FATCA Discussion Thread (Ask your questions) Part Two
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.
@Wellington, I assume it’ll be in the individual IGA’s. The Swiss banks are having to report accounts from 2008 onwards which is before FATCA even became law in the US, making it even more illegal imho, but I think part of that is because of the US/UBS court thing in 2008/9. Check what the Canadian IGA says.
@MedeaFleecestealer
Thanks for your response. My question specifically concerns Switzerland, and it was a Swiss banker who asked me this. There is a LOT of confusion here ahead of FATCA implementation this summer 😉
Depends on where you are. If in Canada, they are supposed to do an ‘electronic search ‘of their customer database for US indicia. If you opened an account with a DL and answered ‘Canadian’ if you were asked citizenship , then there is no problem. Almost everyone has a different situation. If you are lucky enough to have over 1 million in a non registered account, it’s different. Read the IGA.
http://www.fin.gc.ca/treaties-conventions/pdf/FATCA-eng.pdf
@KalC
The Swiss IGA explicitly specifies search rules for accounts of over 1 million. But since FATCA is relevant for accounts of over 50K, I was wondering if there are other search rules for such ordinary accounts. I didn’t find anything concerning this in the Swiss IGA.
@MediaFleeceStealer
Concerning record searches back to 2008/09, would you have any references to this?
Here’s the Swiss IGA
http://www.swissbanking.org/29633.pdf
Can’t see anything in there with a quick scan that mentions anything before 2012/13. PostFinance has asked some of its customers for proof of FBAR filings going back to 2008 though. Mentioned in some of the posts in this thread.
http://www.englishforum.ch/finance-banking-taxation/200706-postfinace-demands-past-fbars.html
FATCA’s good, bad, ugly choices – Foreign institutional investors face new extraterritorial oversight
Can anybody here offer some guidance please .
How does the IRS treat joint checking accounts from 1 expat and 1 non-us person (who does not need to file an FBAR) with regards to assessing the $base for FBAR penalties. ( I am not asking about tax non compliance) outside of OVDP ?
‘First there was FATCA, now here comes AEOI as repercussions from US tax policy spread’
Posted in Business April 15, 2014 By Gareth Vaughan
“The United States Foreign Account Tax Compliance Act, or FATCA, is set to be followed by a much more widespread global equivalent. But the good news is the multilateral version will tax based on people’s residency rather than citizenship.”…….
And I repeat the author’s last line for emphasis:
“………But the good news is the multilateral version will tax based on people’s residency rather than citizenship….”
And what how will the OECD reconcile the two competing (and glaringly contradictory) versions? Or will they – without censure or concern – just merrily carve out the usual exception for the US, and ignore the huge unethical ‘peculiar institution’ of US extraterritorial taxaton which claims that all the world is potentially a ‘US taxable person’?
@badger, of course they will. They can’t force the US to change their tax system and we – and they – know that the US won’t be reciprocating with tax info anyway. The US will have FATCA and the rest of the world might, eventually, have a fair system for everyone else – but that will depend on how much the OECD system is based on FATCA.
@MedeaFleecestealer
The OECD Common Reporting Standards (CRS) or GATCA is almost a carbon copy of FATCA except no exemption thresholds for reporting, and is residency based, not citizenship based. So no depending about it, it is already fully formed Rosemary’s Baby fathered by FATCA.
http://isaacbrocksociety.ca/2014/02/13/gatca-is-born-at-the-oecd-and-fatca-is-the-proud-father/
http://isaacbrocksociety.ca/2014/02/13/gatca-is-born-at-the-oecd-and-fatca-is-the-proud-father/comment-page-2/#comment-1129627
From noone:
OECD: the United States can remain a tax haven Translated from an article in French:
http://translate.google.com/translate?sl=auto&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fwww.lesobservateurs.ch%2F2014%2F02%2F21%2Focde-les-etats-unis-peuvent-rester-paradis-fiscal%2F
Well, hopefully the OECD version may get amended once it starts running, depending on how well it’s working throughout the countries that have signed up for it. FATCA as we know won’t be amended in any way.
Yes, I still don’t see why they roll over so quickly for the US on these things. If the US wants to be part of OECD then they should be prepared to stump up at their end of things.
U.S. FATCA mission, to be the last Tax Haven Standing!
Harper and Co. go to great lengths to campaign in Washington to secure the Keystone pipeline, but make no effort to secure the rights and freedoms of Canadian citizens and residents having their rights stolen from them on Canadian soil, by the US under FATCA extortion – which the Harper government recently acceded to – signing away the security of over 1 million Canadian citizens and residents without consultation, or Parliamentary debate, and shamefully, hiding it in the Omnibus bill, yet:
“……The federal and Alberta governments have campaigned heavily in Washington to advance the case for Keystone XL.
A spokesman for the Prime Minister’s Office issued a statement in response to [President] Carter’s objections to the pipeline, pointing to the jobs it could create….”
http://www.cbc.ca/news/business/jimmy-carter-urges-keystone-xl-rejection-1.2612326
from
‘Jimmy Carter urges Keystone XL rejection
Former president says oil pipeline shouldn’t be approved’
The Associated Press Posted: Apr 16, 2014 12:09 PM
I still ask whether the rights and security of Canadian individuals and families were traded away in pursuit of the Keystone XL pipeline or some other concession from the US. We apparently were not of sufficient concern for the Harper government to exercise their fiduciary and duty of care on our behalf and defense, much less to mount a full campaign against the Made in the US aggressive extraterritorial incursions into Canada that FATCA represents.
Jimmy Carter…the same Former President who: (note it was NOT retroactive as per CONSTITUTION ex-post facto LAW….)
1978 citizenship law amendments (Pub.L. 95-432)
On 10 October 1978, President Carter signed Public Law 95-432 (92 Stat. 1046; 1978 U.S. Code Congressional and Administrative News 2521). This bill repealed several provisions which had previously allowed revocation of US citizenship.
Some of the provisions abolished by Pub.L. 95-432 had already been rendered unenforceable by the Supreme Court. For example, the bill repealed provisions revoking citizenship for voting in foreign elections (Afroyim v. Rusk), moving abroad following naturalization (Schneider v. Rusk), and desertion from the armed forced during wartime (Trop v. Dulles) were all repealed.
Certain other provisions were also repealed, however — not because of adverse Supreme Court rulings, but because (judging from the legislative history) Congress appears to have decided these provisions were rarely used and/or were not worth keeping. For example, Pub.L. 95-432 repealed provisions revoking citizenship of foreign-born US citizens who failed to move back to the US as adults (a rule upheld by the Supreme Court in Rogers v. Bellei); children who failed to move back to the US as adults after their parents had lost or given up US citizenship (a weaker version of the rule previously struck down in Perkins v. Elg); and dual nationals who lived abroad and had voluntarily claimed benefits of a foreign citizenship as adults. It should be noted that the abolition of these provisions was not made retroactive; people who had lost US citizenship under these provisions did not automatically get it back.
@Benedict,
I eventually realized that they made a mistake repealing the sections in your last paragraph, which includes INA 350. They should have kept those, and simply added the words they added to INA 349 (in 1986): “…unless done voluntarily and with the intention of relinquishing US citizenship”. That simple act would have kept an out for accidental Americans, those born dual in either country, who did not get to perform the act of naturalization. They should put it back in retrospectively!
@WhatAmI
Agreed…AND the 1986 changes should not have been made RETROACTIVE…thus inconsistencies (and Constitutionally wrong)
Indeed. The 1986 changes took the power to decide ones citizenship away from the lawmakers and gave it to the individual, but only for certain cases. We were left out.
It seems to me that one of the most powerful expatriating acts is to leave the country at a young age and never go back or have any connection ever again. Yet, that is the scenario they removed.
To use Em’s analogy, US lawmakers have been both witting and unwitting “boa constrictors” on US persons living abroad. A slow death that’s culminating in a record number of people shedding themselves of for many a new found life sucking parasite. But what sort of creature eats itself?
@NeedGuidance
US person on a joint is the proud (aka 2nd class person) owner of the entire account… regardless on who actually puts the money in… If I understand u correctly… fine will be per yr… when the account has the highest amount during the yr… so if u dump money in for a sec then transfer or withdraw the funds…. that amount is the highest that yr… they got u for it. Best way some are handling it is… separate out the accounts.. get the US person off the account so the non-person won’t have their info sent… Others here could give u better info… I am still trying to figure this nonsense out… Once second I think I get it… then I read something that is totally different… got to start reading again… Hope this helps some…
@US_Person_Foreigner says
thank you for your input …. there is a big difference with regards to 1) tax non compliance and 2)FBAR base.
1) inside the OVDI/P and on opt out, the IRS will include in the base to which the penalty applies only the portion of the account that the USP (U.S. person) beneficially owns. One could infer that, if they do that on OVDPI/P opt out where, they claim, the audit result applies, then they should do that in all audits however they get to audit — i.e., whether by opting out of OVDI/P or by QD or by GF.
If the nonUSP is the entire beneficial owner so that the USP acts like a signatory, then there would be no U.S. tax noncompliance and there would be no penalty.
If the account is beneficially owned 50-50, then the base for opt out penalty purposes would only be the 50% for which there is U.S. tax noncompliance.
Beneficial ownership means simply who is the real owner of the account. Often, in the absence of some controlling document, that is determined by the law that would apply to the account. It is not necessarily the person who received the income as compensation.
Now that sounds kind of fair but with
2) FBAR requires no ‘allocation’ betw USP and NRA – it requires the highest balance in the account at any time in the tax year.
A full FBAR penalty would likely be assessed on the balance determined as the basis of the penalty. It’s not a matter of whether one co-owners is compliant and another is not – a single penalty is assessed without proration. The only time this may differ would be in the case of co-owners that are both making a voluntary disclosure.
In this case, each taxpayer who makes a voluntary disclosure will be liable for the penalty on his percentage of the highest aggregate balance in the account. However, in all cases, a full penalty will be the case, it is only a matter of whether it will be split among co-owners that are making a voluntary disclosure.
Now this makes no sense. Me who works and is not a USP for tax purpose have to suffer because my wife is a USP but does not work and her name is on the joint account which is totally normal from where I come from.
IRS is expecting the percentages of tax returns it will be auditing this year to hit a new low, thanks to budget cuts ……. oh my oh my I feel so sorry for my friends at the IRS and Jack Townsend can %$!§&
himself.
http://bit.ly/1eOdF8i
IRS releases new FATCA FAQ’s:
http://www.irs.gov/Businesses/Corporations/Frequently-Asked-Questions-FAQs-FATCA–Compliance-Legal
The IRS Chaos was Known When it was Conceived!
http://samuelclemmons.wordpress.com/2014/04/18/the-irs-chaos-was-known-when-it-was-conceived/
excerpted from Andy S’s work
@Mark…
In 1909 Richard Byrd didn’t know we would have the internet, Big Data with NSA dragnets and the resulting surveillance state and yet, he was still prophetic and right.