I have been absent from the FATCA scene recently. I am back in the states and have been busy preparing to start the PCT hike next week trying to forget this madness. However, I had to fill out my FBAR before I left and file for a tax extension since I won’t be back until the first of September. Then I got two letters from my bank, one in NZ and one at our home back here in the States. It was from the “Foreign Revenue Enquiry Team” who are trying to “cure” their list of potential U.S. Persons.
For your information, here were their lead in paragraphs
“We are writing to ensure we have the latest foreign tax residency information for you as required under the Foreign Account Tax Compliance Act (FATCA).
The foreign Account Tax Compliance Tact is a law from the United States of American that recently came into force. The Act requires Foreign Financial Institutions or their governments to enter into an agreement with the US Internal Revenue Service to determine which accounts are held by US citizens and report certain information about their accounts.
Under an inter-government agreement between New Zealand and the US, all New Zealand Financial Institutions are required to comply with the FATCA legislation. As a New Zealand Financial Institution we are required to collect and retain details from our customers to determine whether they are citizens or tax residents of the US.”
……..(details about why they they had identified us)…………….
If we do not hear from you within 90 days, we will be required to send certain information relating to you and your accounts to the New Zealand Inland Revenue Department, as part of the inter-government agreement between NZ and the US. We recommend that you contact your accountant or tax advisor if you are unsure about your foreign tax obligations.”
Anyway, I don’t have much time to devote to this FATCA crap, as still a lot to get done before I leave, but couldn’t help but send this enclosed letter (copy below) along with my compliance. Does no good, but makes me feel better, and thought I would send along a copy for you if you are interested. I don’t have time to post on IBS, but if someone else wants to, they are more than welcome to use it or not. Just remove the names, thanks.
April 2, 2015
ASB Bank Limited
Foreign Revenue Enquiries Team 6392
P.O. Box 35
Auckland, New Zealand 1140
Please find enclosed the Foreign Tax Certification for xxxxxx and xxxxxx, US Citizen and US Permanent Resident of the USA respectfully.
With that designation, we are forever US tax chattel no matter where we live or reside in the world until we renounce citizenship or go through a onerous formal and expensive process. You Kiwis are so lucky the Inland Revenue Department (IRD) doesn’t do this to you!!!!
We received two copies of your form, one in NZ and one at our home in the States where we do reside. We are only returning one signed copy.
It is with reluctance that we send you our social security numbers (SSN) , not because we are trying to avoid tax in the USA. We file dutifully yearly, and our Kerikeri ASB personal banker has been very helpful in producing yearly reports, so we can determine interest earned in a calendar year which is different than your IRD fiscal year process.
However, given the IRS (International Revenue Service) very poor record with SSN security in the USA, and with the rampant ID theft associated with misuse of our SSN, it is very worrying that now we have to give these numbers out to a foreign company, its employees, contractors and IRD to be even more exposed to potential theft and fraud. DO YOU UNDERSTAND THAT CONCERN? Please assure us of the most stringent security practices for handling these numbers, so our risk doesn’t go up anymore.
The IRS gives away 10s of billions of tax dollars a year fraudulently associated with tax number abuse. It is constantly criticized by the U.S. Treasury Inspector General and Congress for these poor practices which don’t seem to change. FATCA revenue will barely scratch a dent in these loses which, according to Congressional records, will only generate $900 million a year in new revenue for all the disruption this overly complex program is inflicting on the world with its global sanctions for failure to comply. This “Offshore Jihad” by Obama to chase down a few tax cheats living in New York hardly seems worth it, as compared to all the tax dollar fraud “Onshore” in America! But, never mind. Don’t look over there!
Yet, they have convinced you and the IRD (actually lets be truthful, they have extorted you) to ferret out every person they deem to be US TAX RESIDENT even those that are full time Kiwi Citizens and residents living in your lovely country. This will be a direct transfer of revenues from the Kiwi economy back to the US Treasury. Have fun with that. I am sure you are running into some pissed off Kiwis who are newly discovering that they are bound to the USA just like Boris Johnson, Lord Mayor of London, did when he recently had to pay a capital gain tax to the IRS for the sale of his personal residence in London where he had lived since age 5! FATCA helps the IRS find, tax and FINE such obvious tax evaders!!
No wonder the line to renounce citizenship at the Auckland US embassy is getting longer all the time. Aren’t you glad the NZ IRD doesn’t do this to you? Lesson for you. Don’t let your children grow up and get a Green card, become US citizens or marry one!
Of course, in your eagerness to maintain access to the US financial markets you have readily bent over and accepted sovereign domination by the USA and its International Tax Revenue Service. YOU have lobbied and convinced YOUR government to BAIL YOU OUT of hard business decisions by signing an FATCA IGA and imposing the same requirements on ALL NZ financial institutions (FIs) whether or not they really want or need access to US financial markets.
The IGA is a mere Executive agreement (non treaty) that does NOT bind the USA financial institutions to go through the same painful and expensive process you are doing right now. The JOKE is on you. This is a problem of your own creation and now you live with it.
The IRD will NOT get any meaningful reciprocity for all the effort you are going through to “cure” your list of persons that “might be” US Tax chattel. They will NOT find many Kiwis with bank accounts in the USA. The US banks don’t ask for your Kiwi IRD Tax number. In this one sided FATCA process the USA will continue its status as the Biggest Tax Haven in the world. There is NO equivalent domestic DATCA for USFIs.
But, since we all seem think we have no choice but to acquiesce to US demands, please assure the security of our tax numbers which I am sending you today. In the meantime I will continue to fill out my Foreign Bank Account Reports (FBARs) and duplicate FATCA forms yearly and hope they match up with whatever information you will be sending the IRS via the IRD. Frankly I bet this turns into a nightmare of cross checking errors in the future, but that’s not your problem, right? You can continue to buy US treasuries without fear of a 30% penalty for FATCA noncompliance. Good for you. Bad for us. So it goes…
Thanks, Just Me, for this information, another of your many contributions to our continuing education. It is so good to hear from you. The best from all of us who read at Isaac Brock Society and MapleSandbox.