FATCA Discussion Thread (Ask your questions) Part Two
Please ask your questions here about FATCA.
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@all – I found this in a letter from Democrats Abroad to USP/USC in Indonesia, letter written by Joe Green. Does anyone know if this will be the 2013 reporting limit – $400,000 US for single filers and to $600,000 for joint filers?
“We also want to tell you that, while the implementation of the FATCA regulations is still being worked out amongst and between the IRS and various foreign governments and financial institutions, the threshold for reporting financial holdings by overseas Americans has been raised to $400,000 US for single filers and to $600,000 for joint filers.”
Found this interesting comment on a tax professional’s blog;
“…Recently we talked to one IRS official in Chicago that said people who don’t pay their taxes are “domestic terrorists”.)…” from http://taxconnections.com/taxblog/scary-storythe-irs-gets-information-from-spy-agenc/
That comment reminded me that Richard Harvey, father of FATCA advised that FATCA information demands applied to account holders would sell better if linked to preventing terror funding etc. – i.e. it would sell the intrusion more effectively and make it easier to justify:
…”……….Harvey suggests that Treasury and the IRS may want to increase coordination with Treasury’s anti-money-laundering/terrorist financing arm. Detailed customer due diligence may be easier to justify if it is being done for both tax and anti-terrorist or anti-money-laundering reasons. “…
August 9, 2012
FATCA — a Report From the Front Lines
from http://www.taxanalysts.com/www/features.nsf/Articles/7FE9806866554F5985257A5500712E6D?OpenDocument
THIS ONE IS WORTH YOUR ATTENTION. It tells UK residents exactly what their banks will do.
http://www.hmrc.gov.uk/fatca/130814-guidance.pdf
When Canada signs an IGA, we can expect much of the same. Therefore we can expect that RSPs, TFSAs, RESPs, RDSPs and so on will be exempt
In many ways,an IGA will bring some measure of relief to many of you. Certainly, unless you have $1 million in a non registered account, it is unlikely that your bank will have to report your account to anyone.
@ Duke of Devon
That’s 142 pages of mind numbing “relief”? No, I don’t think so. FATCA is flat out wrong and an IGA is a unwanted attempt to justify its existence. It really doesn’t matter that they toss a few exemption bones at us because FATCA needs to be repealed not ratified.
@Allou. I Think you are referring (with Joe Green) to the form 8938, which is on top of FBAR. Check the limits on that one, they are similar to the numbers above, but a bit lower.
FBAR is 10k
Em You miss the point. Fatca may be wrong and IGA may be unwanted but they are coming and many have to deal with them. Its worth knowing what’s in the UK one and what is likely to be in the Canadian one.
@ Duke of Devon
Thanks for posting the link.
I admit to not having read all 142 pages, but I believe in the regulations it states that all accounts with US indicia are reportable, but FIs can elect to apply the thresholds. I take this to mean that an FI can decide not to elect to use the thresholds.Therefore, even low value accounts (under $ 50,0000), could be reported.
It may be cheaper from an IT point of view just to report on everyone with U.S. indicia, rather than having to bother with the thresholds.
Blaze has a crucial reminder for us in her comments at Maple Sandbox http://maplesandbox.ca/2013/carl-levin-fatca-for-law-enforcement-national-security
She posts a quote from a letter from Levin to the IRS that makes amply clear that this is NOT about taxation alone – FATCA was designed to treat all of us as terrorists and criminals.
This is an extract: “……FATCA is structured to address offshore tax abuse, offshore account information has significance far beyond the tax context, affecting cases involving money laundering, drug trafficking, terrorist financing, acts of corruption, financial fraud, and many other legal violations and crimes. Given the importance of offshore account disclosures, FATCA guidance and implementing rule should create account FATCA forms that are not designated as tax return information but, like FBARs, may be provided to law enforcement, regulatory, and national security communities upon request…..”
Ask your Canadian representatives how Canada could collude with an US IGA that in fact is NOT just about taxation – it presupposes that all those subjected to FATCA are terrorists and criminals – without due process, without a warrant, without reasonable cause, etc.
For those who are told that Canada has to respect the US ‘right’ to tax us – without limits – even extraterritorially a strong rebuttal is that FATCA is only very peripherally about taxes. The words of Levin, Harvey and others demonstrate that it was intended and designed to go far beyond any ‘tax’ treaty.
Remind them of the comment by Richard Harvey http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2122491 “…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….”
from;
‘FATCA – A Report from the Front Lines’
J. Richard (Dick) Harvey
Villanova University School of Law and Graduate Tax Program
August 1, 2012
Tax Notes, p. 713, August 6, 2012
Villanova Law/Public Policy Research Paper No. 2013-3001
further to my comment above re Blaze’s post at Maple Sandbox;
Levin’s letter to the IRS is here:
http://bsmlegal.com/PDFs/CarlLevin.pdf
[TEXT OF THE FATCA COMMENT LETTER SUBMITTED BY
SENATOR CARL LEVIN]
January 11, 2012
RE:
Notice 2011-34: Implementing the Foreign Account Tax Compliance Act
to Commissioner Shulman (IRS) and Ms. McMahon (Treasury)
I know that this letter has been posted at IBS before, as has the Richard Harvey article, but it is worth a revisit. The body of FATCA and CBT discussion at IBS is now so rich that it is challenging to remember all of the foundational texts.
@Hazy…
You are right on point. I have made that observation that the $50K threshold that folks think is a ‘safe haven” may not be, but was accused of being a “fear monger”. Like I have said, in regards to the UK, I would not bet the farm on it.
@Em,
Right on!
@Hazy…
Here is this from Jim Calvin of Deloitte out of Singapore who has done some of the most technical reporting on FATCA requirements. I see he thought it necessary recently to make this single post…
http://www.fsitaxposts.com/2013/08/13/faq-ffis-planning-fatca-50000-de-minimis-rule/
It’s not a limit, it’s a minimum.
Further to a review of the UK regulations, Regulation 4.8 requires FIs” to establish the residency of all account holders, not just US persons”.
So as others have been saying, FATCA affects everyone.
And getting back to the point about whether or not an FI is going to use the thresholds, I wonder which type or size of FI will not want to bother with the thresholds. Further, will an account holder be able to find out in advance what their FI is going to do? Will just asking that question be a US indicia.
So that fare saver card I purchase to save money on BC Ferries will be reportable you think? I suppose I’ll have to report the my savings as income too? Absurd.
http://www.reuters.com/article/2013/08/19/us-usa-tax-fatca-idUSBRE97I0YN20130819
‘IRS debuts online registration for firms ahead of FATCA law’
WASHINGTON | Mon Aug 19, 2013 6:15pm EDT
(Reuters) – “The Internal Revenue Service on Monday launched an online registration program for the hundreds of thousands of financial firms around the world that must comply with a U.S. anti-tax evasion law or risk being shut out of financial markets.”…………..
“…To register in compliance with the law, a firm gives the IRS its name, mailing address, any branch offices and other basic information.
The IRS will start approving firms’ registrations in 2014. Firms must register by April 25, 2014, to avoid FATCA’s withholding penalties. In June 2014, the IRS will publish online a list of all the firms complying with FATCA…..”
I look forward to seeing which Canadian businesses are on this list so that I can boycott them.
Hell, that’s going to be one BIG file! I wonder which poor sod drew the short straw to check who the missing ones are.
http://www.irs.gov/Businesses/Corporations/FATCAHelp503?goback=%2Egde_4143548_member_266943354#%21
The 75 page guide to registering your financial institution for FATCA!!!! Whoopiee!!!
The UK government estimates FATCA costs for UK FFIs at 1-2 Billion pounds! They trumpet their IGA as saving a billion or so more that it would have cost without an IGA.
http://www.hmrc.gov.uk/fatca/itc-regs-2013.pdf
Too bad the FFIs didn’t listen to James Jatras and spend a pittance to get FATCA repealed. Or perhaps they are without broadcasting it.
More countries knuckle under:
http://www.bbc.co.uk/news/business-23778144
@Just Me http://isaacbrocksociety.ca/fatca/comment-page-38/#comment-491829 and others,
thanks for the reminder that the FFIs can choose to report everyone – and as @Mark Twain pointed out, the threshold is a minimum only. The banks and other FFIs will take the route that is easiest for them – so if it is easier to give the IRS more, or when in doubt to report anyway, that is what they will do. And no doubt, as we’ve noted before, there will be errors and over reporting.
The Portal of Mordor is now open for FFI registration….
https://sa2.www4.irs.gov/fatca-rup/
Now we shall see how many rush to sign up…
IRS Opens Online FATCA Registration System
IR-2013-69, Aug. 19, 2013
WASHINGTON — The Internal Revenue Service today announced the opening of a new online registration system for financial institutions that need to register with the IRS under the Foreign Account Tax Compliance Act (FATCA).
Financial institutions that must register with the IRS to meet their FATCA obligations can now begin the process of registering by creating an account and providing required information. Financial institutions will also be able to provide required information for their branches of operation and other members of their expanded affiliate groups in which the financial institution is the lead organization.
The registration system, designed to enable secure account management, is a web-based application with around-the-clock availability.
Within a secure environment, the new registration system enables financial institutions to:
•establish online accounts;
•customize home pages to manage accounts;
•designate points of contact to handle registrations;
•oversee member and/or branch information; and
•receive automatic notifications of status changes.
Financial institutions are encouraged to become familiar with the system, create their online accounts and begin submitting their information. Starting in January 2014, financial institutions will be expected to finalize their registration information by logging into their accounts, making any necessary changes and submitting the information as final.
As registrations are finalized and approved in 2014, registering financial institutions will receive a notice of registration acceptance and will be issued a global intermediary identification number.
The IRS will electronically post the first IRS Foreign Financial Institution (FFI) List in June 2014, and will update the list monthly. To ensure inclusion in the June 2014 IRS FFI List, financial institutions will need to finalize their registrations by April 25, 2014.
http://www.swissinfo.ch/eng/business/Julius_Baer_data_thief_gets_three_years_.html?cid=36727372
A Swiss court has sentenced a German IT specialist who sold data from Swiss bank Julius Baer to the German tax authorities to three years in prison.
The 54-year-old man, who appeared before the Federal Criminal Court in Bellinzona on Thursday, agreed to a plea bargain deal with prosecutors. He had been charged with breaching banking laws, industrial espionage and money laundering
Good for the Swiss. And now that the identity of that IT specialist has become public, hopefully he’ll have a lot of civil law suits from people whose data he stole to keep him busy when he’s behind bars. It disgusts me to no end that the SPD here in Germany would rather have the tax authorities do shady deals with criminals to get stolen information rather than have an official agreement with the Swiss on the transfer of such information. There was a draft agreement in place and the SPD blocked it.
http://m.vice.com/en_uk/read/larry-summers-and-the-secret-end-game-memo
How Timmy the Tax Cheat sucked out the world’s money supply, from the 90’s through 2009, when he then got to be King of the Sh_tpile,