Great catch by SwissPinoy that deserves its own post:
Foreign Banks Rejoice: Overreaching U.S. Tax Law in Trouble
http://www.americanbanker.com/bankthink/rejoice-fatca-overreaching-us-tax-law-in-trouble-1055877-1.html?pg=2“The implementation of a new and ill-conceived tax act, which would damage the U.S. economy, adversely affect American firms that operate globally and negatively impact the seven million U.S. citizens who live overseas, appears to be floundering.”
Glad you posted this, as I was about to as being in The American Banker, it needs headling. This is building off of Nigel Green’s blog which I have posted about here.
FATCA good or bad, you decide by Nigel Green
Hmm. The Nation has a different spin on FATCA.
“Foreign financial institutions given reprieves in US, sort of…”
http://www.nationmultimedia.com/business/Foreign-financial-institutions-given-reprieves-in–30198062.html
From the article:
“The only impact of the IGA would be to change the agency to which the information is reported. It does not relieve FFIs from the burden of reporting or change the level of due diligence required to satisfy the IRS that they are able to identify properly when an account holder is a US national.”
“Those who hoped that their governments would step in and fend off the United States’ demands for information soon found their hopes dashed.”
The fight against FATCISM must go on.
American Banker likely gets its news from Isaac Brock Society. Good to see that they are broadcasting facts.
Looks like I won’t be moving to Thailand
@John Brown
IGA = Hopes Dashed
I trust that the FFIs who thought this was their salvation are waking up to the realities. And, maybe, some of the U.S. Banks will finally realize the reciprocity requirements and the direction the IRS is going via DATCA bodes ill for them. I would be reading carefully, Article Two, Article 6 of the IGA and IRS Bulletin 2012-20 starting here.
That is a grim reporting picture for ALL, and not just BANKS. In fact, ‘banks’ is something we should probably avoid using in our a terminology, because of the lack of sympathy for banks generally in the mind of the clueless public. ‘Financial Institutions’ is more neutral term, and if and when we can make it specific to other companies like Insurance Agencies, Brokerage Accounts, Mutual funds, that is better IMHO.
I am pretty sure, that few Corporations have even focused on how FATCA could get them if they have any dealings with overseas vendors or payments via financial institutions abroad. This read on those possible impacts should be sent to every CEO in America with pointed question why they are standing so idly by.
It was in the Corporate Secretary on December 24th, not exactly a great day for getting attention.
Complying with FATCA
Just like the 1099 issue for ObamaCare stirred a lot of opposition and ultimately repeal, this one should too, but again, it has not gotten into their level of consciousness.
@John Brown
Re: “Foreign financial institutions given reprieves in US, sort of…”
http://www.nationmultimedia.com/business/Foreign-financial-institutions-given-reprieves-in–30198062.html
I just added the following comment to the article in “The Nation”:
Repeal Fatca · 58 years old
This is an excellent article. It accurately shows the havoc FATCA is wreaking in the Thai financial community and worldwide. But rather than seeing delays in implementation as a “reprieve” and more time for compliance, Thai industry and the Thai government should see this for what it is: FATCA is in trouble. See Nigel Green in American Banker, also http://www.repealfatca.com. Because the US Treasury Department is having difficulty getting foreign governments to sign onto intergovernmental agreements (IGAs) to enforce FATCA against its own institutions and citizens, they are hesitant to release the final regulations. This is because even FATCA’s proponents admit they *can’t* administer FATCA without foreign governments acting as their deputies under IGAs to administer this one-side law. Meanwhile, the FATCA repeal movement is just beginning to gather steam here in the US. Rather than using the “repieve” to spend more money on compliance, Thai institutions should (a) stop urging their government to make a deal with Washington, which as this article points out won’t provide much relief anyway, and (b) help support our efforts to get rid of FATCA altogether.
@Jim Jatras
Amen to that!
@ Just Me and Jim,
I sincerely hope you are both right. The comparison with the repeal of the more-than-stupid 1099 law may very well turn out to be true. Let us hope so anyway. I still can’t believe somebody would have been so stupid to pass such a law. Laws like that are straight from the old Soviet and East Bloc play books.
I cannot recall where I read it, but very early on when FATCA first came out (perhaps as early as 2010) somebody wrote an article somewhere predicting that US banks would ultimately get FATCA shutdown due to other governments demands for reciprocity. They also wrote that the repeal would be justified by the problems FATCA would create for American citizens abroad. I cannot recall where I saw the article or who wrote it but whoever it was, had some pretty good insight into the problems FATCA would create. Let us hope his/her prognosis will turn out to be correct.
@John Brown…
You are speaking to the DATCA provisions referenced in IRS bulletin 2012-20, which I have been tracking and speaking to on the thread DATCA is not Dead.
I have been trying to keep all articles relevant to the subject posted there. Tim has put up something on DATCA here, and my first use of DATCA in a Post was here, although the editorials that it referenced have now disappeared. Finally, the first story that I ever saw that this issue finally registered for me was on Accounting Today dated: September 27, 2011
Congressman Tells IRS to Back off on Bank Disclosures
But frankly, the opposition to Datca (lite) goes back further to March of 2011 It was in response to an earlier IRS bulletin that I was not paying attention to at the time..
Here the entire Florida delegation, Reps and Dems wrote a letter to Obama, and nothing happened.
It was followed by the IRS Bulletion 2012-15 on February 8th here.
and then I saw the story again surfacing on Accounting Today on May 11, 2012
Congress Probes IRS FATCA Interest Regulations
It is good to look back at it occasionally to remind ourselves how long Treasury has been ignoring Congressional protests.
I think that probe probably led to the Posey Legislation and amendment 3, which was passed by the House on July 26th of 2012, but went nowhere in the Senate.
and so now, we have IRS bulletin 2012-20, and the FATCAnatics march onward with their FATCA IGA mission and a global GATCA. 🙂 Ignoring Congress as they go!
In September there was Ron Paul’s letter to Tim Geithner about FATCA
And then in October, there was the letter by Congressman Reichart imploring Shulman to answer him about what they were up to. No response that I know of.
You if you haven’t read that IRS bulletin 2012-20, it is as much a statement of missionof the FATCAnatics as the NeoCons issued with their Project for a New American Century that laid out their vision prior to our war of preemption on Iraq. Read this letter, and 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 invasion!
To me, the FATCAnatics have laid out their mission just as forthrightly as the NeoCons did, and yet the media chooses not to read.
I don’t know why they ignore it, but it is what it is!
and as I write this, I see the final FATCA regs are out.
The Mission Marches on…. 🙂
@Just Me,
Great summary and reminder re the history and context of DATCA – and relationship to FATCA. Very good resource for us in writing to describe this to others.
Provides fodder for the position that the IRS continues to push the limits of its powers, acting as if it was empowered to enter into international agreements with other nations, and effectively making and implementing foreign policy and changing the relations between the US and all other countries, re IGAs and FATCA, usurping the powers of the State Department in establishing when citizenship effectively ends – for the CLN (i.e. not until the IRS says it does) and trying to tie US passports, and effectively, the right to travel and mobility to US taxation and financial reporting from ‘abroad’. Taxing those abroad to pay for Obamacare – which is not covered under our reciprocal treaty – and so is a double tax.
It is really the unelected IRS and Treasury that is running the US now. Maybe they’ll push to change the name to the USIR : United States of International Revenue (drop the ‘service’ since they aren’t providing us with any, and are having trouble with that even stateside).
@SwissPinoy
Please note the author of that is george@priorconsultancy.co.uk
He is also the same guy that wrote the great interview with James at iExpat
Just a little background here…
I made contact with him sometime back, via twitter which progressed to email and a long list of questions he was wanting answered. I provided him with the back ground narrative of what was happening with the IRS offshore jihad, and the history of Isaac Brock, FATCA and the current mission. I pass this on, just to point out some of the value of tweeting that many may over look. You can make contacts with journalists in ways that even I can do! I truly wished more Brockers were availing themselves of this simplest of social media. only 140 characters, and yet a message can enter the Ethernet and circulate farther and faster than other sources I know. Does not require the investment of time or energy that Facebook does, and you can stay topic focused. Just my opinion.