Monthly Archives: November 2012

Please spread the word!!!

Perhaps communism isn’t so bad after all.

The Treasury Department has already concluded a bilateral agreement with the United Kingdom. Additional jurisdictions with which Treasury is in the process of finalizing an intergovernmental agreement and with which Treasury hopes to conclude negotiations by year end include: France, Germany, Italy, Spain, Japan, Switzerland, Canada, Denmark, Finland, Guernsey, Ireland, Isle of Man, Jersey, Mexico, the Netherlands, and Norway.

Jurisdictions with which Treasury is actively engaged in a dialogue towards concluding an intergovernmental agreement include: Argentina, Australia, Belgium, the Cayman Islands, Cyprus, Estonia, Hungary, Israel, Korea, Liechtenstein, Malaysia, Malta, New Zealand, the Slovak Republic, Singapore, and Sweden. Treasury expects to be able to conclude negotiations with several of these jurisdictions by year end.

The jurisdictions with which Treasury is working to explore options for intergovernmental engagement include: Bermuda, Brazil, the British Virgin Islands, Chile, the Czech Republic, Gibraltar, India, Lebanon, Luxembourg, Romania, Russia, Seychelles, Sint Maarten, Slovenia, and South Africa.

No China or Hong Kong

Brazil is a bit of a surprise that it on the list along with Russia.

From Jim Flaherty:

November 8, 2012

Thank you for your correspondence of July 26, 20 12 regarding U.S. government taxation policy, specifically the Foreign Bank Account Report (FBAR) and the Foreign Account Tax Compliance Act (FATCA). Please excuse the delay in replying.

Rest assured, the Government of Canada shares many of these concerns and has expressed them directly to the U.S. government. While we all understand that Canada and the U.S. share many common values, including ensuring fair tax systems where everybody pays their share, we have concerns about the impact of FBAR and FATCA on Canadians.

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By Anthony Parent of IRS Medic (used with permission)

(Editor’s note:  I am troubled by the IRS approach of “bill first, ask questions later”.  I myself received an unfair tax bill, including late fines and interest, but the IRS finally reversed it.  Others are receiving what are extortionate fines and bills.  Petros)

OVDP Process glitch

November 1, 2012

In a unique type of cases, the IRS is sending out a slew of collection notices to taxpayers who paid 100% of all taxes, 100% of all interest, and 100% of all penalties. Why is this happening? To answer this, you need to know the normal way the IRS starts a collection case, and the rather extraordinary process of a recent IRS offshore amnesty program, known as OVDP.

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“The proposed approaches across the globe simply won’t work. They won’t mesh. They won’t interact. They will cause conflicts,” Pearson said at the meeting. “Washington, we have a problem,” he said.
Business Week

Patrick Pearson, a European Commission official, warned that many of the US rules “won’t work”.
The Financial Times

European hedge funds face arguably the worst – whether to break their local rules or those in the US. The way new OTC trading rules in each jurisdiction are written, it appears they will be subject to both, but will only be able to comply with one or the other… “If you put a European hedge fund in a situation where it has to choose between complying with US or European rules, it may avoid the swap transaction altogether because it will not want to risk being non-compliant,” says Wayne Pestone, chief regulatory officer at FXall in Washington, DC. “Putting hedge funds in this position just doesn’t make any sense.”
Risk.net

There is a lack of clarity on the various steps that need to be taken and the delays in implementation have led to further confusion. Imposing additional overseas (i.e., US) rules could be duplicative and also lead to jurisdictional conflicts. Non-US regulators may also be concerned about such an approach. Cost could be another important factor.
CPI Financial

The US Foreign Account Tax Compliance Act (FATCA) has been described as “a kind of US backward imperialism”
Guardian

FATCA Act could violate American banks… “there is concern about possible violations to the American legal orders (bank secrecy, taxation, consumer protection) with the implementation of the law”
Noticieros Televisa

This is only a bit of many recent news articles that I quickly put together in a few minutes.  More stateside Americans seriously need to spend more time reading international media!

In the following scene, Doctor Who had just saved planet earth from the Atraxi threat to destroy the earth. Now, he calls them back and asks them three questions. The Atraxi answer the questions as follows: (1) earth poses no threat to them; (2) earth has not broken any Atraxi laws; (3) earth is protected, by none other than the Doctor, the last remaining Timelord, in his eleven iterations. Once the Atraxi have fully reviewed the threat to them, the Doctor says to them one word, “Run!”

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I cross-checked the list of Americans Abroad Caucus Members (http://americansabroad.org/issues/representation/americans-abroad-caucus/members/) against the ongoing results between 2 and 3 AM EST and came up with the following:

I had to check them manually by state using http://www.washingtonpost.com/wp-srv/special/politics/election-map-2012/house/ as of about 2AM EST.  I suspect that the results may continue to change for some races.  I am considering the results final if there is more than 70% for a candidate and at least 90% of precincts reporting, and also final if 98% or more of precincts have reported.  (UPDATED 0400 AM EST with info from Shadow Raider and http://www.votecnmi.gov.mp/2012-election-results-mp.php, http://www.vivote.gov/generalresults/2012/default.h)

Please let me know right away if I you find that made any mistakes here and I will correct.

Carolyn B. Maloney (D-NY), Co-Chair http://maloney.house.gov

WON (80.8%) 92.8% of precincts reporting

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This article was written by Giles Gibson in Hong Kong.  The article is not bad, better than most and certainly the best I’ve seen at huffingtonpost, but he seems to think that FATCA is only a concern for wealthy American citizens abroad (a typical Huff problem).  I used to think so too, until I personally learned otherwise.   The article could use some additional commentary about the types of people FATCA is having an impact upon and the innocent being harmed by “IRS’s relentless pursuit of U.S. tax evaders abroad, whatever the cost”.  The concept of “whatever the cost” could be used to justify crimes against humanity and FATCA is certainly a case of national origin discrimination (which is a federal crime in the US).

FATCA: The U.S. Flexes Its Waning Economic Muscle Abroad
11/06/2012 11:36 am

The Foreign Account Tax Compliance Act (FATCA). Typical of the taxman’s inimitable use of the English language worldwide, the title doesn’t exactly sound particularly menacing. However, the shockwaves from this recent piece of legislation from the U.S. Internal Revenue Service (IRS) are being felt around the financial world.

FATCA is aimed at targeting tax avoidance by U.S. citizens and entities abroad. Unlike most countries, American expatriates are still expected to pay tax at home on their income earned abroad. The IRS feels that many Americans are not taking this responsibility seriously enough. Their plan is simple: bring in tough new legislation to force foreign financial institutions to give up details about their U.S. citizen clients, leaving potential tax evaders with nowhere to hide….

http://www.huffingtonpost.com/giles-gibson/fatca-foreign-accounts_b_2081118.html