Senator Rand Paul and Congressman Mark Meadows sent a letter this week to US Treasury Secretary Mnuchin and Director of White House Management and Budget Office Mulvaney.
Co-Leader of the Campaign to Repeal FATCA, Nigel Green, comments that:
“Mark Meadows and Rand Paul Letter to White House and Treasury Urging Executive Action to Nullify FATCA Is a ‘Landmark Moment’ and that “The Foreign Account Tax Compliance Act “has only rolled on because of legally unauthorized ‘intergovernmental agreements,’” so cancelling them would “doom this terrible, toxic law.”
The full text of Mr. Green’s commentary are at PressWire and at ValueWalk.
@Socrates
I’ve asked the same question myself. I’ve been told by more than one source it shouldn’t be a problem.
House bill introduced yesterday. HR 2054. Waiting for word from Senate.
https://www.congress.gov/bill/115th-congress/house-bill/2054?q=%7B%22search%22%3A%5B%22hr+2054%22%5D%7D&r=1
@All
Senator Paul on reintroduction of Senate bill!
https://www.paul.senate.gov/news/press/sen-rand-paul-introduces-bill-to-repeal-fatca
It’s impossible for me to focus on FATCA right now. The Trump betrayal on Syria (manipulated by apparatchiks of the deep state apparatus hellbent on starting WW3) looms far larger in my mind and heart. It’s a pathetic, probably doomed world we live in, given all that has been said and done in the past 24 hours. Perhaps after some inevitable clarifying, a remnant of hope will return but madness certainly prevails at the moment. Sorry to stray off-topic. I’m over and out for awhile.
What would it cost to get Hannity or O’Reilly to rant about FATCA for five minutes, or to buy an ad slot on “Fox & Friends”? That seems the most effective way to persuade the president on any given issue.
Ad slots on O’Reilly won’t cost more than a bag of chips these days, that would be the cheap option.
@All
Good summary of state of play. Both Senate and House bills have been introduced.
http://www.iexpats.com/campaigners-turn-screws-fatca/
@EmBee
I am devastated as well. This shows terrible weakness, not strength. Personally, my hopes all but gone, can only try to salvage what we can, where we can. FATCA is hopefully one of them. Big in itself, small in big, bleak picture.
@Nononymous
Correct but probably unnecessary and costsly. One ad would burn several times what this whole campaign has cost so far. More likely to get solved at sub-Prez level at this point.
My suggestion was facetious, of course. If FATCA gets sorted, it won’t involve the president, who’ll be busy playing with blocks or watching Dora or whatever it is he does most mornings.
Far cheaper to crank out some memes, maybe Pepe the Frog urinating on a FATCA logo with some very Semitic banker caricatures lurking in the background (download free clip art from Der Stürmer). That’ll rally the base.
Whatever. It’s not my country. If somebody kills FATCA, great, my life becomes slightly less inconvenient. Otherwise, when you elect a toddler with poor impulse control, do you expect things to go well?
That being said, I’m not sure why everyone’s got their panties in a such knot about Syria. Nothing more than a nice big flash-bang for the cameras – launch a mess of expensive missiles at an air base after warning everyone to leave, and don’t aim for the runways. I believe they used to call that “signalling” back in the day.
@EmBee, @JamesJattras, I too am gutted. With Trump there was a glimmer of making peace with Russia. The fools have no comprehension what war with Russia would be like. That is largely because the Gulf War and later the War on Terror was kept so clean.
For the last 15 years, One Percent of America was impacted directly by the wars in SW Asia and they were paid for with loans from China.
War has become clean and easy like a video game and with someone elses son or daughter bleeding and sufferring disabilities beyond belief.
The USA went to the brink of war with the USSR because missiles were placed in Cuba yet today the USA is massing troops directly along the border with Russia.
I am indeed a man of peace solely because of my journey as a man of conflict.
@nononymous
Agree
Just heard the voice of sanity from Peter Ford today ex UK Ambassador to Syria..
” It amounts to nothing more than the intelligence sold to us re Iraq”.
Why would Asad ever risk this kind of attack after receiving a US concession of accepting his position. It does not make sense.
Re: Homelanders who are so concerned about “tax cheaters” living abroad – A few weeks ago when (I believe) Americans Abroad was looking for ideas, one that I recommended is to abandon the “country neutral” approach and come up with a plan where if you’re a U.S. citizen who is a tax resident of a country that on average has an equal or greater tax burden (figuring in all types of tax, not just income) than the U.S. then you’re presumed not to be living abroad to evade tax and you can take an automatic exemption from filing any tax forms or paying U.S. tax as long as you’re living in such a country. I know this would leave some expats in low- or no-tax countries out of the reform, but at least it should help soothe the concerns of homelanders about rich people living in tax havens.
That and cut the $2.350 fee to renounce (I really think someone ought to challenge this in court).
My proposal is to cut the renunciation fee to $10, and instead of all the exit requirements to avoid covered expatriate status (five years’ tax and FBAR compliance etc.) just sign a simple affidavit stating that to the best of your knowledge you don’t owe the US any money. If you’re worth millions and they think you’re lying, they can still come after you; if not, you’ll be ignored.
@Kelly
and why are they not concerned about all the tax evasion in Delaware or Wyoming? It just makes me so crazy.
@Kelly: So where does your proposal leave me? I’ve lived in such places as Singapore and Hong Kong, which have a lower income tax rate than the US, and no capital gains taxes. So I am presumed to be a tax evader, and face the punishment for not having chosen to live in Canada or France? Not sure I understand the logic. Not only is your suggestion too complicated as to be unwieldy, but it is also too complex for Homelanders to understand. As far as they’re concerned, “taxes” equals “US taxes”. No one pays “taxes” in other countries. In fact, many suggestions I’ve heard from Homelanders go like this. No matter where you live:
1) First pay your fair share of US taxes.
2) Deduct that from what you owe to France, Canada, or wherever you live
3) Pay whatever leftover, if any, to that country.
Taxes to the Greatest Damn Country On Earth should always come first!
@Kelly: The more I think about it, the more I hope you are not seriously going around promoting your “country neutral” idea. It stinks to high heaven! (and I’m being very polite and refraining from crude, insulting remarks when I say that).
And I don’t say it only because I have lived in alleged “low tax” countries. Your idea reinforces the notion that “tax avoidance” is a prime motivating reason for anyone not living in the USA.
And remember, the picture in most Homelanders’ minds is of Americans having champagne breakfast on their verandas on the Riviera (France, a high tax country).
Perhaps it might bolster the case against FATCA and the FBAR to note that the IRS has established a bad track record of abusing its powers against those with no or minimal tax owed, and no illegal accounts, by abusing the non-willful FBAR penalty they were given in 2003 (commencing in 2004?) and their power to enforce the BSA Bank Secrecy Act FBAR on behalf of the Treasury. Now a very damning TIGTA report finds that they were abusing their powers under the BSA and seizing legal assets lawfully generated by innocent taxpayers without any evidence of any connection to any crime – by using the BSA ‘structuring’ law.
And as the TAS has repeatedly noted, non-willful minnows/benign actors who came forward in the OVDP and OVDI paid higher penalties (FBAR) in proportion to any (minimal) US tax owed than did those owing much more, and minnows and those without professional legal representation fared worse than those with the money to retain experienced and competent counsel.
And we know that in several ways FATCA is punishing and abusing those ‘abroad’ merely for the ‘crime’ of banking locally, and so far it does not appear to be really catching the Whales it was said to be designed to catch or deter.
Now TIGTA has issued a very damning report outlining the ways in which the IRS used its powers to generate revenue via civil forfeiture – imposed mainly on the legal assets of those innocent of the crime they were being investigated for, accused of ‘structuring’ under the BSA Bank Secrecy Act.
See;
‘Criminal Investigation Enforced Structuring Laws Primarily Against Legal Source Funds and Compromised the Rights of Some Individuals and Businesses’ (Ref. 2017-30-025 3/20/17)
https://www.treasury.gov/tigta/auditreports/2017reports/201730025fr.pdf
Interestingly, TIGTA also underscored that the IRS stonewalled the TIGTA investigation, redacted documents, etc. to such an extent that the GAO noted that in their report.
And the report says;
“……….The history of the BSA requirements are long and complex, but the purpose of the BSA
reporting requirements is focused on detecting and deterring criminal behavior. In other words,
the BSA reporting requirements were not put in place just so that the Government could enforce
the reporting requirements. 10 .They were put in place to give the Government tools to address
criminal behavior. Criminal Investigation’s (CI) procedures confirm that the intent of the
Internal Revenue Service’s (IRS) seizure and forfeiture program is to pursue illegal activities:
The Criminal Investigation (CI) Asset Seizure and Forfeiture Program utilizes CI’s
seizure and forfeiture authority as an investigative tool and/or to disrupt and dismantle
criminal enterprises. The program seeks to deprive criminals of property used in, or
acquired through, illegal activities by directing CI’s financial expertise and resources
towards significant seizure and forfeiture investigations in which CI can take a leading
or key role.
11
On October 17, 2014, a new policy was issued by the IRS indicating that CI will no longer pursue the seizure and forfeiture of funds related to legal source structuring cases unless exceptional circumstances justify it. CI officials indicated that there were a number of reasons for the change, including reputational risk and the desire to focus resources in a more strategic manner.
In the same month, a New York Times article was published that claimed, “The Government can take the money without ever filing a criminal complaint, and the [property] Criminal Investigation Enforced Structuring Laws Primarily Against Legal Source Funds and Compromised the Rights of Some Individuals
and Businesses
Page 3
owners are left to prove they are innocent. Many give up.
”
12
In response to the New York Times
article, a statement from Richard Weber (Chief, CI) was issued:
After a thorough review of our structuring cases over the last year and in order to
provide consistency throughout the country (between our field offices and the
U.S. Attorneys’ Offices [USAO]) regarding our policies, IRS CI will no longer
pursue the seizure and forfeiture of funds associated solely with “legal source”
structuring cases unless there are exceptional circumstances justifying the seizure
and forfeiture and the case has been approved at the director of field operations
level. 13”
“In February 2015, the Institute for Justice issued a report which alleged that the IRS was seizing
funds without sufficient proof of criminal wrongdoing.
14
The Treasury Inspector General for Tax Administration (TIGTA) asked CI to comment on allegations in the report. In response, CI stated that it, as well as other law enforcement agencies, has the authority under the BSA to conduct structuring seizures and that it has had the authority to conduct these types of seizures pursuant to Title 31 since the BSA was passed in the late 1970’s. CI also asserted that the cases
were largely pursued under the direction of the local Assistant U.S. Attorneys (AUSA) through
*******11*************** Review Teams.
A similar policy announcement followed from the U.S. Department of Justice in March 2015.
15
The Attorney General noted that structuring laws enacted by Congress are critical tools that law
enforcement employs to safeguard the integrity, security, and stability of our Nation’s financial
system. After a comprehensive review of the Department of Justice’s Asset Forfeiture Program,
the Attorney General indicated that the Department of Justice’s resources will be focused against
actors that structure financial transactions to hide significant criminal activity and will further
other compelling law enforcement interests.”….
Read the whole report and see if it doesn’t remind you of how the IRS abused its powers under the BSA to enforce the FBAR, and how the TAS had to fight to get access to information about how the FBAR penalty was being calculated, who it was being applied against, and how consistently or proprotionate the penalties were, and the process, even when the US tax owed was de minimus, and when the bank accounts were legal and local to the owners – who were already paying taxes in full to the countries where they actually worked and lived.
Here is the NY Times story;
(https://www.nytimes.com/2014/10/26/us/law-lets-irs-seize-accounts-on-suspicion-no-crime-required.html?_r=0 )
After it broke, the IRS changed its policy in terms of its pursuit and seizure of legal source funds;
‘Statement of Richard Weber, Chief of I.R.S. Criminal Investigation’
OCT. 25, 2014
https://www.nytimes.com/2014/10/26/us/statement-of-richard-weber-chief-of-irs-criminal-investigation.html
Read the whole TIGTA report, there is far too much for me to summarize accurately.
https://www.treasury.gov/tigta/auditreports/2017reports/201730025fr.pdf
Perhaps the report above will bolster the case against the BSA FBAR and against FATCA as imposed without cause against those ‘abroad’ as if merely banking locally – outside the US justifies scaring and threatening people into the OVDP and OVDI programs as if all those living outside the US are guilty before the fact. I think there is a commonality with the IRS abuse of the BSA structuring penalty provisions;
Ex. TIGTA said;
“…..The anti-structuring provisions do not distinguish between legal source and illegal source structuring, and the law allowed investigators to seize funds using a seizure warrant upon showing probable cause of a structuring violation even if there was no evidence that the structured funds were involved in any type of other illegal activity.”……
and that;
“..tax violations associated with the structuring of banking transactions were established
by CI in only 21 of the 252 legal sources cases. In the remaining 231 legal source cases, there
was no evidence that the property owner structured funds to hide income from illegal activity
(other than structuring)or to underreport income on their tax return. Current law does not
require that the funds have an illegal source (e.g., money laundering or criminal activity other
than the alleged structuring). In these 231 cases, $17.1 million was seized and forfeited to the
Government…..”……
……”With the exception of the 47 investigations (26 for illegal activity or illegal source funds and 21 f
or tax evasion), CI generally did not pursue structuring cases in a manner consistent with its goals and procedures which indicates that seizure and forfeiture is a tool used to disrupt and dismantle criminal enterprises. The House of Representatives Ways and Means Subcommittee on Oversight held two hearings (February 11, 2015, and May 25, 2016) on the IRS’s structuring seizures and forfeitures.
In these hearings, individuals who were engaged in legal source businesses testified about the
experience of having their accounts seized and the impact of the seizures on their businesses.
OnJune 10, 2016, the IRS Commissioner wrote a letter to the both the Chairman and Ranking
Member of the Subcommittee explaining that the IRS was notifying individuals and businesses
whose assets had been seized and forfeited after FY2009 informing them of the opportunity to
submit or resubmit a petition seeking return of their funds.
37
If the cases were resolved administratively, the IRS will make a determination on the petition. If the cases were resolved judicially, the IRS will make a recommendation to the Department of Justice as to whether the petition should be granted. For cases that were resolved administratively, petitioners must
demonstrate that the funds were from legal sources and there is no evidence that the property owners were engaged in illegal activity or were seeking to cover up illegal activity. This process
is ongoing, and we have not reviewed the extent to which the IRS has received petitions in
response to the letters or whether the IRS returned funds to qualifying petitioners. 3….”
https://www.treasury.gov/tigta/auditreports/2017reports/201730025fr.pdf
CI of the IRS also seized the property first, and THEN ‘interviewed’ the accused even when there was no evidence of any illegal source of the funds and no other illegal activity.
Even if the IRS is being forced to refund the money and assets they seized, what of the impact on businesses and individuals unjustly deprived of their legal assets? What of the interest and the deprivation of the use of their legal assets? And their legal costs to fight the IRS? Many apparently were so afraid and intimidated and lacked money to fight the IRS so they just gave in.
So much of this smacks of the FBAR, the herding of people into the OVD programs, the blanket threats directed against those merely living and working and banking where they live outside the US, the extortionate FATCA witholding to be imposed on legal lawful non-US funds, confiscatory and unconstitutional layers of penalty regimes, etc.
The IRS leopard will never change its spots.
And this is the predator that our home governments have laid down with and in doing so betrayed their own citizens, lawful residents and local constitutions and laws because of the fear of the US bully’s 30% witholding to be imposed EVEN when no US tax is owed and the only US connection is ‘US indicia’ such as a US birthplace.
@Kelly
People pay taxes in their Country of residence in return for services that country gives them, police, security, healthcare, schools, roads, clean air, clean water etc etc. If they don’t live in the USA, then what would they get from your proposal other than a vague promise to be rescued (with a payment due) and the ability to return, which all countries grant their citizens without taxing them. Then there is the added complexity of your proposal, do you really want to add more pages to the largest book in the world US tax code?
Why can’t the US behave like all the other democratic countries in the world? Why do they brainwash their citizens into thinking they owe them a living when they don’t live there?
They are NOT in any way exceptional, just arrogantly stupid.
I have been reading material on website for a number of years but I have never commented here. I live in tax haven with no taxes but very expensive to live here. All the banks want to get rid of their US clients and new accounts are also impossible to open up. Forget about any investment account type here as they all told me no US passport or show us another passport and we will open up an account for you. I happen to be lucky that I don’t have any ‘US indicia’ as I was not born in USA but then they make me sign forms that needs ticking no US citizenship which I don’t want to do as they would invite more trouble and penalties. I have not been to US for five years and perhaps I would not go ever if US does not do something about FATCA or regulations strangulating foreign banks and employers from hiring US citizens as they have to deal with harsher rules from US than with other countries citizens. FATCA, Dodd-Frank acts are making 1.5 m East Asians wanting to renounce US citizenship as news is there all over the net. CBT and repeal of FATCA and Dodd-Frank is the only way to go or else vote with your feets and renounce. It does not cost me much in taxes but my CPA fees are very high as self filing softwares are basically useless when it comes to international filings. Homelanders don’t understand this point and never will. They think we are tax evaders or cheats and this mentality is not going to go away.
I hope and pray that Jim Jatras is successful in getting both FATCA and CBT repealed and US enters with the rest of the world in RBT as I stated before costs of living in tax havens outweigh the taxes paid in US here. The only reason I like it here is that I have a business here that I did not have in USA and medical costs are so cheap in surrounding countries that it becomes easier for me to just hop on a plane for an hour or two and get it done at fraction of costs paid in USA. I am getting my accounts closed out by banks here as they don’t want to deal with US dictated compliances. You can forget about investment firms of any type opening an account for US passport holder.
PS Kelly
How to you propose the US could equate the taxes owed from a myriad of differing tax systems taking into account, sales tax, taxes on gains to primary residence, investment and retirement vehicles, cost of living etc?.
US citizens resident abroad would always receive the worst of all worlds.
It has to be RBT or renunciation.
I doubt with the current climate FATCA stands any chance of a repeal as it has been passed since 2010 and 7 years is a very long time. With the Democrats it was impossible to talk to them as they considered everything tax evasion even living a foreign country. But still I pray you are successful in getting something done. All I am afraid of is some other laws being passed to deal with a high number of renouncers as US expats that I meet everyday are all wanting to leave USA forever. They are not rich but advised by their bankers and investment firms and other firms who need emplyees to sign over their account payouts to ditch the US passport or loose their jobs or accounts.
@Harrison
The repeal has some very strong support especially in the financial/business world and Fatca repeal was also
on the republican platform.,so I am hopeful for all those trapped.
Too late for me , I escaped 5 years ago and wouldn’t take that toxic citizenship back for all the tea in China.
@Heidi,
I will believe it when it finally passes. All I saw was making it more difficult if not impossible for anyone trying to surrender their citizenship which only has a sure shot chances of passing. For the compliance industry, tax lawyers and CPAs the repeal of CBT as well as repeal of FATCA would spell disaster and they would not let it pass without putting up a fight. These condors are the ones who enforce the laws, therefore it is their bread and butter.
You made a good decision to leave 5 years ago. Wish I had left it too. Many in here think about the plight of Canadian Americans only as this is mainly a Canadian forum but we are all affected in every part of the world with some countries bending over backwards to US demands.
As I stated earlier, I have been reading your forum for the past few years and it is very encouraging and full of info but you are up against the most powerful country in the world. The condors lobby in Capitol Hill are never going to let it pass(we all hope and pray it passes) . The only option we all have is to renounce with our feets unfortunately which is a sensible decision that I should have taken years ago like you did. I once read a few stories of people in 2011 who even renounced stateless that is without a second passport from another country as they were tired of US laws. Now I regret that I kept the US citizenship that long. (emotional reasons due to family being there etc. ). At least for Canadians, US is visa free country and I will have to acquire a visa to visit US in future if I do renounce. Drastic times call for drastic measures sometimes. Wish I had applied for Canadian immigration decades ago when I had a better chance as I have lived in Canada for five months and it’s a beautiful country and much less hassles than US due to RBT laws.
@Harrison
Yes, the forum started in Canada but has helped so many worldwide and as such has gleaned financial support worldwide for their lawsuit. I am in a small European country but those Fiesty Canadians put up the only Fatca challenge around and I admire them immensely.
@badger:
The difference is that FATCA/FBAR does not, and cannot “allow investigators to seize funds using a seizure warrant…”.
Big difference.
The US legal system (not just the IRS but the whole shebang) is notorious worldwide for the way it’s bent against small fry who can’t marshal the smartypants lawyers to defend themselves. And inevitably, it’s the domestic small fry who get the worst of it, because they’re the low-hanging fruit. Nowhere’s perfect, but boy am I glad I’m out of America.
Iota, your funds can be seized anytime due to FATCA. Most of the world’s bank have signed up for it and they require you to submit a form to all new and existing customers no matter what the amount. If you have filled out these forms indicating your status as US citizen or permanent resident and provided a SS number that they require anyways, then in the fine print read this. The banks can seize all your funds at the whim of IRS. Secondly, if your bank has a branch in USA then they can simply levy your bank account by levying the money at the branch in US. It’s not small fry’s in the US whose checking accounts are in trouble only. If you live outside, US has power now to get that money in your account provided your bank has compliances form filed out by you which most of the people in the entire world are getting.
Even if you have not filled them your bank will provide them to US if you have any ‘ US indicia or not. This is written on warning letters sent out by all banks the world over these days including banks in small cities such as Chiangmai in Thailand. Banks have zero choices as US has threatened them with 30 percent withholding taxes and fines. If you read a few years ago a 180 years old bank in Switzerland Wegellin was closed down due to IRS penalties and fines.
Even foreigners with no US ties are rather upset as they have foreign entities and they have received forms which are very complicated and require the assistance of a qualified international CPA specialized in US taxation. They have to pay these cpas to fill out those forms to be submitted to bank compliance teams. If the bank is in an IGA country like for example Canada, then they have to be reported to their respective govt depts to be passed to US govt eventually. CRS is another monstrosity developed after OECD liked FATCA so much that they introduced ‘GATCA’ and now called ‘ CRS’. 104 countries have signed up for it with more to follow. It is mentioned on this forum already. This was a direct result of Obama’s FATCA popularity.
Anyways, we are not concerned about CRS as most of us live in the countries we live in and have checking accounts here that are being closed now due to excessive compliances and threats by US govt. CRS is about reporting only not threats to bank itself and its existence. The respective govts will have to take actions on their citizens residing inside those countries and cannot threaten the banks offshore while the US does.
I apologize if I made it sound like I’d make anyone who lived in a country with little or no tax be presumed to be tax evaders, but that’s not what I was trying to get across. My idea was more of a compromise idea that targets the paperwork aspects rather than the fundamental nature of CBT, in that anyone living in a high-tax country would have a presumed liability of zero and not have to bother filing. Nothing worse than the status quo for anyone, even in no-tax countries.
Perhaps a better idea is for each country to have a “standard” foreign tax credit (like the “standard” deduction) which is based on the average tax liability for a resident of that country with said income amount, which would help simplify FTC calculations and close many of the “cracks” where certain sources of income are exposed to U.S. tax (and if the standard credit would negate any U.S. tax liability one would not need to even file). Like with standard vs. itemized deductions you could choose to either take the pre-determined credit or take a credit on the foreign tax you actually paid.
Sorry if I rubbed some people the wrong way, but I’m trying to brainstorm ideas (even if not full-fledged RBT) that would be more likely to pass muster with Congress and the President.