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.
Article by Ron Paul – putting FATCA into larger context of the US use of other types of financial sanctions and coercion of other countries:
http://original.antiwar.com/paul/2014/08/10/us-sanctions-on-russia-may-sink-the-dollar/
‘US Sanctions on Russia May Sink the Dollar’
by Rep. Ron Paul, August 11, 2014
http://www.veooz.com/photos/wH7o_rg.html
Good graphic. But wishful thinking – the crushing of expats is accurate, the apology will never happen.
‘Neighborhood Bully – America Recklessly Throws its Weight Around’
By:
Peter Schiff
Friday, August 15, 2014
“………..Given that the United States is one of only two nations in the world (the other being Eritrea) that taxes its citizens on any income received, regardless of where that income was earned and where the tax payer lived when they earned it, the FATCA laws are an attempt to extend American tax authority and jurisdiction (by unilateral dictate) to the four corners of the Earth. The Economist magazine, which is not known for alarmist reporting, described FATCA as “a piece of extraterritoriality stunning even by Washington standards.” (For those of you who did not pay attention during world history class, “extraterritoriality” is an attempt by one country to enforce its own laws outside of its own borders).
What’s worse is that many accountants and analysts have estimated that the compliance costs that the United States has imposed on these non-constituent banks (which have limited ability to lobby or influence U.S. lawmakers) will far outweigh the $800 million in annual revenue that the law’s backers optimistically estimated. In a June 28th article, The Economist quotes an international tax lawyer saying that FATCA is about “putting private-sector assets on a bonfire so that government can collect the ashes.” The laws are particularly irksome to many because the United States typically refuses to subject itself to the same standards it requires of others. When foreign governments ask Washington for financial information from its citizens, the U.S. government hypocritically trots out privacy laws and poses on the altar of civil liberties. In fact, despite its war on foreign tax havens, for non-Americans the United States is by far the world’s largest tax haven……”………..
http://www.europac.net/commentaries/neighborhood_bully_america_recklessly_throws_its_weight_around
@Badger
This is “Neighborhood Bully ” is an awesome article I think it deserves its own post.
Reading this .. I can see the fading of the US Dollar. Oh, Yes. It is indeed sounding like a rumble coming.
Can it be that the world is now fed up with the bully?
@northernstar, the Bully is at least getting more unwanted and unwelcome attention. I don’t think the US anticipated the strength of the response, or the pushback from Canadians and others abroad. They thought they could just issue ‘myths’ for public consumption ala Mythster Stack, and cheat sheets for IGA signatory governments to refer to in countering complaints from their resident citizens. The Bully may prevail in the end, but not without some scratches at least.
It probably isn’t the kind of media attention to ‘automatic reporting’ and CBT that either the OECD or the US wanted in the run up to the Common Reporting GATCA.
FATCA extortion via 30% withholding characterized by another FATCApologist thus:
“FATCA’s enforcement mechanism is both potent and innovative….”
from;
‘2014 Annual Congress of the European Association of Tax Law Professors Koç University, Istanbul,Turkey
UNITED STATES NATIONAL REPORT ON EXCHANGE OF INFORMATION’
Joshua D. Blank* and Ruth Mason**
And, they trot out that tired and unsubstantiated figure so popular amongst the FATCAnatics – but without robust basis;
…”Every year, the United States loses at least $100 billion in tax revenue as a result of tax evasion that occurs through the use of offshore bank accounts.1″
1 STAFF OF PERMANENT S. COMM. ON INVESTIGATIONS, COMM. ON HOMELAND SEC’Y AND GOVERNMENT AFFAIRS, 110TH CONG., STAFF REP., TAX HAVEN BANKS AND U.S. TAX COMPLIANCE 3 (2008).”
And this made me laugh right away – in order to liven it up and make it sound as if FATCA as applied to the entire globe is really on to something, the authors give the example of; “………cash holdings by individuals into diamonds, which were then smuggled out of the United States concealed in a tube of toothpaste before being secreted in Swiss bank vaults” – and that is only page 2!
It is sad that we do not have a Canadian Finance Minister who would tell the US FATCAnatics that despite their delusions, it is exceedingly unlikely that the accounts of the over 1 million Canadians of US descent that the US asserts are ‘US taxable persons’ – and their joint accounts registered with the CRA, located in Wawa and Pickle Lake, which are mostly comprised of post-tax Canadian wages, held joint with Canadian-only family and business partners, are destined to be scrutinized to the nth degree – the same as those who might be smuggling diamonds out of the US in toothpaste.
Better check Canadian bathrooms as well as Canadian banks I’m thinking?
I also enjoyed page 4:
“Criticism. Commentators have characterized FATCA as “aggressive,”15 “audacious,”16 “egregious,”17 “draconian”18 and “devastatingly destructive.”19 The principal criticisms have been that FATCA is not only unilateral,20 but also extraterritorial.21 Critics contend that FATCA requires financial institutions in jurisdictions outside the U.S. to act like “U.S. Treasury watchdogs”22 and that it “strong arms every financial institution in the world into doing the job of the IRS.”23”
Pay particular attention to footnotes on page 4 prominently featuring familiar Canadian sources:
17 Don Whiteley, IRS Wants Canada to Nab U.S. Tax Cheats: Why We Should Care, The Globe and Mail, Jan. 7, 2013, available at http://www.theglobeandmail.com/globe-debate/irs-wants-canada-to-nab-us-tax-cheats-why-we-should-care/article6994760/#dashboard/follows/.
18 Id.
21 Canadian Finance Minister Jim Flahertty described FATCA’s “far-reaching extraterritorial implications” that would “turn Canadian banks into extensions of the IRS.” Letter from Finance Minister Jim Flaherty to The Washington Post, the New York Times, and the Wall Street Journal (Sept. 16, 2011) available at http://business.financialpost.com/2011/09/16/read-jim-flahertys-letter-on-americans-in-canada. See also Arthur J. Cockfield, The Limits of the International Tax Regime as a Commitment Provider, 33 Va. Tax Rev. 59 (2013), at 102-3, (“the unilateral nature of FATCA arguably subverts traditional multilateral processes”). See also Allison Christians, Putting the Reign Back in Sovereign, 40 PEPP. L. REV. 1373, 1408 (“[FATCA] proposes a turn away from multilateralism”).”
Some of the footnotes are just as interesting as the main text. The Mythster Stack is also cited.
Blank, Joshua D. and Mason, Ruth, United States National Report on Exchange of Information (August 15, 2014). Proceedings of Annual Congress of the European Association of Tax Law Professors, 2014. Available at SSRN: http://ssrn.com/abstract=2481080
@ badger
I just checked my toothpaste. The good news — it’s fluoride free. The bad news — not a single diamond in there.
@EmBee, apparently you’re using the wrong brand. I read in a recent paper by two US homeland tax lawyers that the toothpaste used by ‘taxable US persons’ abroad’ is so full of smuggled diamonds that FATCA was implemented merely due to the tender concern of the IRS and Treasury for the dental health of those who belong to the “US community” ‘abroad’. S’truth – not a Myth!
Next they’ll be requiring Canadian dentists to report on the state of our teeth – accidently cracked by all those unreported gemstones in the dentifrice don’t ya know. Canadian proctologists will also be hit with a 30% withholding – in case diamonds are being secreted when we swallow too much of the aforementioned toothpaste.
Don’t you find it ironic – if we were all the millionaires abroad that the US pretends we are, we could have revved up those legal challenges in a second – paid the lawyers from our toothpaste, and done it with a sparkle in our smiles.
@Embee, @Badger, havn’t you guys donated your diamonds yet to ADCS? I feel sorry for Stephen as he probably has to wash the toothpaste off them.
Aberdeen Asset Management in Australia now prohibits former “US Persons” from investing in their unit trusts. See point c on their FATCA compliance page at http://www.aberdeenasset.com.au/aam.nsf/australia/investorFATCACompliance
So, even if you have renounced and have a CLN, you still can’t invest in their funds. Unbelievable.
@osgood
Putting under the mattress is starting to become a reality if they close all avenues we can grow our money…
Dang… I got to check my toothpaste better… this could be the reason my dentist smiles like an idiot when he sees me… cause them diamonds bust up teeth like u can’t believe… Geez
It appears that Serbia has an official that is willing to stand up for Serbian citizens and residents against the US – something that the Canadian government has not done on behalf of Canadians:
“Serbia’s Information Commissioner has warned that banks must have the full consent of customers before information is passed to US tax authorities under the terms of FATCA, and that it would be illegal for customers to be declined services if they refuse to give consent.”…………
….”Sabic also observed that the USA is not party to the Council of Europe’s Convention 108, meaning that the transfer of personal data across borders would still require the Commissioner’s consent. He explained that all requests for transfer in such circumstances would have to accord with Article 53 of Serbia’s Law on Personal Data Protection.
The Commissioner further emphasized that in cases where bank customers do give consent for data transfer to the USA, the consent is only valid if it is given freely and with a full understanding of the grounds, scope, purpose and consequences of the data processing. Any data processing that fails to meet these standards is illegal and contrary to the Law on Personal Data Protection, he said.
http://www.tax-news.com/news/Serbia_To_Protect_Taxpayers_Rights_Under_FATCA____65575.html
So, is Serbia’s Information Commissioner doing what the Canadian federal government and the Canadian Privacy Commissioner’s inaction is forcing individuals in Canada to fight for on their own?
We are forced to use our own family savings to fight against having our Charter and Constitutional and human rights ceded to a foreign government – that of the US.
Shame on Canada if a Serbian Information Commissioner can stand up and publicly say what our officials will not. Other European countries may follow suit – the Serbian official referred to “the Council of Europe’s Convention 108” http://conventions.coe.int/Treaty/en/Treaties/Html/108.htm
Another reason to donate to the ADCS legal challenge http://www.adcs-adsc.ca/?gclid=CKC18ObOn8ACFWELMgodfmYAUw
Worse, we have MP’s like mine who head pro-constitution foundations who say they are “thrilled” about the FATCA IGA, Badger.
I suppose we might hear Weston claim that defending the IGA is defending Canada’s constitution in that the Canadian government won’t allow it to be used illegitimately in a frivolous lawsuit.
Interesting read:
http://www.sott.net/article/283120-Obama-administration-and-IRS-now-able-to-spy-track-tax-and-confiscate-US-dollars-across-the-world
US Foreign Person
The article you gave us the link too.is interesting. When did those Japanese bankers say they thought FATCA was not good. I tried to find a link to that.
Osgood: Thank you for posting information about the collosal human rights violation being perpetrated by Aberdeen Asset Management in Australia. To deny, not only US Persons but *former* US Persons the opportunity to invest in their company’s funds is utterly beyond the pale. This would have been a marvelous addition to our United Nations Human Rights Complaint. Once we know the status of our Complaint this would be an excellent piece of information to send to the UN as support for our position. Thank you for alerting us.
Thank you Serbia. Serbia stands up for the rights of US citizens who are living in Serbia and for Serbian/US dual citizens. “No one can implement national legislation of another country at the territory of the Republic of Serbia which is contrary to the legislation of the Republic of Serbia.” Sabic also observed that the USA is not party to the Council of Europe’s Convention 108, meaning that the transfer of personal data across borders would still require the Commissioner’s consent. He explained that all requests for transfer in such circumstances would have to accord with Article 53 of Serbia’s Law on Personal Data Protection.
We are waiting for the day that the US government will stand up for the rights of US citizens.
http://www.tax-news.com/news/Serbia_To_Protect_Taxpayers_Rights_Under_FATCA____65575.html#sthash.ZLTSAhJO.dpuf
I confirmed it with a banker I know well in Serbia. Their policy is that it is the client’s choice to be identified as American or not.
http://www.moodysgartner.com/is-the-canadian-fatca-lawsuit-a-pyrrhic-war/
One major accounting firm issued a guidance stating that eventually every account holder in every country with an IGA would have to required to fill out either an IRS form, either a W-9 or a W-8BEN.
I wonder how pleased the billion or so account holders around the world who have absolutely no relationship to the US will be to fill out a W-8BEN? The substitute W-8BEN that I have seen in Japan (in Japanese) is very intrusive by Japanese standards.
Stewart Patton @US_Tax_Services · Aug 19
Theory: #FATCA was designed solely to get #Canadian #expats to show some emotion besides extreme politeness. Has been a resounding success.
@TokyoRose
So basically they are saying… everyone in the entire world will need to file one or the other… what kind bs is this… the US doesn’t run the world yet… no matter what they say… Other then Serbia… every country is bending over for them… what bs….
@US_Foreign_Person
Unfortunately, there is quite a bit of evidence that the US does believe it runs the world, and even more unfortunately, it seems that they are getting away with it.
I’ve been noticing more and more how the US “fines” foreign banks for doing things that the US does not want them to do. A recent article on a $300 million dollar fine on a Japanese bank for dealing with Iran, and a British bank that has been fined twice, once for $650 million for dealing with Iran and then another $300 million for not setting up a system to flag further dealings.
It might be one thing if the international community in the form of the UN or at least the IMF or World Bank, was fining institutions with dealing with Iran, North Korea, etc., but in these cases the US does the policing, and the fining, and KEEPS ALL THE MONEY, a pretty lucrative business! Not really that much different from a bully shaking down the younger kids in the schoolyard for their lunch money…
@osgood
“This prohibition remains even if your investors are effectively cured of their US person status under FATCA by the provision of the requisite documentation.”
That is incredible. At least they recognise that US person status is comparable to a disease which one can be “cured” of.