Liberty and justice for all United States persons abroad

The Isaac Brock Society

Tag Archives: FATCA

Brock Project: April 2019 Report From GAO is evidence of how #FATCA and Foreign Asset Reporting is viewed in the Homeland

Posted on by Posted in Canadian Government, FATCA, Issues regarding US persons abroad 16 Comments

Question:

The above tweet links to the a report from the Government Accountability office. It is extensive but generally interesting. A quick perusal reveals no evidence that the Government views FATCA and foreign asset reporting as tools to enforce worldwide taxation on people who live outside the United States. Yet, that is the purpose of FATCA and foreign asset reporting in general.

The “Fast Facts” page includes:

How does the government prevent tax dodgers from hiding income in offshore accounts?

A 2010 law requires Americans and foreign banks to report more information to IRS about Americans’ foreign assets. Implementing the law, however, has raised some concerns.

For example, close to 75% of taxpayers reporting foreign assets to IRS also reported them separately to Treasury—indicating potential unnecessary duplication.

Also, some Americans living abroad can’t get services from foreign banks that find the law too burdensome.

Our recommendations to Congress, Treasury, and other agencies address challenges related to foreign asset reporting.

The 2010 Foreign Account Tax Compliance Act, known as FATCA, created new reporting requirements for taxpayers with specified foreign asset

Continue reading →

Brandeis: The right to be let alone, to have privacy, is the most comprehensive and valued right

Posted on by Posted in FATCA, Issues regarding US persons abroad 62 Comments

Reposted from the Renounce US Citizenship blog

This post was written in December 2014. It is being reposted in 2018 – the question is why

FATCA and the CRS (“Common Reporting Standard”) are mandatory information sharing schemes. They first define people in terms of their “tax residency” (each country defines who its tax residents are) and then shares people’s private information based on that “tax residency”. In other words (assuming you believe that there is a legitimate interest in privacy) both FATCA and the CRS should be viewed as “privacy overrides”.

Although the notion of privacy is dead in the United States (companies like Facebook and Google make a living off obtaining and using private information), the European GDPR suggests that privacy is valued by Europeans and that individuals should have some control over their data. In Europe the GDPR reflects a presumption that individual belongs to the individual. There is no such presumption in the United States. See:

Automatic exchange of tax information and data privacy

Continue reading →

So, you have received bank letter asking about your tax residence for CRS or FATCA – A @taxresidency primer – Part 4 – Conclusion

Posted on by Posted in Tax Residency 6 Comments

cross-posted from citizenshipsolutions.ca

Part F – A “U.S. citizen” cannot use a “tax treaty tie breaker” to break U.S. “tax residence”. How then does a “U.S. citizen” cease to be a “U.S. tax resident”?

Q. I am a U.S. citizen. I do not live in the United States. I live in Canada. I am a Canadian citizen. How do I stop being subject to the all of the FBAR and other reporting rules, tax rules (including PFIC), life restrictions and inability to effectively invest and plan for retirement imposed by the Internal Revenue Code?

A. You relinquish U.S. citizenship. Please note that a “renunciation” is one form of “relinquishment”. In general, the date of relinquishment of U.S. citizenship is more important than the form of relinquishment of U.S. citizenship. A Certificate of Loss of Nationality (“CLN”) may or may not (depending on the date of relinquishment) be necessary to cease to be subject to U.S. taxation.

Q. In simple terms, where do I get information about the process of renouncing U.S. citizenship?
Continue reading →

So, you have received bank letter asking about your tax residence for CRS or FATCA – A @taxresidency primer – Part 3

Posted on by Posted in Tax Residency 1 Comment

cross-posted from citizenshipsolutions.ca

Part D – Different definitions of “tax residence” – Not all countries define “tax residence” in the same way

Q. What is the criteria that different countries use to define who is a “tax resident” of the country?

A. The circumstances that constitute “tax residence” will differ from country to country. Generally speaking “tax residence” is based on definitions of (1) “residency” (deemed and actual), (2) “domicile” and (3) (in the case of the United States and Eritrea) “citizenship”. Note that different countries may define “tax residency” differently.

Q. How can I learn the definition of “tax resident” for the OECD countries?

A. In an earlier post about “OECD tax residency” I referenced the following chart which summarizes the definitions of “tax residency” in OECD countries. (I suggest that you use these definitions as a “start” to your research and not as the “last word”.)

Q. What is the significance of the “OECD” and why does “OECD tax residency” matter?
Continue reading →

So, you have received bank letter asking about your tax residence for CRS or FATCA – A @taxresidency primer – Part 2

Posted on by Posted in Tax Residency 7 Comments

cross-posted from citizenshipsolutions.ca

Part B – The Combined FATCA/CRS Letter

This letter is particularly worrisome for Canadian residents (whether Canadian citizens or not) who were either born in the United States or are (otherwise) U.S. citizens or U.S. permanent residents (AKA Green Card Holders). Could this mean that they would be required to apply for a U.S. Social Security number?

What follows is a sample letter…

Dear Valued Customer:

We appreciate our relationship with you and we are committed to informing you about matters that affect you. We are writing today to inform you that changes have been made to the Canadian Income Tax Act (Part XVIII and Part XXIX), requiring TD to provide information about customers who have a tax residence in other countries to the Canada Revenue Agency (CRA). The CRA may then share information with other countries through existing provisions and safeguards under the Tax Convention.

To comply with this legislation, we have reviewed our records (eg. address) in order to identify customers who may be residents of other countries for tax purposes.”

Part C – “Tax Residency 101”: It’s about where you should be paying your taxes

Some Question and Answer …
Continue reading →

So, you have received bank letter asking about your tax residence for CRS or FATCA – A @taxresidency primer – Part 1

Posted on by Posted in Tax Residency 3 Comments

cross-posted from citizenshipsolutions.ca

So, you have received bank letter asking about your tax residence for CRS or FATCA – A @taxresidency primer

Introduction – So, what’s this “tax residence” stuff about? What does “tax residence” mean?

In 2014, as people started to receive “FATCA letters” I wrote a lengthy post describing “What to do if you receive a FATCA letter“. Information exchange under the Common Reporting Standard “CRS” has begun in 2018. As a result, I am writing this post which is to explain what the CRS is and how it relates to the FATCA letter. It is important to understand that the “CRS letter is actually a combined “CRS/FATCA” letter which is more likely to be received than the original FATCA letter. I urge that those who have received a letter of this type to read this post PRIOR to seeking professional advice!!!


Continue reading →

FATCA Repeal Update: The action to take right now!

Posted on by Posted in FATCA, House Ways & Means Committee, Issues regarding US persons abroad 6 Comments

From Global Advocate for the American Overseas, Keith Redmond is this important message:

ATTENTION AMERICANS OVERSEAS!

There is a SERIOUS bi-partisan push for an updated FATCA hearing to address the sharing of personal financial data and the lock-out of Americans overseas from foreign financial institutions (i.e. their local banks).

As a result of Suzanne Iclef Herman’s hard work and tenacity in establishing and cultivating a relationship with her Congressman and his staff, we have succeeded in building bi-partisan momentum in an updated FATCA hearing. Suzanne requested to Congressman Posey’s office that I get involved in order to have as many Americans overseas as possible contact their respective Congressmen/Congresswomen.

The attached letter has been sent to Members of Congress (MOC) in a bi-partisan effort to have the House Ways & Means Committee hold another FATCA hearing. In conjunction with the request, MOCs have been sent a letter (in the same aforementioned attachment) which each MOC can send to House Ways & Means Committee showing their support for another hearing. Americans overseas are asked to write their Congressmen/Congresswomen to sign the letter.

Therefore, I am requesting that you contact your Congressman/Congresswoman via e-mail and/or fax AND FOLLOW-UP WITH A TELEPHONE CALL.

I have attached the THREE STEPS to be taken in order to contact your representative via e-mail as well as the link to find your representative’s fax number. Please follow the instructions.

Continue reading →

U.S., U.K., Canada, Australia and Netherlands form international tax enforcement group

Posted on by Posted in FATCA, Tax Treaties 43 Comments

According to an article by Michael Cohn in Accounting Today, a multi-lateral tax enforcement group has been formed. The Joint Chiefs of Global Tax Enforcement (or J5 for short), intend to “collaborate in fighting international and transnational tax crimes and money laundering.”

Membership of the J5 includes the heads of tax crime and senior officials from Internal Revenue Service Criminal Investigation (IRS CI), Her Majesty’s Revenue & Customs (HMRC) in the U.K., the Australian Criminal Intelligence Commission (ACIC) and Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), and the Dutch Fiscal Information and Investigation Service (FIOD).

Leaders of the group met Thursday in Montreal to formulate their plans. The J5 plans to work together to gather and share information and intelligence, as well as conduct operations and build capacity for tax crime enforcement officials. Areas of focus include cybercrime and cryptocurrency, data analytics, and enablers and facilitators of tax crimes. The alliance will concentrate on building international enforcement capacity, as well as enhancing operational capability by piloting new approaches and conducting joint operations, to bring perpetrators who enable and facilitate offshore tax crime to justice

Continue reading →

If you Decide to Comply, DON’T choose a Homelander Tax Compliance Professional

Posted on by Posted in Non Resident Taxation, Renunciation 73 Comments

I was very surprised to receive the following email on Friday evening. I cannot recall ever getting anything like this before. I will not identify the author because it is not proper to publicly share an email without the permission of the sender. It is not anyone I have ever heard of before and I doubt any of you have either. It took me a while to decide if I would answer or not. I tried to put my reaction aside after all, why be surprised that a tax compliance professional would demonstrate so little awareness outside of his/her experience. In the end, I simply could not ignore how I felt. I replied and have decided to publish the email without naming its author and my response.
Continue reading →