Media and Blog Articles Open for Comments – Part 6 of 11 (Year 2019)

523 thoughts on “Media and Blog Articles Open for Comments – Part 6 of 11 (Year 2019)”

1. Following
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2. CANADIAN FATCA AND CRS COMPLIANCE UPDATES:

   “In the first five years of FATCA, there has been a lot of growing pains as Canadian financial institutions embraced, sometimes reluctantly, their new responsibilities to review, identify and report financial accounts of specified U.S. persons (i.e., U.S. reportable accounts). Generally, while Canadian financial institutions made their best efforts to ensure they were complying with their obligations under Part XVIII of the Tax Act, there has not been much in the way of oversight of their activities nor repercussions for failures to meet service standards in due diligence and reporting. More recently, announcements from both the Internal Revenue Service (IRS) and the Canada Revenue Agency (CRA) have indicated that the honeymoon period for FATCA compliance may be coming to an end.”

   http://www.blg.com/en/News-And-Publications/Pages/Publication_5492.aspx?utm_source=Mondaq&utm_medium=syndication&utm_campaign=View-Original

3. Interesting. But the only aspect of the honeymoon period purportedly ending that impacts ordinary folk, in my reading, is the reference to making more effort to collect TINs for reportable accounts from 2020 onwards. I see no reference here to any changes in the current detection regime – if there are no US indicia then the banks may continue to rely exclusively on self-certification. Compliance remains optional.

4. Nononymous:

   “I see no reference here to any changes in the current detection regime”

   Indeed.

   Tax advisers hoping to drum up trade.

5. I found the article to be very matter-of-fact and informative. I didn’t detect any scaremongering, did you? For you to dismiss it as “tax advisers hoping to drum up trade”, is insulting to me and my effort to keep others properly informed with current information.

   Why don’t you take your negativity somewhere else?

6. As a matter of fact, I agree, I was mistaken, for which I apologise. The firm are not tax advisers but lawyers, and they’re not scaremongering, or at least not to US citizens, since the article is about guidance to FIs.

7. Apology accepted. Thank you.

8. Just to clarify, I was apologising to readers for my mistake.

9. Well the suggestion that a honeymoon period is coming to an end is, rhetorically, just a teensy bit scaremongery, since there is no indication of future changes that will make non-compliance more difficult.

   An optimistic reading suggests that if banks will face increased risks for identifying US persons who fail to provide TINs, then one way to reduce that risk is to identify fewer US persons!

10. The missing-TINs issue is a bit peculiar.

    It must be obvious to the IRS that a bank can’t force an accountholder to tell them their SSN. It’s equally obvious that it shouldn’t be difficult to discover the SSN in cases of interest, if the accountholder has previously filed US tax returns, and pointless to bother, if they haven’t.

    But it’s also possible that banks don’t like confronting customers over the issue, being aware how offensive it is.

11. I said:

    “…it shouldn’t be difficult to discover the SSN in cases of interest, if the accountholder has previously filed US tax returns, and pointless to bother, if they haven’t.”

    Not pointless if they’re US-resident, come to think of it.

12. Thinking a little further about scaremongering – I would say that in the FATCA context, it’s only scaremongering if aimed at US citizens living outside the US who don’t file US tax returns.

    The IRS[*] can’t do anything to these individuals while they remain outside US borders; and the IRS doesn’t try; the scary warnings have no basis in fact.

    FIs, however, have good reason to worry about both the IRS and the local tax agency; having a need to maintain FATCA-compliant status and a very very very bad track record of lying and cover-ups and trousering most of the world’s money and then queuing up for taxpayer-funded bailouts.

    The warnings are justified, and no more than the banks deserve. They got us into this mess.

    All IMO of course.

    * The residence country can of course cause harm to US citizens, via the IGA; but IGA1 countries are already doing their worst, by treating all identified US citizens as guilty with no appeal. There’s nothing more they can do.

13. @BB

    Thank you for posting the link to the BLG article http://blg.com/en/News-And-Publications/Publication_5492 and highlighting that particular paragraph. It is an excellent article, which includes a number of points, including references to the 2018 FATCA and CRS Guidance published by the Canada Revenue Agency.

    @Mods I strongly suggest that you add this article to the list in this thread.

    @Plaxy

    It’s pretty clear that your first comment about the article was made without having read the article (only 13 minutes after the comment from @Nonymous) and really was an insult to BB’s efforts to generate some commentary/discussion of value to the blog. In fact @BB drew the attention of the readers to a useful article (which at a minimum references the CRA updates).

    @Plaxy You really should (1) read the article and (2) understand any comments (to which you may reply) in the context of the article, before responding to the comment and/or the article itself. (Also, you should know that there are article about FATCA that are written for educational and not nefarious purposes. So, please loosen the strings of your negativity filter.)

    There is no reason to apologize (your comment at 4:27) to the readers of the blog (who may or may not care about your comments). But you really should apologize to BB for depreciating her efforts and then at 4:49, specifically acknowledging that you were NOT apologizing to her. (Those who are reading this comment now should know that there were two comments after that were specifically removed from this thread.) Note that what could have been a valuable conversation about a valuable article is now over.

    And the result of all this …

    @BB introduced an article worthy of discussion and began the discussion.

    Q. Where is the discussion now?

    A. Nowhere, absolutely nowhere.

14. Actually, when you read the IRS note itself (https://www.irs.gov/pub/irs-drop/n-17-46.pdf), it’s fairly benign in tone.

    The IRS has since issued a notice announcing some further relief for FFIs in IGA1 jurisdictions:

    The Proposed Regulations eliminate withholding on gross proceeds entirely, under the broad statutory grant of authority for the IRS and Treasury to provide exceptions to the definition of withholdable payment. The preamble to the Proposed Regulations notes that financial institutions faced significant administrative burdens attempting to comply with such withholding and that the tax policy underlying FATCA was not substantially affected by such gross proceeds withholding (noting specifically that there has been substantial intergovernmental cooperation since 2010 in implementing the goals of FATCA).

    https://www.lexology.com/library/detail.aspx?g=ff8340d4-a151-45c4-9df9-cc82cf943787

    Rather than a crackdown, a lessening of the pressure. And the IRS seems to think compliance is largely satisfactory.

15. https://www.irs.gov/pub/fatca/NPRM%20re%20Sections%201441-1474%20Regulations%202018%201212.pdf

16. It appears to me, rightly or wrongly, that these IRS burden-reducing measures could perhaps signal a readiness to consider further changes to IGA provisions, should legal challenges to the current requirements be upheld.

    For instance, making it possible to “cure” a US place of birth by establishing that the accountholder has no untaxed US income.

17. @USCitizenAbroad — Right on.

18. They may be reducing the burden for some FFIs but there is nothing there for individuals.

    Lots of work to keep bureaucrats busy though. They have no interest in doing the right thing which is to scrap the whole idea. Why put themselves out of a job. Maybe reducing the IRS budget every year isn’t such a bad idea.

19. portland:

    “They may be reducing the burden for some FFIs but there is nothing there for individuals.”

    No, but perhaps it shows that things could change significantly, without the need for legislation, if it suited their purposes – for instance, cutting down on the deluge of irrelevant reports.

20. Happy New Year to everyone here 🙂

    Here is a little article worth reading concerning ongoing anti-FATCA efforts worldwide:

    https://americanexpatfinance.com/news/item/83-anti-fatca-citizenship-based-tax-efforts-continue

21. Looks like Moodys is doing another cross-Canada road show this winter:

    https://www.moodysgartner.com/learning-tax/

    Perhaps we can organize for someone to turn up in Calgary, Edmonton, Montreal, Ottawa, Toronto, Kelowna, Victoria and Vancouver, and to politely offer a counter-narrative so the crowd isn’t scared into coughing up legal fees.

    I did my bit last summer and figure I’ll need a new psuedonym if I want to be let back in. (I don’t have the link handy but I did an extensive post after attending one of their sessions and asking many awkward questions.)

22. @ Nononymous,

    Here’s the links to your three-part report on the Moody’s seminar from last summer. A good read!

    http://isaacbrocksociety.ca/media-and-blog-articles-open-for-comment-part-5-of-5/comment-page-40/#comment-8275298
    http://isaacbrocksociety.ca/media-and-blog-articles-open-for-comment-part-5-of-5/comment-page-40/#comment-8275299
    http://isaacbrocksociety.ca/media-and-blog-articles-open-for-comment-part-5-of-5/comment-page-40/#comment-8275301

23. More homelander bla-bla-bla:

    Record-Breaking Number Of Americans Want To Get Out Of U.S. Forever

    According to the article: “In 2018, 16 percent of Americans said that they would like to move to another country.” That makes 52,282,680 individuals in 2018 alone. I haven’t run into any, or the ones from 2017, 2016, 2015…for that matter. Don’t you just love these polls?

24. Oh! The fun never ends.

    http://procedurallytaxing.com/like-the-first-amphibian-crawling-out-of-the-swamp-onto-land-the-flora-rule-emerges-from-title-26-to-possibly-infest-title-31/

25. Bedrosian’s case seems to have no relevance for US citizens living outside the US with only domestic accounts. If If I understand correctly, it’s about a US-resident taxpayer with a Swiss bank account which the taxpayer was “using as a savings account” – i.e., apparently, transferring US-source money to an unreported foreign account where the gain would be out of reach of US taxation.

    Plaintiff-appellee Arthur Bedrosian is a successful businessman who has worked in the pharmaceutical industry since the late 1960s. By 1973 he had opened a savings account in Switzerland so that he could make purchases while traveling abroad for work without relying solely on traveler’s checks to do so. Bedrosian initially used the account for convenient access to funds while traveling abroad, but in later years he began to use it more as a savings account. Union Bank of Switzerland (“UBS”) thereafter acquired the bank where Bedrosian had opened his account, which caused the account to become a UBS account.
    From 1973 until 2007 Bedrosian used the services of accountant Seymour Handelman to prepare his income tax returns. Sometime in the 1990s according to Bedrosian, he informed Handelman for the first time that he maintained a bank account in Switzerland. Handelman told Bedrosian that he had been breaking the law every year he did not report the Swiss account to the IRS. Handelman also told him that his estate could deal with the consequences after he was dead. With this advice, Bedrosian continued not to report his UBS account when he filed his annual tax returns.

    Calamitous for Mr Bedrosian when the FBAR penalties increased, but the FBAR penalties increased because of the actions of US-resident taxpayers like Mr Bedrosian. Law-abiding non-US-resident USCs are not hiding US-source income and can’t be hit for millions of dollars in FBAR fines for not reporting their domestic accounts to the IRS.

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