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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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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.

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

  1. Blog post posing the question of how FATCA info can be used and how widely distributed. Note and caveat – the end of the post is an advertisement for their services.
    https://taxconnections.com/taxblog/how-safe-is-your-fatca-data-with-the-irs-not-very/
    ‘How Safe Is Your FATCA Data With the IRS? Not Very!’

    “…So what can the IRS do with that information?
    The FATCA legislation is silent. IRS regulations aren’t much help either. The answer is found in section 6103 of the Internal Revenue Code, “Confidentiality and Disclosure of Returns and Return Information“. First, we will look at the IRS regulations.

    Section 1.1474-7 and 31.3406(f)-1 of the IRS FATCA regulations (“Confidentiality of Information”) suggest that FATCA disclosures can’t be used for anything except for FATCA compliance.

    Wrong. There is an exception in those regs that refers to section 6103 of the Tax Code.

    Unfortunately, section 6103(i) permits the IRS to disclose confidential tax return information to “any federal agency” for use in virtually any matter over which that agency has jurisdiction. This means that access extends well beyond tax administration. Now law enforcement agencies can access the information to investigate anything from money laundering to fighting foreign corruption and terrorism….”…

  2. @northernstar,
    Sorry, the link works for me, and I can’t find another better one, nor another copy of the Jatras letter and FOI request. I can’t cut and paste from them either. You could try using another browser, (ex. Firefox Explorer or Safari), or cutting and pasting the link into the search box?

  3. @Badger…

    Thanks for that. I posted a comment which is in moderation…

    Brian,

    You make good points here, and I would also direct you to Senator Carl Levin’s submissions on FATCA of which he is an author and knows what he is intending…

    See Page 10 (7) Treating FATCA Disclosures As Non-Tax Return Information

    http://bsmlegal.com/PDFs/CarlLevin.pdf

    This is about data collection for other purposes, pure and simple…

  5. From the German IGA

    1. Reciprocity. The Government of the United States acknowledges
    the need to achieve equivalent levels of reciprocal
    automatic information exchange with the Federal Republic of
    Germany. The Government of the United States is committed to
    further improve transparency and enhance the exchange relationship
    with the Federal Republic of Germany by pursuing the
    adoption of regulations and advocating and supporting relevant
    legislation to achieve such equivalent levels of reciprocal automatic
    exchange.

    In my books that’s called let’s-pretend reciprocity.

  8. And, if anyone believes that, there are some bridges to be sold somewhere: http://isaacbrocksociety.ca/2013/07/31/us-wants-its-police-in-canada-and-to-have-them-exempt-from-canadian-law/ Isn’t all the information shareable with any other US government agency? No thanks!

    …and hot off the press, http://www.cbc.ca/news/politics/canada-u-s-beyond-the-border-project-beset-by-delays-1.2445809. How many blamed IT related US initiatives, including FATCA, are to be flubbed up?

    Also, here is Canadian ‘private’ medical information breached, and this woman was denied entry into the US. http://www.cbc.ca/news/canada/toronto/canadian-woman-refused-u-s-entry-because-of-depression-1.2444960

  10. @badger

    This is a very good article. I have a question. What if one does not comply filing US taxes and has no US source of income or US property or US investments can the IRS touch our Canadian bank accounts?
    Of course, one would never go to the US again. Does one have to worry about getting extradited? These questions probably have been asked before in Brock. I apologize for asking again.

  11. The more we draw attention to opposition to FATCA in Canada, the better:

    http://www.thestar.com/news/canada/2013/11/29/social_media_to_be_monitored_by_federal_government.html
    By: Steve Rennie The Canadian Press, Published on Fri Nov 29 2013
    OTTAWA—

    “Social media to be monitored by federal government
    Tweets, public Facebook posts and YouTube videos could soon be subject to round-the-clock scrutiny by the federal government.”

    “Big Brother is watching you — on just about every social-media platform you can imagine.

    Tweets, public Facebook posts and YouTube videos could soon be subject to round-the-clock scrutiny by the federal government, a procurement document posted this week by Public Works and Government Services Canada suggests.

    Welcome to media monitoring in the 21st century, when simply leafing through a stack of newspapers in the morning is about as antiquated as, well, newspapers.

    The federal government is seeking a firm that “continuously monitors social media content on a daily basis in near real time and (can) provide web-based, online media metrics and reporting capabilities.”………

  13. Kenya and FATCA:
    http://www.businessdailyafrica.com/Kenyan-banks-to-reveal-details-of-US-customers/-/539552/2094956/-/item/1/-/mep1cq/-/index.html

    Interesting quote;
    …“The US government wants to be sure that tax declarations reflect the real tax liabilities of its citizens who are living abroad. It wants to see the complete picture of their citizens’ incomes and account behaviour because they believe banks hold this information,” said Mr Njoroge…..”

    FATCA and CBT – the *Panopticon prison for all those deemed to be ‘US person’ living outside the US.
    * http://cartome.org/panopticon1.htm

  16. Thanks Em, I couldn’t remember who first brought up that concept here on IBS, but I am seeing the term used more often now online, as applied to the US FATCA, NSA, etc. Ironic, as I remembered the idea from a course, but was too young and naive to appreciate what it truly meant in application. Decades later, my teachers would be proud to know that I have now achieved integration of the concept. Who says that the liberal arts are a waste of time?

  17. Em @ badger
    I see that info-lib article was written by Wendy McElroy (wendymcelroy.com and ifeminists.com) our very own alternative, ahead of the times and appreciated Canadian blogger (now living in Chile) who also wrote the Mises article below, back in 2011. GO WENDY and GOOD DIGGING BADGER!
    http://mises.org/daily/5666

    Although I’m not ever going anywhere near the U.S.A., I know people who do so I will definitely pass that information along to them … whether they want to hear it or not.

  18. @ badger

    thank you posting the link to information liberation

    very scary to read that the border guards are going to start to enforce the traveling on a us passport.

    it really is like watching the foundations being built to put up a wall around the country

    i am very glad i am out and not trying to get out

  19. @ badger
    Looks like you at least took the most useful courses. I can tell that from your ability to investigate and articulate. I’ve never used a differential equation in real life and now I wish I’d learned writing, logic and investigative techniques instead. I even dropped a political science course when, after 4 long weeks, we had still not finished defining the “nation state”. I should have stuck it out to see if it was leading to a better understanding of, well, politics. C’est la vie. 🙂

  20. @notamused
    Good point. However, is there anything in the agreement that guarantees that the US will be compliant when said agreement comes into effect? We know what happens if Germany does not fulfil its side of the agreement, but does Germany have any recourse if/when Congress tells Germany to take a hike?

  21. @ tdott (November 29, 2013 at 11:36 am)
    You are absolutely right. It is “let’s’-pretend reciprocity … unless the U.S.A. actually produces the goods and I don’t think that is going to happen.

    RECIPROCITY:
    “The Government of the United States acknowledges the need to achieve equivalent levels of reciprocal automatic information exchange with the Federal Republic of Germany. The Government of the United States is committed to further improve transparency and enhance the exchange relationship with the Federal Republic of Germany by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic exchange.”

    TRANSLATION:
    WE, the USG, do solemnly swear on a stack of comic books (with fingers crossed behind our backs) that we really do understand that we should give Germany something or other in exchange for its full disclosure. WE, the USG, will try to lead our FIs to the water trough exchange and honest, cross our heart, we will quite quietly suggest they add a drop or two to the information pool. We’re going to speak with some people in the congress to see if they can think up one of those unbinding resolutions or something or other to make it look like we really do want the FIs to exchange something or other with Germany.

  23. @northernstar, re;
    “What if one does not comply filing US taxes and has no US source of income or US property or US investments can the IRS touch our Canadian bank accounts?”

    I’m not the best person to answer that. All I remember is Flaherty’s promise that the Canadian federal government would not provide assistance in collection if the person was a Canadian citizen at the time that a US tax was levied, and that the CRA would not assist the US to collect re FBAR penalties for Canadian residents AND Canadian citizens. He said: …”Please be aware, we have been clear that penalties imposed by the IRS under FBAR will not be collected by the Canada Revenue Agency (CRA) on their behalf. While the Canada-United States Income Tax Convention contains a provision that allows for the collection by a country of taxes imposed by the other country, this does not apply to penalties imposed under laws that impose only a reporting requirement. Furthermore, the CRA does not and will not collect the U.S. tax liability of a Canadian citizen if the individual was a Canadian citizen at the time the liability arose (whether or not the individual was also a U.S. citizen at the time)….” http://expatsinca.wordpress.com/2011/11/04/encouraging-letter-from-finance-minister-jim-flaherty/ http://isaacbrocksociety.ca/2012/02/13/3200/

    That is the only insight I have in to the question. I know that there are others here who might weigh in and add more.

  24. @tdott
    Nope, I’ve not seen (or heard of) any guarantees. (Of course not, the USA is all about taking, and never about giving.) Having seen the wishy washy paragraph from the IGA you quoted (btw nice translation, @em 😉 ), I was all the more surprised that the actual legislation provides specific details as to what the USA are to provide to Germany. Not that I expect the USA to deliver, but it will be interesting to see what (if any…) consequences that will have when the time comes. Former USPs should, however, really think twice about leaving any assets in the USA after renouncing (for various reasons). Just in case. 😉 I haven’t got a cent to my name there any more, so fortunately I can watch the story unfold from the sidelines.

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