The battle over the domestic DATCA has truly begun in earnest and in public
Two banker groups sued the U.S. challenging rules that require financial institutions to report information on accounts held by nonresident aliens that may be shared with 72 foreign governments.
The Texas Bankers Association and the Florida Bankers Association, in a lawsuit filed today against the Treasury Department and the Internal Revenue Service in federal court in Washington, said the rules are discouraging investment in the U.S. by nonresidents who fear their information may be shared with the governments of countries including Egypt, Pakistan and Venezuela.
The IRS bulletin they are talking about, is the DATCA lite, which was the first step in the push for a domestic DATCA. IRS bulletin 2012-20
Update: April 24, 2013 Here is a link to the PDF lawsuit filing.
Which has now been followed by Treasury’s addition of full FATCA reciprocity (DATCA) in the Obama’s 2014 budget Analytical Perspectives: See page 202 (spacing and highlighting below for clarity)
Provide for reciprocal reporting of information in connection with the implementation of the Foreign Account Tax Compliance Act (FATCA).—In many cases, foreign law would prevent foreign financial institutions from complying with the FATCA provisions of the Hiring Incentives to restore Employment Act of 2010 by reporting to the IRS information about U.S. accounts.
Such legal impediments can be addressed through intergovernmental agreements under which the foreign government agrees to provide the information required by FATCA to the IRS requiring U.S. financial institutions to report similar information to the IRS with respect to nonresident accounts would facilitate such intergovernmental cooperation by enabling the IRS to reciprocate in appropriate circumstances by exchanging similar information with cooperative foreign governments to support their efforts to address tax evasion by their residents.
The proposal would provide the Secretary of the Treasury with authority to prescribe regulations that would require reporting of information with respect to nonresident alien individuals, entities that are not U.S. persons, and certain U.S. entities held in substantial part by non-U.S. owners, including information regarding account balances and payments made with respect to accounts held by such persons and entities.
@bubblebustin,
Excellent. Good thinking and acting you did there!
@bubblebustin
Thanks for doing that. I have sent them messages in the past, and got no response, and haven’t had time right now, but maybe tonight I will too…
For some reason they have tactically decided to stay away from FATCA issue, and editorials they wrote, like in the Miami Herald never mentioned FATCA pushing this reg on them. I pointed it out in comments and in emails, but again, no response. Their focus is security of data, and capital flight. Maybe those are the only things they think the public will understand.
@calgary411, just me
The honeybadger in me couldn’t help itself 😉
GREAT @Bubblebustin…
I have been putting a lot of my effort recently to posting on Linkedin on the FATCA Compliance Industrial Complex groups, and that is the “skunk at the party” in me! LOL
Long live Mellivora capensis @bubblebustin!
: )
@Just Me, all
I just got an email from:
Olivia Carmichael Solis
Vice President of Marketing & Communications
Editor, Texas Banking Magazine
Texas Bankers Association
She’s burning the midnight oil in Texas on a Saturday night! She wrote to thank me for my well wishes and the link to the David Jolly article.
@bubblebustin
Great… I should email Olivia also. What is her email, and I will try to send one tonight too.
interesting piece of research regarding privately held NR deposits
http://www.gfintegrity.org/storage/gfip/documents/reports/gfi_privatelyheld_web.pdf
@Just Me
Take it away! I wonder if it would be of interest to her to read some of the Ways and Means submissions regarding FATCA. Both the FBA and the TBA were absent from the list of contributors there. I guess they no longer see the value in going the political route!
Olivia Carmichael Solis
Vice President of Marketing & Communications
Editor, Texas Banking Magazine
Texas Bankers Association
203 W. 10th St.
Austin, TX 78701
512-472-8388
Olivia@texasbankers.com
“Meeting the growing needs of our members with education, information
and advocacy.”
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Well this is mildly amusing: the Tax Justice Network is linking to this post, for no particular reason that I can discern
http://taxjustice.blogspot.com/2013/04/automatic-information-exchange-will.html
Details of last year’s unsuccessful attempt to start a conversation with them about citizenship-based taxation can be found here:
http://isaacbrocksociety.ca/2012/05/10/tax-justice-and-tax-compliance/
The TJN obviously had too many windows open when they posted that article. Good to see they’re reading IBS.
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@Eric, and @bubblebustin:
Too bad they’re not interested in the ‘unintended consequences’ of their FATCA cheerleading, and the twisted constraints of US extraterritorial citizenship-based taxation forced onto millions of perfectly ordinary individuals and families living outside the US – who already are paying tax in full where they live and have perfectly legal and registered bank accounts.
Guess when you’re a FATCAfanatic, you accept that you are sacrificing a few million innocent individuals and families on the pyre in the course of your Inquisition and Crusade.
What’s a few children with disabilities and their families unable to use Canadian RDSPs because the US calls them ‘foreign trusts’. Or children born outside the US as duals – who inherit US status – and can’t use RESPs for their education – because the US taxes them on it. What’s a bit of double taxation imposed on millions, and punitive laws when you’re on a holy mission? No cost too high if the victims live outside the US and have no meaningful recourse or representation.
If they really were interested in TAX JUSTICE, they would support Carolyn Maloney’s bill to strike a Presidential Commission and investigate the punitive conditions we face for merely living outside the US with a US birthplace or parentage. But, their avowed commitment to JUSTICE is hypocrisy and a sham.
The Tax Justice Network states that trusts are all highly suspicious as tax evasion and money laundering mechanisms.
And so the US treats all of us living outside it ‘equally’ – equally presumed guilty – all of us presumed to be criminals first and foremost, with the burden and onus on us to disprove that presumption annually, for the rest of our lives – and beyond (via reporting on our ‘foreign estates’) merely because of US birthplace or parentage, plus our suspicious ‘choice’ of residence ‘abroad’.
That’s how ‘TAX JUSTICE’ is defined by the TJN.
@Badger
Well said. Surely the TJN’s pursuit of ‘tax justice’ can also be expanded to include not only the world’s impoverished, but also the injustices we as USP’s living abroad are forced to endure, yet they seem loathe to address them. They are myopic in their vision and therefore must encounter a great deal of opposition on many fronts, as many radical groups do.
@bubblebustin
I finally sent an email this morning to the Texas Banking association at the email you provided. Interestingly enough, when I went looking on the Florida Banking Association for their press release or a reference to it, there is NOTHING!! Did I miss it? They are the ones I have emailed before with no response. The only email I could find (and admittedly, I have not spent a lot of time trying) is info@floridabankers.com
Anyway, fired off an email to Olivia, (copy FBA) thanking them for their efforts and wondering why no mention of FATCA in their press release? http://bit.ly/10uiMmM This must be a tactical decision to avoid being broad brushed as part of a group trying to protect high rolling American offshore tax evaders, I would reckon.
Very interesting about Florida and Texas banks. In 2012 the RBC moved its US operations from Florida to Georgia or North Carolina.
@Eric
The TJN are ideologues, so I fear having a rationale conversation is probably pointless, but we should try. They have “Certainty” as to their righteousness and the morality of their position, or have blinders as to the consequences of the policies they support. As “true believers” it is hard to bend their thought patterns. It would be probably be like converting the Pope to a Muslim.
@Just Me
Needless to say, I haven’t heard anything back from the FBA either. I’m curious, how did you come across the Bloomberg article, the subject of this post, when FATCA isn’t mentioned anywhere in it?
It’s going to become increasingly harder for TJN to accurately define ‘tax haven’ and ‘tax evader’ when their friends, family members and fellow citizens get rounded up in the US’s efforts to combat offshore tax evasion through FATCA.
@ badger
I think it would be worth a shot to try to post your comment at TJN. They posted one by Eric previously. BTW, in my books TJN stands for Tyranny Justification Network. These types are the epitome of rigid think but it can’t hurt to sling a bit of reality at them now and then.
I recognize their name. I Think they were listed on rollcall as being a supporter of the HIRE act.
@Bubblebustin…
Not sure how I found that article at Bloomberg without a mention of FATCA. Probably saw “new IRS rule” and immediately knew what they were talking about without the F word being mentioned.
@Em. Give a try. I have posted therefore, and kept waiting to see it show up. Not sure that it ever did. Maybe I should try again. You have to enter the enemies camp and engage them.
This paper includes a discussion of who should be considered a “taxpayer” by a state. The author argues that citizenship-based taxation is unjust from both a human and statist perspective, and therefore makes the case for residence-based taxation.
Interesting read: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2230668
IRS Tries To Help Non-Compliant Taxpayers…… sorry not for OVDI/P or VD victimes 🙁
The IRS has pointed out that its Fresh Start program makes it easier for taxpayers to pay back taxes and avoid tax liens. It has also increased the amount that taxpayers can owe to USD10,000 before the IRS generally will file a Notice of Federal Tax Lien.
http://www.tax-news.com/news/IRS_Tries_To_Help_NonCompliant_Taxpayers____60526.html
@Mike Tarrantes
Thanks for the link. That is Allison Christians, and you can follow her blog here…
Also assume you know she was featured in the FATCA FATCA Finding Forum here.