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.
whitekat, most “firesafes” only guarantee to keep the interior temp below 350 degrees and this is well above the melting point of the new plastic bills. Some may do better, but check it ouit before buying obe,
Woofy – Your preceding comment shows that you need to steal a page from Petros. Put nothing in that fire safe except gold bars. Then after the conflagration, you can still recover the melted metal. Temperature not likely to reach the point of vaporization? Question for all: How far can hot gold run? Pun intended.
@Just Me, re the twittering back to the Canadian Credit Union’s tweet, thanks!
http://www.examiner.com/article/obama-lays-framework-for-purge-of-online-opponents?fb_action_ids=334717706628299%2C334222200011183%2C334219756678094&fb_action_types=og.likes&fb_source=other_multiline&action_object_map=%7B%22334717706628299%22%3A136025396563929%2C%22334222200011183%22%3A309780122478248%2C%22334219756678094%22%3A337752523010675%7D&action_type_map=%7B%22334717706628299%22%3A%22og.likes%22%2C%22334222200011183%22%3A%22og.likes%22%2C%22334219756678094%22%3A%22og.likes%22%7D&action_ref_map=%5B%5D
(that’s a long link)
Violent extremist groups ─ like Al Qaeda and its affiliates and adherents, violent supremacist groups, and violent “sovereign citizens” ─ are leveraging online tools and resources to propagate messages of violence and division. These groups use the Internet to disseminate propaganda, identify and groom potential recruits, and supplement their real-world recruitment efforts. Some members and supporters of these groups visit mainstream fora to see whether individuals might be recruited or encouraged to commit acts of violence, look for opportunities to draw targets into private exchanges, and exploit popular media like music videos and online video games. Although the Internet offers countless opportunities for Americans to connect, it has also provided violent extremists with access to new audiences and instruments for radicalization.”
Under the guise of curbing the “radicalization” of U.S. citizens and identifying and purging potentially violent persons from the Internet, the White House has initiated the creation of a new interagency working group to address what it calls a growing problem.
The White House issued a fact sheet delineating the broad objectives of the plan.
There is a lot of discussion here and elsewhere about “minnows” and “whales”. The extreme ends of these definitions are fairly obvious, but I am interested in where people see the cut off points? What about someone with, say, $1.5 million in assets, or $3 million for a couple. Probably not Whales, but would you consider them minnows?
Thanks to everyone that contributes here. This site is an invaluable resource.
I concur, as one, who is apparently on the list of those deserving Extraordinary Attention. In January 2013, my bank accounts in Jerusalem were seized by the Israeli Bank HaPoalim, purportedly pursuant to its FATCA-related “New Policy” (which the Bank refuses to produce). The Bank refused to provide any written notice, explaining its actions. A letter on behalf of Bank of Israel’s Governor Stanley Fischer made it clear that the actions had no basis in the law of the State of Israel. State Department veteran, Washington DC Attorney James Jatras, who specializes in FATCA, opined that the Bank’s conduct had no basis in FATCA or in the US law either.
Under the guise of tax collection, the US is imposing on other nations its notoriously corrupt banking regulation, key perpetrator of the financial crisis.
Conduct of the US in this matter is inconsistent with the spirit and the letter of the Basel Accords on international banking. Moreover, through such conduct the US appears as a juvenile delinquent, positioning China as the only responsible adult on the scene.
Joseph Zernik, PhD
Human Rights Alert (NGO)
13-02-17 More on US-China relations
http://inproperinla.blogspot.co.il/2013/02/13-02-17-more-on-us-china-relations.html
The US ambassador to Norway said that they were looking for rich people. He said “you better file now or you’ll be in big trouble later”. .
The FATCA program requires people to beg for mercy in every program at every stage. THe streamlined procedure lists interest/gain income of $1500 (if my memory is right). In that program (the kindest of all), the applicants are labeled as “low risk” and “high risk”.
I am also interested in better answers. Saving for retirement under the Obama administration makes persons a high risk.
With all its intents of “soft landing” of the US, it is hard for the Chinese to contain another nation, whose government is determined to cause its own nation’s implosion.
Below is another example of juvenile delinquent conduct by the US government, on international banking of all matters, where US banking regulation is notoriously corrupt and a key perpetrator of the financial crisis.
The current move of the US government, relative to FATCA, may end up in a farce. However, conduct of the US stands in total disregard of the spirit and the letter of the Basel Accords on international banking, and the US government ends up positioning the Chinese government as the only responsible adult on the scene.
jz
_____________________
Source: http://www.repealfatca.com/index.asp?idmenu=4&title=News&idsubmenu=116
Swiss parliament, people should say ‘No!’
U.S.-Swiss ‘Intergovernmental Agreement’ a Dubious Win for FATCA
James George Jatras for RepealFATCA.com
February 14, 2013
Washington, DC
Today the U.S. Treasury Department announced it had signed an “intergovernmental agreement” (IGA) for the enforcement of the “U.S. Foreign Account Tax Compliance Act” (FATCA) in Switzerland. The announcement apparently breaks a dry spell for Treasury in its continuing efforts to dragoon foreign states, euphemistically dubbed “FATCA Partners,” into submitting to the extraterritorial imposition of this expensive and burdensome U.S. law on their institutions and citizens.
The Swiss agreement is the first one finalized on the “Model 2” “non-reciprocal” IGA version, under which the non-U.S. “Partner” dispenses with even the pretense that this is a mutual exchange of information. By signing the agreement, Switzerland is unilaterally capitulating to Washington’s threat of sanctions and not even claiming to get anything in return except (hopefully) some small relief from the massive costs FATCA would impose.
Even that hope is illusory in light of the fact that under “Model 2,” Swiss institutions would report directly to the IRS instead of to the Swiss tax authority. Also of doubtful value is the inclusion on Annex II of the IGA of entities “deemed compliant” with FATCA, such as the Swiss Central Bank, since the U.S. side can insist on modification of the IGA (including “to remove entities, accounts, and products . . . due to changes in circumstances”) simply by threatening unilateral cancellation of the agreement (under Article 16(2)).
Swiss citizens will have their say, Americans will not
Even Swiss supporters of the IGA show little enthusiasm for an agreement imposed only because of a U.S. threat of what amount to sanctions:
Bankers Association “welcomes” signing, but remains critical of Fatca
The Swiss Bankers Association said Thursday noon that it “welcomes the signing of an agreement” and hopes for a swift ratification. Thanks to the agreement, “the complexity and costs arising from the unilateral Fatca legislation introduced by the US will be reduced for Swiss financial intermediaries.” But it remains critical of Fatca, stating that “The banks nevertheless continue to view Fatca critically due to the costs it incurs and the administrative burden it creates. Were they, however, to refuse to implement Fatca, they would face competitive disadvantages internationally that would jeopardise their survival.”
Parliament and Swiss media, where several voices have objected to the US imposing its own laws in other countries, may be less enthusiastic, and it remains to be seen if pragmatism wins out. [Source: “US-Switzerland sign controversial Fatca agreement (update) , February 14, 2013”
But at least on the Swiss side the IGA will be tested by constitutional procedures and the democratic voice of the people. The IGA must win parliamentary approval and may possibly be put to a popular referendum. The Swiss People’s Party – part of the governing coalition and largest party in the parliament – has said it reserved the right to reject the FATCA deal, accurately accusing “Washington of imposing its laws outside its own borders and lacking respect for the sovereignty of other states.” If the Swiss people take a hard look at what clearly is a bad deal, they will say No.
On the American side, by contrast, Treasury claims the IGA is just an “Executive Agreement,” requiring no Congressional approval. That may not wash on Capitol Hill. Even though the U.S.-Swiss IGA cites the U.S. tax convention in several places and claims to be acting “pursuant” to it, the IGA is not being submitted to the Senate for its advice and consent. Indeed, the IGA even cites as authority amendments to the U.S.-Swiss tax convention that have not yet even been ratified, having been held up in the Senate on constitutional concerns by Senator Rand Paul (R-Kentucky).
In short, some in Congress will see the IGAs with Switzerland and other countries – which are nowhere mentioned in or authorized by FATCA or any other statute – for what they are: Treasury’s blatant disregard for Congress’s authority and an attempt to end-run the American democratic process. We will see whether they will be allowed to get away with it.
Meanwhile, all not well on the “reciprocal” front
While the Treasury Department and FATCA supporters can be expected to tout the U.S.-Swiss agreement as evidence they are back on a roll in herding countries into IGAs, in reality efforts to secure signatures of “Partner” governments still appear to be slow going. Treasury remains far behind their target of 17 countries they had expected to sign up by the end of 2012 and of the 50 they claim to be negotiating with, particularly those that (unlike Switzerland) require at least the fiction of evenhandedness in the “Model 1” version.
In particular, “negotiations have not progressed with key U.S. trading partners Canada and China.” Canada, our largest trading partner with many dual-citizens, expats, and “accidental Americans” who would be particularly hard hit by FATCA, would find compliance particularly difficult, with an IGA or without. China, for both practical reasons and on principle, appears steadfast in telling the U.S. it won’t comply. As Nigel Green, CEO of deVere Group has noted:
The entire FATCA project could ultimately come unstuck if China refuses to comply, and start a domino effect all over the world. If that were to happen, FATCA would become a farce, as it cannot effectively function without the agreement of every government all over the globe.
Let’s hope so!
James George Jatras
http://www.RepealFATCA.com
@RepealFATCA
+1.202.375.1007
James George Jatras
Principal, Squire Sanders Public Advocacy, LLC
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@Hogwarts
What is the definition of ‘Fair share”?
What is your definition of Rich? Generally speaking, I have heard it said, that no matter how much money you have, you usually define it as 2.5 times more than what you have now.
It all depends on your frame of reference.
Minnow and Whale was just a convenient short hand I used almost 4 years ago now in my arguments with the IRS, to make a distinction between what the original targets of the IRS offshore OVDP program was (Homeland tax evading Whales hiding funds offshore in elaborate schemes promoted by the likes of UBS) and what I considered myself at the time, just an American Expat Minnow who had benignly fallen afoul of rules I did not know about. IE, I was NOT what they were looking for.
So there is no definitive dollar or asset amount (technical threshold), similar to what the IRS likes to use for its definitions, where if you are one dollar over or under, totally different rules/penalties apply.
If you feel like a Minnow, were/are not engaged in Homeland deliberate offshore tax evasion, than you are probably one.
@Mark Twain,
I collected EI benefits during one of the years spanning the ‘stream-lined’ program. Those EI benefits, combined with earnings from Canadian mutual funds held in my children’s RESP’s could conceivably result in $1500 taxes owed to the USA, thus putting me into a ‘high-risk’ threshold, ineligible for the ‘stream-lined program’.
The IRS failed with the ‘stream-lined’ program.
² whitecat The streamlined program is a joke. I am a risk because I have worked in 3 countries, none of them bigger than Ohio. And because I have saved for my retirement, Another sin.
(that\s 3 countries within the European union & EES)
It looks like search and seizure is becoming a popular thing for legislators, just as the gun people had envisioned. And we know that having a bank account justifies a body cavity search.
http://seattletimes.com/html/localnews/2020373291_westneat17xml.html#.USKKczIc72G.facebookpon?
I spoke to two of the sponsors. One, Sen. Adam Kline, D-Seattle, a lawyer who typically is hyper-attuned to civil-liberties issues, said he did not know the bill authorized police searches because he had not read it closely before signing on.
“I made a mistake,” Kline said. “I frankly should have vetted this more closely.”
That lawmakers sponsor bills they haven’t read is common. Still, it’s disappointing on one of this political magnitude. Not counting a long table, it’s only an eight-page bill.
“Now I understand why my opponents are worried about federal takeover”
A little something from one of our FATCA Industrial Compliance Complex, Ernst and Young
10 things institutions should consider to mitigate the impact
Interesting to see how all discussion is now centered on the process of complying…
• Conduct a Fatca impact assessment
• Establish a robust Fatca program
• Allocate a budget
• Map-out all requirements
• Assess strategic options
• Design the optimal solution
• Focus on on-boarding procedures
• Appoint a Responsible Officer
• Define a communication strategy
@JustMe, re the quote from Ernst and Young “…..The threat of Fatca will mean financial institutions will need a more intrusive, relationship with their customers and investors”…..
Good to see anything at all which acknowledges the effect on individuals, and the real nature of the banking relationship (intrusive) under FATCA. Usually there is nothing.
The relationship between an account holder and a financial institution can be very adversarial anyway, when maximizing profit is the only guideline, and the account holder’s best interests just get in the way. But FATCA adds ‘intrusion’ into the mix – and brings the US and IRS into the relationship. The banks etc. will have to work very hard on their spin – especially once they start making people prove citizenship status and asking for the requisite documents, but it may be a big challenge for them to mask the true unpalatable situation – not only do they have the use of your funds, but they will be an intimate partner of the IRS – a ‘foreign’ government agency. Even with an IGA, it is still the banks that will be the face of FATCA – the only one we will see in person. At a time when interest rates are so very low, it may be that people will choose to hold their money only in government bonds (like Canada Savings Bonds), or under their mattress, or only use credit unions (where at least the profits go to running the organization and to member-shareholders ). Not to avoid reporting, but because the usual banking relationship will be insupportable.
When I see their use of the word ‘intrusive’, it brings to mind a digital exam, or a body cavity search. I doubt that our banks want that to be the image we associate with them!
More compliance necessary—-this time for mail order shippers
http://marketplacefairness.org/compliance/
(More tax is “fair”)
http://www.prweb.com/releases/2013/2/prweb10435767.htm
@Whitekat. Yeah, can’t use Streamlined, can’t file forward, can’t file backward, that leaves OVDI & 27.5%. Nowhere to run, nowhere to hide.
and I refuse to pay 27.5%
Interesting article on the negociation of an IGA between the US and the Bahamas:
http://www.tribune242.com/news/2013/feb/19/qc-urges-hybrid-iga-for-bahamas-fatca-compliance/
A couple key points of interest:
– “Model 1 IGA presented “a risk that the IRS may be able to come in and audit your systems.
“As a matter of principle, bearing in mind these are businesses operating in a sovereign country, that is not acceptable to me. I would have preferred to exclude that option and if you’re going to enforce an audit, it should be done through local agencies other than the IRS.”
– The bahamas don’t want to be limited to model 1 or model 2 and want to better protect their FFIs. They want a “hybrid route that’s customised to meet the particular needs of the Bahamas”.
-“I don’t think there’s any question we will shortly see an OECD initiative intended to achieve a European version of FATCA. That’s almost inevitable in my view, the leading QC told Tribune Business”
“I think that’s very dangerous, not so much for the Bahamas, but all international financial centres…….
Mr Moree told Tribune Business that complying with a FATCA-type of initiative by European nations would be “extremely expensive” for the Bahamian financial services industry, just like the additional compliance and due diligence burden the US was currently imposing.
And lastly, something that I have never seen before in an article:
“FATCA, which was brought into law in March 2010, is a set of rules set out by the US Internal Revenue Service (IRS) designed specifically to limit tax evasion by US persons living abroad”.
Something we already knew: any US person living abroad is a potential tax evader.
I had put this on another thread. I thought some might be interested in it. Perhaps it will get more reading of a reading here.
http://www.scmp.com/news/china/article/1151651/netizens-applaud-us-taxation-plans-amid-concerns-about-corruption-china
I think the Bahamians are smoking too much of that Caribbean weed if they think they can get Treasury to create a hybrid IGA just for them…
Qc Urges ‘Hybrid’ Iga For Bahamas Fatca Compliance
@Chris
Regarding the narrative of “FATCA, which was brought into law in March 2010, is a set of rules set out by the US Internal Revenue Service (IRS) designed specifically to limit tax evasion by US persons living abroad”.
You know, every time I see that assertion, I never see attribution or reference for where that statement came from. I think this is one of these memes that gets passed from journalist to journalist, without any fact checking.
You would have thought, if that assertion was true, you would have seen it mentioned in the JCT press release when they rolled this out, but where is the reference that would let you imply that this is so? It is NOT there. http://bit.ly/V6Aee7
@Calgary411…
I could not read that online, even with translation, as the link just takes me to the login page for Weibo
Is there another reference?
I just googled “America joins China’s anti-corruption campaign” and got:
http://www.scmp.com/news/china/article/1151651/netizens-applaud-us-taxation-plans-amid-concerns-about-corruption-china
A few commenters think it good news. One says:
@Calgary411… Thanks. I guess I could have done that! LOL
@Chris… I put up a comment on Tribune242…
http://www.tribune242.com/news/2013/feb/19/qc-urges-hybrid-iga-for-bahamas-fatca-compliance/?c=9730