Media and Blog Articles Open for Comments – Part 4 of 11 (Year 2017)

1,720 thoughts on “Media and Blog Articles Open for Comments – Part 4 of 11 (Year 2017)”

1. From Keith Redmond

   #FATCA Mark Crawford and I were guests with Anthony Parent and Claudine Gindel of @IRSMedic on today’s podcast.

   Youtube video here. Please Retweet:

   https://twitter.com/kredmond_global/status/862413741715058688

2. This image resonated today at the FATCA Twitter Rally.

   Please retweet.

   https://twitter.com/JCDoubleTaxed/status/862274398564237313

3. Cheap way to renounce? How do you get on the Death Master File?

   “Living man declared dead by IRS for 29 years resurrected by U.S. senator”
   http://www.cbsnews.com/news/living-man-declared-dead-by-irs-for-29-years-resurrected-by-u-s-senator/

4. CRS Early Adopter countries are soon due to transmit their first reports. SOVOS, who found high FATCA error rates, are predicting even worse rates for CRS.

   http://www.bankingtech.com/826152/survey-the-first-crs-transmittals-take-place-in-22-days-time/

   “The company is predicting that the majority of transmittals submitted in the next two months may be rejected and returned for correction and resubmission. Using as a baseline a survey it carried out last year into FATCA filings made by financial institutions in the US year, (where it found that only 44% were accurate) it now predicts that this first CRS filing will attract an even lower figure; 40% or only four in every ten transmittals.

   The company points to five factors which it believes supports its prediction. These included the volume of data to be submitted; the inconsistency found across jurisdictions and the perceived lack of support received from jurisdictions; the degree of subjectivity found in the OECD Schema and the level of technical expertise made available to compliance departments.”

5. Let the lawsuits begin!

6. Who would sue whom?

7. There’s a new FATCA critique video from the MoFreedomFoundation people who brought us this one (a favourite of mine);
   https://youtu.be/Y-EVF7CZt_w

   This new one is about FATCA as imposed on India;
   https://youtu.be/fSBHNHWTWDs

8. IRS Medic launches “Let’s Get FATCA Repealed!!!”:

9. A very thoughtful piece by Virginia laTorre Jeker on the Swiss Bank Program.

   “To Be or Not to Be – A Participant in a DOJ Non-Prosecution Program?”
   https://www.angloinfo.com/blogs/global/us-tax/to-be-or-not-to-be-a-participant-in-a-doj-non-prosecution-program-2/

   Striking to read about banks going through the same sharp learning curve with the SWB as many USCs soon found themselves going through with CBT/FATCA: no, you can’t trust them; yes, they move the goalposts; yes, the penalties are just as brutal for the mildly non-compliant as for the deliberate scheming crooks.

   They just lifted it over into the tax code and extended the penalties to USCs, it seems.

10. The Democrats are trying to get AFL-CIO and unions voice opposition to repeal of FATCA.
    Some counter measures on Facebook here:

    https://www.facebook.com/WorkingAmerica/posts/10155337290693118?comment_id=10155344668538118&comment_tracking=%7B%22tn%22%3A%22R4%22%7D

    Please Like comments.

11. Here’s the petition to STOP the FATCA Repeal bill. No way to comment. Sadly, the anachronistic, useless AFL/CIO may be able to garner many signatures.

    https://actionnetwork.org/petitions/congress-dont-let-rich-people-evade-their-taxes/

12. Some have described what the Swiss banks went through at the hands of the US Justice Department as “OVDI for banks” – there were even some that were scared into the program, later opting out knowing they were not culpable in reality.

    Are there any stats on the number of Swiss accounts of US persons coughed up during the investigation that were residents of Switzerland?

13. @Bubblebustin:

    “Are there any stats on the number of Swiss accounts of US persons coughed up during the investigation that were residents of Switzerland?”

    I don’t know. Perhaps only expats would see the significance of that number now – the whole climate around account reporting has changed since then.

14. The OECD is trying to force the Bahamas to sign their Multilateral Convention on Mutual Administrative Assistance in Tax Matters, “the most comprehensive multilateral instrument available for all forms of tax co-operation to tackle tax evasion and avoidance, a top priority for all countries.”

    “Fnm Deputy: Oecd ‘Preying On The Weak’”
    http://www.tribune242.com/news/2017/may/11/fnm-deputy-oecd-preying-weak/

    The OECD and its members have ratcheted up the pressure for the Bahamas to switch its approach to implementing the CRS, the global standard for automatic tax information, from its chosen bilateral route to a multilateral method.

    #This would require the Bahamas to negotiate with all-comers at once, rather than individual countries on a nation-by-nation basis, but the intensifying international pressure means one of the key issues facing the incoming administration – and something that will require a quick decision – is whether to change the CRS approach.
    [..]
    The OECD and its members have ratcheted up the pressure for the Bahamas to switch its approach to implementing the CRS, the global standard for automatic tax information, from its chosen bilateral route to a multilateral method.

    #This would require the Bahamas to negotiate with all-comers at once, rather than individual countries on a nation-by-nation basis, but the intensifying international pressure means one of the key issues facing the incoming administration – and something that will require a quick decision – is whether to change the CRS approach.

    #Mr Turnquest told Tribune Business that the FNM had met with OECD representatives while in Opposition, and was aware of the organisation’s concerns.
    [..]
    #Mr Turnquest said an FNM administration would be guided by the private sector in its policy response to the CRS pressures, which have been complicated by the refusal of European Union (EU) member nations to enter into automatic tax information exchange agreement negotiations with the Bahamas on a bilateral basis.

    #This, in turn, potentially exposes the Bahamas to being included on a so-called EU blacklist of countries considered ‘non-cooperative’ on tax matters, which is supposed to be published before year-end 2017.
    [..]
    Mr Turnquest then accused the OECD of ‘changing the rules of the game’ with respect to the CRS, having approved the ‘bilateral’ approach to implementation only to turn around and pressure the Bahamas into switching to the multilateral approach.

    #“The goal posts continue to be moved in terms of compliance issues,” he told Tribune Business. “That’s the problem we’ve had over the years. They have to be clear what the regulatory requirements of us are.

    #“They [the OECD] need to be more clear as to where they see this road ending, in terms of acceptable rules, so that we and other international financial jurisdictions can determine how we best fit into that model and adapt our local regulations to meet the standards they’ve set.

    #“No business can continue with a constantly evolving set of standards. There must be some period of consistency. They [the OECD] have to stop themselves. Otherwise the world will see it for what it is: Unfair competition, and the strong preying on the perceived weak.”
    [..]
    Monica Bhatia, who leads OECD’s Global Forum secretariat, said the Bahamas was perceived as “the last tax haven standing” and an “outlier” because it was the sole financial centre of any significance to persist with the bilateral approach to CRS implementation.

    #Tribune Business sources present at the seminar with the OECD said the body had cleverly modified its arguments, and objections, regarding the Bahamas’ choice of the bilateral implementation route.

    #Given that it had previously approved the ‘bilateral’ route as an option, the OECD knows it is open to charges of ‘hypocrisy’ and ‘goal-post moving’ if it simply demands the Bahamas goes multilateral.

    #Instead, its officials argued that the Bahamas had left it too late to use the bilateral approach to meet its automatic tax information exchange commitments by the September 2018 deadline.

    #The OECD’s presentation to the Bahamian financial services sector was described as “dripping with sarcasm” by one observer, who said it employed the theme: ‘Why are you always the last guys to comply?’

    Last tax haven standing? Last guys to comply? Hmmm…

15. Similar to the Virginia laTorre Jeker article mentioned above, the Litigation Journal published an article late last summer called: “The DOJ’s Swiss Bank Program – Lessons Learned and the Road Ahead”. Several highlights:

    “- The DOJ collected over $1.36 billion in penalties, this figure does not reflect:
    — The amount of back taxes and penalties the IRS collected from the taxpayers forced to self-disclose as a result of the Program.
    — The amount the DOJ is yet to collect from clients it will prosecute using the information it obtained from the banks.

    – The amount the banks paid to clients to:
    — obtain certain information to show US tax compliance; or
    — incentivize the clients to self-disclose.

    – While there are no official figures, the US government likely collected about $3 billion in penalties under the Program and client penalties under the OVDP.
    – The banks probably paid another $50 million to current or former clients to provide documentation or incentivize self-disclosure, which the banks used to mitigate their penalties under the Program. ”

    Although the article does not indicate the number and value of accounts held by US Persons in Switzerland, it does mention this:

    “Larger banks with many smaller US clients.
    There is a perception that most banks in Switzerland service only a small number of ultra-high net worth clients. However, some banks, including larger universal banks with private banking businesses in Switzerland, have many relatively low-value, US-related accounts.”

    As the article further details, the Swiss Bank Programme was FUBAR from the start:

    https://globalcompliancenews.com/wp-content/uploads/2016/10/LIT_AugSep16_Feature-SwissBank.pdf

16. Brock SWAT could land Facebook comments here. The author is taking some flak on Twitter.

    Keith REDMOND‏ @kredmond_global 54m54 minutes ago

    A clear example why @ACAVoice is NOT our friend! #FATCA
    https://twitter.com/kredmond_global/status/863140616720527361

    Trump Tax Plan Could Make It Easier To Hide Money In Offshore Accounts
    LYDIA O’NEAL @LYDSONEAL ON 05/12/17 AT 11:05 AM

    http://www.ibtimes.com/political-capital/trump-tax-plan-could-make-it-easier-hide-money-offshore-accounts-2537792

17. UK CRS Guidance has been revised to allow redaction of certain information on human rights grounds; perhaps UK residents subject to FATCA could now demand access to similar concessions where relevant.

    HMRC has clarified and completed its guidance for charities on the Common Reporting Standard, including updates on the implications of the guidance on human rights. The updates have been welcomed by umbrella bodies, but the Association of Charitable Foundations (ACF) criticised the “abject failure” of HMRC for not engaging with the charity sector at an earlier stage. The Common Reporting Standard (CRS), which asks financial institutions to report on account holders as a method of preventing tax evasion, came into force at the beginning of 2016, amid concerns that it would place a significant administrative burden on grant-making charities in particular. The updates from HMRC have included technical clarification around aspects such as unit trusts and common deposit trusts, with the most substantial update being the introduction of a new chapter on how the guidance impact on charities and their human rights, which went live this morning. This chapter includes information on the protection on human rights grounds, including on when safeguards are already in place. It also includes details on how information can be redacted when there is a threat to human rights, and information on how to apply for a redaction.

    https://www.civilsociety.co.uk/news/hmrc-revises-common-reporting-standard-guidance-over-human-rights-implications.html#sthash.w5VR4xFQ.dpuf

18. As per the article flagged by JC above, with the ridiculously skewed title at http://www.ibtimes.com/political-capital/trump-tax-plan-could-make-it-easier-hide-money-offshore-accounts-2537792 ;
    the IRS and FATCAnatics and friends are rushing to rationalize FATCA, in the fact of challenges to is, and in the face of their utter lack of any cost benefit analysis for FATCA, or robust basis for their claims:

    “………whether monitoring or implementing restrictions on some activity will only make things worse for law-abiding citizens — without changing anything for actual criminals. More specifically in this case, are the costs of compliance with FATCA really worth what is, as of now, an ambiguous amount of recovered taxes on previously-sheltered accounts? And does it effectively target those secretive account holders in the first place?

    Researchers from the University of California, Berkeley, the University of Copenhagen, the University of Michigan and the IRS are working to at least answer the first question. Their estimates, which one of the study authors, Berkeley post-doctoral scholar Daniel Reck, said are “very preliminary,” peg the benefits of the law at more than $1 billion annually. In their analysis of pre-FATCA data on voluntary foreign account disclosures, they’ve also noticed some interesting characteristics among the accountholders: The “quiet disclosures” prior to FATCA, Reck said, are from “mostly U.S.-based” account holders with “high-value accounts” containing upwards of $1 million, and the accounts were largely concentrated in regions known to be tax shelters, like Switzerland and the Cayman Islands.

    Reck, who will have to deal with the FATCA filing requirement when he joins the faculty of the London School of Economics as an assistant professor in the fall, and his colleagues are rushing to finalize their numbers by this summer, when the law could be rolled back…..”……

    I really wonder how Reck’s claims accord with what the Taxpayer Advocate might have found re the characteristics of ‘quiet disclosure’ pre-FATCA.

    Reck claims that re; “..pre-FATCA data on voluntary foreign account disclosures, they’ve also noticed some interesting characteristics among the accountholders: The “quiet disclosures” prior to FATCA, Reck said, are from “mostly U.S.-based” account holders with “high-value accounts” containing upwards of $1 million, and the accounts were largely concentrated in regions known to be tax shelters, like Switzerland and the Cayman Islands…””

    Hmmm, and what about the quiet disclosures from NON-taxshelters, like Canada, Mexico, and the UK, the top jurisdictions with the majority of those deemed to be US taxable citizens. And what of jurisdictions with expired Green card holders?

    I hope that reputable scholars like Allison Christians, as well as the IRS Taxpayer Advocate Nina Olsen will be closely scrutinizing the claims of the pro-FATCA researchers, and that the researcher’s data sets containing the information as to the characteristics of the quiet disclosures pre-FATCA will be made public for all to see.

    Otherwise, it will be just more of the FATCAnatics spinning some more of their myths, and citing unsupported fantastical cocktail napkin based figures in order to support their skewed worldview and agenda.

19. badger,
    That article was particularly infuriating – on many levels.

    As for the claims that increased disclosures are due to FATCA – given that they admit most of the accounts are from Switzerland and known (non-US) tax havens, I don’t see how they can possibly disentangle the effect of FATCA from the effect of the Swiss Bank program and Non-prosecution agreements. As the banks started disclosing, there would have been a rush of their clients (especially US-resident clients) to get in their disclosures before it was too late. There may also have been a spillover effect with clients of tax haven banks outside Switzerland deciding that the game was up. All of this just shows that the traditional enforcement methods available before FATCA were effective. FATCA is essentially playing whack-a-mole with nuclear weapons after a large portion of the “moles” have already been caught.

20. The authors referred to above demonstrate their unsupported bias from the get go, when they refer to only ‘tax evaders’ in the voluntary disclosure programs – despite the TAS finding that a significant number of those who came forward from outside the US were not actually actively ‘evading’ tax, and were not actually in danger of criminal tax charges, and that many owed zero to de minimis US tax, but entered the program due to the threats and urging of the IRS.

    The authors – which includes one from the IRS itself, start by lumping all quiet filers together as tax evaders;
    See draft paper;
    ‘Taxing Hidden Wealth: The Consequences of U.S. Enforcement Initiatives
    on Evasive Foreign Accounts’
    https://www.gsb.stanford.edu/sites/gsb/files/acct_05_17_slemrod.pdf

    How can a paper with an IRS employee as a co-author actually be considered unbiased? Can we really expect it to be objective or fair or unbiased – when discussing a pet project of the IRS which has already sunk incredible amounts of money into failed FATCA related expenditures, and been criticized even within the US for it – by TIGTA and the TAS? See ex. https://taxpayeradvocate.irs.gov/Media/Default/Documents/2016-ARC/ARC16_Volume1_MSP_16_FATCA.pdf

    And I deeply resent the disingenous mischaracterization by ACA counsel Charles Bruce in the article from ibtimes that; “….it’s easy to find a reasonably-priced tax return preparer… ,”. outside the US and that people’s fear of falling into a US tax and form crime penalty pit inadvertently was overblown. His claim is false. I should know, as I had years of past returns and forms, including the 3520, 3520A, FBAR, and 8854 prepared after doing research to compare quotes from different ‘professionals’, and enduring significant incompetent errors produced at high cost by those who should have known better. My financial situation was fairly simple, I owed no US tax, but the form 3520 and 3520A alone were forms that the professionals either said they would not prepare, no longer prepared, or charged several hundreds of dollars to prepare. Even within the US there is still ignorance as to the whole realm of forms and tax burdens required of those living outside the US – even without any US source income. Even several of the IRS reps I spoke to (ex. FBAR ‘help’ line, IRS general international, etc. did not understand the FBAR provisions, or would not answer my questions, reading verbatim from forms, or stating that the question was a legal one outside of their scope. And the more I learned about the labyrinthine and incomprehensible forms, and the layers upon layers of potential and real confiscatory penalty structures (in multiples of 10,000. and hugely disproportionate to zero or minimal and inadvertant misteps, the more it was confirmed for me that I could not afford or justify keeping my US citizen birthright because it posed a significant threat to the wellbeing and economic security of myself and my Canadian family.

21. Yes, Charles Bruce’s comments were perhaps the most infuriating part of the article. Foreign tax credits and FEIE don’t remove double taxation on PFICs or Australian superannuation by the IRS. And, as you point out, the compliance cost is exorbitant because of the intrusive level of disclosure that must be made by anyone who dares to attempt to live a normal life outside the US. I needed to be able to plan for my retirement using all the tools available to my neighbours. As a US taxpayer this was not possible.

22. @Karen, and of course they make assumptions that willfully ‘evade’ any recognition that in the EU there are many people who are mobile and have accounts outside of their current country of residence, that there are significant numbers of Swiss citizens living in the US who would have pre-existing accounts, and deemedUS citizens/persons living in Switzerland with legitimate ‘local’, and that there are legitimate reasons for US residents to have non-US accounts. And of course there are many people in Canada with US ties and family, or work, for whom it would be entirely legitimate to have a pre-existing Canadian account, or a US person who holds power of attorney on Canadian accounts for a senior parent, child, etc. People move back and forth across the US /Canada border and there are many who have ties on both sides of the border. For ex. I know a family where Canadian grandparents resident in Canada opened Canadian birthday accounts for their US born grandchildren to use when they come up for visits. And their Canadian adult child married an American, moved down there, but left a small RRSP acct behind, and also held p of attorney for finances – and is named executor on their Canadian parent’s wills. Now, too late, they have some inkling of what that means (re FBAR, 3520, etc.), though all legit accts, and having zero US tax implications (in terms of US tax owing), they face huge scary potential deemed ‘form crime’ complications.

    The base assumptions of the US and these authors (one of whom is an IRS employee) is that no ordinary people have any cross border movement, family, and ordinary financial affairs. And I note that the footnotes and sources do NOT include the TAS analysis of the OVD participants, or criticisms of the OVD programs, FBAR and FATCA as administered by the IRS. How very convenient. And of course the paper is being produced to support FATCA against its recent challengers. So basically a piece of IRS firendly propaganda.

23. ” #FATCA Mark Crawford and I were guests with Anthony Parent and Claudine Gindel of @IRSMedic on today’s podcast.”

    Saw the video . Mr. Redmond is an honorable and courageous young man .He is one professional who senses the apprehension of accidentals and those of us who gave up their american-ness when they moved abroad permanently.

24. ‘form crime’

25. Carpetbagger alert: https://www.smsfadviser.com/strategy/15482-how-the-super-reforms-impact-us-expats – this is open for comments and I have one under moderation. This is a professional newsletter and not aimed at the general public – please keep that in mind should you decide to comment. You can find a copy of my comment on the FATCA and Australia thread here: http://isaacbrocksociety.ca/fatca-and-australia/comment-page-44/#comment-7885845

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