149 thoughts on “DATCA is not Dead! It lives on…”

1. Quote from another source…

   What we need is to get Castro and Chavez to ask the IRS to provide them with the list of names of their refugees in the USA and their banking details – that will cause the ire of Congress to rise up and flood the IRS!

   Yet that is exactly what is involved here. Indeed, the issue of reciprocity is another one of those issues that should cause this to collapse – like the issue of identity theft/security in the data from overseas. I do not believe the IRS by themselves have either the power or right to actually offer this at all. There is nothing on our tax forms that identify the nationality of the taxpayer. So how would the IRS actually get that information?

   Further, true reciprocity would require all US financial institutions – not just banks, but the Fidelity and Merrill Lynch and Charles Schwabs – to identify the nationality of their clients, too, and report all of the same details to the IRS for distribution back to the countries with whom they have signed IGAs.

   This would turn the monster of FATCA into GODZILLA!

   We should actually start pushing for this because that will make the IRS sweat like you wouldn’t believe. The very issue of reciprocity turns IGAs into a treaty discussion.

   There is absolute NOTHING in the FATCA legislation that gives the IRS the right to promise let alone provide this information about foreign nationals in America; quite the contrary. The entire discussions on dual tax treaties in the past were left to administrative negotiations by State to the IRS because of the details involved, AND because the argument was that the IRS were only getting the counter-party to permit the IRS to tax AMERICAN citizens living abroad.

   There was never any discussion of the issue of dual nationalities, and absolutely, positively NEVER an issue of the IRS reporting on foreign nationals in the USA back to their home governments. Indeed, we were the odd man out because we were the only ones who tax on a citizenship base.

   We’re not talking about that at all here; these IGAs are promising reciprocity of “information” – that is NOT the purview of the IRS at all. And if it requires the same reciprocity – i.e., all US financial institutions changing their CRM programs to provide this “reciprocity”, this is WAY out of the IRS’ responsibility and highly illegal! The minute the American Bankers Association gets wind of this one, the proverbial will REALLY hit the fan!

2. More comments from another source…

   This is an interesting document. (speaking of IRS bulletin 2012-20 above)   According to it, “reciprocity” involves the IRS collecting only information on non-resident recipients of interest payments on bank accounts in the USA.  So if a German has a bank account in Miami and earns more than $10 in interest each year, the IRS demands the bank fill out a form and report it to them.  They would then exchange this information with the German authorities.  There is absolutely nothing in it about any other type of financial transactions – no pensions, no securities, no asset sales no bank account details of a non-interest bearing nature – in other words all of the other things that FATCA affects expats.

   Further, their section on information security is simply laughable.  It states they won’t provide any of this reciprocity with any foreign authority if they deem that authority does not have sufficient safeguards to protect it, or suspects it won’t, etc.  It also states it will be publishing a list of the countries it “trusts” and those it doesn’t in his regard.  But it says NOTHING about how it will safeguard the information it receives from overseas about expats which is substantially more than it receives from any US citizen domestically.  The information demanded by FATCA is a hacker’s wet dream!

   But it is missing the huge issue on reciprocity:  It isn’t actually collecting information about RESIDENT “aliens” (I hate that term!) to their home country as it is requiring all of the countries around the world with respect to expat Americans.  So if a German living in New York is earning lots of money, the IRS doesn’t provide his financial details or bank/financial institution details to the German authorities.  But that’s the demand the IRS is placing through FATCA.

   This is so typically of bureaucratic double speak it makes me sick.  The final straw is how they say “it has been determined” that it doesn’t need to comply with two Executive Orders that would require a cost-benefit analysis if it affected something more than $250 million.  The fact is it DOES affect this much, and “who determined it doesn’t need to be done”?  Well – THEY did!

   If FATCA were only the collection of information from FFIs on the interest banks paid on deposits of US citizens resident in the United States from overseas, then this would be reciprocity according to their own description here.  But it most certainly is NOT!

3. Continuing commentary.

   The EU Commission admitted at a public forum in New York that there was NOT true reciprocity in the IGA’s however, the EU had made a decision not to be difficult for being difficult’s sake. Well I for one like being difficult for difficult’s sake. One thing you have to understand is that being difficult just to be difficult is a very “American” cultural trait. We all think of FATCA from an “American” or “North American” cultural perspective more than the people in Brussels and our instincts to fight it are very culturally American. It like the story of the Canadian passport holder (Mr. Ladybug on IBS) trying to enter the US at Pearson Airport with a US place of birth demanding and insisting they were solely a Canadian citizens after which the border guard after finally relenting muttered the person was so much a “US Citizen.” The question is how do you get Europeans to fight FATCA from their own cultural perspective especially in the context of the fact there is very a preeminent bias in Europe towards very top down do what your told economic policies.

4. and more…

   The Europeans WON’T fight the issue.  The objective is to get AMERICANS to fight it – including Green Card Holders.  We start pointing out that the IRS has agreed to provide the information they are demanding from overseas from those people in the USA – reciprocity.  Americans at home will start complaining about the IRS providing their info to foreign governments!  They won’t care about, let alone understand the details, about FATCA – what they’ll care about is that the IRS is doing this without Congressional approval – or if they do, they’ll rise up and complain and suddenly Congress will look at this a lot closer.  That’s what we want to do.  The IRS is betting that no one on the Hill will pay any attention to a “technical agreement” – unless it ISN’T a technical agreement!

   Respondant

   Who ever wrote this did recognize one thing; that being most of the details that foreign Banks must provide the IRS about their “US person” accounts in accordance with the provisions of FATCA are of no absolutely no interest and therefore totally useless to foreign tax authorities with respect to their non-resident citizens, because they are not subject to taxation by their country of citizenship.  Why would they want tons of this reciprocal data?  They have no reason for not wanting it and every reason for not wanting 

   Comeback

   That’s why it is important for us to point this our to US residents – esp. green card holders or just people here from other countries.  The principle here is that the IRS has “agreed” to provide this information – and we should actually INSIST on reciprocity because the IRS will never do it!  And when they don’t we can turn around to the foreign governments and tell them to stop FATCA because the USA isn’t living up to its promise of reciprocity.  We will, in short, catch them in their own trap!

5. More on impact of DATCA on non-banks. 

    

   As you can see, this goes far beyond banks to include US insurance companies, investment firms, etc. 

    

   Naturally, they’re all asleep at the switch.  This from the IGA 

    

   US domestic reporting requirements under Art. 2(b) (“reciprocal” version of FATCA “partnership” agreement released 7/26/12)

    

    

   Article 2

    

   Obligations to Obtain and Exchange Information with Respect to Reportable Accounts

    

   1. Subject to the provisions of Article 3, each Party shall obtain the information specified in paragraph 2 of this Article with respect to all Reportable Accounts and shall annually exchange this information with the other Party on an automatic basis pursuant to the provisions of Article [] of the [Convention/TIEA].

    

   2. The information to be obtained and exchanged is:

    

   [ . . . (a) is the foreign “partner’s” obligation]

    

   b) In the case of the United States, with respect to each [FATCA Partner] Reportable Account of each Reporting U.S. Financial Institution:

    

   (1) the name, address, and [FATCA Partner] TIN1 of any person that is a resident of [FATCA Partner] and is an Account Holder of the account;

   (2) the account number (or the functional equivalent in the absence of an account number);

   (3) the name and identifying number of the Reporting U.S. Financial Institution;

   (4) the gross amount of interest paid on a Depository Account;

   (5) the gross amount of U.S. source dividends paid or credited to the account; and

   (6) the gross amount of other U.S. source income paid or credited to the account, to the extent subject to reporting under chapter 3 or 61 of subtitle A of the U.S. Internal Revenue Code.

    

   NOTE: “Reporting US Financial Institution” in this context is not just banks:   Art 1(g) – cross reference with 1(p), below: “The term ‘Financial Institution’ means a Custodial Institution, a Depository Institution, an Investment Entity, or a Specified Insurance Company.”  

    

   Each of the capitalized terms has its own definition, as follows:

    

   h) The term “Custodial Institution” means any entity that holds, as a substantial portion of its business, financial assets for the account of others. An entity holds financial assets for the account of others as a substantial portion of its business if the entity’s gross income attributable to the holding of financial assets and related financial services equals or exceeds 20 percent of the entity’s gross income during the shorter of: (i) the three-year period that ends on the December 31 (or the final day of a non-calendar year accounting period) prior to the year in which the determination is being made; or (ii) the period during which the entity has been in existence.

    

   i) The term “Depository Institution” means any entity that accepts deposits in the ordinary course of a banking or similar business.

    

   j) The term “Investment Entity” means any entity that conducts as a business (or is managed by an entity that conducts as a business) one or more of the following activities or operations for or on behalf of a customer:

   (1) trading in money market instruments (cheques, bills, certificates of deposit, derivatives, etc.); foreign exchange; exchange, interest rate and index instruments; transferable securities; or commodity futures

   trading;

   (2) individual and collective portfolio management; or

   (3) otherwise investing, administering, or managing funds or money on behalf of other persons.

    

   This subparagraph 1(j) shall be interpreted in a manner consistent with similar language set forth in the definition of “financial institution” in the Financial Action Task Force Recommendations.

    

   k) The term “Specified Insurance Company” means any entity that is an insurance company (or the holding company of an insurance company) that issues, or is obligated to make payments with respect to, a Financial Account.

    

   p) The term “Reporting U.S. Financial Institution” means (i) any Financial Institution that is resident in the United States, but excluding any branches of such Financial Institution that are located outside the United States, and (ii) any branch of a Financial Institution not resident in the United States, if such branch is located in the United States, provided that the Financial Institution or branch has control, receipt, or custody of income with respect to which information is required to be exchanged under subparagraph (2)(b) of Article 2 of this Agreement.

    

   This is the section that defines whose (which aliens’) accounts would be reportable.   Not sure how this meshes with non-resident alien interest concerns:

    

   cc) The term “[FATCA Partner] Reportable Account” means a Financial Account maintained by a Reporting U.S. Financial Institution if: (i) in the case of a Depository Account, the account is held by an individual resident in [FATCA Partner] and more than $10 of interest is paid to such account in any given calendar year; or (ii) in the case of a Financial Account other than a Depository Account, the Account Holder is a resident of [FATCA Partner], including entities that certify that they are resident in [FATCA Partner] for tax purposes, with respect to which U.S. source income that is subject to reporting under chapter 3 or chapter 61 of subtitle A of the U.S. Internal Revenue Code is paid or credited.

    

6. Americans Surprised that FATCA Impacts Domestic Financial Account Holders

   Welcome to DATCA America!  Serves you bloody right.  Good for the goose is good for the gander, as they say…

7. Time to recap the DATCA story…. (as much for me as for anyone who happens to bother reading this.)  I may flesh it out a little more and make a full post of it later, but want to get it recorded tonight while still fresh in my mind.I have been trying to keep all articles relevant to the reciprocal information sharing subject posted here as I found them.  I coined the word DATCA to reference it as the domestic version of FATCA.  

   Tim has also put up something on DATCA here,Lets review. (draft version:)somewhat arbitrary start date for a timeline.

   February 22, 2011 –  IRS Bulletin: 2011-8 REG-146097-09 was issued:  It was a Notice of Proposed Rulemaking; Notice of Public Hearing; and Withdrawal of Previously Proposed Rule making Guidance on Reporting Interest Paid to Nonresident Aliens

   March 11, 2011 –  A bi partisan letter from the entire Florida delegation, comprised of Reps and Dems was written to Obama to complain about regulations that the IRS was unilaterally imposing on US banks as part of the FATCA rollout effort. However, they did not identify or maybe even understand that one was part of the other.

   Another link for this letter.

   September 22, 2011 –  There was Ron Paul’s letter to Tim Geithner about FATCA  I was not aware of it until posted by recalcitrantexpat on Feb 8, 2012. 

   September 27, 2011 – The first story that begin to register for me that there was opposition to actions that the IRS was taking. It was in an Accounting Today story six months later: Congressman Tells IRS to Back off on Bank Disclosure

   The chairman of the House Ways and Means Oversight Subcommittee demanded Tuesday that the Internal Revenue Service suspend a proposed regulation that would require banks to disclose the amount of interest paid to nonresident aliens.Rep. Charles Boustany, R-La., wrote a letter to Treasury Secretary Timothy Geithner and IRS Commissioner Doug Shulman saying the proposed regulation could potentially drive foreign investment out of the U.S. economy and harm individuals and small businesses by reducing access to capital. He called on the Treasury to provide a cost-benefit analysis detailing the administrative burdens of the regulation before it is approved by the IRS.This is not the first time the IRS has attempted to issue this regulation,” said Boustany. “At the close of the Clinton Administration, the IRS tried to put in place similar reporting requirements. However, after members of Congress, the Federal Deposit Insurance Corporation, and the U.S. Small Business Administration raised strong concerns, the proposal was eventually withdrawn. It is disappointing to see the IRS once again try to impose unnecessary regulations and costs on U.S. banks.

   This story also got a mention out of Rosa Eckstein Schechter of Florida here:  Congressional Challenge to FATCA Brewing Out of Louisiana Congressman’s Letter to Treasury Secretary Geithner

   October 27, 2011 – There was a Hearing held by the subcommittee of Financial Institutions of the Committee of Financial Services about “PROPOSED REGULATIONS TO REQUIRE REPORTING OF NONRESIDENT ALIEN DEPOSIT INTEREST INCOME”
   
   Hat tip to Badger who dug this out here.

   February 2, of 2012 – There was a US Treasury Department release of a  JOINT STATEMENT FROM THE UNITED STATES, FRANCE, GERMANY, ITALY, SPAIN AND THE UNITED KINGDOM REGARDING AN INTERGOVERNMENTAL APPROACH  (IGA)TO IMPROVING INTERNATIONAL TAX COMPLIANCE AND IMPLEMENTING FATCAGeneral Consideration 5 laid out a vision of reciprocity (A DATCA?) that said: 

    In this regard the United States is willing to reciprocate in collecting and exchanging  on an automatic basis information on accounts held in US financial institutions by residents of France, Germany, Italy, Spain and the United Kingdom. The approach under discussion, therefore, would enhance compliance and facilitate enforcement to the benefit of all parties.

   February 8th, 2012 This was my first use of the term DATCA related to the IR-2012-15:  Treasury, IRS Issue Proposed Regulations for FATCA Implementation.  It was here I begin to identify that some form of a DATCA was going to be a part of FATCA implementation.

   April 17, 2012 –  It was was reported in Accounting Today that  IRS Issues FATCA Guidance on Reporting Interest Paid to Nonresident Aliens 

   The IRS noted that the regulations would facilitate intergovernmental cooperation on FATCA implementation by better enabling the agency, in appropriate circumstances, to reciprocate by exchanging information with foreign governments for tax administration purposes

   May 11, 2012 –  Another story surfaced on Accounting Today basically expressing dissatisfaction with what the IRS was doing, and asking again for information.Congress Probes IRS FATCA Interest Regulations

   The chairman of an influential congressional subcommittee is demanding information from the Treasury Department on a recent Internal Revenue Service regulation requiring banks to disclose the interest they pay to nonresident aliensCongressman Charles Boustany Jr., R-La., who chairs the House Ways and Means Oversight Subcommittee, has written a letter to Treasury Secretary Tim Geithner asking for more information about the regulation.However, Boustany finds the regulations troubling. He had written to Geithner last September after the IRS issued a Notice of Proposed Rulemaking and received information in December. However, he said in his new letter that while Geithner’s initial response was helpful, it did not provide all of the information requested.“This regulation could drive foreign investment out of our economy and burden banks with unnecessary reporting requirements, in turn hurting individuals and small businesses,” Boustany said. In a new letter that he sent Friday, Boustany called on the Treasury Department to provide correspondence and other documents relating to the formation of the opinion that the proposed regulation is not a “significant regulatory action,” as well as other information requested in Boustany’s earlier letter.

   May 14, 2012 – The IRS went ahead with their final reg,  IRS bulletin 2012-20 which was the first step in meeting the “Joint Statement” agreement of February 2, 2012 and ignoring Boustany’s letter above just days before.  It officially created the reciprocal provisions (DATCA lite)  in the Model Agreement 1 which was to follow.

   26 July 2012 – The US Treasury Department issued the first FATCA model 1 Inter-government reciprocal agreement, (IGA) that contained article 6, promising to provide reciprocity (as in IRS bulletin 2012-20)  to countries that signed the agreement.  The Actual language said: 

   United States is committed to further improve transparency and enhance the exchange relationship with[FATCA Partner] by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic exchange.

   July 26th of 2012 –  The Posey Legislation and amendment 3, which was passed by the House  but went nowhere in the Senate. In this legislation they tried to reign the IRS in.

   Posey’s third Amendment, which is based on bipartisan, bicameral legislation he introduced with Congressman Gregory Meeks (D-NY) to stop the IRS from implementing new misguided regulations expected to lead to billions of dollars of capital flight from U.S. banks to foreign institutions. Despite strong bipartisan requests in both chambers of Congress, the Treasury Department has refused to withdraw the rule, or at a minimum, conduct an economic impact analysis on how the regulation would affect the banks and the economy. 

   According to Florida’s office of financial regulation, the regulation could lead to tens of billions of dollars being withdrawn from Florida banks and moved to overseas accounts. Posey said his Amendment would delay the IRS rule until unemployment drops to 6 percent. The House approved this Amendment with a bipartisan vote of 251-165. 

   Obviously at this point it was clear that FATCAnatics were marching onward with their FATCA IGA reciprocal mission and a larger global GATCA in mind.  🙂  They seem determined to ignore Congress as they went!  Their intention or interest mattered not!

   Oct 17, 2012 – There was the letter by Congressman Reichart imploring Shulman to answer him about what they were up to.  No response that I know of. 

   January 28, 2013  – The final FATCA fatwa regs are released effective January 28th, and countries are being pressured to sign FATCA IGAs with some measure of reciprocity rather than be subjected to the onerous FATCA Portal of Mordor as released in the 544 pages of regulations.

   April 14, 2013 Obama’s budget released and calls for FATCA reciprocity This is the domestic full blown DATCA they have desired to be imposed on the USFIs. See page 202. It was posted on IBS with additional comments Here Comes DATCA.

   April 19, 2013 Banker Groups Sue Treasury, IRS Over Account Reporting Rule Story from Bloomberg about the attempt to stop DATCA lite without a mention of FATCA. We blogged about what this all means here.

   May 23, 2013 There was an
   EU Parliament public hearing on FATCA that featured presentation and answers to questions by Treasuries Robert Stack. His answers on FATCA reciprocity were videoed and loaded on You tube here, and his transcript is loaded here. In his answers, he has explained that reciprocity (DATCA) is in the Obama budget, and what that would mean for Delaware Corporate beneficial ownership transparency.

   Jun 06, 2013 Representative Bill Posey introduces legislation H.R. 2299: To prevent the Secretary of the Treasury from expanding United States bank reporting requirements with respect to interest on deposits paid to nonresident aliens

   – So that is the brief history that I have watched develop and recorded it.  It is interesting to look back and remind myself how long Treasury has been marching to their own drummer and have been ignoring Congress. No way was a domestic reciprocal FATCA (DATCA) ever part of the intention of Congress when this was passed it, assuming they even knew it was in the Hire Actin the first place. 

   There is nothing in the 2009 Press Release that heralded its coming. If reciprocity had been part of the intention, why wouldn’t they have just created the authority when they wrote FATCA in the first place?  

   They didn’t write it, because they were only focused offshore and in no way knew that the Treasury FATCAnatics were about to hijack the mission. I do speculate that a DATCA certainly must have been part of a secret goal of some of the sponsors, as America is the BIGGEST tax haven in the world and the resting place for trillions of dollars undeclared around the world. They wanted to stop that.

   Switzerland is a piker by contrast.

   This comment by @Badger on another thread is worth repeating:

   The IRS has not charged any actual bankster executives when illicit money owned by foreign non-resident depositors is discovered hidden in US bank accounts on a large scale, and it appears that none of these investigations even went to trial. The banks settled, but still made a profit.

   See: …”As the U.S. Internal Revenue Service crusades against Americans using offshore banks to hide money, these tax experts say, the United States itself serves as a massive haven for international tax cheats.”

   “We’re the biggest tax haven in the world,” says Robert Goulder, editor-in-chief of U.S.-based Tax Notes International. “People joke about the Cayman Islands. The biggest haven is an island, all right. It’s either Manhattan or Great Britain.”

   Jack Blum, a former U.S. Senate investigator and an authority on offshore tax shelters, says U.S. bankers “sell tax evasion to citizens of Central America, the Caribbean, all over Latin America.” The U.S. government hasn’t put a stop to it, Blum says, because bankers and politicians don’t want to stop the flow of foreign cash into the United States.”

   also:

   The Global Intelligence Files: Re: US Bank – Dirty Money

   WACHOVIA ENTERS INTO DEFERRED PROSECUTION AGREEMENT

   How a big US bank laundered billions from Mexico’s murderous drug gangs

   So, therein will be the future battle lines be drawn as they progress towards a full FATCA implementation globally.  Full Reciprocity is not there yet, but an IRS spokesman said recently, reciprocity is a work in progress. Make no mistake about it, that is where the ideologues of Treasury are heading. And frankly, if America is not going to be so hypocritical in its approach to financial transparency, it has to begin at home.

   Will they get there? Will they actually pass a DATCA? It all depends if Congress has a spine! However, I think we under estimate how much our banking system has relied on illicit and ‘dark money’ for liquidity. Are we willing to give it up in an ideological pursuit of Global financial transparency? What will be the impacts on the US homeland for capital flight if we do? Will your loan not be approved because reserve levels of your local bank are too low, and the DATCA money is no longer resting in your bank? How pure do we want to be in our global efforts?

   Just an aside:  If you haven’t read that IRS bulletin 2012-20 that I have linked here, you really should.

   It is as much a statement of mission of the FATCAnatics as much as the NeoCons issued with their Project for a New American Century years ago that laid out their vision prior to our war of preemption on Iraq.

   Read this letter. Look at those signatures and compare it to the officials in the first administration of W, and then tell me why you were surprised at our Iraqi invasion!

   To me, the FATCAnatics have laid out their mission just as forthrightly as the NeoCons did. There should be no surprises about where they are heading. Yet the media chooses not to read or report on it.  I don’t know why they ignore it, but it is what it is I guess!

   The Mission Marches on…Others are beginning to wake up to what is happening, but not in the Mainstream media yet…..and now you are up to date for the moment.

8. FULL RECIPROCITY UNDER FATCA IS A WORK IN PROGRESS, IRS OFFICIAL SAYS
   As we have been saying…

   Responding to a question about reciprocity, Setzer said the United States had committed to such a concept. However, U.S. reporting rules for domestic banks “are what they are,” and do not require identification procedures identical to those required under FATCA, he said.

9. Christophe just posted this, and it continues the story on DATCA and attention it is beginning to raise…

   Exclusive: Foreigners’ accounts in U.S. banks eyed in tax crackdown

   “The Obama administration may soon ask Congress for the power to require more disclosure by U.S. banks of information about foreign clients’ accounts to those clients’ home governments, as part of a crackdown on tax evasion, sources said on Monday.“

   So Obama is going to ask congress to vote laws to allow reciprocity to happen. Let’s see how the banking lobby is going to work…

   And that was interesting too:

   “China has been publicly dismissive of FATCA, but it is talking with U.S. officials behind the scenes, sources said.”

   “France and Germany “have been asking for something more like full reciprocity,” said Jonathan Jackel, a lawyer with the law firm of Burt Staples & Maner LLP in Washington, D.C.“

   “The Texas Bankers Association is considering a lawsuit against the government to stop accountholder information sharing with Mexico, said Eric Sandberg, the group’s president“

   And why just with Mexico?

   And the article ends with

   “The United States should be moving toward full reciprocity,” said Georgetown Law School Professor Itai Grinberg, a former Treasury official, adding it would be “deeply hypocritical” of the United States to ask for U.S. taxpayer information “without offering some kind of reciprocity.“

   It’s getting interesting. Let’s count the points 

10. Now the story is spreading to other places: http://www.chicagotribune.com/business/sns-rt-us-usa-tax-fatcabre91312w-20130204,0,2690343.story

    The more the coverage and attendant scrutiny of this – the faux ‘reciprocity’ and domestic US opposition, the more attention to FATCA, the better.

11. Same story now posted online at the Canadian Globe and Mail: http://www.theglobeandmail.com/report-on-business/international-business/us-business/foreigners-accounts-in-us-banks-eyed-in-tax-crackdown/article8207084/

    Open for comments!

12. @badger

    Thnks… Let’s hope it keeps spreading as it might finally begin to dawn on some in the hallowed homeland, that this FATCA wind is blowing onshore.    Keep watching for others.

13. @Just Me, have you seen this:

    http://www.tax-news.com/news/IRS_Delays_Foreign_Financial_Asset_Reporting____59406.html

    “IRS Delays Foreign Financial Asset Reporting

    by Mike Godfrey, Tax-News.com, Washington 28 January 2013

    The United States Internal Revenue Service (IRS) has disclosed that, in a Notice
    to be published on February 19, 2013, it will provide guidance to certain taxpayers
    concerning the first taxable year they must report specified foreign financial
    assets to comply with the provisions of the Foreign Account Tax Compliance Act
    (FATCA).

    It was originally proposed that, starting in tax year 2011, a Statement of
    Specified Foreign Financial Assets would need to be filed by taxpayers with
    specific types and amounts of foreign financial assets or foreign accounts.”……….”

    However, the new IRS Notice has now informed taxpayers that the first taxable
    year they will be required to report their interest in foreign financial assets
    has been delayed.

    The IRS and the Treasury Department intend that, when final regulations are
    issued, those final regulations will modify the effective/applicability date
    of the FATCA reporting provision so that it will not be required earlier than
    taxable years beginning after December 31, 2012.”

    Not sure what this means?

    .”

14. @badger

    I had heard rumors that this was going to happen, but was waiting from something substantial to report, so this might be it…  Very interesting… I have to assume that form 8938 won’t be required for this tax year then, even though it was last year?  Hummmm

15. That’s what I thought it meant. Confusing – since presumably some people filed last year.

    But, the “certain taxpayers” group could be made very small. Wonder what they are up to, and why. I guess we’ll see.

16. But to get around ‘DATCA’, US banks are helpfully creating non-interest bearing accounts, and ‘other alternatives’

    http://www.jdsupra.com/legalnews/nonresident-alien-deposit-interest-repor-85444/

    ….”In response to the new reporting requirements, many banks are now offering non-interest deposit accounts to Mexican nationals as well as considering certain other products that are similar to deposits, but may not involve the payment of interest required to be reported….”

17. @Badger…
    That was soo predictable, eh? 🙂

18. non-interest bearing accounts—that is the object of it all, isn’t it? To force people into something that has no gain to the customer

19. Another addition to the DATCA story via Badger…

    ARTICLE: The Effects the Bank Secrecy Act Has Had on the South Florida Banking Industry and Economy, and How the Newly Proposed IRS Regulation Would Compound Those Effects

    http://bit.ly/Xzwhy0

20. Finally, this story comes out in the open and the Bankers associations have grown a pair…

    Banker Groups Sue Treasury, IRS Over Account Reporting Rule or (DATCA)

21. Would love for this statement to turn out to be true…

    Treasury Department’s Promises of U.S. FATCA IGA ‘Reciprocity’ Dead

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