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. It’s the Flora rule moving from one body of law to another that is the focus of the article. Once said to be an impossibility, possible it now is.

2. US law.

   Of interest to US tax attorneys, no doubt, and to some of their clients. But for non-US-residents who have US citizenship but have no reason to be concerned about the ponderous pondering of the barely-functioning US legal system – not.

3. You keep forgetting two very important points. One, FBAR is CRIMINAL law. While most countries may not extradite for taxes, many of those same countries will for criminal violations of law.

   Second, many USCs living abroad need our passports to remain abroad.

4. It would be very interesting if a non-tax-evading non-US-resident US citizen were to face extradition to the US over a breach of a US citizenship obligation.

   That would put the cat among the AEOI pigeons, for sure. An end to the flim-flam about “respecting the right of the US to claim all US-born as US-tax-resident.” The liberal economies would have to put their taxpayers’ money where their mouth is.

5. “It would be very interesting if a non-tax-evading non-US-resident US citizen were to face extradition to the US over a breach of a US citizenship obligation.”

   FBAR is not only a citizenship obligation. Non USCs living and for a time after, who once resided in the US must also file FBARs.

6. Extradition for breaches of international law would not be interesting, IMO.

   Extradition for breaches of a US citizenship obligation would be very interesting indeed, IMO.

7. Your vision is too narrow. Right now, one of the barriers against FBAR fines being used towards passport revocation is that each live in different legal realms. If the Flora rule can infect the one from the other, then eventially I see FBAR fines being used towards the revoking passports, among other difficulties.

8. The article states that FBAR requires reporting of accounts in excess of $10,000. Has something changed? It has been wideky reported that the aggregate value of all acounts being equal to or above $10,000 at any time during any given year triggers the requirement to report all assets held abroad.

   The fines also differs from what I have read here and elsewhere. The article states the nonwillful fine of $10,000 per unreported account and not the $10,000 per unreported acount multiplied by 6 years.

   The willfil fine as reported in the article also lacks it multi year, three, for that fine.

9. “Extradition for breaches of international law would not be interesting, IMO.”

   Again, thinking too narrowly. If one can not challenge FBAR fines untill they pay them, then innocent people may be at risk or extradition or, later, loss of passport, untill they raise the funds to first pay the fines and then to challenge in court.

   Lots of room for abuse.

10. What’s of concern to me is the claimed or attempted or rumoured extraterritorial imposition of US law on US-born individuals who don’t live in the US (as currently practiced by Model 1 IGA countries).

    Other countries appear to have nothing to gain from enforcing/collecting US FBAR penalties, and don’t currently do so. It would be interesting to see what they would do if confronted with an FBAR-penalty-based extradition request.

11. “What’s of concern to me is the claimed or attempted or rumoured extraterritorial imposition of US law on US-born individuals who don’t live in the US (as currently practiced by Model 1 IGA countries).”

    People with your concerns only are not the only ones who read IBS.

12. Re:

    “If one can not challenge FBAR fines untill they pay them, then innocent people may be at risk or extradition or, later, loss of passport, untill they raise the funds to first pay the fines and then to challenge in court.” and “It would be very interesting if a non-tax-evading non-US-resident US citizen were to face extradition to the US over a breach of a US citizenship obligation.”

    Extradition treaties generally require dual criminality — that is that the act for which Country A requests extradition of a person must be classified as a crime in both the requesting country (Country A) and the requested country (Country B).

13. Duality: Thanks for posting that excellent article! And Happy New Year to you, too! It’s always possible that this one will be better than the last. We can only hope.

14. “Extradition treaties generally require dual criminality — that is that the act for which Country A requests extradition of a person must be classified as a crime in both the requesting country (Country A) and the requested country (Country B).”

    Many countries do have antimoney laundering laws, which FBAR is

15. Back to my question on the fines, are they not for the aggregate balance of all accounts outside the US being equal to or greater than $10,000 or just for not reporting individual accounts that have a balance of over $10,000 as quoted in the article.

    And my other question on the fines being for multiple years?

16. Given that the IGA1 countries are reporting domestic accounts held by their own (US-born) residents as cross-border, the dual criminality criterion no longer seems much of a barrier.

    Canada argues that the owners of the accounts are required by law to report the information to the US. Indeed, it’s hard to see how any IGA1 could say otherwise, since that’s their justification for the seizure of the information.

    Could an IGA1 country reasonably argue that not reporting the information is not against domestic law, given that domestic law has been rewritten to require banks, and allow the tax agency, to report the information?

    Though for the present, the question seems entirely hypothetical.

17. Re: “Many countries do have antimoney laundering laws, which FBAR is”

    Yes, but that in itself would not be sufficient for extradition. It has to be more specific. The US would have to prove to a tribunal of Country B that a particular article of Country B’s criminal law is equivalent to the particular article of US criminal law under which the US has charged the person. Country B’s criminal law could have several anti-money-laundering offences but not have one that equivalates to the requirement to file FBAR.

18. The US-UK Extradition Treaty seems to allow for extradition only for offences that are punishable by a year or more of deprivation of liberty.

    Not filing FBARs for domestic accounts, or ignoring FBAR penalties, seems unlikely to result in imprisonment, even under US law, unless there’s evidence of money-laundering or tax evasion or terrorist financing.

    So – there really seems little prospect of the UK government being required to explain and justify its position on the question of extraterritorial enforcement of US laws.

19. As more and more countries adopt FATCA like programs, I am certain we are going to see more laws similar to FBAR in these countries. As of 2011, Japan now has its own requirements for reporting of “offshore” accounts. At least one bank in Germany sent a FATCA like letter to Japanese friends of mine then living in Germany. They were givennthevoption to allow the bank to report their accounts to Japan or close the account. They closed the account. The husbands company shortly thereafter recalled the husband to Japan, unrelated, so they do not know if their other banks may have done so too if they stayed there longer.

    Many countries now have reporting requirements for their citizens whether they are resident at home or abroad. Exactly thae same as FBAR, doubtful, but I do not doubt it will become close enough in increasing numbers of cases.

    Many countries signed on to FATCA thinking it nothing more than a common sense approach to catching tax cheats. Others believe it is a treaty. Not hard to hoodwink the same into believe that FBAR is nothing more than a way to catch international money launderers, child trafficers, drug trafficers, terrorist and anyone else they like to lump us in with.

20. Our new friendly (and corrupt and hypocritical) face as chairman of the US House Ways & Means Committee, who is obsessed with “offshore tax avoidance”. Though his target is those big, mean corporations, I wonder how he will respond to Holding’s Tax Fairness For Americans Abroad Act, which seeks to let us multi-billionaire, child-sex-trafficking fatcat traitor expats wriggle out of paying their fair share to the USA.

    https://readsludge.com/2019/01/09/richard-neal-chairman-contributions-from-companies-he-criticized-as-offshore-tax-dodgers/

21. For those who are interested in a conference call discussion with Solomon Yue and John Richardson on the Holding bill:

    When: Tuesday January 15, 2019 – 12:30 EST/17:30 GMT (Toronto, Canada) time (one hour)

    See: http://www.citizenshipsolutions.ca/2019/01/13/why-all-individuals-should-support-the-repholding-tax-fairness-for-americans-abroad-act/

22. @MuzzledNoMore

    “We can only hope.”

    Agreed, it is the only way forward in this strange world.

    In that article, it mentioned that…

    “Washington insiders are now saying that Congressional approval, in the form of a vote, would be needed before the U.S. could legally reciprocate with its FATCA IGA partners, and provide them with the same type of banking details that these partner countries are now providing to the Internal Revenue Service.”

    It appears unlikely that Congress would approve reciprocity or that the United States would ever join the CRS regime. So now what?…

23. It’s strange that the article suggests that this is something Washington insiders have recently concluded. It’s long been acknowledged that the IRS can’t reciprocate under current US law. Allison Christians commented, back in 2014.

    Since the US side of the IGAs is to deliver very modest undertakings that Treasury also believes can be done without congressional approval (namely, extending the longstanding s. 6049-based information exchange with Canada to other countries), this is probably true; all IGA promises to alter the law in the future should be seen as what they are, unenforceable promises that are beyond Treasury’s control and so won’t be delivered.

24. Perhaps this:

    extending the longstanding s. 6049-based information exchange with Canada to other countries

    is what the Canadian government had in mind when it first suggested to the IRS the idea of using the treaty Exchange of Information article as a way to enforce FATCA extraterritorially. (https://www.fin.gc.ca/afc/faq/fatca-eng.asp).

    And that was what was expanded on by the US Treasury and the G5 into the Model 1 IGA.

25. @plaxy

    So now what?…
    USA on a tax haven blacklist?
    Maintain the status quo?

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