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.
Yes – https://www.bloomberg.com/news/articles/2016-06-22/ubs-gives-irs-records-on-u-s-citizen-s-account-in-singapore-iprjhqd9
@iota,
The point of what I am focusing on is to refute the claims made that the QI program has the authority to seize funds. It would appear that the US does give itself the authority to do so; I am just trying to find definitively, once and for all, where it is and what it entails.
You may be right; I don’t remember. But the summons issues seem to be regarding records, not funds (if I understand it……)
Sorry, I admit to being lost. Ultimately, what matters to a USC in the UK or in Canada or elsewhere, is what local law allows a bank to do.
As far as the UK goes, my amateur guess would be that in a criminal case the person would be extradited. If the only offence was not paying US tax, or not filing FBARs, the UKG would do nothing and the bank certainly wouldn’t be allowed to hand over money from the person’s bank account, be there zero or a hundred branches of the same bank in the US.
@Patricia
Thanks. I was having a hard time convincing everyone here about the letter. My attorney friend also told me yes IRS can levy a bank account by going through a bank branch of a foreign bank located in US and first levy notices are sent and it takes a very short time to levy the account. However, I was not aware of the correspondennt bank aspect as you pointed out but it did happen in case of banks in Belize who had their correspondence accounts blocked with Wachovia bank USA for US account holder levies.
See iota, I was not trying to scare anyone but pointing out the facts that some jurisdictions have IGAs that are different from Canada and instant IRS seizures could take place here as compared to Canada or other jurisdictions. This used to be a tax haven for everyone in the world (expenses here make up for all your taxes) therefore IGAs are written differently from other countries. When I saw the letter I was dazed too for a moment as I had never thought about instant seizures before. It’s like shoot first and ask questions later. I am glad Patricia stepped in and had all the legal information posted here from IRS manual.
Now I am just praying for Jim Jatras to score a touchdown against those condors lobby. All the best Jim.
“See iota, I was not trying to scare anyone but pointing out the facts that some jurisdictions have IGAs that are different from Canada and instant IRS seizures could take place here as compared to Canada or other jurisdictions.”
Title 18, if I understood Patricia correctly – not the IGA. That’s what’s important from the USC’s point of view, it appears to me. The IGA is local law, Title 18 is US law.
It would be interesting to see the actual text from the letter you received.
The local laws maybe allow here this type of nonsense I think . I was quite shocked too after reading the letter. It had never occurred to me that they would go bend over for everything US govt demands. But then the Singapore bank manager of OCBC told me the same yes it is something we would have to comply with if IRS makes a request to us. They can also seize it through our branch in USA.
That’s not seizing it from the USC though. I can well imagine that the US could take the money from a US bank located in the US. And if the USC was eventually brought to court in the US, no doubt the USC could then be made to repay the bank the funds had been seized from. That’s all on US soil and not something a USC living and banking legitimately outside the US needs to worry about, as far as I can see.
@iota
apparently, if there is a treaty between two countries, particularly with a mutual agreement regarding collection (only 5 countries), there is no need for a court proceeding……….
@Patricia – yes, if there’s an article on mutual assistance in collecting. Only five countries have such an article – Canada, Sweden – can’t recall the other three.
@patricia.
I am sure those 5 countries would include Canada, UK and France, Three I am certain about. I believe they can even forfeit your real estate in Canada as they can do in UK for non payment of taxes to US.
France, Holland, and Denmark.
If a USC living in one of those countries was threatened by the US with a lien or a levy, my understanding is that the local tax agency, once the claim was accepted, would collect the tax using its normal tax-collecting procedures. Not through authorizing a local bank to seize the person’s local bank account.
“I am sure those 5 countries would include Canada, UK and France, Three I am certain about. I believe they can even forfeit your real estate in Canada as they can do in UK for non payment of taxes to US.”
The UK/US treaty has no collection agreement, and the IRS definitely cannot seize real estate in the UK.
@iota. That’s not seizing it from the USC though. I can well imagine that the US could take the money from a US bank located in the US. And if the USC was eventually brought to court in the US, no doubt the USC could then be made to repay the bank the funds had been seized from. That’s all on US soil and not something a USC living and banking legitimately outside the US needs to worry about, as far as I can see.
I had a long talk with OCBC bank manager that USC account in Singapore would be seized by OCBC Singapore if OCBC branch’s asett located in USA was seized by US govt for USC account located in Singapore. I had a long talk with the manager about this issue 3 years ago. I don’t know about if it was Title 18 or Title 26 as there are legalities that only a good tax lawyer can determine. But as per my tax attorney friend anything is possible with US govt. You cannot trust it just make yourself extra safe by filing everything correctly and renounce quickly. Simple as that. I am waiting for Jim Jatra to win against those condors lobby. The attorney friend laughed at me and stated you can’t win against condors as their lobby is too strong and Homelanders always think of US citizens living in other countries besides the military as tax evaders.
I had mentioned to him about resolutions to repeal FATCA by the Republican Party platform a few months ago before this JJ push a few days ago. He was laughing about that that this is never going to happen. I really like to see him loose this one,
“But as per my tax attorney friend anything is possible with US govt.”
Yep, on that I totally agree. Fortunately, there’s not much they can do to you if you keep clear of the US and don’t own any US assets.
“Just make yourself extra safe by filing everything correctly and renounce quickly. Simple as that.”
Renounce first, file if you want to, tell them nothing they don’t need to know, would be my advice to my fellow-minnows. Worked for me. 🙂
@iota.
Great info that the US cannot take the property of a US citizen in U.K. Actually I am thinking of starting another business in UK soon with my brother in law and you have just provided me with good information. Thanks again for providing excellent info.
Will you be opening your business account with HSBC? 🙂
@iiota.
Wish I had this chat with you years ago before I filed everything that I received from a non US mother. I had to pay US taxes on her income too believe it or not since she had a lot of PFICs a no no for US citizens but since she was not a us citizen it wasn’t a problem for her. Since my business was already in a tax haven it was easy to open up accounts here. This is before FATCA had set its ugly foot all over the world. There were no forms for FATCA certification back then as all accounts were opened up by my other passport as US passport holders were denied completely to have any account whatsoever. A bank employee escorted an American to the door plz we don’t want trouble with your govt as we don’t know what it wants right now and we will get clarifications later on by our govt so we are advising every American to go open up an account with Citibank. Most banks are still denying services to Americans and make an ugly face when a US passport is shown as it has become the world’s most toxic passport thanks to the efforts of condors working with Obama.
@ iota lol no way! No HSBC plz. Maybe a bank with no branches that even touch USA
FATCA/CBT has certainly come as a shock for a lot of people. But still, most don’t file, so from the IRS’s point of view it can’t be as profitable as they claim. Perhaps it will gradually lapse into disuse, like so much of the US law code.
This article perhaps warrants revisiting? Though as it says, it is “from a Canadian Perspective’.
‘FATCA and FBAR Reporting by Individuals:
Enforcement Considerations from a
Canadian Perspective’
Andrew Bonham*
Canadian Tax Journal
2012, Volume 60, Issue Number 2
https://www.ctf.ca/ctfweb/Custom/CMDownload.aspx?ContentKey=7ae51268-fbf4-4abf-a07a-41c7be3af7f6&ContentItemKey=c3e8c6ab-f4f9-45b3-8d34-c8dde8c018a2
https://www.ctf.ca/ctfweb/EN/Publications/CTJ_Contents/2012CTJ2.aspx
@iota
it MAY be that IRS can levy and so and for that, one is entitled to a hearing
I suspect when it comes to collecting from a US branch of a foreign bank, then has to be DOJ
Per the enforcement provisions of the various tax treaties, remember that in Canada it only applies to US tax monies owing by non-Canadian US citizens, or for dual citizens it applies only to debts incurred prior to acquiring Canadian citizenship. (Hence US difficulty in the Pomerantz case.)
Otherwise what I think we are talking about with the possible seizure of funds from banks with US branches – I say possible because I’d still like to see an example of it actually having happened – is US law pre-dating FATCA, which would apply to US citizens known to the IRS against whom judgements have been made. (I now recall that the main point of the page linked to on the lawyer’s site was what to do if you owed the IRS money.) This is then potentially an issue for someone in the system, with an outstanding balance. It’s quite a step from that to being identified via FATCA, then to having a determination made that money is owed, then to having actions taken against a non-US bank account. While such a chain of events might conceivably occur in some unfortunate “tax haven” country, it’s not possible for a Canadian citizen living in Canada with no US assets.
@iota. It’s not profitable at all . They had claimed that it would make them billions of dollars per year . So far only millions for the last six or seven years enough to run IRS for a few hours. They had claimed trillions hiding overseas in tax havens. Not Americans though. This thing was just a money maker for compliance condors that’s all.
@Nononymous –
“…what I think we are talking about with the possible seizure of funds from banks with US branches – I say possible because I’d still like to see an example of it actually having happened – is US law pre-dating FATCA, which would apply to US citizens known to the IRS against whom judgements have been made. ”
And/or possibly relating only to US-source income. Can’t see the IRS wasting time and money trying to seize a foreign bank account over Saving Clause claims. But if it’s a genuine case of tax evasion, they could reasonably ask for the other country’s co-operation, even if there’s no collection article in the treaty.