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.
Further to my comment above;
http://www.treasury.gov/resource-center/tax-policy/treaties/Documents/FATCA-Notification-Letter-11-5-14.pdf
Don’t know what, if anything this might mean for Canada or other IGA signatories – depends on the terms in each.
The
FACTAFATCArequirements say that you are not required to fileFACTAFATCA information on a deposit account in a “foreign branch of a US Financial Institution”. Presumably this is because that institution would report all account information to IRS voluntarily of all customers.I plan on moving overseas and opening an account with the local Citibank branch in that country. Anyone know whether that account would be exempt from
FACTAFATCA reporting requirements for the account holder?@Quest, I think it will depend on a) what model IGA that country has agreed to and b) what the bank itself decides.
This from the Swiss IGA:
“A New Individual Account that is a Depository Account is not required to be reviewed, identified, or reported as a U.S. Account unless the account balance exceeds $50,000 at the end of any calendar year.”
However, that doesn’t mean that the banks aren’t reporting them anyway, just that they’re not required to under the terms of the IGA.
@WhatAmI
That’s for your answer. Actually, I wasn’t clear enough. I didn’t have in mind the IRS telling a Canadian FI that they must submit directly to them concerning suspected US persons on a list that IRS would send. What I was worried about is whether this kind of list could be used to tag an account as FATCA reportable, where the info would then be sent to CRA for passing on to IRS with the regular FATCA info.
I have read the IGA and most of the CRA guidance to FIs and it isn’t clear to me about extra info that may come to the attention of an FI after the initial computer search. Since accounts must be searched for indicia every year, the new indicia could be coming from God knows where…like the possible IRS lists I was referring to, or maybe from snitches.
Oh yes, I am becoming paranoid. I never tell new acquaintances about my possible origins, and I have browbeaten my poor husband on this subject til he finally understood. Not really good for a marriage, this FATCA business 😉
@JoellaP
I see. We can only guess and apply logic where we have no business applying logic. But here goes…
The IGA contains pages and pages about “What’s an Account”, What’s a US Person”, “What are Indicia”, “What’s a reportable Account”, etc. For the IRS to totally override all that and hand-feed a list to an FI or the CRA without this being mentioned in the IGA seems unlikely. 🙂
Democrats Abroad continue to twist themselves in knots rationalizing support for FATCA with all its attendant costs and harms for the rest of the world – while disingenuously explaining away why lack of reciprocity isn’t actually robust evidence of rampant US hypocrisy and arrogance. Now they are laying ground to explain away the lack of US participation in the OECD Common Reporting. Which of course the US Treasury touted FATCA as precursor for (and pretends that everyone in the world wants to emulate). Laughably, they are now pretending that it is only the Republicans which are the obstacle to the US signing up to the CR, not that the domestic US banking lobby would mount resistance, or that Obama might not even have the authority to bind the US to it. See the chosen angle the DA is floating for expat and public consumption:
Democrats Abroad:
dated November 2014
Regarding the non-participation of the US in the OECD Common Reporting, you might remember that it was the Mythster Stack who was described as: “…the U.S. delegate to the
Committee on Fiscal Affairs (CFA) in the Organization for Economic Cooperation and Development
(the OECD)…” http://www.europarl.europa.eu/document/activities/cont/201305/20130521ATT66359/20130521ATT66359EN.pdf back when he appeared before the European Parliament at: EUROPEAN PARLIAMENT COMMITTEE ON ECONOMIC AND MONETARY AFFAIRS
PUBLIC HEARING on The fight against tax evasion – FATCA as a step towards international automatic exchange of information? Tuesday 28 May 2013 . This was the not so public ‘public’ event which was attended by Victoria – and almost was denied access – but in the end was able to attend this ‘public’ event with the assistance of EU MEP Sophie in’t Veld http://thefranco-americanflophouse.blogspot.ca/2013/05/eu-public-hearing-on-fatca.html http://thefranco-americanflophouse.blogspot.ca/2013/05/a-day-at-european-parliament-in-brussels.html
https://www.democratsabroad.org/group/fbarfatca/democrats-abroad-supports-americans-abroad-safe-harbor-exemption-fatca-reporting
This thread is for asking questions about FATCA so …
MY QUESTION: Do Democrats Abroad have a good solution with their “safe harbor” exemption?
MY ANSWER: NO. This is just a euphemistic tweak to legislation which needs to be totally repealed and it shows me that Democrats Abroad and the Democratic Party remain enthralled by the abomination of CBT.
MY COMMENT: I seldom see Congress striving to rectify anything. More often than not, it is striving to double down on everything that’s punitive to the American people.
@EmBee
“I seldom see Congress striving to rectify anything. More often than not, it is striving to double down on everything that’s punitive to the American people”
Brilliant…I wish I would have said that. But then again I probably will borrow it from you at some point.
@badger
I’m ashamed to admit it, but I would have probably supported those misguided souls, not too long ago. I think they may have lost me forever after all this.
@calgary411
I haven’t heard anything about that since it was brought up over a yr ago. Notice it only allows US to enter Canada… I see nothing about Canadian enforcement entering the US… Why don’t the PM just turn everything relating to Canada over to them & call it a day…. I totally hate that US & Canada shares anything… make them work for it… why hand it right over to them… we are monitored on our own soil… we are monitored on their soil…. has no one ever heard of privacy and the term… innocent until they can prove u are wrong?
@ProudAussie, the DA is not just misguided, but are fully into deep willful disingenuousness now.
@ProudAssie & Badger
Quote from DA’s safe harbour preamble (see EmBee’s comment above for link)….
“Despite the grave injuries and inconvenience they’ve suffered, Americans living abroad were never the target of the [FATCA] law.”
Is this “misguided” (ProudAussie), or “deep willful disingenuousness” (Badger)?
Anybody care to vote?
@ Shovel
As much as I respect and value ProudAussie, I have to go with Badger on this … “deep willful disingenuousness”. DA has seemingly come down with a cognitive dissonance virus.
I’m going to have to vote for badger as well
Shovel,
I too have to vote for Badger’s “deep willful disingeneousness” description! Misguided the Democrats Abroad cannot be — we have been communicating with them what is going on for years. DA has willful blindness and their political line to feed.
For those following this angle of FATCA (with more analysis to come, on Thurs.):
http://lawprofessors.typepad.com/intfinlaw/2014/12/analysis-of-the-2014-fatca-giin-registration-lists.html
Tuesday, December 2, 2014
‘Analysis of the 2014 FATCA GIIN Registration Lists’
By William Byrnes
The Cola Party has been established.
On December 16, 2014 and every year thereafter, American ships shall be boarded and their Cola shall be dumped in the Sea.
Join now and help establish the appropriate candidates and leadership
https://www.facebook.com/groups/1565563347009106/
http://eng.fjarmalaraduneyti.is/news/nr/18720
“FATCA agreement between Iceland and the United States
12/2/14
Iceland has reached an agreement in substance with the United States on the terms of a Model 1 intergovernmental agreement (IGA) to implement the Foreign Account Tax Compliance Act (FATCA), and has consented to be listed on the website of the US Treasury Department as a jurisdiction that is treated as having an IGA in effect. As from 30 November 2014, Iceland is treated as having an IGA in effect.
According to an update of 30 November 2014, published by the US Treasury Department.”
http://tax-expatriation.com/2014/12/05/does-the-u-s-government-assume-u-s-citizens-having-assets-outside-the-u-s-are-hiding-assets-from-the-irs/
……….”………Does the IRS Assume U.S. Citizens Having Assets Outside the U.S. are Tax Cheats?
This rhetorical question is asked for a simple reason. In IRS training materials, which are part of the basic core training provided to IRS agents investigating individuals with assets outside the U.S. and international matters and transactions, the IRS makes the following bold statement:
“Most U.S. taxpayers using an offshore entity or structure of entities to hold foreign accounts are simply hiding the accounts from the Internal Revenue Service and other creditors . . . “
Thanks for that, Badger. I sent it to Solomon Yue. Perhaps it’s useful to the Bopp lawsuit?
@bubblebustin, I hope it helps. If that is there in black and white, there is probably more of the same if Bopp et al. or others wanted to look.
I think anything that shows that the root position of the IRS is supposition of guilt before innocence for all accounts and all persons outside the US – making no distinction for those living outside the US and that therefore treats all those deemed US citizens outside the US as willful tax evaders and money laundering criminals for having ordinary everyday local accounts full of local post-tax earnings and savings (the fictive ‘foreign’ accounts) is valuable. The treatment of all those abroad as fictive ‘US residents’ for US tax purposes creates automatic discrimination against US persons ‘abroad’ and manufactures/pre-supposes guilt before innocence – even in the face of logic and reason.
Obviously the US homelanders at the IRS and Treasury don’t get out much, and can’t fathom that people in the rest of the world were born there, move there, live there, pay taxes there and have legal local lives that do not revolve around the US.
FATCA and CBT in Sweden (not sure of date written:
https://judilembke.wordpress.com/articles/americans-in-sweden-suffer-us-tax-crackdown/
‘Americans in Sweden Suffer US Tax Crackdown’
@Badger
Solomon thanked me and said he would forward to Mr Bopp 🙂
@Badger
That Swedish article – “I really can’t believe it! This nice country that I respect – have they gone mad?”
Short answer, “Yes”.
@bubblebustin, apparently the madness is infectious – like Mad Cow disease – Canada, Sweden, New Zealand and all the rest have it. Some rushed to the head of the line to receive the virus via IGA and infect their citizens, their own taxpayers, and their financial system. Canada could have waited, and studied things more http://taxpol.blogspot.ca/2014/11/questions-on-canada-us-fatca-agreement.html – as Profs Christians and Cockfield advised Parliamentarians here, to no avail (ex. …”..There also appears to be a false impression that there is urgency in this matter, yet the U.S. has a list of countries it will “deem” to have an agreement like this in place, and Canada was the very first country on that list and it was there before we signed an agreement. Even if we weren’t on the list, the U.S. Treasury recently announced another 18-month grace period, so we have the time to get this right. Let us not act in haste and repent at leisure….” http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=6597204&Language=E&Mode=1 )
Legal challenges like that of the ADCS are the only cure.
About the Swedish link above, the story is frightening, and at the end I found this: “Peter Hallworth, a UK native who lives in Stockholm, has two children who were born in America who, upon reaching the age of majority, will face a lifetime of not only filing US tax returns but also of complying with FBAR.”
Indeed his kids are in trouble, because they are born in the US. My kids, thank GOD, were born elsewhere and I did all the paperwork to make them US citizens. THANKFULLY they are not easily identifiable as such because they are born elsewhere, and thus will be able to open bank accounts normally (and remain under the radar). I have decided to let them decide at age 18 if they want to renounce or not. After all, this does give them the opportunity to move to the US, which remains a land of opportunity.
As for me I have to contemplate difficult days ahead as I attempt to navigate compliance.
I think accountants may be a problem, they will advise contacting a lawyer, that’s always expensive and bad. Would it not be better, if possible, to just try to send in the forms to the IRS oneself? And hope for the best, without involving nitpicking professionals? On the other hand, how else would one be sure to understand what is necessary?
Note that CHILDREN are not exempt from FBAR!!!! Therefore if they are unable to fill these forms out, one needs to help them. I read this today on the IRS website. Pure craziness.
Last, FATCA requires “ALL” banks in the world to sift through ALL their bank accounts looking for US indicia, such as birthplace. Low value accounts and manual searches (after electronic searches) need to be completed by June 2016 (I think). Meaning that if your bank hasn’t found you now, they probably will within the next couple years. And then they will ask if you comply, and if you don’t they will terminate your accounts. There is no way out here. Unless one can live with no accounts, no money in one’s name, no property. And renunciation is expensive and implies compliance… Catch 22.