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FATCA Discussion Thread (Ask your questions) Part Two

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Please ask your questions here about FATCA.

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

  1. BEFORE IT’S NEWS:

    FATCA Invades Canada

    “What does this new law mean to the average Canadian Citizen?

    Once again, less privacy, bigger government, and greater economic inefficiencies. Complying with FATCA will surely be expensive bureaucratic work and this expense will be pushed onto the consumer. I would not be surprised if banks start charging higher fees– fees that will rob the savings of the middle class, in addition to inflation. Of course, if you pertain to any of the criteria listed above, you may be under scrutiny by your bank and may be subject to a 30% withholding tax on US source income.”

    http://beforeitsnews.com/economics-and-politics/2013/11/fatca-invades-canada-2459096.html

  2. I thought there was a law in Canada that a Canadian citizen could not be refused banking services. What happens to duals who are deemed recalcitrant and have their bank accounts closed? Where are they supposed to bank? How will they receive paycheques or pension cheques?

  3. @Rob,

    I believe the general thought here at IBS(not to be confused with intestinal upset), is that Canada will not allow bank closures of witches (err I mean recalcitrants), but we won’t know for sure until/if an IGA is signed.

  4. @Whitekat…
    That is what a reading of the IGAs says…
    Not closed but reported…

    I would expect something similar to this from the UK IGA

    2. Suspension of Rules Relating to Recalcitrant Accounts. The United States shall not require a Reporting United Kingdom Financial Institution to withhold tax under section 1471 or 1472 of the U.S. Internal Revenue Code with respect to an account held by a recalcitrant account holder (as defined in section 1471(d)(6) of the U.S. Internal Revenue Code), or to close such account, if the U.S. Competent Authority receives the information set forth in sub paragraph 2(a) of Article 2, subject to the provisions of Article 3, with respect to such account.

    Now, can Treasury actually waive (via the IGA) the requirement to close the account as called for in the actual Statute? I guess that is for lawyers to determine.

    See

    Section 1471 (b) (1) (F) (ii)
    if a waiver described in clause (i) is not obtained from each such holder within a reasonable period of time, to close such account.

    I am not an attorney, but it seems to me the discretion to waive that closure requirement probably rests here…

    Section 1471 (b) (2) (A) and (B)

    You can look it up, if you wish.

  5. Thanks for the replies. Just to clarify, even if you refuse to sign a waiver the bank cannot close your account, but they will send your account information to the IRS ( through the CRA). If the bank cannot close your account or appropriate funds from your account to pay penalties to the IRS, and if the CRA will not collect penalties on behalf of the IRS is your money safe?

  6. @Just Me, the French IGA has the exact same clause. I didn’t understand it. By definition, a recalcitrant account refuses the information to be sent. But the phrasing says that the account will not be closed only if the US gets the info. So either they don’t send the info and close the account, or send the info, regardless of the person not signing the waiver and the account is not closed.
    That paragraph confused me. Does that mean that they will not even bother with the waivers, and that there will be no recalcitrant accounts to avoid the closures?

  8. @Rob,

    With information comes power. Although there are no provisions under way currently for the IRS to be able to collect those penalties, in my opinion, once IRS knows how much you have, your money is not safe unless you actually put it in a safe (and I am not talking about the safe at the bank).

  10. I’m not sure if this has been posted before or not. Found it on YouTube. Gets of to a slow start but stay with it. It’s rare to see something from within the US that “gets it” as well as this guy.

  11. Funds start questioning any involvement with the US:
    “…..Indian mutual funds, which are set to stop accepting money from US investors with a new tax regime setting in January.

    The Foreign Account Tax Compliance Act (FATCA) guidelines will require foreign financial institutions receiving money from US investors to report the offshore holdings of those investors to the American tax authorities.

    The new rules would increase the compliance cost for mutual funds garnering assets in the US and make them unviable.

    “The move will result in significant costs and compliance implications for fund houses accepting subscription from US investors, as the man power, paper work and ongoing reporting requirement will be massive.

    This, in addition, to fears of any inadvertent non-compliance of the complex US regulatory regime. Hence, the worry for them right now is whether accepting investments from US investors is worth the above efforts,” said Tejesh Chitlangi, Partner at IC Legal, Advocates & Solicitors…..”….

    http://www.business-standard.com/article/pf/mfs-set-to-skip-us-as-stringent-tax-regime-sets-in-113112700774_1.html

  12. The new rules would increase the compliance cost for mutual funds garnering assets in the US and make them unviable.

    Certainly not an understatement. Glad this is being brought to light.

  14. @Calgary411’s post: http://isaacbrocksociety.ca/fatca/comment-page-60/#comment-716857

    This member of the FCC says in reference to banks turfing their American customers, “One can understand this reaction, but one must also question the wisdom of deciding not to do business with the citizens and corporations of the world’s largest economy.”

    and…

    @Osgood’s video post: http://isaacbrocksociety.ca/fatca/comment-page-60/#comment-718026

    where the talk show host makes the distinction between educated American emigrants in a frothy rant against America’s deadbeat immigrants,

    …warms my heart to feel all of this appreciation for our existence!

  15. Another good FATCA video;
    http://youtu.be/RlWoNYByfIM

    ‘FATCA – You are a “person of interest”‘
    Clément Jérémie

    Evokes the Beyond the Border plans of Harper and Obama as well.
    This is a MUST READ article
    http://www.thestar.com/news/canada/2013/07/30/us_wants_exemption_from_canadian_law_for_crossborder_officers_rcmp_memo_says.html

    …”the U.S. has recently expressed concerns with the continued application of the ‘host country law model’ and has requested that its officers be exempted from the laws or the jurisdiction of the ordinary courts in Canada in the context of the Next Gen and Preclearance initiatives.”…”

  16. Thanks once again, badger!

    …an internal RCMP memo says.

    The debate over whose laws would apply to U.S. officers working in Canada raises important questions of sovereignty and police accountability, says the briefing note prepared for RCMP Commissioner Bob Paulson.

    “Canadians would likely have serious concerns with cross-designated officers from the U.S. not being accountable for their actions in Canada,” it says.

    I hope so; in line with other recent news stories of the US creep (double entendre) into Canada.

  18. ….”The Internal Revenue Service’s online portal for foreign financial institutions to register under the Foreign Account Tax Compliance Act has so far logged entries from 6,700 institutions worldwide, an IRS official said.

    “We’re very pleased with the performance of the portal to date,” said Michael Danilack, IRS deputy commissioner (International), who disputed news reports of connectivity problems for users….”..
    from
    http://about.bloomberglaw.com/law-reports/more-than-6700-financial-institutions-have-tested-fatca-portal-danilack-says/

    So I was wondering;
    Has the bank of Kabul signed up to the FATCA portal yet? Has Afghanistan signed an IGA? Or will the Bank of Kabul report directly to the IRS? I don’t see Afghanistan on the Treasury list of countries frothing at the mouth to comply http://www.treasury.gov/resource-center/tax-policy/treaties/pages/fatca-archive.aspx

    Read more about Kabul Bank:
    http://online.wsj.com/news/articles/SB10001424127887324539404578342174235885546
    http://www.nytimes.com/2012/04/06/world/asia/karzai-orders-inquiry-in-kabul-banks-losses.html
    http://www.ipsnews.net/2013/03/kabul-bank-a-bank-that-defaulted-on-trust/
    http://en.wikipedia.org/wiki/Kabul_Bank
    “Depositor and U.S. taxpayer losses;
    With regard to public sector corruption in Afghanistan and the loss of nearly U.S. $1 billion in U.S. taxpayers’ funded foreign assistance to Afghanistan in the form of U.S.-supplied Afghan government and Afghan military and police salaries deposited into Kabul Bank, The New Yorker Magazine, the Wall Street Journal, the New York Times, National Public Radio (NPR) and others, have reported that widespread corruption, ponzi schemes, fraudulent loans, mass looting, insider loans to fake and bogus companies run by family and friends, and other corrupted practices, were undertaken by a small group of Afghan insiders (less than 12 people), apparently linked to Mahmoud Karzai, President Hamid Karzai and Ahmed Wali Karzai.[29][30] This resulted in nearly $1 billion ($900 million) in Kabul Bank’s deposits seemingly vanishing into Dubai and other off-shore locations and unknown offshore bank accounts and tax havens. Hundreds of millions of U.S. dollars were often smuggled and flown out of Afghanistan secretly stashed in bags and airline food trays [31][32][33]” and, http://topics.nytimes.com/top/news/business/companies/kabul_bank/

    Read more about recent US citizen and renunciant Mahmood Karzai – a brother of President Karzai, with interests in the Bank of Kabul:
    His name is on this renunciant entry of the US Federal Register
    / Vol. 78, No. 89 / Wednesday, May 8, 2013 / Notices 26871

    Here is a bit of background http://seattletimes.com/html/nationworld/2008814435_karzai05.html http://en.wikipedia.org/wiki/Mahmood_Karzai

    Mahmood Karzai had called for the US to assist with funding a bailout of the Bank of Kabul (using US taxpayer monies):
    http://www.washingtonpost.com/wp-dyn/content/article/2010/09/02/AR2010090202266.html http://www.huffingtonpost.com/2010/09/02/kabul-bank-bailout-mahmou_n_703682.html

    Despite early stories reporting the opposite, the US insisted it did not use US taxpayer funds to bailout the Bank of Kabul:
    http://www.alternet.org/rss/breaking_news/276660/us_denies_taxpayer_funds_to_bail_out_kabul_bank
    http://www.npr.org/2011/02/28/134137014/another-bailout-looms-but-this-time-its-for-kabul

  19. @badger
    You are sooooo good…thanks for the great links .Yep…we is being robbed so crooks can get paid.

  20. Jamaica Gleaner:
    FATCA: The Offshore Voluntary Disclosure Programme Explained

    Opening paragraph:

    “FOR THOSE American citizens, green-card holders, American businesses overseas, such as sole proprietorships, partnerships, and corporations that may have failed to file tax returns or make the requisite annual disclosure, the Internal Revenue Service (IRS) is still offering a breakthrough that is called the Offshore Voluntary Disclosure Programme (OVDP).

    This will allow persons to become fully tax compliant.”

    Well, we know where this is (mis)leading to.

    http://jamaica-gleaner.com/gleaner/20131127/lead/lead7.html

  21. @northernstar, re; “Yep…we is being robbed so crooks can get paid.”..
    And wars fought and oil bought.

    @bubblebustin, saw that from the Gleaner. Another cycle of mis/information from Compliance Vultures begins.

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