Liberty and justice for all United States persons abroad

The Isaac Brock Society

Posted on by Posted in Issues regarding US persons abroad 167 Comments

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.

Letter of Senator Paul and Congressman Mnuchin to Secretary of The Treasury and the Director of White House Management and Budget Office

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.

167 thoughts on “Rep. Mark Meadows & Sen. Rand Paul – Important Letter to White House/Treasury Urging Action to Nullify FATCA”

  2. @Harrison, in this case, the Canadian bank in question ( TD ) was not able to freeze/take the Canadian assets in Canadian sited accounts at the behest of the IRS who sought to leverage the bank to collect a claim against a Canadian with Canadian sited TD accounts – using TD’s branch presence in the US as their method. The Canadian judgement went against the TD.

    HIGH COURT OF JUSTICE
    68 O.R. (2d) 379; 1989 Ont. Rep. LEXIS 206
    RE VAN DEMARK ET AL. AND TORONTO-DOMINION BANK
    April 19, 1989
    http://uniset.ca/other/cs6/68OR2d379.html

    “.There is no dispute between [**7] the bank and Kenneth Van deMark and the dispute, if any, is between the bank and the Internal Revenue Service of the United States.

    The effect of what has occurred is that a Canadian citizen has placed assets in a branch in Canada of a Canadian chartered bank. The bank also does business in the United States and is being threatened by a United States authority.

    One must sympathize with the position of the bank but that position is the result of its election to carry on business in more than one country and that cannot influence the application of Canadian law……..”

    …….
    “….The case cited in support of the proposition that United States courts do have jurisdiction refers to a case in which jurisdiction over a foreign branch was obtained by virtue of the fact that jurisdiction existed over the home office of that bank in New York. It seems to me far from obvious that jurisdiction over a branch in New York would give United States courts, in United States law, jurisdiction over a Canadian head office or Canadian branch.

    In any event, while acceptance by the bank of a penalty imposed in the United States might seem to be a hardship, the effect of permitting the Ontario branches to defend the applicants’ claim on the basis of the bank’s liability in New York State would be to enforce indirectly a claim for taxes by a foreign state and one that has, so far as the evidence discloses, not even given rise to a New York or Federal Court judgment….”…….

  4. @Nononymous

    We know who it doesn’t apply to. We are simply trying to find out exactly what the rules are.

  6. They never get it correct. IT is always slanted in whatever directi to fit their needson needed.

  7. Whatever the dominant politicians want is always presented in a way to have the general public believe their way is the correct way. Only a small percentage of the population actually thinks for themselves and they never win just because they are right. The good people mostly just give up and the bad guys win. The bad guys being the established office holders in both parties, who are only 9nterested in getting re elected, the next day after the election is over.

  8. First Carribean bank international and Belize Bank international. Google on them and I believe there were cases of IRS seizures due to bank accounts of US citizens where Tile 18 was involved. On Monday, I will try talking to my friend more on this issue and let you know. As I stated before, banks in some countries or some jurisdictions even are bending over backwards to accommodate IRS due to US govts threats on 30 percent of withholding taxes on every transaction of the banks or heavy fines on the banks itself or even in some cases loosing correspondence accounts over bank accounts belonging to US citizens. As per another expat I talked too today he was told by his bank in HK he would loose his account in Bank of China if there was any request from IRS. This is over Title 18. You all are lucky in Canada that you don’t have to deal with this issue there as maybe Canadian govt had negotiated IGA differently trying to protect its residents. As I was reading through some of the webpages here it is quite evident, Canada has tried to protect you as much as possible. But a visit to US might pop up some surprises for some of you if the information is leaked over by your CRA. I remember my attorney friend’s conversation on this issue that some of his clients were arrested at US airports after landing in USA and never heard from for months until they contacted them from prison. It was Title 18 also and these clients were on their way to talk to him about their accounts in various jurisdictions not including Switzerland. These were sealed indictments that foreign banks leak without informing you to save themselves and no action is done until only the US citizen visits US and then he is not heard from again for months. That is why I complied but then like iota I feel sometimes I should have renounced years ago without filing but I had US based children to think about.
    When I read CRA had leaked over your information, I wanted you all to just be careful and be like iota and avoid visiting US at all. If you have or had substantial savings in your accounts then you are a target. If not then you don’t have anything to worry about.

  9. I think I need to be clear that it was not loosing his account in Bank of China in HK only. He was told if in case of IRS request, he would loose his money in the account to be seized by IRS. He immediately took it out of Bank of China as HK banks are pretty nervous too from what I have heard from them. In 2010- 2013 they were not that worried over IRS. Now it’s a different story as they have been advised by their compliance teams not to open up accounts even for non residents of HK. Many offshore services providers who were introducers to HK bank accounts have gone out of business due to FATCA and CRS both.
    Anyways enough on this matter I think.

  10. And no I did not use the services of my friend attorney for any of my own issues. It would have resulted in conflict of interest as he and I grew up together.

  11. @badger – “I’m sure that the bank recouped the money some other way.”

    No doubt. But it seems the risk of having to pay the tab for customers’ ML/international tax offences is one of the factors in the decline of correspondent banking.

    Correspondent banking relationships (CBRs), which enable the provision of domestic and cross-border payments, have been terminated in some jurisdictions following the global financial crisis. In recent years, several countries have reported a reduction in CBRs by global banks. Pressure on CBRs has been associated with restricted access to financial services by certain categories of customers, business lines, jurisdictions or regions. Survey and other available evidence indicates that smaller emerging markets and developing economies in Africa, the Caribbean, Central Asia, Europe and the Pacific as well as countries under sanctions may be the most affected.

    Individual banks may decide to withdraw CBRs based on a number of considerations. Generally, such decisions reflect banks’ cost-benefit analysis, shaped by the re-evaluation of business models in the new macroeconomic environment and changes in the regulatory and enforcement landscape, notably with respect to more rigorous prudential requirements, economic and trade sanctions, anti- money laundering and combating the financing of terrorism (AML/CFT) and tax transparency. These factors inform banks’ risk and reputational cost perceptions. Further pressures to withdraw CBRs may arise where regulatory expectations are unclear, risks cannot be mitigated, or there are legal impediments to cross-border information sharing. These factors operate concurrently, although their relative significance varies case-by-case.

    https://www.imf.org/external/pubs/ft/sdn/2016/sdn1606.pdf

    Perhaps helps to explain the alacrity with which countries jumped to sign IGAs removing “legal impediments to cross-border information-sharing.” Loss of correspondent banking relationships could be even more perilous than the withholding threat, for a small economy heavily dependent on access to international banking.

  12. “Antigua and Barbuda objects to being named as tax haven

    Antigua and Barbuda objects to being named as tax haven

    ST JOHN’S, Antigua (CMC) — The Antigua and Barbuda government Wednesday formally launched “strong objections” with the State of Illinois in the United States which has introduced legislation listing the island and 10 other Caribbean Community (CARICOM) countries as tax havens.

    In letters to Speaker of the House of Representatives of the Illinois General Assembly, Michael Madigan and House Representative Leader, Jim Durkin, Antigua and Barbuda’s Ambassador to the United States Sir Ronald Sanders said that the listing is a matter that needs immediate corrective attention as it poses severe threats to Antigua and Barbuda’s economy and the well-being of its people.

    In his letters, Sanders provided evidence substantiating that Antigua and Barbuda is not a tax haven including a February 2014 declaration by the Financial Action Task Force, on whose decision-making councils the Government of the United States sits, that the island was fully compliant and cooperative with the international standards that it has established.

    Sanders further noted that on the international level, Antigua and Barbuda last year became a signatory to the Organisation for Economic Cooperation and Development (OECD) Common Reporting Standard under which the island is legally bound to report on bank accounts and other assets held in Antigua and Barbuda, to the tax authorities of the originating country.

    He said also that Antigua and Barbuda has a Tax Information Exchange Agreement (TIEA) with the United States which has been in force since February 10, 2003.

    He said this agreement has worked to the satisfaction of the United States government and its agencies, and no request to Antigua and Barbuda for information has been denied.

    The diplomat said also that the two countries have concluded an Inter-Governmental Agreement, facilitating implementation of the provisions of the US Foreign Account Tax Compliance ACT (FATCA) which came into effect in February this year.

    “Under this Agreement, my government and the financial institutions in Antigua and Barbuda have already incurred great cost to provide information on financial information to the US Internal Revenue Service on US companies and persons,” Sanders wrote.

    He said that naming Antigua and Barbuda as a tax haven by the State Legislature of Illinois would have devastating effects on the correspondent banking relations between the US and Antigua and Barbuda banks.

    “The consequence on my country’s economy would be disastrous, and relations between our two countries would be severely and unnecessarily harmed. I am confident that such consequences were not intended by the State of Illinois.”

    Sanders said that the action of the State of Illinois is “unjust” and warrants urgent rectification.

    http://www.jamaicaobserver.com/latestnews/Antigua-and-Barbuda-objects-to-being-named-as-tax-haven

    Sanders recently gave a very interesting presentation on “The Future of Financial Services in the Caribbean” at a conference in Panama – a vigorous condemnation of the OECD countries, especially the US and the UK, for the unfair treatment handed out to the smaller low-tax countries – CARICOM nations particularly.

    The truth that dares not speak its name is that “automatic exchange of tax information”; false branding of countries as “tax havens” while the real tax havens continue to thrive and prosper; and sanctions against what is described as “uncooperative jurisdictions”, is a form of neo-colonialism.
    [..]
    All Caribbean countries have had to make themselves compliant with the demands of the countries of the OECD as a group and individually.

    In this regard, every Caribbean country is compliant with the rules of the Financial Action Task Force (FATF) on money laundering and counter terrorism financing.

    They are also subject to regular reviews.

    In fact, they are more compliant than the US, which the FATF found to be non-compliant with ‘entity transparency’ and ‘gatekeeper rules’ in 2006, and which the FATF has chosen not to evaluate since.

    And, as far as the OECD Global Forum rules on Transparency and Exchange of Information for Tax Purposes are concerned, the majority of Caribbean countries are on their way to full compliance.

    Notably, my own small country, Antigua and Barbuda, is fully compliant with the requirement for Common Reporting Standards (CRS), while the US has not signed-up to it.

    And the US has been the beneficiary as trust structures move there to avoid disclosure.

    States in the United States, such as Delaware, South Dakota, Wisconsin, Colorado and Arizona, disregard OECD rules – and are practical tax havens, demonstrating why the US has not signed-up to the CRS.

    But, it is clear that the doctrine of ‘might is right’ continues; the principle of transparency applies only to the weak; and the notion of a level playing field for competition is a myth.

    http://www.ieyenews.com/wordpress/sanders-the-future-of-financial-services-in-the-caribbean-part-1/

  13. Thanks @iota, I didn’t really understand correspondent banking and the impact on smaller countries and their financial sector.

    Re Sander’s comments (ex. “..The truth that dares not speak its name is that “automatic exchange of tax information”; false branding of countries as “tax havens” while the real tax havens continue to thrive and prosper; and sanctions against what is described as “uncooperative jurisdictions”, is a form of neo-colonialism…” ) the issue of the State of Illinois branding Barbuda, etc. as tax havens, and the neo-colonialism perpetuated by those in the US dominated OECD etc. at the expense of other smaller countries;
    https://books.google.ca/books?id=fo6-wRfbd9sC&lpg=PA312&ots=1DstFsq4l_&dq=%22allison%20christians%22%20AND%20oecd%20AND%20colonialism&pg=PA312#v=onepage&q=%22allison%20christians%22%20AND%20oecd%20AND%20colonialism&f=false

    Also the OECD is dominated by business interests and pretends that is representative of ‘civil society’ ( See; ‘Other key stakeholders’
    “The OECD also co-operates with civil society on a number of levels. The OECD’s core relationship with civil society is through the Business and Industry (BIAC) and the Trade Union (TUAC) Advisory Committees to the OECD. These advisory bodies contribute to most areas of OECD work through policy dialogue and consultations. ” ) and gives mostly only lip service to hearing NGOs and others who represent the interests of less powerful groups and individuals who have limited to no real input. It is an exclusive club that pretends to inclusivity and democracy. Look at the bs rhetoric on their website, the membership list ( http://www.oecd.org/about/membersandpartners/ http://www.oecd.org/about/civil-society/the-oecd-and-civil-society.htm ) etc.

    See Allison Christians re the imbalance between rich and developing countries in terms of tax policy; “…it seems clear that at least in the area of tax policy, inclusiveness for developing countries will be elusive so long as the framing, discussion, and consensus building takes place within an established order that continues to be dominated by the world’s wealthiest countries. “.
    from; Allison Christians, Taxation in a Time of Crisis: Policy Leadership from the OECD to the G20, 5 Nw. J. L. & Soc. Pol’y. 19 (2010).
    http://scholarlycommons.law.northwestern.edu/cgi/viewcontent.cgi?article=1046&context=njlsp

    It suits the US to cast other countries as tax havens while turning a blind eye to internal tax havens (states such as Delaware, Nevada, etc.) and to the money laundering facilitated by US financial institutions ( https://www.bloomberg.com/news/articles/2016-01-27/the-world-s-favorite-new-tax-haven-is-the-united-states ). Mexico for instance approached the US about information exchange before the advent of FATCA ( http://www.taxanalysts.org/content/news-analysis-how-us-tax-haven-mexicos-wealthy https://www.scribd.com/document/55599619/REV-Carstens-Letter-to-Geithner ). And the US dominates the OECD. So no surprise that it is given extraspecial status of its own in a footnote on lists of those countries who have or haven’t signed on to the CRS, and a special *note that pretends that FATCA will be truly ‘reciprocal’ and excuses it from being listed with the other countries who haven’t signed on. It isn’t on this list, http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/crs-by-jurisdiction/ and nothing is there to draw attention to the fact that it isn’t.

    *”1
    The United States has indicated that it is undertaking automatic information exchanges pursuant to FATCA from 2015 and has entered into intergovernmental agreements (IGAs) with other jurisdictions to do so. The Model 1A IGAs entered into by the United States acknowledge the need for the United States to achieve equivalent levels of reciprocal automatic information exchange with partner jurisdictions. They also include a political commitment to pursue the adoption of regulations and to advocate and support relevant legislation to achieve such equivalent levels of reciprocal automatic exchange.”
    https://www.oecd.org/tax/transparency/AEOI-commitments.pdf

  14. @badger and @iota
    Mr Obama’s campaign promise was to wipe out tax havens in 2008 as he was saying trillions of dollars were hiding offshore. Yes maybe billions of dollars by Apple, Amazon etc who were using legitimate IRS techniques as designed by US tax lawyers for tax optimization and a few thousand companies owned by people all over the world hiding money offshore but attacking millions of minnows residents in other countries and immigrants who had no clue about taxation nightmares of US was wrong. OECD needed a treaty like this for decades but wasn’t able to do anything until they got US on board with them after FATCA was rolled out. I remembered a bank manager working overseas saying to me that he wished all the countries adopted US law of FATCA so our crooked politicians would not be able to hide their money. Well, those crooked politicians always had convuluted structures designed by lawyers to bypass laws. The only few politicians got caught were Iceland president and a few others who had not structured their asetts control properly. I learned it all through my friend how these people were doing it and how innocent minnows were robbed by coaxing them to use programs like OVDI, streamlining etc where some of them lost half their savings. I am with iota on this. Complying even causes more headaches as then you paint yourself with a ‘red dot’ as it happened to me and I had always complied.

  15. @badger.
    US always dominates everything in this world ever since world war 2. OECD needed US to get on board for decades and Obama was ready to hop on as he had made this his campaign promise. I was reading this in 2008 during his first campaign. US has no privacy laws whatsoever. Anyone can search for your marriage or divorce records for free while even for Canada or UK or any other country you can’t do this. If you pay a few dollars you can check everything about someone in US and possibly their assets too. US govt has destroyed all privacy laws. Now they can buy your internet history too or someone else can buy it too. This is ridiculous. Everything is up for sale in US. Glad that I got out of US.
    I am sure they will not be able to repeal FATCA or any other laws to loose taxation money and compliance condors will never let these laws that make money for them pass. The only law they will pass is making citizenship harder if not impossible for you to give up. You made a good judgement call iota to renounce and I wish I had too years ago. Now I regret my decision.

  16. It’s not primarily about FATCA, if I understand Sir Ronald’s analysis correctly; it’s about the loss of correspondent banking relationships.

    In wealthy countries such as Canada, the UK, the EU, by complying with the transparency regimes banks can protect themselves from the reputational damage that attracts huge US fines and sends share prices plummeting. It’s business as before, as far as the big banks are concerned.

    In the Caribbean low-tax economies, “complying with FATCA and the other transparency regimes brings protection from the mega-fines, and signing the IGA and the other TIEAs buys protection from withholding, but complying doesn’t protect them from the loss of their correspondent banking relationships, because the rich-country corresponding banks are scrambling to cover their own backs and it’s easy for them to jettison a relationship which (they presumably fear) could expose them to forfeiture and other risks.

  17. “US govt has destroyed all privacy laws. Now they can buy your internet history too or someone else can buy it too.”

    And guess who voted for that? Mark Meadows, who now says he wants to repeal FATCA on the grounds of privacy.

    Hmmm…

  18. This and this alone is not the reason we want the entire tax code thrown in the garbage. It is so politicians don’t have the ability to extort ”campaign contributions” from those wanting a tax break the rest of us won’t have simply because we cannot pay the lobbyists to funnel the ”payoffs” to the congressmen, on the House Ways and Means Committee.
    It is also so tax lawyers and tax accountants don’t get paid to fill out forms that only 3% ever get a second look and the evaders get away with it.
    It is so the evaders who take in cash and never even file a tax return , have a stake in the game.
    We want to go back to financing the government with tariffs and duties, meaning stuff coming into the country and stuff sold within the borders of the U.S.A.
    We want the FairTax passed after the whole tax code all 73,000 pages which would have already been declared ”void for vagueness” and because the average man or woman could never understand it. This gives government the ability to charge you with violation of the tax code after you have tried diligently to comply. We stop being their boss and they become our jailers.
    Keeping the Marxist code (Yes the idea for our tax code came from the Marx’s Manifesto) where he demanded to have an income tax in order to destroy the despised middle class.
    We have about as much a chance of fixing this monster, short of a revolution, as it snowing in Phoenix AZ in August. (The tax code is bigger than the Holy Bible which most of us haven’t read either).

  19. I don’t think Marx can be blamed for the US tax code, let alone FATCA, but he certainly nailed America:

    Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind.

    The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere.

    The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country.

    To the great chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilised nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations.

    Nobody ever said it better.

    He didn’t foresee that the bankers would wreck the party by trousering most of the money though. 🙁

  20. I have also read Marx and didn’t mean to trigger the entire Manifesto, but he was the basis of our Income based tax code. Our founders wisely prohibited it, but the Marxist’s who came here with the wave of immigration managed to get the 16th amendment to our constitution passed by lying to an ignorant proletariat and using ”envy of the rich”, which still exists today, to get it passed.
    In order to establish ”normal order” we need to go back to the constitution, however the descendants of the original Marxists will fight it to the ends of the earth, but doing away with the Income tax and passing the FairTax is the onl way to save the republic from the untalented, young, who are brain washed by their Marxists professors as well as the grammar, middle and high schools.

  23. You shouldn’t be too surprised to learn that Nicholas Shaxson (one of the “tax justice” types) was making a big stink about the attacks on FATCA over on Twitter a few days ago. Some Brockers & others responded to him. See the following conversations:

    “Rand Paul, Freedom Caucus’ Mark Meadows, go after FATCA law on offshore tax evasion”
    https://twitter.com/nickshaxson/status/849993129914773508 (https://archive.fo/Hvl3a)

    “A new attack on FATCA is mounting, complete with fake stats” (I guess he thinks the IRS’ own FATCA projections are fake stats too? )
    https://twitter.com/nickshaxson/status/849940794672914433 (https://archive.fo/fqrBS)

    “Offshore Tax Haven Lobby Makes Push to Defend Tax Evaders”
    https://twitter.com/nickshaxson/status/850272461811732480 (https://archive.fo/Xed40)

    Complete with the usual victim-blaming (“That passport of yours comes with quite a privileges, worth something overseas”) and sorry-I-don’t-give-a-shit-about-you-little-eggs who-get-broken-for-my-omelette (“i deal with (vastly bigger) global damage/discrimination due to tax havens and offshore stuff. fatca, if flawed, is a defence against it”)

    Reminder: we’ve been trying to explain things to these “tax justice” types for five years and they willfully refuse to even acknowledge our concerns
    http://isaacbrocksociety.ca/2012/05/10/tax-justice-and-tax-compliance/

  24. Following on what Eric said above, about nasty anti-expat tweeters: Did anyone care to notice that for says after the post titled “A new attack on FATCA is mounting, complete with fake stats”, there were only 2 likes and 1 retweet? Today there are 6 likes. Not exactly making huge waves out in cyberspace. Here’s what I think:

    Stop replying to jerks like this! He/they are no more worthy of retorts or discussion than the madman shouting on the corner proclaiming the end of the world.

    In fact, trying to educate such people works against us! The more attention we spawn, the higher such a tweet or Facebook post gets ranked.

    If we can just hold in our anger for a few seconds and count to three before firing off a rebuttal, and then simply click away, the ranting maniac loses all power. His 2 likes will remain just 2, and he will understand that he is shouting into the big empty void, the electrons he wasted streaming out into space.

    Stop trying to ‘educate’ maniacs! It isn’t worth our time, and it does all of us less than good.

  25. @Barbara
    Exactly. Either they are compliance condors with their own agenda or they are brainwashed or ignorant homelanders who won’t or can’t be educated.
    Save your valuable time for more profitable pursuits.

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