FATCA Discussions This thread is for general discussion. If you have specific question/s, please use the FATCA Questions Thread or the Banking Issues Thread. Share this:TwitterFacebookEmailLike this:Like Loading...
Latest from TIGTA re the IRS, implementations costs, and failures to benefit from FATCA and generate revenues promised when FATCA passed in US;
See also charts of estimated IRS costs in implementing FATCA. No mention of the global costs of everyone else to keep this extortionate charade going of course!
Additional Actions Are Needed to Address
Non-Filing and Non-Reporting Compliance
Under the Foreign Account Tax Compliance Act
April 7, 2022
Report Number: 2022-30-019
…….”…..FATCA provisions have been in effect for over 11 years, and the IRS has not made
significant measurable progress toward ensuring compliance. As mentioned previously, when
the law was passed in March 2010, the Congressional Joint Committee on Taxation estimated
that revenue from FATCA would be $8.7 billion from FYs 2010 to 2020. To date, the IRS has
been unable to quantify revenue generated from FATCA compliance activity beyond the
$14 million in revenue from penalties unrelated to the campaigns, despite spending over
$574 million on implementation and establishing two campaigns that have sent out 847 letters
to taxpayers. IRS officials advised us that the revenue impact to FATCA reporting is in the
impact on voluntary compliance. Even though the IRS cannot quantify this impact, the IRS
points to the increase in Foreign Bank Account Reporting filings. …..”….
Even the Congressional Research Service reports says quite plainly of FATCA;
July 15, 2022
The Foreign Account Tax Compliance Act (FATCA)
..”….FFIs that do not comply with
FATCA may face 30% withholding on their U.S.-source
…”he CRS provides for
reciprocal information sharing. More than 100 countries
have adopted the CRS, but the United States has not..”……..
“….The TIGTA report indicates withholding of $536 million in
2018, and $8 million of penalties for underreporting. IRS
stresses that the purpose of FATCA is not withholding or
penalties but to encourage voluntary compliance. The
effectiveness of FATCA is difficult to measure. ….”…….
.”Reciprocity, Joining the CRS
Unlike the CRS, FATCA does not have full reciprocity in
information sharing. The IRS receives more information on
U.S. owners of foreign accounts than other countries
receive on foreign owners of U.S. accounts. Legislation
would be required to authorize the collection of the data
needed for full reciprocity, including account balances and
beneficial owners. …… The failure of the United States to
reciprocate under FATCA has been criticized by the
European Union. In some views, the failure of the United
States to share information under FATCA makes it one of
the major secrecy jurisdictions in the world……..”……
.”FATCA and Americans Living Abroad
The U.S. tax system is largely based on citizenship—where
U.S. citizens are taxed on their worldwide income
regardless of where they reside..”.
…”..A further concern related to FATCA is that it may impact
individuals who are U.S. citizens as a result of being born
in the United States or by having a parent who is a U.S.
citizen, but have otherwise little to no tie to the United
States. These individuals may not even be aware of their
U.S. citizenship unless notified by an FFI of their need to
comply with FATCA or if denied entry to the United States
with a non-U.S. passport. As a result, these individuals are
sometimes referred to as accidental dual citizens.
Accidental dual citizens are subject to the same FATCA
requirements as other U.S. citizens. Due to their tenuous
ties to the United States, accidental dual citizens may be
more likely to renounce their U.S. citizenship than other
groupings of U.S. citizens living abroad, though costs
associated with renouncing U.S. citizenship may be
considered prohibitive. The European Union Parliament has
stated its position that being subject to FATCA is not
justified for these individuals….”…..
NOTE: opposition or questions about FATCA’s reciprocity and imposition on those living in the EU – with no economic connection to the US – whose only US ‘taxable status’ is based on having had a US birthplace or parent is mentioned but NO mention of opposition in Canada. Which is exeedingly strange given that we have been described as having the largest population of those deemed US citizens outside the US other than Mexico, AND given the IBS efforts and the ongoing legal challenge in Canada so valiantly mounted by ADCS, as well as our high renunciation rates, and other forms of opposition to FATCA and US extraterritorial citizenbased taxation that have roots or branches here.
Couldn’t the arguement be flipped? How many Canadians with a non US place of birth and are US citizens avoid FATCA by lying to the FFI?
Force all Canadians to prove they are not USCs for a level playing field.
The playing field is already level. Canadians born in the US don’t find it any more difficult to avoid FATCA, if they know to use a driver’s license as ID.
Stupid question: the IGA (at least the one I know, Belgium) appears to specify that reportable accounts have a balance above 50000 USD. When one only has accounts that are under this limit, are the banks usually excessively zealous and report anyway?
From that IGA:
II.New Individual Accounts. The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts among Financial Accounts held by individuals and opened on or after July 1, 2014 (“New Individual Accounts”).
A.Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the Reporting Belgian Financial Institution elects otherwise, either with respect to all New Individual Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in Belgium provide for such an election, the following New Individual Accounts are not required to be reviewed, identified, or reported as U.S. Reportable Accounts:
1. A Depository Account unless the account balance exceeds $50,000 at the end of any calendar year or other appropriate reporting period.
2.A Cash Value Insurance Contract unless the Cash Value exceeds $50,000
My understanding is that banks are required to report accounts above the threshold, but they are not prevented from reporting anything under it. So some banks may decide that it’s safer and easier to report all identified US-person accounts than to apply a filter to the data and report only report those above the threshold.
When *someone* submitted an access to information request asking this question of the Canadian government, we learned that over half of the accounts reported fell under the threshold: