FATCA Discussion Thread (Ask your questions) Part Two
Please ask your questions here about FATCA.
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NB: This discussion is a continuation of an older discussion that became too large for our software to handle well. See FATCA Discussion Thread (Ask your questions) for earlier discussion.
Can someone make a separate post for the NTA’s latest report to Congress? You can sense of urgency and frustration in her words when she states her concerns for Americans living abroad. The situation is already dire. FATCA will be an unmitigated disaster for both us and the IRS. FATCA must be repealed.
Sorry, here’s the link:
http://www.taxpayeradvocate.irs.gov/userfiles/file/FY15-Full-Report/IRS-2013-MSP-Responses.pdf#page=86
Advice from Panama; the US should be looking at Delaware;
http://richarddetrich.com/tag/fatca/
As we know, Delaware has long been known as a leading world tax haven http://www.theguardian.com/business/2009/nov/01/delaware-leading-tax-haven . But strangely, there is no FATCA or OVD equivalent for the state of Delaware – the state of VP Biden. No confiscation of funds, no demands by Treasury that it come forward and enter a domestic voluntary disclosure program, no threats from the IRS, Treasury and the White House. No reports issuing wild guesstimates of the size of unpaid taxes (US and other countries) being laundered and evaded with State of Delaware assistance. No demands that there be automatic reporting to FINCEN, or other US law enforcement agencies, or the tax agencies of other countries.
How will the OECD’s Common Reporting initiative treat Delaware? The US will rig itself a free pass or just state that it won’t cooperate, but continue to demand the expensive multi-course free lunch from the rest of the world who it is extorting via FATCA and CBT.
US hypocrisy continues – business as usual, the US continues to profit by protecting its own status as a massive tax haven:
Vice President Biden’s state of Delaware http://corplaw.delaware.gov/eng/borders.shtml continues to profit by its state government supported policy of secrecy – encouraging shell companies to incorporate there, but is engaging in an exercise to rearrange some of the trim on the Emperor’s invisible clothes:
See; ‘Lobby groups ‘see right through’ US state’s financial transparency attempt’
By Leslie Wayne
June 17, 2014 “……..The state relies on fees from corporate registrations to pay for about a quarter of the state’s budget, creating a powerful incentive to maintain the status quo and allow secrecy to prevail. Yet the state is facing mounting criticism over its freewheeling ways. Much comes from abroad but even a branch of the U.S. Treasury pointed a finger at the Delaware for being “particularly appealing” for the formation of shell companies because of its lack of transparency and high level of secrecy…”..
…..”“Drug dealers, corrupt American politicians and illegal arms smugglers have all used anonymous Delaware companies in order to profit from their crimes,” said Heather Lowe, legal counsel for Global Financial Integrity, a nonprofit group based in Washington, in a statement. “Public registries of beneficial ownership information are the best approach to ending the use of anonymous companies.”..”…..
http://www.icij.org/blog/2014/06/lobby-groups-see-right-through-us-states-financial-transparency-attempt
Interestingly, the tiny faux attempt at appearing to require some kind of transparency would require law officials to apply in order to get at information about the true owners of the shell companies “”..Law enforcement agencies could obtain this information, but would have to go through a legal process first….”.” (See same link above). Unlike FATCA as applied to all the globe, and all those the US deems ‘taxable persons’ abroad, the information on those incorporating in Delaware is not even currently automatically collected, much less mandatory, and is not made available to US investigators – thus individual and mass data is not accessible or shared and distributed among multiple US agencies the way that FATCA was designed to be (See Carl Levin’s letter demanding wide access to and sharing of FATCA data, links here http://maplesandbox.ca/2013/carl-levin-fatca-for-law-enforcement-national-security/ http://bsmlegal.com/PDFs/CarlLevin.pdf ).
So the US demands automatic reporting on all the details of our legal local transparent SIN# registered savings in Canada (and the equivalent for the entire globe) from millions of Canadian citizens and legal permanent residents – at Canadian taxpayer and accountholder expense, yet the state of Delaware itself is in the business of profiting from maintaining secrecy for corporations and hides their true owners http://corplaw.delaware.gov/ . You’ll note that the entrance to the homepage is in several languages other than English – so as to be helpful for people outside the US http://corplaw.delaware.gov/ger/index.shtml .
Where are the FATCA crew – where are their public statements making threats to Delaware and demanding that the State cease profiting off a culture and practice of financial secrecy? And that the true owners of the shell companies pay their fair share of taxes to the countries they should have been paying to. Where are the FATCAnatics insisting that the owners of the shell companies in Delaware enter a Voluntary Disclosure program before they are discovered – and fess up? When will they levy confiscatory fines and penalties on the State of Delaware and institute an investigation and report that looks into the current governor, Congressman, Senator, and VP Biden’s role in maintaining or tacitly condoning Delaware’s tax haven status? And what does the POTUS have to say about the State of Delaware affairs? Hmmm?
The French gov”t is taken for a ride as well. (google translate version.) You’d think they would know better after the BNP fiasco.
FATCA, Stranger than fiction…
http://www.international-adviser.com/news/tax-regulation/fatca-is-stranger-than-fiction
Andy Thompson, director of operations at the Wealth Management Association, stresses that understanding the purpose of FATCA and what is required is difficult, particularly for small firms.
“While the registration process is relatively straightforward, the due diligence for all pre-existing accounts and every new account is a huge undertaking for any firm, big or small as is the amount of information that will have to be reported for relevant accounts,” he says.
“Tax residency will now be one of the most important questions when learning about new clients. The requirement to educate and explain to clients what FATCA is and why it impacts them cannot be underestimated, particularly to entities such as trusts who may struggle to understand why they are required to provide so much detailed information when they have no connection to or investments in the US.”
It’s fair to say that FATCA has not been wholly welcomed with open arms, globally or indeed in the US itself. One leading US tax lawyer memorably compared the regime to “exterminating ants with a nuclear bomb” which would not have the right effect on offshore tax avoidance.
@JustMe
Very good article that is anti FATCA. I loved the one comment there now…
by Don ..
“In Canada the ADCS is taking the Canadian Govt to the Canadian Supreme Court over FATCA. Dual citizens are furious.
Expect legal challenges in Europe as well which could lead to the European Court of Justice.
FATCA is far from a done deal for dual citizens.
Stay tuned.”
@northernstar
I liked the other one listed there…
Exterminating ants with a nuclear bomb
Myopic Americans have NOT figured this fact out yet…
“FATCA is going to raise the cost of banking throughout the world. It doesn’t just affect foreign payees; US businesses now have significant costs and burdens as they engage in global operations.”
At least a nuclear bomb gets the intended targets too, FATCA doesn’t!
http://www.vancouversun.com/mobile/news/vancouver/Metro+Vancouver+woman+joins+movement+drop+citizenship/10056687/story.html
‘Metro Vancouver woman joins movement to drop her U.S. citizenship’
Wednesday, July 23, 2014
By Douglas Todd, Vancouver Sun
……..”.Hundreds are also joining activist groups launching counter-assaults on FATCA, including one called The Isaac Brock Society, named after a Canadian leader in the war of 1812.
.”………Canadian-based activist groups, including the Isaac Brock Society, Maple Sandbox and the Alliance for the Defence of Canadian Sovereignty.
…….
http://www.frontpageafricaonline.com/index.php/politic/2355-i-m-liberian-citizen-by-birth-rob-sirleaf-addresses-controversy
“………………..The issue of dual citizenship has dominating discussions about the upcoming senatorial elections. President Sirleaf recently fueled fire on the issue when she acknowledged in an UNMIL Radio interview that many officials in her government hold both Liberia and U.S. passports. U.S. Ambassador Deborah Malac was quoted by the News Newspaper last week as saying that while the U.S. do not comment on the issue of citizenship or residency status of any individual, the U.S. is a country that recognizes dual citizenship. “We don’t have the same kind of structures that the Constitution of Liberia has, so the discussion of dual citizenship is an issue the United States treats very differently.”
Pressed as to whether there was a situation where he was at one point an American who has since renounced his citizenship, Sirleaf said he has always been a Liberian. “I’m a Liberian citizen, always has been for many years. I travel on the passport, voter registration card and everything remains the same. I’m very sensitive that discussing people’s private paperwork issues, of anybody, including mine; of anybody else in Liberia I don’t think is a fair representation and I shouldn’t take a stand on that.”….
Reread this “….President Sirleaf recently fueled fire on the issue when she acknowledged in an UNMIL Radio interview that many officials in her government hold both Liberia and U.S. passports…”
Ask yourself whether these Liberian officials are going to be FBARed and FATCAed?
@ badger
Good digging to find that Vancouver Sun article. Many thanks to Pat who agreed to be interviewed. The photo illustrates the sad reality that so many with the weight of US citizenship on their shoulders and the fear of being exposed to IRS tyranny can only speak from the deep shadows. This article is a keeper and I was so pleased to see Brock, the Sandbox and ADCS get a mention.
I wonder if Liberia will be changing its flag after the US FATCA flogging begins? Check it out.
@Bubblebustin, really? Many thousands of innocent Japanese people were killed by the US when they dropped the bombs in WW2, but were any of the actual Japanese leaders who declared war killed? No, a nuclear bomb doesn’t hit its intended target, any more than FATCA does. Both spread wide ranging collateral damage to the innocent people caught up in their explosions.
@Medea Fleecestealer
An excellent example. Maybe this is exactly the IRS strategy, but dropping the bomb on a lot of innocent people they are looking to scare the people they’re really after, and they don’t give a damn about the collateral damage. For the US, this is a tried and true method.
@MedeaFleecestealer
I was speaking in terms of magnitude.
@Bubblebustin, I agree, the magnitude of this is appalling and frightening for many. Like the N-bomb I wonder if it has hit any of the people it’s aimed at. Somehow I seriously doubt it. They’ll have simply moved their money elsewhere. I’m sure there’ll be some banks somewhere who’d be happy to claim they don’t have any US citizens if the IRS comes asking.
FATCA is now law of the land in France.
http://www.fiscalonline.com/Les-senateurs-adoptent-le-projet,6499.html
“Mardi 22 juillet, le Sénat a adopté le projet loi ratifiant l’accord entre la France et les États-Unis sur la loi américaine dite “FATCA”, dont l’enjeu est le développement de l’échange automatique d’informations comme nouveau standard mondial pour lutter contre la fraude fiscale internationale.
La première transmission d’informations est fixée au 30 septembre 2015. Les échanges seront ensuite annuels.
Les USA se sont engagés à promouvoir les réformes pour une réciprocité complète.
En 2015, les numéros de compte des Français possédant des avoirs aux USA seront communiqués à la France.”
“Tuesday, July 22, the senate passed the law ratifying the IGA between France and the United States on the law called “FATCA”, whose goal is to develop automatic information exchange, like the new worldwide standard to fight international tax evasion.
The first transmission is set to take place on September 30, 2015. Further exchanges will be annual.
The US vowed to promote reforms to reach a complete reciprocity.
In 2015, account numbers of French owning assets in the US will be communicated to France.
They’re not mentioning if the French impacted are French residents only, or if expats will have their privacy violated as well.
The article make it sound like they really believe in reciprocity… Let’s see if that really happens.
Wonderful summation by Just Me of FATCA, how we got here, and questions re upcoming GATCA at the OECD. Is the aim of the US to be the “last tax haven standing”?
http://federaltaxcrimes.blogspot.ca/2014/07/report-that-ubs-is-facing-music-in.html#comment-1505439450
‘Unauthorized FATCA ‘Intergovernmental Agreements’ Are Part Of Obama’s Executive Overreach’
by James Jatras
http://www.forbes.com/sites/realspin/2014/07/28/unauthorized-fatca-intergovernmental-agreements-are-part-of-obamas-executive-overreach/
reference to analysis by Allison Christians.
http://www.accountingweb.com/article/bramwell%E2%80%99s-lunch-beat-canada-finds-fatca-costs-them/223667
‘Canada Banks Find FATCA Costs Them Plenty’
“Banks in our neighbor north of the border have had to pay more than half a billion dollars in compliance costs, as reported by Rita Trichur in the Wall Street Journal. The Foreign Account Tax Compliance Act (FATCA) took effect on July 1. According to the WSJ, banks all around the world have been racing to keep up.
About 1 million U.S. citizens live in Canada—perhaps making it the largest home-away-from-home for Americans. Canadian banks say costs will escalate as personnel have to work with customers and respond to tax officials. And then there are employee training costs..”……….
Ridiculous error in this ‘Business in Canada’ mention of FATCA – stating that it applies to US RESIDENTS in Canada:
https://businessincanada.com/2014/07/28/the-morning-playbook-germany-sours-on-ceta-fatca-costs-canadian-banks-hundreds-of-millions/
“FATCA costs Canadian banks hundreds of millions. Citing people familiar with the matter, The Wall Street Journal’s Rita Trichur reports that the big five Canadian banks have spent approximately $750 million in order to comply with the terms of the Foreign Account Tax Compliance Act, an American law that requires these Canadian institutions to provide information on U.S. residents living in Canada to Revenue Canada, which then passes the figures along to the IRS.”
Anyone business minded who has a mind to take the author – which in this case is their ‘editorial board’ to task?
editorialboard@businessincanada.com.
Funny, their ridiculous error accurately reflects how we’re actually treated by the US – as though we are residents of the US (for tax purposes only).
Everything you want, and probably don’t want to know about FATCA in Canada. The CRA’s FAQ’s on FATCA:
http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/fq-eng.html
@Bubblebustin
Unfortunately it doesn’t have everything I want to know. If an FI has a clear US place of birth on record, the FI is under no obligation to investigate if that person has US citizenship or not. As they are under no obligation to notify the customer, the customer’s banking info could be sent to CRA/IRS. Even if IRS does nothing with it, privacy has been violated.
@Kathy
Good point. If you would pose your concern in the form of an enquiry, I would be pleased to send it to my MP, John Weston. Maybe he’s as ‘thrilled’ about answering our concerns about FATCA as he us about the FATCA IGA itself. I doubt it, but it’s worth a shot if you’re interested.
@bubblebustin;
Thanks for posting the CRA FATCA FAQs.
This statement struck me as ridiculously and criminally disingenous for the CRA to mislead the Canadian taxpayer thus:
“. 4. What will each government do with the information it receives?
The information received by the CRA and the IRS will be used primarily for risk assessment purposes and to ensure that taxpayers properly report their income from accounts held in the other country.
The Canada-U.S. tax treaty limits the use of information received through exchanges such that it can only be used for the purposes of the administration of tax laws. Thus, for example, the IRS will be precluded from sharing the information it receives under this Agreement with non-tax authorities. Also, the IRS will not be permitted to use the information it receives under this Agreement to administer non-tax laws such as the U.S. Bank Secrecy Act…”
“Primarily for risk assessment”? What ‘risk’? Who’ll do the ‘assessing’? The CRA too? ALL Canadian citizens and residents affected are to be automatically wholesale judged guilty BEFORE presumption of innocence.
Who/what exactly will “preclude” the IRS from sharing the information with non-tax authorities? And to enforce that the IRS will not be “permitted” from using the info to administer the Bank Secrecy Act? How would the CRA or the Canadian goverment do that? They have no mechanism, no resources, no access after it goes to the IRS, no control, and no real motivation or recourse.
The FATCA IGA is not a treaty with the US in the US government eyes. AND, we already know that the US can trump anything it actually signs as a treaty anyway – like the existing Canada US tax treaty via the last-in-time rule, and the savings clause – that overrules anything they even explicitly appear to agree to. And the existing tax treaty didn’t stop the application of the Obamacare investment tax from being applicable to Canadian citizens and residents. The US didn’t even bother to notify Canada, and if it did, Canada did sweet FA about it on behalf of its taxpayers and citizens. See years long mistreatment of our registered savings – not exempted – by now, firmly willful. Canada didn’t bother to address that, despite its clear duty of care and fiduciary duty to Canadian taxpayers, even though they were created to fulfill important Canadian government social, fiscal and economic goals.
We already know that the Patriot Act and Homeland Security provisions assert the right to do with data whatever they please. Not to mention the NSA and all its secret kin running rampant and uncontrolled. FATCA has been described as being not only about ‘tax evasion’, but about anti-terrorism, money laundering, drug and other crime prevention and security initiatives. FATCAfather Dick Harvey said it would go down better if it was sold as being more than just a tax enforcement mechanism, he; “…..suggests that tax authorities may want to increase coordination with the anti-money laundering/terrorist financing arms of government. Detailed customer due diligence may be easier to justify if it is being done for both tax and anti-terrorist/money laundering reasons”. Harvey suggests that tax authorities may want to increase coordination with the anti-money laundering/terrorist financing arms of government. Detailed customer due diligence may be easier to justify if it is being done for both tax and anti-terrorist/money laundering reasons. . Levin said; “…Foreign account information is too important to a wide range of civil and criminal law enforcement and national security efforts to be designated as tax return information bound by Section 6103’s severe restrictions on access….” http://bsmlegal.com/PDFs/CarlLevin.pdf .
Therefore, for the CRA to assert that the data will only be used for tax purposes and not shared outside the IRS is utter consciously crafted bullshit. And they know it. Canada has NO mechanism to track what happens to the data they will be funnelling automatically and ad infinitum to the US. And no leverage, and no resources to do so – even IF the CRA and Harper had any motivation or interest in doing so.