Liberty and justice for all United States persons abroad

The Isaac Brock Society

1,012 thoughts on “FATCA Discussion Thread (Ask your questions) Part One”

  1. @Watcher

    Thanks for posting another version of the article. Since the IGA in the UK is subject to legislative approval, do you think that the securities and investment industry’s vocal criticism of FATCA is to gain public momentum against it? Are IGA’s seen as the means to an end of FATCA and that’s why countries seem to be readily willing to jump on board? That would seem rather disingenuous and ploying of the parties in power, and could potentially backfire among their electorate.

  2. High Cost to Go Green: Giving Up A Green Card“Giving up a Green Card can cost Greenbacks. For many, it’s an unpleasant surprise. As U.S. continues its war on offshore tax evasion, many expatriates feel caught in the crossfire. See Americans Are Undesirable As FATCA Closes More Doors. FATCA, the dreaded Foreign Account Tax Compliance Act, has made Americans undesirable. See FATCA Makes Banks Shut Out Americans.”
    http://www.forbes.com/sites/robertwood/2012/12/01/high-cost-to-go-green-giving-up-a-green-card/

  3. @bubblebustin

    I saw that earlier today, and tweeted it, but didn’t get around to putting it up here.  Thanks for recording it. 

    I will say this for Robert, he stays with the FATCA subject, and writes from every angle.  I know some here think he is promoting for the attorney consulting complex too much, but he has done a good job of educating and keep the subject alive when others don’t really write about it.   Also, he is pretty good at responding to your comments, if you make them.  I have given him some lengthy ones! 🙂

  4. @just me

    Between all of us who make efforts to put anything FATCA related on this thread, I feel confident we won’t miss anything. Thanks for suggesting it be used as a ‘repository’ for FATCA related articles and information, as not everything is separate post-worthy, but worth being kept somewhere specific where it is easily found.

  5. @all,

    I posted this elsewhere, but it is so comprehensive, that it merits close reading, and details the history that led up to FATCA and the persecution of those of us living outside the US:

    See last page particularly. Also specifically mentions the CRA notice of refusal to assist in collecting FBAR penalties in Canada (which I have never seen in any other US source materials):

    https://meetings.abanet.org/meeting/tax/ITE12/media/08-Developments%20in%20Criminal%20Enforcement-Outline.pdf

    International Tax Enforcement
    November 8-9, 2012
    New York, NY 
     
    OFFSHORE ACCOUNT ENFORCEMENT ISSUES – 2012 
     
    Scott D. Michel, Caplin & Drysdale, Washington, D.C.

  8. *badger, the last two paragraphs of the document you posted are telling in that they imply that all this is about tax evaders, with no acknowledgement of the collateral damage to innocent persons living outside the US who are being caught in the dragnet and the resulting paperwork mudslide, though actually owing no tax.  It’s clearly a case of being assumed guilty until proven innocent, but who gives a sh*t? — not the IRS or the tax professionals, nor people who aren’t affected.  No wonder more and more innocent people who ARE affected want to renounce.

    Here’s the quote (emphasis mine):

    “It is very much in the IRS’ interest to encourage taxpayers to come forward and bring funds held in undeclared accounts “back into the system,” for future taxation on income and gains earned by such funds and, eventually, perhaps, through imposition of the estate tax. The voluntary disclosure policy is an important component of the IRS’s overall compliance mission.

    “In light of the many developments occurring in the past three years in the area of undeclared accounts, and the increasing ability of the U. S. government to penetrate bank secrecy, it would still behoove financial and legal advisors worldwide to consider advising individual U.S. clients who may have undeclared accounts and institutional clients who may have assisted U.S. taxpayers to establish such accounts to come into compliance. Although the civil liabilities may be severe and the financial pain high, the ability to avoid criminal prosecution in the enhanced enforcement environment is a substantial benefit to be considered.”

  9. Tax talks with HM Treasury over FATCA issue

    More unintended consequences:

    TALKS have been held between the Crown Dependencies and HM Treasury about the potential for new arrangements for automatic exchange of tax information with the UK.

    If implemented, it could have a significant impact on the island’s trust and corporate services sector.

    The extra administrative costs of regulation could prove a real burden, and could lead some firms to downsize, shut up shop or consider relocating to other offshore centres.

  10. In spite of FATCA, Credit Suisse  “is looking to further expand its footprint into the Americas despite its already high concentration in that region. According to Steve Mackey, head of private banking and country manager for Credit Suisse (Bahamas), “the European market was traditionally where our wealthy clients came from, but the new wealth emerging from Latin America is where we will focus our activities in the future”. Within the Latin American market, Mackey pointed out to Guardian Business how Brazil has emerged as a key market.”

     “FATCA has been a tremendous drain on the whole global banking industry. It has increased the legal and compliance costs for all banking institutions.” Despite these global setbacks, the Credit Suisse executive told Guardian Business that the firm is looking forward to growth areas. “I think locally we are doing quite well.

    We are definitely having a decent year but a new environment for our business is that as the revenues from the offshore business change, you have to right size your business as well,”

    http://www.bahamaslocal.com/newsitem/61549/Credit_Suisse_FATCA_is_tremendous_drain.html

  11. It really does save a reporter a great deal of investigating when she can just use the word “etc” to include anyone you’re too lazy to verify:

    Taiwan Lags Inking FATCA Agreement with U.S.

    “The U.S. has already concluded a bilateral agreement with the U.K. and is in the process of finalizing an intergovernmental agreement with France, Germany, Italy, Spain, Japan, Switzerland, Canada, Denmark, Finland, Ireland, Netherlands, Norway, etc., hoping to conclude negotiations with them by the end of this year.” 

    http://www.cens.com/cens/html/en/news/news_inner_42232.html

  12. @bubblebustin

    So nothing about expanding in America, just Latin America?   And yes, Etc is very convenient!

  15. @calgary411

    Good find. I don’t know how significant the share of Mailpac’s business comes from USP’s living outside the US, but if I had Mailpac stock, I’d sell right now.

    “Mailpac customers, she suggested, should complete a Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding form, known as the W-8BEN, to prove their non-American status.”

  17. http://www.taxanalysts.com/www/features.nsf/Articles/2341982CF5EB061885257AC4005E31DA?OpenDocument

    Tax Gap proposals, like FATCA is about looking “real good.”

    The panelists also had harsh words for the Foreign Account Tax Compliance Act, which Potter grouped with other tax gap proposals. They agreed that the costs borne by companies to comply with the law far outweigh the revenue benefits to the federal government — a problem that Potter said is common to tax gap provisions.

    “Tax proposals are estimated by how much revenue they raise. There’s really just no good way to do it for enforcement compliance provisions. They never raise very much revenue, even if they look really good,” Potter said.

  19. JBA Pushes For Inter-Governmental Agreement On FATCA

    The Jamaica Bankers Association (JBA) is again urging the Government to push for an agreement with the United States to ease the costs faced by local financial institutions if they are to conform with the Foreign Account Tax Compliance Act (FATCA).

    JBA President Bruce Bowen said the association continues to lobby for an inter-governmental agreement that would allow local financial institutions to report to a local competent authority rather than the Internal Revenue Service (IRS).

  20.    *http://www.forbes.com/sites/realspin/2012/11/20/coerced-foreign-tax-compliance-is-killing-american-jobs/

    “FATCA kills American Jobs” – this may have been posted already.

  22. …along with the excellent comments, many from Brockers. Thanks, Marie, for bringing it forth again.

  23. FATCA: How can it affect you?

    “Of course we cannot ignore the issue of confidentiality laws of the financial institutions in Trinidad and Tobago and the obligations of confidentiality and privacy to the customers. FATCA has insisted that participating FFIs should make all attempts to obtain a waiver of secrecy and other privacy laws from the US person in order for the information to be disclosed to the IRS. If the US person refuses then the account must be closed. This places the financial institutions of T&T in a problematic position in that based on the laws of T&T, and in the best interest of good customer service, they do not want to breach the customer’s confidentiality and trust, but at the same time the financial institution does not want to be faced with a 30 per cent withholding tax on all of its US income.”

    That’s the billion dollar dilemma, isn’t it? 

    http://www.trinidadexpress.com/business-magazine/FATCA__How_can_it_affect_you_-182119141.html

  24. http://www.independent.co.uk/news/business/analysis-and-features/why-americas-fatca-might-spell-disaster-for-britains-fatcats-8387007.html
    Why America’s Fatca might spell disaster for Britain’s fatcats
    UK financial services will be hit by an anti-evasion plan that will mainly help the States

    “It is a huge exercise just getting ready for Fatca,” said one senior executive at one of the UK’s largest retail banks. “But it is not just that we will have to report annually from now on while taking even more care whom we allow to open accounts. The potential for cock-ups and errors is phenomenal. We don’t want to promote tax evasion but it does appear we are bearing a lot of the Americans’ costs for them.”

    Until the draft legislation is published next week many in the City still remain unconvinced that their firms will be legally entitled to withhold tax for the IRS on the clients’ accounts or, indeed, that they will not be in breach of data protection laws. The Treasury believes it has addressed all these issues.

    Deloitte’s Mr Tragheim said: ” Fatca represents a massive change. Client records will need to checked, new on-boarding procedures introduced and details reported to regulators. It’s a giant step with regard to increasing cross-border exchange of customer information. It’s difficult to see how the juggernaut will stop.”

  25. @calgary

    Happy to see that the actually logistics in implementing FATCA are covered:

    “Failure to comply, or perhaps even get the mechanics right, will carry a heavy burden…But it is not just that we will have to report annually from now on while taking even more care whom we allow to open accounts. The potential for cock-ups and errors is phenomenal.” 

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