FATCA Discussion Thread (Ask your questions) Part Two
Please ask your questions here about FATCA.
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FINAL UK IGA REGULATIONS are issued…
http://www.iss-mag.com/regulations-and-compliance/hmrc-issues-fatca-regulations-and-compliance
Here is the Guidance…
http://www.hmrc.gov.uk/fatca/130531-guidance.pdf
I just started to read this, but here is how they are modifying their law to meet the US requirements. Do you think any Parliamentarian will notice…??
http://www.hmrc.gov.uk/fatca/130531-guidance.pdf
The UK legislation bringing into effect the implementation of the UK-US Treaty is contained at clause 219 of the 2013 Finance Bill. This clause provides HM Treasury with powers to make Regulations to give effect to the Agreement (and other similar Agreements). The Regulations (The International Tax
Compliance (United States of America) Regulations 2013) can be accessed on HMRC’s website at http://www.hmrc.gov.uk/fatca/index.htm
@Just Me
Do a current news search of “IRS” and what pops up is “Obamacare”, healthcare, health insurance, etc.
For the first time in history, IRS will be involved in the administration of American healthcare, governed by somewhere between 10,000 pages (Washington Post) and 20,000 pages (National Review) of dense regulations.
Adding to the confusion is that many influential entities, ranging from state governors and congressmen, to insurers, doctors, businesses and individuals, are utterly opposed to this and intend to contest it relentlessly.
At this juncture, how will Treasury muster the resources to cope with and decode and respond in a timely manner to FATCA’s massive flood of data – and expected reciprocity – from the untold hundreds of thousands of banks, brokerage firms, insurance firms, pension plans, credit unions, and other financial institutions in the rest of the world’s 190 different countries?
And here is what Jamaica plans to do re implementing FATCA:
http://jamaica-gleaner.com/gleaner/20130531/business/business1.html
“Jamaica plans to set up a central authority led by the central bank to report on the financial activities of US taxpayers to their government, which has been on a three-year campaign to track down tax cheats.”……”The creation of the central authority means Jamaican institutions affected by FATCA will not have to deal individually with the US Internal Revenue Service.””””””
“….The Jamaican Government will also commit to any necessary legislative changes that will ensure that these disclosures do not breach Jamaican law,” said BOJ…..”
@wondering in name, and ‘wondering’ in comment. I think it will be massive data overload and actually take years and years to sort out and make sense of it. Of course once we all have an International TAX ID number, that will make it easier.
@ Just Me,
War in Vietnam, Iraq, Afghanistan…
War on Drugs, War on Illegal Immigration…
Gun control collapse, Health care chaos, Student loan debacle, Home foreclosure crisis, Sequestration, State and Municipal bankruptcies…
Let’s be optimistic. Failure could be an option for FATCA as well.
For me, a hazard of this political mess is that a narrow issue and agenda, pursued by a handful of fanatics, threatens to negate what I admire about the people, culture and achievements of the American people.
For balance, here’s a short list – less than 1% – of things I like about America:
Apple / Yo La Tango / Cormac McCarthy / NPR Fresh Air with Terry Gross / REM / The New Yorker / South Beach / Roswell Park / HBO / Village Vanguard / The Simpsons / Richard Ford / San Francisco / Miles Davis / Jackson Hole / MIT / Boston / Rick Moody / Leonard Bernstein
Ansel Adams / Highway 61 / Richard Right / Jonas Salk / Ralph Ellison / Florida Keys / Big Sur / Slate / Washington Square Park / Elmore Leonard / Skateboarding and ski movies / John Coltrane / Bruce Springsteen / Laura Stamm’s Power Skating / Pittsburgh Penguins
…etc
@wondering… You make a good point, but it is the collateral damage of all those things that American never learns.
You a FreshAir fan too? Your all right. Terry Gross is the best interviewer ever. Hard to beat her
@Joe Blow… Rosa would get this attorney and sue!
http://www.npr.org/2013/06/02/188125996/john-whitehead-on-protecting-individual-rights
@Just Me,
Yeah, collateral damage – and blowback. The numbers are staggering. More than 50,000 dead in the Mexican drug war. The war in Iraq has cost the US about $1.7 trillion with additional $490 billion in benefits owed to war veterans (Reuters). And consequences persist – see Christopher Hitchens’s article on legacy of Agent Orange birth defects “The Vietnam Syndrome”.
http://www.vanityfair.com/politics/features/2006/08/hitchens200608
It’s assumed (but unproven) that FATCA could raise an additional $8 billion over ten years.
In 2012, the US government was spending more than $10 billion PER DAY, roughly 40% of which was borrowed.
However Terry Gross – and NPR in general – still rock. We dnload her podcasts for road trips; it’s our arts and culture and politics briefing. Also live stream “The Current” from Minnesota Public Radio; great new music – and a kick from the weather reports because the are usually worse than here!
I’d add Sebastian Junger, Chris Hedges, and the late Christopher Hitchens to any list of faves. I wish someone of that caliber would write a book about all this…IBS has become a virtual Tahrir Square…there is big story here for the right author.
@ Just Me
Thanks for posting links to UK IGA guidance. One question that has been floating around is whether various government registered retirement or other savings accounts would be included in the aggregate for threshold limits that determine the extent of scrutiny that must be undertaken by an FFI. From a quick reading of the guidance, I believe that government registered accounts are exempt and therefore not considered a financial account.for threshold purposes.
In Canada, there are RRSP, TFSA, RESP and RDSP accounts that are government registered, so i assume they would not be counted when a financial institution in making an electronic sweep of its accounts.
@Wondering, Just Me
The USG will attempt to solve these overload concerns by increasing automation, but as the NTA has pointed out, taking the human element out will only lead to more problems.
Just let Hal run things:
A little background on another hero to expats, Jackie Bugnion:
“Jackie Bugnion heads up the Tax Team of ACA and has been active in drafting ACA position papers on FATCA and on residence-based taxation. Every year for the last ten years Jackie has gone to Washington D.C. during Overseas Americans Week to visit congressional offices on issues facing Americans abroad.
During her professional life, Jackie has worked in the Swiss watch industry, banking and the consumer products industry, always on the financial side.
She holds an MBA from Harvard Business School and a BA in Economics from Cornell. An American by birth and education, Jackie is also Swiss through her marriage and has lived in Switzerland for 48 years.”
http://www.amiando.com/FATCA_GE.html
FATCA and Rosa Parks
http://maplesandbox.ca/2013/what-would-rosa-parks-do/
FATCA is coming soon to Israel
http://www.jpost.com/Business/Business-Features/Your-Taxes-FATCA-is-comingsoon-to-Israel-315448
I have a growing concern about FATCA that I haven’t seen expressed elsewhere. I’d like to hear the opinion of others here:
Presently, the FATCA regulations will require participating FFIs to scan their records for US accounts, and report that information to the IRS. Another requirement is to act as a withholding agent for the IRS, withholding 30% of US source income and gross proceeds to non-FATCA compliant FFIs, recalcitrant NFFEs and a few others. Notably, there are no regulations specifying withholding against the US accounts themselves.
Now let’s assume the IRS identifies a tax evader (X) with a large account in some remote FFI (ABC Bank). X has all his assets offshore and has no intention of ever returning to the USA, so doesn’t respond to the IRS’ demands. Now the IRS has this multi-billion Dollar FATCA program deployed globally which permits absurd penalties on foreign entities if they don’t comply, yet provides them no recourse against the real targets of the program? I believe that FATCA could be used to recover those funds.
For decades the US has frozen the US assets of foreign entities (governments, corporations and individuals) when it believes they owe money. A New York court is currently upholding the rights of a US hedge fund that seized an Argentinian naval vessel in Ghana. It seems likely that the US would have few qualms seizing X’s foreign assets; FATCA wouldn’t provide the authority, just the mechanism. Even if ABC Bank refused, and it had no US assets, ABC would be connected to the US through one or more FATCA withholding agents. The IRS could just freeze some FFIs US assets, and that liability would find its way to ABC Bank.
My concern is that once FATCA has proven to be a handy repatriation tool, it presents an entirely more ominous threat. The US is facing some rather extreme fiscal uncertainties, the likes of which it hasn’t seen since the 1930s. Numerous bubbles, the credit crisis, QE and the uncontainable deficit have put the US economy in extreme and uncharted waters. There remains a possibility that these untested remedies merely foreshadow a greater crisis.
Jim Rogers is a renowned financial markets commentator, frequently interviewed on CNBC and Bloomberg. He started the Quantum Fund with George Soros back in the 1970s. He recently suggested a possible scenario if the current financial programs unravel badly: in order to protect its citizens from the ongoing uncertainties inherent to the financial markets, the US government has passed a law that all tax free savings accounts must invest exclusively in US Government Bonds. In other words, the US will nationalize your 401(K). Some of you may be familiar with Executive Order 6102, signed in 1933 by FDR, requiring all citizens to deliver their gold bullion to the federal government in exchange for US Dollars. It then promptly devalued the Dollar (against gold) by 40%.
Executive Order 6102, or something similar, would be met with more defiance than compliance by today’s untrusting citizenry, but I have read a few articles speculating on how similar measures might be taken today. The most plausible I’ve heard is Jim Rogers’. I’d like to suggest another: the repatriation of all offshore US financial assets. Those who failed to comply would be subject to enforced repatriation via FATCA.
Global repatriation is a far-fetched, worst-case scenario. However, if my reasoning is valid, then FATCA’s potential use as a repatriation mechanism presents a significant risk to the savings of Americans abroad. Is it a risk we should be considering?
From the hypocrit-in-Chief
https://www.facebook.com/photo.php?fbid=10151681273654238&set=a.158628314237.115142.63811549237&type=1&relevant_count=1&ref=nf
“Every single American deserves to be treated equally in the Eyes of the Law”
http://www.acfcs.org/by-taking-certain-steps-the-irs-may-share-bank-data-it-gets-from-foreign-banks-under-fatca-with-other-us-agencies/?goback=%2Egde_4118437_member_247324492
This might be Another key explaining the joy of FATCA implementation.
By taking certain steps, the IRS may share bank data it gets from foreign banks under FATCA with other US agencies
FATCA data could help military, intelligence agencies in ‘threat finance’ work
Section 6103 also permits disclosure of “return information” to certain Federal officers and employees and law enforcement agencies for purposes of combating terrorism.
This information may also be shared with US intelligence agencies for their use in “investigation, collection or analysis.” This work by intelligence agencies has been given the name, “threat finance.” This work includes not only the pursuit of terrorism cases but also those involving other national security threats, including trafficking in nuclear materials, weapons of mass destruction, humans and narcotics, as well as foreign corruption.
Pretty scary. And it might explain why all the media and politicians are on full radio silence.
and now this ‘general warrant’ of collecting everyones data…
NSA collecting phone records of millions of Verizon customers daily
Exclusive: Top secret court order requiring Verizon to hand over all call data shows scale of domestic surveillance under Obama
Good debate and discussion around this issue on To the Point….
http://www.kcrw.com/news/programs/tp/tp130606nsa_collects_verizon
Audio will be up soon, and discussion is in the first half of the program.
Given this is unhelpful news for Mr. Obama, I’m guessing there will be another witch hunt for the poor soul who made the court order available to the Guardian. Of course, it’s probably safe to assume the Verizon court order is only one of many. The good news is there won’t be any more pesky revelations like the seizure of the AP’s phone records. They won’t even have to bother asking for them since they already have them.
Please tell president Obama that I never cheated on my girlfriend —- that he can stop reading my emails now.
“The law, which Congress reauthorized in late 2012, is controversial in part because Americans’ e-mails and phone calls can be swept into the database without an individualized court order when they communicate with people overseas. While the newspapers portrayed the classified documents as indicating that the N.S.A. obtained direct access to the companies’ servers, several of the companies — including Google, Facebook, Microsoft and Apple — denied that the government could do so. Instead, the companies have negotiated with the government technical means to provide specific data in response to court orders, according to people briefed on the arrangements. ”
http://www.nytimes.com/2013/06/07/us/nsa-verizon-calls.html?nl=todaysheadlines&emc=edit_th_20130607&_r=0
Huff & Puff and NY times !!!
Mr. Obama is proving the truism that the executive will use any power it is given and very likely abuse it. That is one reason we have long argued that the Patriot Act, enacted in the heat of fear after the 9/11 attacks by members of Congress who mostly had not even read it, was reckless in its assignment of unnecessary and overbroad surveillance powers
http://www.huffingtonpost.com/2013/06/06/ny-times-editorial-board-obama-administration-lost-credibility_n_3398666.html
London unites to tackle FATCA threat http://www.insuranceinsider.com/london-unites-to-tackle-fatca-threat Now they are figuring out what the hell they capitulated too. Serves them right!
re: London “together” with Ernst & Young – –
Ernst & Young gets to flip the coin and both sides are “heads”
@Accidental
I see that no one has responded to your very good questions. Maybe I am not smart enough to be able to speculate on all the permeation’s of what is possible, but there is good reason to think this is more about Control than it is about revenue creation. Once you have control, than all things are possible.
Of course that is not said publicly. All you hear is the JCT justification that this effort will be the funding mechanism for their Hire Act in that phony game they play in DC, where they pretend to cover the cost of new programs.
I just read this blog tonight that asks the same questions. Ignore the product promotion at the bottom, but it too raises some of the issues you do..
The Real Reason Governments Are Killing Financial Privacy
@Accidental,
You said: ‘Notably, there are no regulations specifying withholding against the US accounts themselves.’
Are you sure about that? My understanding is that withholdings against individual accounts would be part of the phased in FATCA regulations – but I could be misunderstanding.
You said: ‘Global repatriation is a far-fetched, worst-case scenario. However, if my reasoning is valid, then FATCA’s potential use as a repatriation mechanism presents a significant risk to the savings of Americans abroad. Is it a risk we should be considering?’
Yes, I think it is a risk we should be considering, and another reason to derail the FATCA train before it has a chance to inflict such destruction. However, I seriously think that common sense will prevail before things get so ridiculous that 80 year old grannies bank accounts are raided and pilfered – at least in Canada. There are TOO MANY OUTRAGED CANADIANS WHO WON’T STAND FOR IT, so its not likely going to happen in my opinion.