Liberty and justice for all United States persons abroad

The Isaac Brock Society

FATCA Discussion Thread (Ask your questions) Part Two

If clicking on a link brings you to the wrong page in the comment stream, click on this sentence to arrive at the current page of the comments.

Please ask your questions here about FATCA.

Participants will need to provide their e-mail address (real or fake) and an alias. The only written rule is that participants must use a same alias each time they post (and not “anonymous” or derivatives thereof).

Bear in mind that any responses that you get from participants is peer-to-peer help, and it is not intended as a replacement for professional advice. Also, the Isaac Brock Society provides this disclaimer: neither the Society nor any of its members are professionals. We offer our advice here only in friendship and we recommend that our readers seek professional advice if they need it.

If you wish to receive an e-mail notification of comments, check the box to that effect when making your first comment.

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.

If clicking on a link brings you to the wrong page in the comment stream, click on this sentence to arrive at the current page of the comments.

 

3,498 thoughts on “FATCA Discussion Thread (Ask your questions) Part Two”

  1. badger and tdott,

    Reminds me of this passed on to me:

    Will the IGA the US executed with the UK be the model for Canada’s?

    All Canadian trusts and estates classified as Foreign Financial Institutions: grandma’s estate, a Canadian discretionary trust, and even TFSAs will have to: a) register as an FFI, and b) report their US beneficiaries in the same way as Scotia, Royal, TD, CIBC, etc.?

  2. Today my husband drove to a small town in southern Alberta to visit a museum. (He got a free pass with his citizenship package.) When the woman at the gate saw his pass she congratulated him on becoming a new Canadian and then asked him if he was, by any chance, American. My husband replied yes and then wonder of wonders she said, “Did you become a Canadian because of FATCA?” He was quite surprised she had brought that up. When my husband acknowledged that it was certainly a big factor in his decision she gave him an understanding nod and said, “You won’t believe how many people in town are worried about FATCA too.”

  3. @Em

    Did your husband mention the Brock and Maple Sandbox websites? I always carry a few Brock business cards to give to people when on the subject.

  4. http://www.forbes.com/sites/robertwood/2013/10/25/irs-pays-billions-in-bogus-refunds-but-legit-refunds-still-get-audited/

    So, these guys give away $13.2 Billion a year on average in EITC fraud, and yet they are in charge of the global FATCA round up of all U.S. Persons living everywhere on the globe. The mission is to extort 100s of thousands of financial institutions around the world to be compliant or the IRS will withhold 30% of their U.S. sourced income. This effort (according to Congresses Joint Committee on Taxation) will result in less than a $1 billion a year supposedly lost in offshore tax revenues? Talk about misplaced resources and attention!

  5. @JUSTME

    In 1983 I complied and filed my US taxes for 1982. I was sent a ? 2000 tax refund cheque to my amazement. My husband and I had not worked in the USA since 1969 when we became landed immigrants in Canada. I called IRS and told them that there was a mistake. I sent the cheque back registered mail with a letter to the IRS. I still have a copy of the cheque and letter. I stopped complying when I became a citizen of Canada in 1993. Now I filled out my relinquisment in July and am waiting for my CLN to be sent.

  6. @ northernstar
    Yesterday was just a little day trip for my husband so he wasn’t expecting to hear FATCA pop up in a casual conversation. I always carry Brock cards but sadly he didn’t have any with him. However today we are both armed and will continue to be.

  7. Further changes need further consideration

    Given the intense political grandstanding that surrounded the G8 Summit in June, the likely benefit and cost of implementation of the various measures described was understandably hard to discern. “All jurisdictions should take part in the initiative to stop tax evasion,” said Chancellor George Osborne.

    “I am determined that tax that is owed must be paid. We all agree on the importance of collective action to avoid tax evasion and avoidance and the Crown dependencies and the overseas territories need to play their part in that drive. They will need to do more.”

    The immediate problems with this high sounding pronouncement were three fold.

    Firstly, the statement took no account of the fact that the Cayman Islands already had in place not only full proactive reporting with each European Union Treasury pursuant to the 2005 European Union Savings Directive, full tax transparency with the IRS pursuant to the 2001 Tax Information Exchange Agreement and with the United Kingdom pursuant to the 2009 Double Tax Treaty and with 28 other jurisdictions.

    Secondly, and as a result, the possibility that the “drive” could raise further revenues for the benefit of the U.K. budget is remote to none.

    Thirdly, no one appears to have undertaken any cost/benefit analysis of the introduction of the United States and United Kingdom FATCA legislation.

  8. The Flight from America: The Process Gains Momentum

    The building of a society in America which is increasingly taking on totalitarian characteristics has already gone through several stages. The most recent one is connected with the U.S. Congress passing a law in 2010, often referred to by the abbreviation FATCA, on the taxation of foreign accounts. This law will come into full force in mid-2014.

  11. Just Me,

    I hadn’t previously heard or seen us being referred to as “deadheads” before.

    FATCA is meant to bring all these «deadheads» to light and force them to pay taxes, repay tax debts for previous years and pay fines. And even to take the most inveterate evaders to court. There is a misconception that the U.S. Internal Revenue Service is hunting only for the big evaders, and doesn’t pay attention to the small ones. Several years before the enactment of FATCA (in 2004, to be exact), the U.S. Congress passed a law according to which fines are levied on those who did not inform the Internal Revenue Service about foreign accounts in amounts greater than $10,000. The fines, frankly, are draconian. Either $100,000 or 50 percent of the amount in the account (whichever is greater, naturally). In current U.S. legislation, besides fines for not filing a tax return (or for falsifying it), there are additional fines for nonpayment of the taxes themselves. There have been instances when for the nonpayment of approximately $20,000 in taxes (which could happen even for technical reasons, with no ill intent on the part of the taxpayer) the U.S. Internal Revenue Service imposed a fine of over a million dollars.
    Many Americans are already beginning to realize what kind of a tax trap the U.S. government is trying to drive them into. And they are beginning to act.

  13. The US Treasury has released proposed guidance for foreign financial institutions (FFIs) entering into agreements directly with the US Internal Revenue Service (IRS) under the Foreign Account Tax Compliance Act (Fatca).

    The draft FFI agreement includes proposed guidance not only for FFIs reporting directly to the IRS, but also those reporting via the so-called model 2 intergovernmental agreement (IGA).

    http://www.irs.gov/pub/irs-drop/n-13-69.pdf

  14. Hazy…

    Here is how one attorney describes it…and then co-enables the inevitability…

    FATCA: Fear And Terror Caused by America – FATCA Express Leaves the Station – Coming Soon to Your Hometown

    Just yesterday, the Department of the Treasury and the US Internal Revenue Service (IRS) issued Notice 2013-69 for foreign financial institutions (FFIs) to comply with the information reporting and withholding tax provisions of the Foreign Account Tax Compliance Act (FATCA). The US Congress enacted FATCA in 2010 as the ultimate method to identify US persons using foreign accounts and entities to evade US taxes. Back in 2010, very few believed that FATCA would survive. Indeed, its implementation has been delayed several times. Now, however, FATCA is rapidly becoming the global standard to stop offshore tax evasion. We are seeing many other countries implementing FATCA wannabe laws and applauding the US model. The Treasury Department has now signed nine so-called Intergovernmental Agreements (IGAs), negotiated 16 agreements in substance, and is engaged in FATCA bargaining discussions with many more countries. All aboard the FATCA Express!

  15. Looking for Lucre in all the wrong places. http://bit.ly/17syRgk

    The Obama administration has performed the unique trick of alienating the majority of our most important allies, while at the same time causing America to be viewed as a patsy by its enemies.

    The situation is bound to get worse now that the administration has taken the position that most financial institutions outside the United States are conspiring to help Americans and others avoid U.S. taxes and, thus, is attempting to require all of these foreign financial institutions to report to — and, in effect, become agents of — the Internal Revenue Service. A global revolt is brewing against the United States for being an international financial bully. The consequences of this revolt are likely to be extremely damaging and long-lasting to the nation.

    Read more: http://www.washingtontimes.com/news/2013/oct/28/rahn-looking-for-lucre-in-all-the-wrong-places/#ixzz2jDDB1jlp
    Follow us: @washtimes on Twitter

  17. I came across this as a side article for a link that was in today’s comments.

    Regarding: the estates we will leave to our families, big or small…

    This tells the story of the estate left by a US resident/citizen who had undeclared secret foreign accounts in Switzerland (those that the US SHOULD be looking for: their residents who ship untaxed, undeclared money offshore) — so it is different than for those who live abroad, but it does emphasize that our issues with US Citizenship-Based Taxation and FATCA will not end with our deaths — it will all roll over to our families / our beneficiaries. http://blogs.angloinfo.com/us-tax/2013/10/21/what-to-do-if-someone-dies-owning-an-undeclared-offshore-account/

    … and it is the main reason that I, at age 70, want to make sure my adult children do not inherit issues with the US with what I am able to leave them. I have renounced US citizenship, as has my husband and daughter and that, presumably, stops issues for us.

    But does it really stop the US issues for me if I am the Holder of a Canadian RDSP for my son who, because of his developmental disability, is entrapped into a ‘supposed’ US citizenship because the US will not allow him to renounce and will not allow a Parent, Guardian or Trustee of such a person to renounce US citizenship of their family member’s behalf, even with a court order. It is immoral — there should be a way out, finality, for these people as well. There must be a way for ALL families to be out from underneath the heavy hand of the US IRS, even if only have the outrageous costs and stress of filing year after year, after year — for $0.00 that would be actually owed to the US. Use common sense USA — not punishment?

  20. @ badger
    The IB Times article states:
    “Already, dozens of firms from more than 150 countries have started registration.

    Okay, if you stop using “dozens” after perhaps 200 then that’s a far, far cry from the hundreds of thousands of FFIs the IRS expects to register. I suppose though, in the delusional minds of the IRS prognosticators those dozens will magically escalate into hundreds of thousands in just a matter of a few months. Dream on!

    Oh but wait, Setzer or the IRS says there could be one million, maybe even five million FFIs out there (only his hairdresser knows for sure). Most definitely — Dream on!

    Interesting comment by Elvis:
    “FATCA is painstakingly easy to avoid, you could hold 10 individual US accounts at $49,999 in different banks, they only check on 1 date what the balance is (30th June 2014), after which each account can hold $999,999, and even then the checks are only once a year on dec 31 (so feasibly hold any value up till dec 30, and $999,999 just for dec 31). I work with companies trying to implement FATCA, and it is obvious in the industry that it really won’t make much of a difference to US revenue.”

  21. Connecting the dots – at least in the title:
    The NSA, FATCA and the IRS
    http://www.forbes.com/sites/robertwood/2013/10/31/whats-fatca-global-banking-meets-nsa-but-reports-to-irs/

    10/31/2013 @ 2:48AM
    ‘What’s FATCA? Global Banking Meets NSA But Reports To IRS’
    Robert Wood, Forbes

    Don’t like the ‘resistance is futile’ conclusion though.

    The Canadian Banksters may have surrendered, but Canadian citizens and voters and residents and taxpayers haven’t yet.

  22. @badger
    Of course a tax lawyer would write this.
    My reaction reading his article was luck you. Sorry for misspelling?

  23. @Badger… I hear you…..

    Don’t take this as defeatist, but in the reality world of Tax Practitioners, it is hard to refute that FATCA is here to stay. Frankly, with as little organized opposition as there has been around the globe, and with the expanding compliance orgy of sons of FATCA, it is a hard conclusion to refute. Don’t like it, but there it is.

    FATCA is turning out to be Obama’s signature global achievement along with Drones, and they aren’t going to repeal it anymore than ObamaCare, which in spite of very determined effort, it has NOT gone away. I don’t like it, but, there it is, again…

    That said, we still have to try to throw roadblocks in its way, and attempt to get it to collapse on its own weight. Canada is appearing more and more as the last stand effort. If FATCA remains hidden from the masses, and only the elites know or write about it, and with the FCC co-enabling feeding frenzy, it becomes a self fulling prophecy

    We might just have to wait for FATCA to blow up on its own. Seeing all the negative press on the ObamaCare web site, and all the unintended consequences of folks having their insurance cancelled, this is what will have to happen to FATCA before the press starts paying attention. A financial war between states over compliance and the withholding, or mass exits out of USD financial instruments might be the only way to spark attention so it gets reigned in or modified… We knew this battle was a long shot, so what can we expect. Soldier on…

    BTW, I think another tack to sew some fear of our own, and that is to emphasize the aspect of Responsible officer personal liability.

    This posting on the 6th FATCA myth is worth consideration.. There is a few typos, but he is right on point, imho. We need to spread some personal fear into executive hearts that they are personally liable for FATCA failures, and they will fail. It is designed to fail with its complexity. This means the IRS is coming after them personally…

    http://www.strevus.com/blog/myth-6-the-inter-governmental-agreements-igas-have-simplified-fatca/#!

  24. As much as I tried to think otherwise, I have to say that Robert Wood is a homelander. He doesn’t really seem to comprehend how anti-American FATCA really is – and unfortunately like too many, allows his source of livelihood to corrupt his perception of it.

    Robert Wood profits from throwing Americans under the bus.

Leave a comment

Your email address will not be published.

%d bloggers like this: