This was proposed by Just Me and seconded by a few others so I thought we could take a shot at it together.
The basic idea is to create a one page (maybe two) tract that could be used as a template – something that could be adapted to the local circumstances. It could be sent to journalists, passed out during demonstrations or just emailed to people we know who are still very confused about what FATCA is, what it means, and why they should care.
Here are the latest updates as of September 17, 21:51 Paris time.
What is FATCA?
The Foreign Account Tax Compliance Act (FATCA) is an extra-territorial U.S. law that demands that all financial institutions in the world report to the United States’ Internal Revenue Service (IRS) the confidential account information of millions of people it classifies as “U.S. persons”.
What is a U.S. Person?
A U.S. Person can be a U.S. citizen, a Green Card Holder, or the citizen of another country who has a connection to the United States.
Here’s how you may have a US connection:
* born in the USA
* born outside the USA with one or two American parent(s)
* lived in the USA for a number of years
* visited too long in the USA in any given year
* married to a US person
* share signing authority on an account with a
US person
Chances are very good that you, or someone you know, is a U.S. Person. That means FATCA affects you personally. Millions of people worldwide who do not consider themselves to be U.S. citizens are still considered U.S. Persons by the U.S. government even if they have never lived or worked in the U.S., are citizens of another country, and have never held a U.S. passport or Green Card.
But I’m not a tax evader or a U.S. citizen or Green Card Holder!
Under FATCA you are presumed to be guilty until proven innocent.
If your local bank suspects you are a U.S. Person, they will require that you prove you aren’t.
If you clearly are a U.S. Person, and your country has signed an agreement with the United States (called an “IGA”), then your local bank will send your account information to your local government who will then turn it over to the United States.
Under these agreements, this will happen even if your country has strict laws protecting personal privacy. So far the following countries have either signed these agreements or have agreed to do so: UK, France, Germany…..
What will the United States do with that information?
Under American law U.S. Persons are also U.S. taxpayers. Those who live outside the United States are required to file tax returns, bank account reports and pay American taxes. This is true even if the U.S. Person earns no income and has no assets in the United States.
You might consider yourself a responsible tax-paying citizen of another country but the United States sees it differently. If they think you are a U.S. Person then they feel they have the right to add you to the American tax base.
There are others ways they could use that information. If enough countries are bullied into complying then the United States government will have a master list in their databases of all the people (and their assets) in the world who have any connection however innocent to the United States of America. That sounds a lot like the recent NSA scandals where the United States spied on citizens of other countries.
FATCA is spying by other means.
But I thought FATCA and all those reporting rules only applied to the rich?
Not true. FATCA impacts ALL U.S. Persons: rich, middle, or low income .
The filing threshold for one form, the FBAR (Foreign Bank Account Report), is only 10,000 USD. This threshold is the total of all that person’s accounts (checking, savings, and retirement) combined – not the value of any one account. This means that even very low-income U.S. Persons must file and face stiff penalties – up to 500,000 USD and 5 years in jail – if they fail to do so. The American IRS can impose these fines even if the U.S. Person is too poor to file a tax return and doesn’t owe any tax.
I’m not a U.S. Person and I don’t have any connection to the United States. What does FATCA have to do with me?
FATCA impacts ALL citizens in ALL countries in three ways:
1. All financial institutions worldwide are affected by FATCA. The billions they will spend in compliance costs will be passed along to customers in all countries through higher FEES.
2. Local governments and local taxpayers will bear the cost of the staff and information systems required to implement FATCA in that country.
3. Existing privacy and anti-discrimination laws will have to be downgraded in every country in order to facilitate FATCA. This means that citizens everywhere can expect less protection of their privacy from their local government.
Part IV (What they can do about it)
Some ideas for this section:
Here I would point them to Isaac Brock first as a resource. As them to join us or pass the link around to people they know who are affected by FATCA.
Then we can list the other sites we think they would find useful: Maple Sandbox, ACA, AARO and so on.
FATCA = US drones strike Canadian family nest-eggs
FATCA = a Foreign-American-Tax-on-Canada’s-Assets
“US declares Canada a ‘US taxable person’! Ask me about FATCA today!”
Sorry all, perhaps my last posts should go here http://isaacbrocksociety.ca/2013/09/11/its-time-for-our-second-anti-fatca-protest/ instead.
Didn’t meant to distract from this thread.
FATCA — Foreigners Attempting Theft of Canadian Assets
FATCA — Fiendish America Torpedoes Canadian Autonomy
The Trifecta of US Tax Tyranny — CBT, FATCA, IGA
I hope we’re not overwhelming Victoria. We’re so lucky to have someone with her writing skills willing to take this on.
My thoughts … CBT and FATCA are too complex to expect a perfect factsheet but a reasonable facsimile will do the trick. Remember if it is used as a handout, it can be modified for each country, placing emphasis on whatever is most likely to strike a chord. I see the factsheet as a portal into the truth and consequences of the US tax system and that portal is best built by the victims rather than the bully. I would like to see it remain fixed at the top of the main page, if possible.
FATCA = USA’s War Tax upon Canadians
Took a mental health break this afternoon and painted the study in the basement.
Now my husband is making me pizza for dinner and I’ll work on the updates (and put up the new graphic from Canadiangirl) as soon as I have some food in my stomach.
A tout à l’heure…..
And here is the latest version!
Canadiangirl – is this the right graphic?
Re-reading, I still think it could use some simplification. Less is more. My .02 is that we need to be careful with MEGO syndrome (my eyes glaze over). Grab their attention, keep them reading and then (as Mark Twain said) get them to go somewhere else to find out more.
What do you think?
Final paragraph – there has been some great stuff published on Brock – some truly eloquent comments. This part is really important. We have delivered all this terrible news, now we have to let in the light. Where can they go to get informed? What can they do to help fight FATCA?
And thank you ALL for working on this. I’ve been wanting to do this for some time but I didn’t want to do it alone.
I find painting a good mental health break also. I’ve been thinking of painting university daughter’s room to help motivate her with university studies. I wonder what colour would be conducive to studying?
Thank you Victoria! And yes, that’s the right graphic.
There is a typo in the paragraph where you describe the penalties for not filing FBAR.
The text says 500,00 USD when you probably wanted to say $500,000.
It looks good!
Awesome work!
One nit:
Should be “if …, then your local bank …”, not “if …, than your local bank …”
A question:
Does the average person know that, say, 10 USD means $10 in US dollars? Lack of a “$” and unfamiliarity with the “USD” acronym threw me the first time I saw this. Having said that, maybe I was just being simple :-).
Just noticed that the answer to the question “What will the United States do with that information?” does not really answer the question: “Under American law U.S. Persons are also U.S. taxpayers. Those who live outside the United States are required to file tax returns, bank account reports and pay American taxes. This is true even if the U.S. Person earns no income and has no assets in the United States.” Does that not belong in the first paragraph?
@Whitekat, I like green myself.
Thanks for catching the typo.
Good question about $ versus USD. I was taught to put USD because the $ sign is used for currencies other than US dollars.
http://www.allembassies.com/currency_symbols.htm
Oh and Canadian girl you are absolutely right. That paragraph needs to be clarified or added to a previous one.
@Victoria
I’m sure “10 USD” is the proper (official, even) way of denoting it. So in multi-country, multi-currency (less so now I suppose) Europe, I can imagine that it’s not an issue.
I was thinking more about the average Canadian person (and I probably should have said so).
FWIW, this is what I was used to seeing: “$10 US”
Maybe this is one of those country specific tweaks? Or maybe I’m the only one thinking this way, in which case just ignore me.
Who Must File (for income thresholds): http://www.irs.gov/publications/p501/ar02.html#en_US_2012_publink1000220687
U.S. Citizens or Resident Aliens Living Abroad
To determine whether you must file a return, include in your gross income any income you earned or received abroad, including any income you can exclude under the foreign earned income exclusion. For more information on special tax rules that may apply to you, see Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.
What Em said 🙂
“CBT and FATCA are too complex to expect a perfect factsheet but a reasonable facsimile will do the trick. Remember if it is used as a handout, it can be modified for each country, placing emphasis on whatever is most likely to strike a chord. I see the factsheet as a portal into the truth and consequences of the US tax system and that portal is best built by the victims rather than the bully. I would like to see it remain fixed at the top of the main page, if possible.”
I’m thinking of this as a “core model”. Yes, there will have to be customizations. Tdott is right that even something like the “$” is region-specific. But the Brockers in each region will know what has to be changed to fit local circumstances. I am giddy at the idea of translating it into French because I know it’s going to be very different. But there will be a lot I can use from the Canadian version because I think the French share some Canadian perspectives on the US.
But once its done it will make things so much easier. I write way too many long emails, have had too many requests for info that I’ve had to sit on until I have the time to think about it. I think I’m not alone here. This will make it so much easier. So, thanks again, folks for working on this.
(of course there are many things that you could add, but judge where to stop) Perhaps the security issue would raise some eyes.
The USA has no demands upon how your personal data is handled—-Could your private details fall into other hands? Could your social security number or bank account numbers be kidnapped? Could a non-US person’s data be transmitted or kidnapped? The answers aren’t known.
@Mark Twain
“The answers aren’t known.”
For the UK, the answer is known (From page 73, 2nd para, under 4.1)
“A Financial Institution can rely on a third party service provider to fulfil its obligations under the legislation,…”
http://www.hmrc.gov.uk/fatca/130814-guidance.pdf
Mark Twain’s and OAP’s points are extremely important. Thanks to FATCA, detailed financial information flows from an FI to a “third party service” to the CRA to the IRS and then onward to any other US agency that wants to pick through it. The NSA doesn’t even have to work to get the information. The NSA data storage centre in Utah with its yottabytes of capacity will add every single byte of information to the dossier it keeps on all USPs and ultimately everyone on the entire planet. Obviously this is not a good thing. At any point this data is vulnerable to intercept by a hacker or a dishonest employee because we know that they have no more solved the security problems of electronic data transfer than they have solved the issue of nuclear waste. Decreasing our financial privacy increases our insecurity and leads inevitably to the utter destruction of every last vestige of freedom we might have had. FATCA is not about taxes; it’s about control. More FEAR, less FREEDOM — that’s FATCA for ya!
And on that subject…a trend that started in the USA Financial District a decade ago…OUTSOURCING BACK OFFICE….
http://www.cbc.ca/news/canada/british-columbia/rbc-replaces-canadian-staff-with-foreign-workers-1.1315008
And not just the RBC…
http://www.everyoneschance.ca/news/indian-it-outsourcers-face-backlash-in-canada/
The real question is WHO IS THE GATEKEEPER? Who will protect the individuals records? and to what extent? Is there really any privacy when you outsource? Maybe the NSA is going about it all wrong…they should just open an outsourcing firm instead (or maybe they already have one in India) 😉
there is a potential to put the positions of the party(s) on the FATCA protest handout sheet (once again, the handout could get too long, but then the object of any protest is to encourage action and effect the voting process).
Otherwise> “tell your representative what you Think”, or “what is your rep’s position upon FATCA?”
“That means FATCA effects you personally” should be “That means FATCA affects you personally.”
http://dictionary.reference.com/help/faq/language/d70.html
“up to 500,00 USD” still needs to be corrected to 500 000 USD. It’s half a million, not 500 bucks. 😉
watcher and not amused – just updated with your corrections. Thank you.
I just re-read and I think it flows very well. Word count is about 750 words. Should we tighten it up further (take stuff out) or is this OK?
And how shall we end it? Any ideas for a kick-ass closing statement?