FATCA Discussion Thread (Ask your questions) Part Two
Please ask your questions here about FATCA.
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Thanks, Badger. I’ll try to get through them today.
Dick Harvey is looking more and more like Dr Frankenstein every day. Dr FATCAnstein?
So what else is new—USA gives away its citizens to foreign governments. Spying on Americans by America for delivery to another country. Sounds a lot like some other policies we know.
http://www.theguardian.com/world/2013/sep/11/nsa-americans-personal-data-israel-documents.
Why not, Saudi Arabia wants us to fight Syria for them, so what the heck?
I want to know why not at least one government has the gonads to stand up to the USA on FATCA?
It is both amazing and shameful that foreign governments are falling over like dominoes when faced with
Treasury ultimatum of comply or face 30% withholding. What a sham and racket.
This is such a shameful scam on expats makes me feel so taken advantage of as it sticks its ugly finger
into everyday financial affairs of innocent people just trying to get by. Now I have to worry about making a simple mistake and having my head taken off for it.
A link to an article from a compliant expat in Israel – whose bank is harassing them due to FATCA;
http://nehama.newsvine.com/_news/2013/09/14/20489241-message-from-an-expat-or-how-i-became-a-tax-evader
@badger
Now where would an “offshore tax heaven” exist for USP’s abroad? 🙂
Bubblebustin, I liked that accidental turn of phrase as well – referring to a tax ‘heaven’. Must be somewhere over the rainbow. We certainly know that FATCA is designed to make every country a tax hell for USPs ‘abroad’ – including the country where we live.
Here are all the options the IRS and Treasury offers to the children of US residents -whether citizens or not. Some are available as tax free savings, and some can result in money from the IRS even if no US taxes were owed and paid.
So, children inside the US can get official US government tax breaks to help them go to college.
But, the children of all those outside the US can be taxed, and FBAR’d and FATCA’d, but not allowed to benefit from a Canadian government RESP. If they have one, it is taxed as a ‘foreign trust’, and the reporting for it is so complex, costly and fraught with potential errors, pitfalls and penalties that even the principal is seriously compromised.
That tells us that according to the US, the welbeing of our children living outside the US – though deemed US taxable persons, are not considered important, except as a source of US extraterritorial revenue and penalties.
I’d like to see a protest sign that focusses on TFSAs, RESPs and RDSPs – since a threat to those is something that all Canadians can understand and relate to.
And they are pet projects that Finance Minister Flaherty and Harper are proud of.
Hard for the Harper government to explain why they have allowed the Canada-US tax treaty to fail to address the threat to Canadian registered savings plans. Especially when the RESPs and RDSPs are for the good of our vulnerable children and dependents – who can’t possibly be money laundering, tax evading drug lord terrorists as the US insists.
Here is the link to the article that extolls all the education benefits that the IRS and Treasury confer upon US resident taxable persons – which it does not offer to US taxable children or their parents who live outside the US – though both sets of children are deemed “US taxable persons”
http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2013/09/take-advantage-of-education-tax-breaks.html
Wednesday, September 11, 2013
‘Take advantage of education tax breaks’
“Back to school blackboardSchool’s back in session! So are the expenses.
But your favorite relative, Uncle Sam, might be able to help.
There are many tax breaks that can help students, and their parents, cover education costs. The options are this week’s Weekly Tax Tip.
Savings plans: There are two tax-advantaged educational savings plans. A 529 plan is an increasingly popular way to pay for college costs. A recent study by education loan provider Sallie Mae found that 17 percent of families last year tapped 529 funds, the highest percentage since the study began in 2008.
The numerical name of this educational savings plan comes from the Internal Revenue Code section under which 529 plans were created. They are operated by a state (every state has at least one 529 plan) or educational institution and help families set aside funds that can be withdrawn tax-free to pay future college costs.
Contributions to a Coverdell Education Savings Account are more limited, just $2,000 a year. However, that money and subsequent earnings can be withdrawn tax-free as long as they are used to pay eligible schooling costs.
And the costs don’t have to be for college. Qualified Coverdell expenses include those in kindergarten through a student’s senior high school year.
Education tax credits: The American Opportunity Tax Credit (AOTC) replaced the Hope Credit in 2009 has been extended through the 2017 tax year.
The AOTC is worth up to $2,500 plus up to 40 percent of the new credit is refundable. This could get you as much as $1,000 back from the Internal Revenue Service even if you don’t owe any taxes.
While the AOTC is available for expenses incurred during the first four years of college, the Lifetime Learning Credit can be used to pay for undergraduate, graduate or even course work to improve job skills.
The Lifetime Learning credit could cut up to $2,000 from your tax bill.
Other educational tax options: There also are tax breaks for savings bonds used to pay for some school costs, employer assistance of up to $5,250 as nontaxable income to cover school expenses and the above-the-line deductions for tuition and fee expenses and up to $2,500 in interest you pay on a college loan.
Even adult students get another shot at tax help from the tax code. If you take work-related courses and can’t use the Lifetime Learning tax credit to pay them, you might be able to deduct the continuing education as a business expense. Include the work-related study costs as part of the miscellaneous deductions section when you itemize on Schedule A.
Do your homework. IRS Publication 970 is a handy course guide. A good grade on these educational tax benefits could make a big difference.”…………..
Hypocrisy is US – the US facilitates tax havens and US tax avoidance via Puerto Rico and American Virgin Islands:
http://truth-out.org/news/item/18833-washingtons-contradictory-policy-on-tax-avoidance
The US says “tax havens are okay with the IRS and Treasury as long as their OUR US tax havens. Like Delaware, the home state of Vice President Joe Biden – http://www.dw.de/nevada-ups-the-ante-on-delawares-tax-status/a-16745409 or Florida where “…Miami is a massive offshore banking centre, offering depositors from emerging markets the sort of protection from prying eyes that their home countries can no longer get away with…” http://www.economist.com/news/leaders/21571873-how-stop-companies-and-people-dodging-tax-delaware-well-grand-cayman-missing-20 http://www.publicintegrity.org/2011/05/18/4638/irs-crusades-against-americans-hiding-money-offshore-latin-american-tax-cheats-flock http://www.gmlaw.com/florida-the-tax-haven-if-youre-a-domiciliary/ http://www.lectlaw.com/filesh/bbg33.htm
There is also Nevada http://www.dw.de/nevada-ups-the-ante-on-delawares-tax-status/a-16745409 Texas http://www.taxanalysts.com/www/features.nsf/Articles/522A39903AFD6CFB8525761D004F113B and others http://sbcmag.info/news/2012/may/top-10-us-tax-haven-states . US banks facilitating money laundering and profiting from deposits from the proceeds of crime like those from the drug trade are considered ‘too big to prosecute’ http://blogs.wsj.com/washwire/2013/03/06/holder-banks-may-be-too-large-to-prosecute/ http://www.bloomberg.com/news/2013-03-31/money-laundering-banks-still-get-a-pass-from-u-s-.html http://www.theguardian.com/world/2011/apr/03/us-bank-mexico-drug-gangs
http://lovinglifeineurope.blogspot.ca/2013/09/the-end-of-american-ex-pat-influence-in.html
Link to an interview re the ‘unintended’ consequences of FATCA. \s always, it’s the little guys who get hurt by the unintended consequences.
The photo above is of D-L being interviewed by Swiss TV station RTS Un for the program Mise au Point, which aired last night and focused on FATCA. It’s mostly in French, though you can hear some of D-L’s English remarks. You can view the program at http://www.rts.ch/emissions/mise-au-point/5131227-mise-au-point.html. The FATCA segment runs from about 09:53 to 22:17.
I haven’t listened to it, but post it here for French speakers.
supplemental to my previous post:
http://theexpatwriter.blogspot.ca/2013/09/it-is-more-complicated-than-tax.html
“Monday, September 16, 2013
It is more complicated than tax avoidance
I appeared on Swiss television last night on the RTS program Mise au Point. Click the link to watch.
http://www.rts.ch/emissions/mise-au-point/5131227-mise-au-point.html
The interview discussed the US FATCA banking legislation and the reasons so many dual citizens are renouncing. The segment begins about 09:53 into the program and runs through 22:17.
It starts with my cancelled passport and my segment is in English–guess they couldn’t take my French accent or want to have to type subtitles. They did show my novel with the cover from my housemate.”…….
@badger
Merci pour ca….
It should really be subtitled in English for all to understand…
I faced the same documentation requirements here in Canada at the TD Waterhouse…so it is coming if and when Canada signs…and for expediency purposes, the banks will send out the same letters requesting persons to sign the W9 and General Waiver for US Persons or close option. (shown at 17:33)…
@Benedict Arnold be me
Wouldn’t the banks be asking for W-9’s regardless of whether or not Canada signs an IGA? FATCA’s coming with or without Canada signing, and banks may even be more proactive if they don’t believe they’ll have the protection of an IGA.
the only difference is that in once case the w-9 is an American rules, whereas with an IGA it is a Canadian rule.
@ bubblebustin
They do require a W9 (US Owner) or W8-BEN (Foreign Owner) if they see you making US Investments or you indicate an intention to…but they aren’t going to get you to sign THE Disclosure Waiver if you are Canadian since they will not share your info…in fact, if you look closely at the documents you do sign, there is a clause built in asking whether they can even share your info between subsidiaries of the same bank..(e.g. RBC Dominion Securities would ask you whether they can share info with RBC and RBC Insurance etc…) I have always signed NO and advised anyone else to do the same…
The W9 form includes a TIN – Taxpayer Identification Number…if you aren’t a US Citizen , you most likely wouldn’t have one…I know my purely CANADIAN wife has one because she had to make a CLAIM to get back withholding tax on her Las Vegas winnings…I never had one, nor did I have a Social Security Number…strictly Canadian Social INSURANCE Number…( I guess being a LOSER in LAS VEGAS has some benefits besides being compted 😉 )
Sophia Yan published her second article on CNN money, entitled “Banks lock out Americans over new tax law”
http://money.cnn.com/2013/09/15/news/banks-americans-lockout/index.html?iid=HP_LN
http://www.repealfatca.com/index.asp?idmenu=4&title=News&idsubmenu=135
Jatras latest, on financial privacy and the police state.
http://www.usatoday.com/story/news/nation/2013/09/17/fifth-avenue-skyscraper-iran-government-seizure/2829517/
Judge confiscates building with Connections to Iran bank. SMells funny.
TIGTA criticizes the IRS for its lack of rigorous statistical methods and lack of adequate methods in quantifying the storied ‘tax gap’ – including the portion attributed to ‘offshore’ ‘evasion’.
So, if TIGTA finds the IRS significantly lacking in their estimates and attribution of the sources of the ‘tax gap’, including issues such as transparency, methodology, statistics and analysis, etc. including IRS estimates of the portion attributed to the ‘offshore’ tax gap, then how could anyone possibly take their estimates re FATCA seriously at all?
http://www.treasury.gov/tigta/iereports/2013reports/2013IER008fr.pdf
http://www.accountingtoday.com/news/Inspector-General-Questions-Accuracy-IRS-Tax-Gap-Estimate-68045-1.html
…”“Measuring the Tax Gap is both complex and challenging,” said TIGTA Inspector General J. Russell George in a statement. “However, I am concerned about the overall accuracy of the estimate.”
TIGTA recommended that the IRS study the feasibility of developing separate estimates for the informal economy and offshore tax evasion. In addition, TIGTA recommended that the IRS consider changing the approach to measuring the corporate Tax Gap estimates.
The IRS substantially agreed with TIGTA’s recommendations to study the feasibility of developing separate estimates for the informal economy and offshore tax evasion. …….
…..“The IRS agrees that some steps may be taken that would improve the quality of Tax Gap estimates and provide additional insights to policymakers,” wrote IRS director of research, analysis and statistics Rosemary D. Marcuss in response to the report.
…”
@badger
With the shooter in DC who was a contractor that passed all those security checks with all the arrests and mental issues and the NSA hacking and now this treasury report that they don’t have the statistics right and in order, it makes it look like the “greatest” and “richest” most powerful country world really is just an illusion. I am so thankful I live in Canada.
Now if our politicians can actually stand up to those American illusionists.
@badger
Unfortunately, the horse has already left the barn!
@bubblebustin;
well perhaps citing the TIGTA report will give ammunition to those who keep challenging the IRS and Treasury to produce their cost/benefit analysis of FATCA.
@northernstar;
Canadian politicians choose to be complicit collaborators of the US and go along with the illusion to further their own ends – to our detriment at the hands of both governments.
@badger
I guess you’re right, but it’s getting pretty tiresome to watch them embark on every war the same way, with always the same result! Ready, shoot, aim!
http://www.usatoday.com/story/news/nation/2013/09/18/beanie-babies-founder-warner-tax-evasion/2833359/
More gasoline to put in the fire extinguishers.
The announcement Reuters is referring to in this Thu Sep 19, 2013 9:23am EDT piece turned out not to be about a Canadian IGA on FATCA. However, it is interesting that the piece quoted a spokesperson for the Dept. of Finance who said;
“We believe we are close to agreement and we are hopeful that we’ll be able to announce further details in the near future,” a spokeswoman from the Department of Finance told Reuters in an email on Friday….” http://www.reuters.com/article/2013/09/19/canada-economy-flaherty-idUSL2N0HF0JM20130919
Now they have been saying that for a while, but the fact that they keep repeating it makes no sense if it isn’t true.
I find it hard to believe that they could reach any agreement on FATCA that would be acceptable, unless the US agrees to exempt Canada and Canadian citizens and permanent residents from it. Which I doubt the US would do – given its behaviour all along – insisting that Canadian legal local transparent accounts belonging to Canadian citizens and Canadian resident taxpayers are to be treated as ‘offshore accounts’ just exactly like those in the Caymans belonging to US residents. And that TFSAs and other Canadian government registered savings are ‘foreign trusts’ – equivalent to those belonging to Penny Pritzker – Obama’s new Commerce Secretary http://www.bloomberg.com/news/2013-05-21/pritzker-s-54-million-family-trust-fee-seen-as-unique.html and Jack Lew, Obama’s newest Treasury Secretary http://billmoyers.com/2013/03/08/jack-lew-citigroup-and-the-ugland-truth/ and the newest US Ambassador to Canada Heyman – investment banker formerly of Goldman Sachs, and a huge Obama fundraiser, whose “…complex investment portfolio…” was seen as a possible obstacle to his nomination http://www.theglobeandmail.com/news/politics/obama-plans-to-pick-bruce-heyman-as-us-ambassador-to-canada/article14424868/ .
So, the US government continues to put the wealthy foxes in charge of the hen house, while chasing and trapping ordinary Canadian chickens – and US tax their Canadian laid nest eggs.