Patricia Moon posted part I:
In Part II, the author argues (among other things) that FATCA is nothing more than a continuation of the “FBAR Fundraiser“.
Here we go …
Reposted with permission of Tax Connections.
Written by Gary Heald | Posted in FATCA • Gary Heald
In FACTA Part I, I argued that in light of the Joint Committee on Taxation (JCTX-5-10), Congress failed to engage in the necessary due-diligence to reasonably relate FATCA to the collection of tax revenue lost through “tax schemes” and “tax evasion” by U.S. persons with foreign financial institution accounts. Congress operates as America’s legislative fact-finder. They are charged with determining whether relevant and reliable evidence negates the underlying policy-purpose for a particular law, when presented with evidence to that effect. JCTX-5-10 was directly relevant because it offered a direct answer to the question of “how much” FATCA revenue. As for reliability, the Joint Committee on Taxation produces some of the most reliable evidence on The Hill, and this was no exception to that general rule. Congress knew FATCA would collect less than one-half of one-percent of what was sworn to during the Ways and Means hearing estimates. They also knew that even after ten-years, FATCA would not fully-fund the Hiring Incentives To Restore Employment (HIRE) Act (and that does not take into account the costs for implementation and renewed requests for additional expansion and implementation funding).
In Part II, I want to touch on three related areas of concern. First, and as has been discussed by more than a few other people, the $10B that the IRS collected between 2009 and 2016 included a disproportionately low amount of tax revenue coupled with a substantial amount of penalties associated with FBAR. Further, alongside a disproportionate amount of penalties, FATCA and Offshore Voluntary Disclosure Programs (OVDP) illegally filled the gap left by Qualified Intermediaries (QI) pooling, forcing foreign financial institutions to report on the account value of U.S. persons in violation of their own law, and if reproduced domestically, in violation of our own laws as well. Finally, FATCA has become a continuation of the IRS war on FBAR perpetrated by Treasury’s Financial Crimes Enforcement Network (FinCEN), federal law enforcement and the intelligence community all of which sought to curtail the use of secret foreign bank accounts for illegal purposes (e.g., tax evasion as well as securities manipulation, insider trading, evasion of Federal Reserve margin limitations, storing and laundering funds from illegal activities, and acquiring control of U.S. industries without detection by the SEC)  by establishing a worldwide-financial-industry informant system.