.com,
   john.mckinnon@wsj.com,
   Niels Marquardt ,
   “Beazley, Kim” ,
   “U.S. Senator Rand Paul” ,
   abelson@globe.com,
   christine.morris@globe.com,
   tracy.jan@globe.com,
   mcgrory@globe.com,
   rgavin@globe.com,
   daniel.adams@globe.com,
   Eileen Woods ,
   Michael Bailey ,
   JAbundis@globe.com,
   laura.amico@globe.com,
   hkaufman@globe.com,
   VChao@globe.com,
   shira.center@globe.com,
   dabel@globe.com,
   Scott Allen ,
   letters@nytimes.com,
   staff@nytimes.com,
   bizweb@nytimes.com,
   davan.maharaj@latimes.com,
   Marc Duvoisin ,
   Lawrence.Ingrassia@latimes.com,
   Megan.Garvey@latimes.com,
   John.Adams@latimes.com,
   Ben.Welsh@latimes.com,
   Julie.Westfall@latimes.com,
   Kim Murphy ,
   David.Lauter@latimes.com,
   TonyBarboza@latimes.com,
   Thomas.Curwen@latimes.com,
   Alan.Zarembo@latimes.com,
   Cindy.Carcamo@latimes.com,
   Esmeralda.Bermudez@latimes.com,
   Nicholas.Goldberg@latimes.com,
   Michael.Hiltzik@latimes.com,
   Brian.Thevenot@latimes.com,
   David.Lazarus@latimes.com,
   Alice.Short@latimes.com,
   Amy.Scattergood@latimes.com,
   postnow@washpost.com,
   metro@washpost.com,
   facetime@washpost.com,
   letters@washpost.com,
   foreign@washpost.com,
   business@washpost.com,
   travel@washpost.com,
   fxliving@washpost.com,
   Mick@mulvaneyforcongress.com,
   Stephanie@mulvaneyforcongress.com,
   Eric@mulvaneyforcongress.com,
   mark_prater@finance.senate.gov,
   preston_rutledge@finance.senate.gov,
   jim_lyons@finance.senate.gov,
   “Coughlan, Tony (Finance)” ,
   nick_wyatt@finance.senate.gov,
   eric_oman@finance.senate.gov,
   christopher_hanna@finance.senate.gov,
   todd_metcalf@finance.senate.gov,
   kara_getz@finance.senate.gov,
   ryan_abraham@finance.senate.gov,
   “Smith, Tiffany (Finance)” ,
   todd_wooten@finance.senate.gov,
   danielle_deraney@finance.senate.gov,
   christopher_arneson@finance.senate.gov,
   John Anthony Castro

5. Some important ones that did not post correctly

   tony_coughlan@finance.senate.gov
   Tiffany_Smith@finance.senate.gov
   NielsMarquardt@amcham.com.au
   lachowitz@white-lighthouse.com
   Kim.Beazley@dfat.gov.au
   j.castro@castroandco.com
   geoff.martz@abc.com
   kelly.odwyer.mp@aph.gov.au
   josh.frydenberg.mp@aph.gov.au
   B.Billson.MP@aph.gov.au
   ewoods@globe.com
   m_bailey@globe.com
   scott.allen@globe.com
   Marc.Duvoisin@latimes.com
   Kim.Murphy@latimes.com

6. Hope they read it

   People have had enough notice ??????????

   I have written to the Senate Finance Committee and newspapers etc. that expats are NOT AWARE they may owe US tax. The MAJORITY of 8.7 million expat potential voters do not know thus the OMG (OH my God) moment.

   The streamlined program acknowledges this.

   I have asked that on International flights passengers should be asked by flight crew to fill in a tax related form for Americans visiting their elder parents and family.

   I have asked that the IRS fund a media campaign (newspapers, TV ads ,magazines. On the NEWS (thus relatives may inform expats).

   Instead of JUST asking for a SS # on new passports have a signed statement regarding US tax payments.

   To say that the 8.7 milllion expat Americans are AWARE is insane

   I believe that the amount of negative media attention this may draw would make the US embarrased of the CIVIL WAR CBT stance on tax.

   America is the the ONLY westernised country to have such a tax. Even our tax advocate Nina Olsen has stated the unfairness of this US policy.

   Some say tax treaties take care of this BUT for some countries this is NOT so

   REGULATED pension plans AND sales of expats ONLY overseas dwelling are taxed by America (WHY – benefits? ) In Australia this has NOT been changed for TWENTY THREE YEARS ( Australias Superannuation plan (NOT recognised in America as a certified pension plan) this and the sale of ones own dwelling are both tax free in Australia.

   Tax concessions given to American natives are NOT given in Australia thus VERY unbalanced

   America was FORMED on the idea that they would not pay taxes to a foreign country they no longer lived in (Britian).

   I talk to many ex American vets from the 60ies and 70ies and their opinion of the America today and its policies is shameful.

   I wonder if these people who gambled with their lives would have been so patriotic if they had acknowlwdged a time machine back then

   Please respond
   Jak Dac

   Streamlined Program Will Expire!

   Written by Larry Stolberg, CPA, CA | Posted in Expatriate • FATCA

   TaxConnections Member Larry Stolberg
   The updated Streamlined Program that was revised in June 2014 is a simplified method of allowing delinquent U.S. taxpayers to become tax compliant. If certain conditions are met, tax and information return penalties could be waived. Refer to my article on the website and the IRS site for additional information on the program.

   On December 17th at the George Washington University Law conference on international taxation, the Commissioner of the IRS John Koskinen said, “At some point, we will have assumed that people have had enough notice that they should have become voluntarily compliant,” “At that point—after some period of time and you’re not compliant—it will be assumed that logically you are purposely not compliant”.

   This announcement is a wake-up call as such amnesty programs do not last forever. Furthermore, with the advent of the sharing of financial information with Treasury under FATCA this year, it appears that it may be only a limited time for delinquent filers not to be discovered.

   https://www.taxconnections.com/taxblog/streamlined-program-will-expire-larry-stolberg/

7. Taxes the overseas income of American companies and CITIZENS. Rubio and Lee would join much of the civilized world by moving America to a territorial system that taxes only domestic income.

   https://reason.com/archives/2015/03/17/the-good-the-bad-and-the-ugly-of-the-rub

8. May help BEFORE April 30, 2016

   Tougher rules for Social Security claiming strategies

   http://www.cbsnews.com/news/new-rules-for-social-security-claiming-strategies/

9. Hi all, Emily here from The Oz.

   Just a reminder that if anyone receives scary/threatening letters from their banks or if any developments come to light, please let me know! My email address is emily.ritchie@news.com.au.

   Hope you’ve all had a safe and happy holiday season!

10. @ Emily,

    ANZ is already printing out that “you state that you are not a US citizen” when opening an account…and that if this is not correct to contact them.

    Why do you suppose THAT is? Maybe they want to give a special welcome? Do you think??

    Or, is it much more likely that they want to close the acct?

    This happened when my daughter opened a little savings acct. for her first part-time job. The woman actually never asked nationality- though my daughter has quite a strong American accent- she just folded the paper & put it into an envelope. The form in question wasn’t looked at until a month afterwards- when I went to go & make a deposit for her & needed the acct. number to do so. That, was the first I’d seen it…I haven’t done anything about it yet & not sure what to do? Employers pay only into a bank acct…now what?

    This entire issue is absurd & all I can do is to hope that the CA case is successful & that the IRS is reined in & forced to re-write these heinous & treacherous rules.

11. Who wants to apply for this great job? http://www.efinancialcareers.com.au/jobs-Australia-Melbourne-FATCA_Operations_Analyst_6_Month_Secondment.id01112248?query&page=1&backLpId=cy02158177

12. @Sleepless

    I wonder if an AU/US person can apply?

    Would be interesting to see if they kick you back & why?

13. @Jane – Yes, I was thinking the same thing!

14. Would need someone who wasn’t relinquishing/renouncing to attempt…anyone reading here feel game to join the site offering this job & try to apply as a AU/US citizen? That would give emily something to write about!

15. @Emily
    Our understanding is that under the AUS/US IGA, the banks are not obligated to inform or make inquiry’s to their US tainted customers (American Accidentals, Australian Dual citizens, lawful permanent residents) to confirm there US status.

    The banks have already disclosed the US tainted banking records to  the ATO.

    ATO has already breached customer confidentiality by sending  to the IRS, a foreign authority, 30,000 Australian citizen and residents private bank records alongside the potential breaching of Human Rights to privacy enshrined in law. The breach of privacy is disproportionate to the aim.

    What you want be to be asking now is for the scary IRS demand letter that American Accidentals, Australian Dual citizens, lawful permanent residents citizens may be receiving.
    IRS obligations such as:
    Annual tax filing declarations
    F BARs Report of Foreign bank account reporting to disclose all accounts over $10,000 relating to life savings, investments, insurances, SMSF retirement funds, with a $10,000 per account penalty hanging over it
    Capital Gains tax on domestic house.

    Our local MP enquiries to the ATO and the Treasury is that verbally we have been told the ATO will not collect taxe’s on behalf of the IRS.
    We await confirmation in writing from them.

    I havent heard of Australian banks denying US persons banking services yet like what is occurring worldwide.
    I hope others here are donating to the Canadians FATCA lawsuit.

16. From Rachael
    OPEN LETTER TO PRESIDENT OBAMA IN RESPONSE TO THE STATE OF THE UNION ADDRESS
    January 15, 2016
    Dear Mr. President,

    Thank you for your sincere and uplifting State of the Union Address. Your skills in speechmaking are truly impressive.

    Your speech was addressed to your fellow Americans. I would like to respond to some of your remarks from my point of view: that of an overseas American who has felt the heartbreak of having to renounce my American citizenship.

    By U.S. Navy photo by Mass Communication Specialist 2nd Class Kevin S. O’Brien [Public domain], via Wikimedia Commons
    President Obama, by U.S. Navy photo by Mass Communication Specialist 2nd Class Kevin S. O’Brien [Public domain], via Wikimedia Commons

    A Changing World

    One of the things you emphasized in the first part of your speech was the changing world we live in:

    We live in a time of extraordinary change—change that’s reshaping the way we live, the way we work, our planet, our place in the world.

    Undoubtedly, this is true, and the pace of that change keeps increasing. What you didn’t mention next to “the way we work” was “where we work.” In other words, in this fast-changing world, more and more Americans are working overseas. Estimates vary, but the number of Americans living in other countries is probably somewhere between 7 and 9 million.

    Diplomacy

    You posed a series of questions in the State of the Union Address, one of which struck me as relevant to overseas Americans:

    Third, how do we keep America safe and lead the world without becoming its policeman?

    Seven to nine million Americans is a lot of people, and they—we—are representing America every day in a way that your diplomats and politicians cannot. We live among local people all over the world, and the many people we work with, study with, compete with, trade with, and so on, may very well be basing their assessment of Americans on these personal interactions. You should not discount the effects of these countless overseas contacts.

    You touched on this potential when you said the following, proposing that, instead of taking over and rebuilding every country that is in crisis, we should take a “smarter approach”:

    … on issues of global concern, we will mobilize the world to work with us, and make sure other countries pull their own weight.

    We—the 7-9 million ordinary Americans already living overseas—could help with that mobilization.

    “Blue Marble” photo of the earth’s eastern hemisphere by NASA [Public domain], via Wikimedia Commons
    By NASA [Public domain], via Wikimedia Commons

    Spirit of Discovery

    We overseas Americans represent the good things about America that you wish the rest of the world to understand. In the State of the Union Address, you mentioned the “spirit of discovery.”

    America is Thomas Edison and the Wright Brothers and George Washington Carver. America is Grace Hopper and Katherine Johnson and Sally Ride. America is every immigrant and entrepreneur from Boston to Austin to Silicon Valley, racing to shape a better world. That’s who we are.

    Yes, I agree, that’s who we are. And you mention immigrants, but not emigrants: those who have left the US. Please don’t assume that Americans who leave the country are abandoning being American or rejecting what is good about the American spirit.

    Americans leave the US for work—a job in an American or foreign-owned company—or for adventure—the spirit of discovery that you praise—or for love: like me, many met and fell in love with a foreigner and settled in their partner’s country.

    In your speech, you praised “daily acts of citizenship” carried out by Americans. Back in the 1980’s, I joined the Peace Corps and spent two years teaching in Malawi. Doesn’t that count as a praiseworthy act of citizenship? Or does it lose its value now that I’ve moved overseas? I know another overseas American who fought in the US military. Doesn’t that count? Yet he has also had to renounce his citizenship.

    US Treatment of Overseas Americans

    Despite the fact that we overseas Americans are a ready pool of representatives of America who can further American goals overseas, and despite our “daily acts of citizenship,” we are treated as if we are criminals and traitors to our country.

    In your speech, Mr. President, you briefly mentioned the target of the FATCA law:

    It’s sure not the average family watching tonight that avoids paying taxes through offshore accounts.

    Your audience applauded this line. Are you, or any of your congressional audience for the State of the Union Address, aware of the unintended consequences that have resulted from FATCA? Did any of you actually read it? Or did you all just buy into the rhetoric that it would catch “fat cats” who were hiding money overseas?

    FATCA was intended to stop Americans living in the US from hiding their money in overseas bank accounts in order to avoid paying taxes on it.

    However, the unintended consequences are far-reaching. All overseas Americans have money in “foreign” accounts—that should be obvious given that people bank where they live—but that does not make us criminals. Many—and I’d venture to say most—of us do not actually owe taxes in the US. We don’t, however, avoid paying taxes: in many countries, including the Netherlands, where I live, we have to pay much higher taxes than if we lived in America. We don’t mind, since we receive services where we live, not in the US.

    All overseas Americans have money in “foreign” accounts but that does not make us criminals.
    Powered By the Tweet This PluginTweet This
    Nevertheless, we have to file lengthy, ridiculously complicated forms to prove our innocence, often leading us to take on the cost of paying accountants to ensure accuracy. We also, in order to prove we are not criminals, have to report information that homeland Americans are not required to reveal. That’s the part that is most offensive to me: that invasion of privacy based on an assumption of wrongdoing.

    The part of #FATCA that is most offensive to me: invasion of privacy based on an assumption of wrongdoing.
    Powered By the Tweet This PluginTweet This
    If we do not comply with FATCA and the complicated reporting requirements, we are threatened with far higher penalties than homeland Americans would get for the same level of offense.

    So, Mr. President, instead of listening to us and fixing what is wrong with the FATCA system, you, along with the whole of the Congress and Senate, ignore the vast majority of overseas Americans and continue spouting the rhetoric of criminals hiding money in offshore accounts.

    Instead of using us as unofficial ambassadors to further American aims overseas, you’re pushing us further away: to the extent that many are renouncing citizenship.

    Instead of encouraging our leadership in foreign-owned companies, you’re taking away our competitive edge because foreign companies don’t want to deal with Americans and the complications FATCA brings.

    Instead of rewarding that “spirit of discovery” that you praise, you’re treating us as suspected criminals

17. Prime Minister Malcolm Turnbull is in Washington D.C. to meet with Barack Obama Tuesday 19 January.

    Malcolm Turnbull Tell US Hands Off Super!

    https://twitter.com/JCDoubleTaxed/status/688847276043730948

    Retweets welcome.

18. Just tweeted same on his Facebook and Twitter EVERYONE please do so

19. Australia can teach America about Innovation.

    https://twitter.com/JCDoubleTaxed/status/689211206167478273

20. On Facebook on Ambassador John Berry page post with Turnbull and Obama (with links to their Facebook pages) Good oportunity to ask them to fix tax treaty re Super and house sales
    .

21. Can Expats start a campaign re Ted Cruz for Expats maybe some other candidates will join to get votes

    Brian Dear‎ to Citizenship Taxation
    23 hrs · Avignon, France ·
    No mention of CBT or FATCA, but you can bet your bottom dollar, there would be no chance of a repeal of CBT. After all Sanders wants to pay for some of his proposals with a tax on overseas business earnings there is no universe where Sanders repeals FATCA or CBT: his position is that people don’t pay enough taxes, that is indisputable. Even people making under $250K will see dramatic tax increases (specifically with payroll taxes and thus self-employment taxes as well.) A vote for Sanders (or Clinton) is a vote to continue CBT, FATCA and a punitive taxation system that charges us for the right to maintain our American passports despite not setting foot on US soil. Currently, Ted Cruz is our best bet since it’s clear Rand Paul is pretty much finished. Before I get flamed over mentioning Cruz, I would encourage everyone to actually read the platforms of the candidates (all of them) and not rely upon news media sensationalism. By the way, the linked article is from a very liberal news source — so even they aren’t under any illusions regarding the Sanders taxation plan.

22. https://www.rostrawpoll.com/go/republican-primary/?utm_medium=ad&utm_source=facebook&utm_campaign=20160122_Mexico-facebook-post_facebook&utm_content=facebook

23. Article at the Australian Tax Man Steps Up Swiss Account Investigations has details on numbers of accounts (30,000) and total amounts they contain (think it was 2bn AUSD, but didn’t take a copy and can’t get back in) being reported to IRS.

24. @Publius, try;

    http://www.theaustralian.com.au/business/taxman-steps-up-swiss-account-investigations/news-story/0df9f41797587ef7c4a3010e830a304a
    .”.Australian authorities have handed over 284 “outgoing exchanges” to other countries and made 235 “incoming” requests in the past year, resulting in total tax liabilities of $255m. A new automatic sharing of bank information with the US government has seen Australia hand over details of 30,000 financial accounts of Americans and Australians worth more than $5bn to the IRS.

    The bank details of Australian taxpayers were handed to the IRS under new powers of the US Foreign Account Tax Compliance Act (FATCA). The ATO is expecting to hand over similar volumes to US authorities in 2016..”….

25. Foiled the second time I tried the link @Publius! Sorry.

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