This just out from Steven Mopsick after a few week’s radio silence:
http://mopsicktaxlaw.blogspot.ch/2013/01/living-with-fatca-uncertainty-what.html
There is some interesting material in his post. Calling all Brockers, please hammer the Mopsick site with comments and spread the link around as well as the link to this thread here at IBS. Some quotes:
I will be chairing an international conference in Miami this week on FATCA compliance….
With the publication of the Final FATCA Regulations last week, we learn
the next big FATCA timeline date is July 15, 2013—the date the IRS is
opening its aptly called FATCA Registration Portal—the door to the
Byzantine world of compliance with the myriad duties of an IRS
withholding agent…If every foreign financial institution abroad with American customers
were to sign up on July 15 for their fair share of FATCA abuse, the IRS
FATCA Portal computers would pop their fuses [emphasis JDT]. Even the IRS realizes it
would be a daunting challenge to manage an ongoing reporting
relationship with every bank in the world and that it would be a lot
easier if the IRS could collect the data it wants on Americans from one
source in each country as opposed to thousands of banks all over the
world.But the reality is, for most countries, this is unlikely to happen in
time for the FATCA effective dates. Once they kick in, the IRS will have
no choice but follow the law and start demanding a 30% haircut from all
US source income flowing out of the United States, until each country
signs up. Until they do, both the impending FATCA effective dates and
the inaction or delays of foreign governments are in effect, leaving
foreign financial institutions no choice but to enter the Portal to
Mordor…3. If there is uncertainty in a country about whether there is going to
be a bilateral deal, or whether the deal can be made on time, it would
not be hard to imagine that disgruntled shareholders of foreign
financial institutions might bring legal action against current bank
managers who sat on their hands while their government’s bilateral deal
fell through and the IRS started withholding. One could easily envision a
shareholder suit claiming damages in the amount of the 30% profits the
IRS was taking from funds foreign financial institution shareholders
thought was coming to them….
I wonder if Steven is really part of the active pushback against FATBARDT or is he part of the compliance complex “I will be chairing an international conference in Miami this week on FATCA compliance….” I’d like to know what conference this is and if we can get any minutes or video coverage of it. Perhaps he is just playing good-cop bad-cop with both the expat community and the compliance community.
Being a defense lawyer is not good business. Losers can’t pay the bills
http://callcenterinfo.tmcnet.com/news/2012/02/22/6137700.htm
Bankers Meet in Miami for Anti-Money Laundering FATCA Summit
MIAMI –(Business Wire)–
WHAT: 12th Annual FIBA Anti Money Laundering Compliance Conference.
Over 1100 professionals from 40 countries
WHEN: Thursday February 23rd & Friday February 24th – 8:30 a.m. – 6:00 p.m.
WHERE: Intercontinental Hotel – Miami, FL
100 Chopin Plaza Miami, FL 33131
ORGANIZED BY: FIBA, Florida International Bankers Association
WHY: The most important International Anti Money Laundering Compliance conference bringing together some of the most recognized entities featuring leading specialists from banks and other financial institutions, regulatory agencies, law enforcement, lawyers, consultants and information technology.
The program will provide the very latest information on current Bank Secrecy Act/Anti-Money Laundering/OFAC Compliance requirement and will help foreign bankers acquire first-hand knowledge of the due diligence expectations of U.S. regulators and banks under a risk-based Bank Secrecy Act/Anti-Money Laundering/OFAC Compliance program.
WHO: Some of the panelists include:
SOME OF THE TOPICS: (over 20 sessions)
http://www.antimoneylaundering-fiba.com/
webinars for past events were free–can’t find info about this one yet
http://www.fiba.net/pages/Webinars1/
* Perhaps he is just playing good-cop bad-cop with both the expat community and the compliance community….. unfortunately I have to agree – everybody has his own agenda here even Steve Mopsick! On the one hand 30 years experience working within the IRS is great for insights and contacts but do you realy want somebody that involved with the “Service“ defend yourself within the OVDP ?? I do not know and I am not sure he is capable of taking a tough stand in your favour against the IRS after being with them for soooo long 🙂
@Mike Whatever Steven’s motives are, any article on FATCA is fair game for a Brocker visit to hammer out comments about our different angles on what is going on and its effects.
*@Jefferson ……….. absolutely
*I just cannot get rid of my suspicion that they must please the IRS instead of being fair to the client. It is like the problem of the lawyer who wants to put everybody into OVDP and the lawyer who considers a number of compliance options. Since most OVDI participants are still in the waiting queue after 1 year I am still missing any data to what extent tax lawyers have achieved anything worth paying for (cost/benefit analysis) !! What I hear so far is that 2012 will be the peak of this “retainer“ circus and law offices have to cut their estimates … even Caplan & Drysdale ($770/h now for 2013) . I realy hope so !!
@Mike Then there is the angle on people who then try to opt-out of OVDI after getting in and many of these probably fire their lawyers, represent themselves, or choose another lawyer.
*yes, the big thing currently is to to tell the client to opt out of the “penalty“ structure within the OVDI…… I wish I would have the guts to represent myself 🙂
@Mike Tarantes – The best thing I did in 2012 was revoke the POA of my OVDI attorney. Posts from the commenter with the pseudonym Moby confirmed my feelings, which were very much like yours and they helped me gather the strength to do it. I felt I had no choice but to fire my attorney. I had been looking at opt out for a long time and presented a write up of my facts to him. I was told that I had favorable facts, but that his costs would be greater than my penalty (in the middle double digit 000s) so I should just pay the penalty. So I decided to face the wrath of the IRS on my own and guess what, it is not as bad as I feared. I have opted out and I do not think I should say anymore until that is settled. So far, the value my attorney contributed was not worth the price I paid. Some things went wrong with my OVDI process (due to poor IRS management of this process), had I not fired him, I would have easily spent another USD 10k and he would have just been writing letters that I was capable of writing. I realized pretty quickly, that my lawyer, in spite of working for a firm with huge teams of associates processing the OVDI cases, was guessing just as much as I was at what would come next in the process. I also think that the IRS knows a minnow when they see one, but the only way they can treat you in accordance with what they see (and the facts you present to them) is when you opt out.
What this latest Mopsick article suggests is:
“You can take the man out of the IRS, but you can’t take the IRS out of the man.”
Mr. Mopsick’s article should be circulated far and wide. It will generate plenty of hostility toward FATCA.
@Mike
Agree with @Lisa – where you may want help/objective advice is on how to draft your “reasonable cause” letter.
I would be interested in comments on this thought:
I think that you DON’T need the lawyer in the OVDI (there is no room for discretion or judgment) program per se. Where you DO need the lawyer is on the “opt out” where judgment is required (which is exactly the point that they say the fees are too high).
Where you also may benefit from advice on which compliance option to exercise in the first place.
@USCitizenAbroad
Entering OVDI with/without a lawyer would depend on how complex your situation is (if you have a business to report, etc) FBAR’s are easy enough to do on your own and my husband did ours. That being said and knowing what I know now, I still would have started filing but not under OVDI. The IRS misled taxpayers into OVDI by implying that the penalty mitigating provisions of the IRM were no longer available for delinquent taxpayers. The NTA confirmed this in her 2011 Report to Congress.
In an unorthodox move, we included a reasonable cause letter in our OVDI submission. I felt it was warranted, and our lawyer ok’d what I’d written. My husband and I are poster children for reasonable cause. Can’t tell you anything beyond that, other than we have someone with TAS poised to work on eliminating our penalties when we finally get a response. Word from our lawyer is that responses have been better than anticipated, so we may not need TAS at all if we are satisfied with what the IRS comes back to us with. There are rumours that Canadians are receiving exceptional treatment, but being in an information vacuum, all I can do is speculate.
@Bubblebustin
I have seen you refer to the “penalty mitigation” provisions a number of times. Do you understand those to be available to be applied under the title 31 FBAR issues or just the title 26 tax issues?
*Mr. Mopsick seems to tell Latin America and Caribbean bankers to go ahead and comply with US law, even if you are violating the laws and possibly even the constitutions of the countries where you are located. You need to decide whose laws to violate, those of the United States or those of the country where you are located.
Not very good alternetatives to chose from. Languishing in prison in your own country for gross violation of its privacy laws or for serving as the tax collector for a foreign country which has granted no authority for the United States to levy and collect taxes within its borders will not be swollowed easily. If you chnose to violate the US FATCA legislation, better not plan on ever setting foot in the US again.
@USCitizenAbroad
It was TAS who informed us of “First Time Penalty Abate” for penalties relating to a previously unreported capital gain.
http://www.irs.gov/irm/part20/irm_20-001-001r-cont01.html
20.1.1.3.6.1
Regarding FBAR:
IRS bulletin “Information for US Citizens or Dual Citizens Residing Outside the US” states:
6. Possible penalties for failure to file FBAR
If you fail to file an FBAR, in the absence of reasonable cause, you may be subject to either a willful or non-willful civil penalty. Generally, the civil penalty for willfully failing to file an FBAR can be up to the greater of $100,000 or 50 percent of the total balance of the foreign account at the time of the violation. See 31 U.S.C. § 5321(a)(5). Note that this penalty is applicable only in cases in which there is willful intent to avoid filing.
More here:
http://www.irs.gov/irm/part4/irm_04-026-016.html
I can’t read this stuff so I stick to the summaries, but I admire you if you do. The fact remains that my husband and I were completely unaware of our obligations to file and pay US taxes and report FBARs prior to 2011.
*@Lisa …. thank you very much for your response – what are favourable facts these days (willful/not willful,specific intend or intentionally avoid/deliberately evade…. what evidence of acts to conceal income and financial information combined with the failure to pursue knowledge?)
I agree I did use professional help for the reasonable cause letter . Can someone describe the process once you are in the OVDI (what letters do I receive from the IRS etc. how long until we get to the point of opting out or not ?)
I agree also that it makes sense to have a tax lawyer on retainer for the OPT OUT decision
But this seems to be like a turkish bazar … who has to pay the 27.5% ,20%,12.5% or the jackpot with only 5% and how stubborn can I be insisting on the 5% for example – that brings me back to my original question about a successful tax lawyer with a track record and not just a compliance tiger
@Mike
From personal experience, this is what you hear from the IRS when you enter OVDI:
*btw. after reading quite a few comments here …. does this community have a negative opinion on Mopsick `s blog or his credibility as tax lawyer ?
*Just trust me, said the spider to the fly. “Won’t yol step into my parlour said the spider to the fly. It’s the nicest little parlour that ever you did spy….”
*haha ,I guess I am the fly 🙂
@Mike, you are defintely NOT the spider.
@All – I changed my handle as suggested by Just Me
@Mike – My opt out point came pretty quickly. My examiner did the analysis that is mentioned in FAQ 50 and it was clear that I would get a higher penalty in the program than outside of it. This also made me realize that every nasty thing I had thought about my ex-lawyer pushing me into the program was true. He should have done this analysis and it would have been clear that I should have never been in the program in the first place. As for letters you receive, it is likely the first thing you will receive from anyone in the IRS is a request to sign an extension of the Statute of Limitations for tax and FBAR. When you opt out, you will certainly get an FBAR SoL extension request for the FBAR year that will run out next. The other thing I got was an IDR, which is a request for information. In my case, it was just copies of foreign tax returns they wanted. I am on my third IDR now and all the requests make sense. I really don’t find them that hard to deal with. My case is not typical in that tax wise, I was better off not applying the method of PFIC calculation used in OVDI. Additionally, I had foreign tax credits I could apply to PFICs and that is not allowed in OVDI. The program was meant for criminals and they never anticipated that a participant would have foreign tax credits for passive income. When this is over, I will tell you the difference in the amount of PFIC tax owed in OVDI vs.outside of OVDI. It was jawdropping. So I said, “Screw it. There is no way I am going to stay in this disaster program. Why wait around for a Form 906?” and I opted out. So my case is following 2 tracks now. One in which I have a normal examination to determine the tax and the other where I have to write a letter about the FBAR penalty. I give a lot of credit to the agent who did the math and showed it to me and then told me it was my decision as to what to do. The agent is tough and no-nonsense, but always gives me a thorough explanation of why something is being done.
@bubblebustin – Thanks to you I have requested an FTA for the tax penalty. However, my examiner needs to check if an FTA is an “examination” abate or a “collection” abate and what is within an examining agent’s scope to grant. That was disappointing. I’ll let you know what the agent comes back with. If you can find out any more information about an FTA, it would be greatly appreciated.
@all…
Surprised no one has posted anything for Steven’s blog. I started one last night, slept on it, reconsidered and finally posted just now assuming there would be others.
Anyway, here is what I put up… I am on the security theme these days. Not enough attention to that, so throw it where ever I can, even here on Forbes this morning.