Liberty and justice for all United States persons abroad

The Isaac Brock Society

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

You can access all years at this link: Media and Blog Articles – Links for All Years

If clicking on a link brings you to the wrong page in the comment stream, click here to get to the most recent comments.

 Media and Blog Articles

EmBee suggested that it would be good if there was a thread for new articles, so that people would be aware of where to comment.   So, I created this permanent page.   I’ll make a permanent list of links posted here and keep adding to it,  but not deleting, so we’ll end up having sort of a  “bibliography” of FATCA/CBT articles.  [Note:  Some articles are not open for comments]

For more articles on FATCA, enter FATCA into Google then click on the link “more news for fatca” just below the most recent featured article.

Notes:

From JC:   To see #FATCA on Twitter for latest breaking news.  JC finds that is quite a good source and there even are some international articles that one may read using Google Translate.   Others may help certain tweets and articles remain in elevated position by retweeting them.

From Badger:   On an important archival note, please use the Internet Archive Wayback machine https://archive.org/web/ (see bottom right ‘Save Page Now’ box to enter URLs of webpages you want saved for posterity, and try to save backup copies of articles and other items of interest in some other form – such as a datastick or external drive. Some important and very significant webpages and the fulltexts of articles are no longer available (although some can be retrieved if someone using the Wayback machine saved them).

Be sure to read the comment stream for this thread — there are usually very recent articles mentioned.

2019.12.15
Canadians travelling to or through the US should pay attention to their withering rights, H.M. Jocelyn, CBC News, Canada.
2019.12.12
EU revives issue of FATCA information exchange as year-end deadline for banks approaches, Helen Burggraf, AmericanExpatFinance.
2019.12.10
13 Reasons Why I Committed Citizide, John Richardson, TaxConnections.
US tax filing requirements that Americans living in Canada should know, David Altro and Avi Guttman, Globe and Mail, Canada.
2019.12.07
Confirmed – Rep. Holding to leave Congress at end of 2020, after reintroducing Tax Fairness for Americans Abroad Act,  Helen Burggraf, AmericanExpatFinance.
2019.12.06
Trump is trying to make it took expensive for poor immigrants to stay, Annalisa Merrelli, Quartz, US.
2019.12.05
Revenue Neutrality And A Move To Residence-based Taxation: Open Letter To Democrats Abroad, John Richardson, Karen Alpert, Laura Snyder, TaxConnections.
What It’s Like to Retire Abroad,  Glenn Ruffenach, Wall Street Journal, US.

Earlier 2019 articles are in the  Media and Blog Articles 2019 Archive.  Links to previous years’ archives are also at that link.

2020.01.01: This thread is now closed. Please comment at Media and Blog Articles Part 7 of 7
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523 thoughts on “Media and Blog Articles Open for Comments – Part 6 of 11 (Year 2019)”

  1. Japan T – I looked at the comments on the article, there are actually remarkably few suggesting that only cheating tax evaders have anything to fear, most are just angry at this information being handed to the IRS.

    And so they should be.

    Of course there’s always the ignorant few that have no idea what the real situation is and what is happening here, but it’s good to see people genuinely angry over this.

  2. Yeah I was pleasantly surprised by the comments too. Not that I’d inflict a serious quantitative analysis on them (I’d rather pull my own teeth) but subjectively it seemed much saner and more sympathetic than the ill-informed nonsense we’ve seen in the past.

  3. This turned up on Tax Connections today:

    https://www.taxconnections.com/taxblog/canada-revenue-agency-cra-has-shared-over-1-6-million-documents-with-the-irs-to-date/

    It’s short so I’ll quote:

    The Canada Revenue Agency (CRA) continues to supply information to the IRS on U.S. Citizen owned investment and bank accounts. According to CBC, CRA has already shared over 1.6 million Canadian banking records with the IRS. Even with the significant sharing of documentation we are still not seeing an increased level of new clients being contacted by the IRS.

    You would think that if the IRS has such a large of amount of banking information from United States citizens abroad they would be enforcing compliance by reaching out to these Americans. This might be something that has yet to happen and may be on the horizon.

    My reply, which they will usually publish after a short delay:

    You’d think, wouldn’t you? Here, two possible explanations for why there have been zero reports of non-compliant US persons in Canada being contacted by the IRS on the basis of FATCA reporting:

    1. The IRS does not have the ability or the resources to sift through mountains of messy FATCA data and begin efforts to contact names on the list that don’t match to current taxpayers. Note that much of the data will come without SSNs, as it is not mandatory that customers supply that information for existing accounts, only that institutions request it annually. Furthermore, the existence of a Canadian account is not in itself evidence of a filing obligation, since it says nothing about income; it’s not necessarily the case that a non-filer is not compliant with US tax obligations. More importantly, there’s next to no ROI in this effort because most of the individuals identified by FATCA would owe little to no tax (due to FEIE or FTC) and the US has no legal ability to collect penalties or taxes owed from Canadian citizens (i.e. duals) per the tax treaty. In other words, maybe the reason the IRA hasn’t pursued anyone is because they know full well they generally can’t “enforce compliance” and would be wasting their time and money attempting to do so.

    2. Looking at the numbers in the report, it states that 600k accounts were reported in 2016 and 2017 (interesting that the number has not gone up). If we assume most FATCA-compliant customers will have multiple accounts, then it’s maybe 100k individuals being reported. That is approximately 10 percent of the estimated 1 million US persons in Canada. I suspect that’s less even than the number of permanent residents without Canadian citizenship. My hunch is that a great many of the people who’ve identified themselves to their banks as US persons, and are thus subject to FATCA reporting, were already compliant with US taxes (globally the compliance rate for non-resident US citizens is thought to be 11-15 percent). The vast majority of US persons in Canada are duals or “accidentals” (children born to Canadians temporarily in the US but with no other tie to the country) who likely do not self-certify as US persons when asked by their banks because they don’t believe themselves to be US citizens, or refuse to do so on principle, or in some cases don’t understand the rather elliptical questions about “tax residency in another country” on the FATCA/CRS forms provided to them when opening new accounts. In short, FATCA enforcement in Canada is not very strict and relatively easy to sidestep even for those with a US birthplace. Read the detailed CRA guidance on FATCA compliance and you will note that unless it has other hard evidence of US citizenship, banks must accept without question a customer’s self-certification, and ID showing birthplace is not required to open an account.

    The short version: it’s very easy for Canadians to avoid FATCA reporting; if reported nothing much will happen because the IRS can’t deal with all the crap data it’s getting and it knows that pursuit of non-residents is going to be a huge money-loser.

  4. The key takeway:

    “Even with the significant sharing of documentation we are still not seeing an increased level of new clients being contacted by the IRS.”

    Tax accountants are complaining that FATCA hasn’t generated any new business for them. It does make one smile.

  5. Well, this was the first time I remember seeing such comments on articles from Canada, so seeing them gave me the same sadness similar comments from the US do. Glad to learn that there are fewer than before.

  8. To be fair (if such a thing is possible regarding the IRS), when I look at the IRS list of international compliance reviews cited by the Tax Connections article, they still seem geared toward homelanders trying to cheat regarding foreign income. Look at the wording for the FEIE Campaign:

    Individuals who meet certain requirements may qualify for the foreign earned income exclusion and/or the foreign housing exclusion or deduction. This campaign addresses taxpayers who have claimed these benefits but do not meet the requirements.

    In other words, it seems that they’re sniffing around for people who haven’t met the foreign residence requirement, most likely homelanders who went abroad for a less than one year contract. So full-time expatriates shouldn’t be under any scrutiny.

    But I agree that these new “campaigns” are yet another reason why full non-compliance–a flagrant violation of US law–is a lot safer than attempted compliance and being raked over the coals over some trivial alleged offense.

  9. Someone please correct me if I’m wrong, but as I under stand it, nonfilers can not claim the FEIE. If, in these compliance reviews, a USC living abroad is found to not be filing, say from FATCA filings from our banks, what is it stop the IRS from assesing tax and fines for not filing and base these on our entire earnings?

  10. The IRS wouldn’t know anything about income beyond the interest reported under FATCA, which isn’t excluded under the FEIE anyway.

    If a human or good AI looked at the full record of transactions – which is *not* required to be reported under FATCA – they could make some guesses about annual income I suppose.

  11. Umm, there are many reports of FIs sending much more than required by FATCA. Perhps not in Canada (yet?), but certainly in other countries.

    In fact, Japanese FIs are sending data on all transactions, which would serve as a way to spark the IRS’s interest.

  13. Google Translate generally does a great job with company names and addresses. Besides, with the resources of the US gov. at their disposal, not hard at all.

  14. Oh, and as all transactions are being reported, it would be no mystery that monthly deposits of roughly the same amount might, just possibly indicate income.

  18. Another poor article suggesting other nations joined FATCA just to help the US stop tax evasion. No mention of devastating sanctions then for financial institutions not complying then?

  23. More detail and comment on the recent dropping of the FATCA gross-proceeds-withholding threat:

    The United States may be the only developed nation that has not adopted the Organisation for Economic Co-operation and Development’s Common Reporting Standard (“CRS”), which, similar to FATCA, is an automatic intergovernmental exchange of tax and fiscal information system.

    One crucial difference between CRS and FATCA lies in the enforcement mechanism employed by the respective regimes. Under CRS, a financial institution that fails to comply with CRS would be subject to penalties imposed by its jurisdiction of residence, which penalties are generally of a far lesser magnitude than the withholding taxes imposed under FATCA. The elimination of FATCA withholding on gross proceeds narrows the gap in penalties imposed under the two regimes, although the prospect of future foreign passthru payment withholding is disappointing.

    https://www.jdsupra.com/legalnews/irs-issues-proposed-fatca-regulations-62871/

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