Thank you to all those who worked so hard to make this hearing a reality, and in particular to witnesses Daniel Kuettel and Mark Crawford for putting a human face on the FATCA disaster. Here’s a brief overview of what happens during each section of the hearing. Longer and more detailed notes after the jump. See also the official webpage for the hearing.
| Time | Summary | Details |
|---|---|---|
| 14:36 | Quick introduction by Rep. Mark Meadows (R-NC-11) Meadows is the chairman of the Subcommittee on Government Operations |
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| 15:32 | Testimony by Sen. Rand Paul (R-KY) Mentions that FATCA gathers far more information on foreign accounts than Form 1099 does on domestic accounts (I’ll call this “8966 vs. 1099” for short). States that he hopes to get FATCA repeal done as part of tax reform. |
Link |
| 23:07 | Opening statement by Meadows Mentions poor return-on-investment from money spent on enforcing FATCA. |
Link |
| 27:45 | Video by Donna-Lane Nelson Discusses her renunciation. Mentions that she’s a lifelong Democrat and not rich. |
Link |
| 30:45 | Meadows continues opening statement | |
| 31:30 | Opening statement by Rep. Gerald Connolly (D-VA-11) Connolly is the ranking member of the subcommittee. Makes incorrect statement that most countries tax worldwide income of citizens. Notes FATCA implementation difficulties. |
Link |
| 37:00 | Introduction and swearing-in of witnesses | |
| 38:30 | Testimony by James Bopp Lawyer for Republicans Overseas. Mentions Democrats Abroad survey showing FATCA’s effects, and that U.S. is one of only two countries which tax citizens abroad. See written submission. |
Link |
| 44:50 | Testimony by Mark Crawford American businessman in Europe. Mentions how Same-Country Exception (SCE) would not have solved his business banking issues. See written submission. |
Link |
| 50:10 | Testimony by Daniel Kuettel Ex-American who renounced to save his mortgage. Mentions that his daughter will eventually face the same choice he did, of having U.S. citizenship or having a normal life where she lives. See written submission. |
Link |
| 54:00 | Interstitial remarks by Crawford and Connolly | Link |
| 55:30 | Testimony by Elise Bean Former Carl Levin counsel. Says Forms 8966 and 1099 are equivalent, and that the number of citizens renouncing is not a concern because more immigrants are naturalising. See written submission. |
Link |
| 1:03:50 | Meadows questions Bean Asks about U.S. banks’ views of FATCA reciprocity, if revenue from OVDP was taxes or penalties, if suspicion of wrongdoing is sufficient justification for FATCA. |
Link |
| 1:10:30 | Connolly questions Bean Asks about FATCA implementation difficulties. Bean denies that FATCA is the problem, pointing instead to CBT and the lengthy renunciation process. |
Link |
| 1:15:50 | Connolly asks Bopp for response to Bean Bopp says that FATCA is causing problems for large numbers of people, not just renunciants; rebuts Bean’s earlier point about 8966 vs. 1099; notes that penalties are not tax penalties but FBAR penalties. |
Link |
| 1:17:34 | Recess Microphones left on, pick up some chatter at 1:22:00 regarding the Democrats Abroad survey. |
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| 1:54:53 | Hearing resumes | |
| 1:55:25 | Rep. Jody Hice (R-GA-10) questions Bean Asks Bean how much revenue is lost to offshore tax evasion, how much FATCA recovers; Bean not familiar with JCT $870 million recovery estimate. Hice expresses concern at such poor results for potentially law which has both Fourth Amendment and separation-of-powers issues. |
Link |
| 1:59:45 | Hice questions Bopp Asks whether FATCA should be repealed or modified. Bopp responds proposed fixes (probably means SCE) don’t solve problems. Kuettel and Crawford also support repeal. Bean supports modification. |
Link |
| 2:00:59 | Statement by Rep. Carolyn Maloney (D-NY-12) Mentions membership in Americans Abroad Caucus, concerns about terrorism financing, disappointment at Treasury’s non-response to SCE (actually, Treasury said no). Notes she has introduced a bill to require SCE implementation. |
Link |
| 2:08:53 | Rep. Eleanor Holmes Norton (D-DC) questions Bopp and Bean Asks Bopp about SCE; Bopp says SCE will not relieve burdens. Asks Bean whether repealing FATCA and joining CRS would get same information; Bean unsure. Criticises Bopp, Crawford, and Kuettel’s call for repeal. |
Link |
| 2:16:00 | Meadows questions Bopp and Bean If nothing else, watch this. Meadows comes to the conclusion, based on Bean’s statements regarding 8966 vs. 1099, that FATCA was intended to circumvent the protections of the subpoena process. |
Link |
| 2:27:07 | Maloney questions Kuettel about SCE Kuettel responds that SCE would not have solved his problems because “the damage has already been done”, the banks are terrified of America, and that SCE still puts a burden on the banks themselves. |
Link |
| 2:31:10 | Closing statement by Meadows Rebuts remarks by Democratic members stating that FATCA addresses terrorism financing, noting that a Hezbollah sanctions bill he sponsored used different tools. Asks each witness to give him three suggestions for modifying FATCA if there is not bipartisan support for repeal. |
Link |
15:32 — Testimony by Sen. Rand Paul (R-KY)
Paul’s testimony is scheduled to go first, before Meadows’ formal opening statement, because he has another appointment at the White House afterwards. Starts out by discussing violation of Fourth Amendment; mentions Taxpayer Advocate report criticising FATCA. Mentions “double standard” (18:07): Americans overseas have balances and transactions disclosed under FATCA (on Form 8966, though neither he nor any of the other speakers mention the form number), while Americans at home only have actual income reported on Form 1099 (all the speakers know what a Form 1099 is). “Guilty until proven innocent” (19:32). Goes on to compliance costs (19:45), and then IGAs (20:11). Reiterates unconstitutionality of IGAs (21:08). Questioning begins at 21:40. Meadows praises Paul for bringing the issues to light. Paul responds that he hopes to get FATCA repeal into tax reform (22:30).
23:07 — Opening statement by Meadows
Mentions poor ROI of FATCA (25:00), and that shifting enforcement dollars from FATCA to general enforcement would actually result in a $1 billion revenue gain. Mentions burdens on trading partners (25:35), IGA partners’ anger at non-reciprocity (26:15), mentions renunciations (27:15).
27:45 — Video by Donna-Lane Nelson
Mentions that she is a life-long Democrat forced to renounce by FATCA, and that she needed to pay for a specialized accountant to help her with all the reporting requirements despite her limited income.
31:29 — Opening statement by Rep. Gerald Connolly
Claims that most countries tax worldwide income of their citizens (31:51). But even he admits that no one should have to renounce due to the burden of complying with the law (32:25). Claims that decades of FBAR non-compliance is evidence that some taxpayers “are not paying by the rules” (32:45). Mentions OVDP (33:45), lumping together taxes & penalties. Claims that 1099 has same information as 8966. Mentions Citigroup still offering accounts to Americans abroad (34:30). Mentions countries adopting CRS; claims that it gets information on “citizens”. Wants to find a way to protect FATCA.
My comments: some of Connolly’s incorrect claims — that most countries have citizenship-based taxation and that 1099 collects the same information as 8966 — and his lumping together of taxes, tax penalties, and FBAR penalties, were rebutted by later witnesses. No one, not even the Democrats, explicitly brought up U.S. non-participation in CRS.
38:30 — Testimony of James Bopp
Introduces self, mentioning role with Republicans Overseas. Draconian system of tax laws (38:54). Corrects Connolly, mentions that U.S. is one of only two countries with CBT. Ties territorial taxation of corporations to territorial taxation of citizens (39:30). Mentions FBAR (39:55). Illegality of IGAs (41:40). Mentions Democrats Abroad survey which found account closures, strain with non-American spouses (42:30). Mentions that people renouncing are ordinary middle-class Americans (43:00). Mentions Crawford v. Treasury (43:45). Closes by describing Americans overseas as ambassadors who promote American values and American products, but who are stamped with scarlet letter by U.S. laws.
44:50 — Testimony of Mark Crawford
Introduces self as businessman residing overseas with no other citizenship besides American. Mentions background with Clinton administration (46:00). Discusses effect of FATCA on small markets (46:30). Saxobank rejection of American citizens abroad, including Crawford himself, leading to Saxobank dropping Crawford’s business as well. Notes that Same Country Exemption (SCE) would not have solved his problems (48:30).
50:10 — Testimony of Daniel Kuettel
Introduces self as former American residing in Switzerland who was forced to renounce citizenship by FATCA. Mentions U.S. Army service, marriage with wife in Philippines, job loss in dot-com crash, move to Switzerland as “economic refugee”. Says he did not renounce to avoid taxes but that he enjoys paying taxes. Mentions failed efforts to refinance his condo (51:19), and that HUD, Veterans Affairs, and the Department of Justice did not help him (51:52). Mentions ongoing issues for his daughter who remains a U.S. citizen but not his son (52:45), and that she will eventually face the same choice he did of having U.S. citizenship or having a normal life in Switzerland (53:40).
In barely three-and-a-half minutes, he demolishes every one of the myths that Homelanders spread among why people move to other countries and why they renounce citizenship.
54:00 — Interstitial remarks
Crawford thanks Kuettel for his testimony and his service, jokes that Kuettel is the only witness who’s ever said he enjoys paying taxes. Moves on to Bean; opens with conciliatory tone, praising her for her work on the UBS scandal and describing negative effects of FATCA as unintended consequences. Connolly asks for statement from FACT Coalition opposing FATCA repeal to be entered into the record, jokes that only two types of people oppose taxes: men and women.
55:30 — Testimony of Elise Bean
Introduces self as presenting “another view of FATCA”, from her experience under Carl Levin. Discusses Cayman Islands credit cards, UBS and Credit Suisse undisclosed accounts and private bankers trying to get business in US. Mentions that both firms did not disclose many accounts. Mentions success at getting information from a bank in Liechtenstein which had opened accounts for a Florida businessman, who was caught by a whistleblower disclosure. Mentions OVDI, claims that 100,000 Americans have gone into OVDI and calls $9.9 billion “back taxes” without even mentioning the word “penalty” as Connolly did. Notes that FATCA does not impose taxes. Repeats claim about 1099s having the same information as 8966 and that Americans abroad are being treated the same as Americans at home.
Claims that FATCA’s rough early implementation was due to foreign banks being furious about their “secrecy” being attacked. Claims that CRS is doing the same thing as FATCA. Claims that Americans forced to renounce their citizenship are “a very small number of people” by comparing them to the number of people gaining citizenship (1:02:20). Closes by stating honest taxpayers at home have to give the same information to the IRS, and objects that “Americans who have the wherewithal to go abroad” should not have to do the same.
My comments: Bean repeats the usual FATCA-natic fallacy that large numbers of immigrants excuse harms done to emigrants. She takes it even further by trying to claim that the naturalisations demonstrate that the burden of U.S. tax compliance is fair. Well of course FATCA isn’t causing problems for most new citizens — their local bank accounts aren’t the ones being FATCA’ed. And even Bean’s fellow Democrat Carolyn Maloney later rejects the argument that a high ratio of naturalisations to renunciations means that there are no problems. No need for my comments on the rest, Meadows deconstructs it all very ably
1:03:50 — Meadows questions Bean
“Are you suggesting that the whole reason we’re doing this is because U.S. banks want us to do it?” (1:04:05). Lots of back and forth about whether Bean would change her position if U.S. banks did. Bean tries to draw distinction between the banks themselves and the banking industry associations which include foreign members. Meadows notes that the U.S. banks aren’t yet being subject to requirement for reciprocal disclosure, and that if and when they are they might start opposing FATCA. Meadows mentions that the money from the voluntary disclosure programs was 80% from penalties not taxes. Bean keeps trying to mention 1099s on domestic bank accounts. Meadows makes her answer whether she thinks that mere suspicion of wrongdoing should be enough to investigate a foreign account (1:09:00). Bean eventually says yes, says no to Meadows’ subsequent question about whether he should be able to read her emails on mere suspicion of wrongdoing.
1:10:30 — Connolly questions Bean
Implies that Meadows is only looking at extremes, goes to “opposite extreme” and asks whether an American should be able to open a bank account in Switzerland and never pay taxes on it. Admits nevertheless that FATCA has disrupted Americans’ lives, pointing to Crawford and Kuettel’s testimony. Attributes that to “the implementation was rocky”, asks Bean whether the implementation is still “rocky”. Bean responds that problems still exist. Connolly asks whether Bean admits that the other three witnesses have a point. Bean responds that their concern is misplaced because their real problem is CBT or the renunciation process (1:14:00) and that “FATCA does not require anyone to renounce their citizenship (1:15:00).
1:15:50 — Connolly asks Bopp for response
Bopp says problems caused by FATCA are not rare, pointing to the survey by Democrats Abroad. Rebuts Bean’s point about 1099s, noting difference between income reporting and balance reporting. Closes by noting penalties were not even tax penalties but FBAR penalties.
Followed by recess.
1:55:25 — Rep. Jody Hice (R-GA-10) questions Bean
Asks how much revenue is lost to offshore tax evasion. Bean responds $100 to $150 billion. Ask how much revenue is brought in annually because of FATCA. Bean responds that it’s too new since reporting only began in 2015. Hice responds with the Joint Committee on Taxation estimate $870 million, Bean says she wasn’t familiar with that estimate. Hice accepts JCT estimate, notes that FATCA recovers only a small proportion of the problem, and compares that to FATCA implementation costs and harms mentioned by other three witnesses and harms to U.S. allies. Notes issues whether FATCA is even constitutional or not, mentioning 4th and 5th amendment concerns due to FATCA demanding information which would normally require a warrant to obtain, as well as the separation-of-powers issues with IGAs, which aren’t authorised in the statute itself and never been submitted for Senate advice and consent. Calls it “not only disastrous as a law, but dangerous” despite any good intentions behind it.
My comment: even the JCT $870 million annual revenue estimate is probably still too high, and the IRS lowered its own estimates of FATCA revenue to not even one-tenth of the JCT figure before they gave up on making any estimates at all.
1:59:45 — Hice questions Bopp
Hice asks Bopp whether he agrees that FATCA needs to be repealed or majorly modified. Bopp states that fixes being proposed by “various individuals” (probably referring to SCE) don’t fix constitutional issues or implementation costs, because the banks still have to report.
Hice asks Kuettel, Crawford, and Bean for yes or no answers on repeal or modification. Kuettel and Crawford say repeal. Bean says no to repeal, tries to say something about courts, Hice cuts her off and asks whether she supports modification, Bean says yes.
2:00:59 — Statement by Carolyn Maloney (D-NY-12)
“I represent a district that has many Americans who love abroad”. Mentions that she has heard from many constituents who have had to renounce citizenship or who have been taken off of a spouse’s bank account. However states that she is sympathetic with Bean’s point about terror financing, drug trafficking, human trafficking. Does not support repeal but states that ordinary Americans should not be subject to same scrutiny as criminal tax evaders and money launderers. Mentions that she is co-founder of Americans Abroad Caucus and that due to that position she’s heard about negative effects of FATCA, including refusal to serve American customers. Says that it’s unacceptable that even one or two or two thousand people renounce their citizenship because of FATCA.
Mentions Taxpayer Advocate’s recommendation of Same Country Exemption. Mentions (in a way that suggests she thinks it’s good) that even with SCE, Americans abroad would still be required to file FBAR reports, so that the IRS would not lose access to their account information. Submits letter from members of Congress to Treasury recommending SCE in September 2015 and criticises lack of response. Mentions that she has introduced the Overseas American Financial Access Act to require SCE (see press release).
My comment: Maloney deserves credit for her early attention to banking issues caused by FATCA and her vote against repealing the Foreign Earned Income Exclusion, as well as her implicit rebuttal of Bean’s claim that the number of renunciations is not worthy of attention. However, Maloney is incorrect that Treasury has never responded to calls for SCE. They have responded — in the negative.
2:08:53 — Rep. Eleanor Holmes Norton (D-DC) questions Bopp and Bean
Mentions support for Maloney’s idea. Calls the problems “probable unintended consequences”. Expresses concern about Bopp, Kuettel, and Crawford’s responses to Hice on repeal, stating that the “evidence was overwhelming”. Asks “Do you really want no law on the book that goes after the bad guys” and accuses them of not helping. Bopp notes that SCE will not relieve burdens.
Norton goes on to ask Bean about the Common Reporting Standard and whether it shares the same information. Bean responds that CRS is based on FATCA but not identical. Norton states that it looks like the rest of the world is moving towards FATCA. Asks whether information of US accountholders would still be collected if Congress repeals FATCA but CRS went on. Bean doesn’t know. Norton criticises other witness for alleged unwillingness to negotiate.
2:16:00 — Meadows questions Bopp and Bean
Notes contradiction between Bopp and Bean’s testimony, with Bean stating that FATCA 8966 is the same as what US banks have to do with 1099s while Bopp disagreed. Bopp stands behind his position on 1099s, noting that 1099s only report interest, not gross receipts and withdrawals nor account value. Bean admits that Bopp is correct. Meadows asks why. Bean says “that was the way the law was written” and that subpoenas can obtain the same information from U.S. banks.
Meadows asks whether FATCA was intended to let the U.S. government get around subpoenas (2:18:23) and whether Bean wants to change her earlier testimony. Bean says that foreign banks have to file a form and US banks have to file a form. Meadows asks whether Bean would accept modifying the law to require foreign banks to only report 1099-equivalent information; Bean says no. Meadows criticises Bean for unwillingness to negotiate. Bean admits that “we are forcing [banks] through the 30% excise” (probably means threat of 30% withholding (2:20:19).
Meadows again asks whether Bean would accept foreign banks filing 1099s. Bean responds that the 1099 should be expanded to require FATCA-equivalent information from domestic acountholders (2:21:01). Meadows notes that he and Bean would never agree on that.
Meadows asks what Bean thinks the problems are with FATCA. Bean mentions two. States that penalties were unreasonable. Meadows asks for appropriate penalties. Bean brings up example of person hiding $21 million in Israel who was fined $8.3 million. Bean notes that penalties are scaled and sometimes the appropriate penalty is zero in some cases if you don’t know you’re violating the law. Bean mentions second problem is FBAR and FATCA duplication.
Meadows criticises Bean’s position as eliminating one form and waiving a few penalties. Asks why FATCA is only addressing a small amount of estimated offshore tax evasion. Bean responds that $150 billion includes corporate avoidance and evasion, while $30-70 billion is individual. Meadows asks Bopp, Crawford, and Kuettel to submit three recommendations for modifying rather than repealing FATCA.
2:27:07 — Maloney questions Kuettel about SCE
Maloney goes back to points about terrorism financing. Asks Kuettel whether SCE would have been sufficient to help him. Kuettel responds that it would not have, because “the damage has already been done” and the banks are still terrified of America, and that SCE still places burdens on the banks.
My comment: the full text of Maloney’s SCE bill is not yet available, but existing proposals for SCE either do not modify the bank’s reporting obligations at all (i.e. the individual is relieved of the requirement to file Form 8938, but the bank still has to file Form 8966), or require the customer to submit U.S. tax returns to the bank and for the bank to decide whether that means the customer is compliant (what Mark Twain likened to being strip-searched in the bank lobby).
2:31:10 — Closing statement by Meadows
Closing statement by Meadows. Says that this is not about terrorism financing. Compares his Hezbollah sanctions bill (H.R. 4411 to FATCA, stating that very different tools were used. Says that he does not like treating Americans abroad differently than Americans in the contiguous 48 states or Puerto Rico. Asks Bean to keep an open mind, and asks Bopp to think about replacement. Thanks Paul for attention to issue brought to his attention by citizens abroad who love the United States.
Conclusion
I can’t say it any better than badger said in a comment:
Tell us oh FATCAnatics and US CBT apologists how you and your tax laws and FATCA and FBAR benefited those outside the US who you slandered today? How did you support the children ‘abroad’? How did you support those with disabilities ‘abroad’? What healthcare or education did you provide us with? How about the roads we drive on? Post-secondary grants? Clean water to drink? Food or shelter?
Oh, you say we can’t qualify for anything – unless we live inside the US? Funny, in view of the claim that the US government benefits us wherever in the world we reside.
And you have the nerve to pretend that FATCA and FBAR and US extraterritorial CBT has not caused us harm and caused ordinary people and families to renounce? Or that even if that is the case, it is justified because you “meant well” and disingenously claim it was ‘unintended’?
Hmmm, what is ethical about lies, obfuscation and sins of omission coming from those sworn to serve?
Is it ethical to dismiss the harm to so many ordinary people in order to pursue your crusades and obsessions?
The FATCAnatics were all about pretending that their ends justified whatever harm their means have caused, and finding ways to make light of it – and apparently they’ve got no qualms whatsoever in playing fast and loose with the facts and abusing their control over the proceedings to upbraid those who don’t agree with them.
When Connolly gave his exaggerated example of the ‘extremes’ of egregious tax evaders in his attempt to dismiss the harms experienced by the witnesses, he basically said that it doesn’t matter what happens to the many ordinary people as long as they can pursue the few. And it is absurd and improbable that there are masses of US taxable millionaire and billionaires running loose outside the US, hiding among us ordinary folk, just waiting to be FATCAed.
@Don there already was a #4 Get Out of Jail Free Card,
#5) Citizenship Reinstatement if wish Should that be with refund of renunciation fees?
Not much time, but I really want to pay my respect to Ms. Nelson and especially Mr. Kuettel.
Their stories are much like mine: my family went to North America way before the US existed (the first “Unforgiven” arrived in 1701). I, too, served in the military, married a foreigner, and stayed overseas to be able to have a decent job. I also went through the breakdown with vomiting (although when I had my OMG) and was shell-shocked after my consulate appointment.
In my case, however, FATCA only opened my eyes, it was FBAR that made up my mind that I had to protect my family and I no longer have any wish to have anything at all to do with the US again, ever.
To the point, though, Mr. Kuettel is just an ordinary Joe, no lawyer or international entrepreneur, and seemed a little out-of-his-waters during the session, but the man did his thing with sovereignty.
Because I could never pulled that off AND have sat there so calm and not scream at Ms. Bean: Mr. Kuettel, you are the man and carry those big brass ones with pride.
Someone should have asked Bean that US bank send their client 1099 copy. These non-US bank don’t send any copy to us what data under FATCA they have reported to IRS. Don’t have right to know or receive copy of our account information which is shared to government.
@Viral Shah – very good point.
If the US bases its defence of CBT on the proposition that all US citizens must be treated the same, wherever they live, USCs with accounts outside the US should receive a copy of what is sent to the IRS about their account.
The trouble is, within the US, US law can require FIs to do this. Outside the US, neither the FI, which sends the information to the local tax authority, nor the local tax authority, which sends the information to the IRS, can be compelled by US law to do this.
But does the US not have a legal duty to guarantee the USC’s right to receive a copy of the information sent to the IRS about the USC’s account? Is there not some wretched Amendment to the wretched US Constitution being broken by failing to provide the USC with this information to which s/he is surely statutorily entitled?
If I was (still) a USC, and suspected that my account information was being reported, I’d be strongly tempted to write to my Congressional representative, if I had one. This is another of the shaky legs supporting the CBT/FATCA/IGA contrivance; shaky legs should all be shaken.
I am not at all sanguine about the chances of a full FATCA repeal.
FATCA seems to have been accepted although reluctantly by most of the rest of the world (in lieu of crs) by the 30% threat to their banking and investments. If a repeal was achieved then wouldn’t the pressure be on the US to join CRS and their banks in Delaware etc would have to come clean? By Trump’s own words, he likes the way Delaware does business.
I would love to be proven wrong, can anyone explain how they would deal with the Delaware problem if post FATCA they were shamed into joining CRS?
@Heidi – I hazard a guess that the aim is to try to avoid signing up to CRS, by moving FATCA a wee bit closer to CRS.
Whether that’s feasible remains to be seen but it would certainly be another feather in Mr Meadows’s increasingly feathery cap if he pulls it off.
Or I may just be imagining things.
“Mr Nguyen, so good of you to come” said the banker while ushering him in the small but brand new office.
“Xin Chao, Mr Trong, I am pleased to be here” answered Nguyen, feeling uncomfortable in his seldom worn suit and afraid to touch anything in the immaculate office with his always dirty hands.
The banker sat first, as was proper, and started typing on his computer. Nguyen, as the client, a good client, didn’t need to wait for an invitation and sat down as well, inwardly cursing the white leather of the chair that would be difficult to leave unmarked. He remembered the previous office in the old French building. It was decrepit and very hot, with only one ceiling fan, but the worn leather seats were comfortable and less sensitive to grease stains. The old office was much larger as well and had a window. Nguyen recalled how proud, and nervous, he had been to be opening his first bank account. They hadn’t met since that momentous event.
“So, Mr Nguyen, I see your business is doing well” said Trong, adding after a pause, “it is called American Motors”.
“Yes” confirmed Nguyen, “although I will probably no be able to keep the name for very long now that we are trading with the U.S.”.
“That’s a shame. So why the link with America? It can’t have been very popular a few years ago.”
“Well, as you must have noticed, I am only half Vietnamese. My appearance has been a burden all my life but when Vietnam opened up to foreign visitors, I found that it brought business. I learnt to speak some English and advertised the fact that I was tourist-friendly.” Nguyen was now on uncomfortable ground and choosing his words carefully. He had grown up under strict communist rule and the banker was old enough to have been active in the war. His position in the State Bank was a strong hint he had been close to the post-war communist regime.
“So you’re American.” Said Trong.
Nguyen couldn’t help some of his anger show but replied very carefully “No, I am Vietnamese, just like you.“ Now glaring at Trong and painfully aware of how impolite that was, he continued: “If you really want to know, my mother was raped by an American soldier, that’s why I am big. He didn’t actually leave a passport behind for me”.
Trong tried to remain impassible, he was well aware of Nguyen’s situation and “rape” had been a good excuse when the invaders and their dollars were there. “I assume the new government took good care of her” he said, immediately regretting it. He knew full well what had happened in those cases and only flinched a little bit when Nguyen now speaking very loudly indeed replied: “Of course not! We were shunned, ostracised. She was called a whore, a collaborator and I was bullied as one of the enemies. I started my life in a reeducation camp but even after we’d been politically cleansed and sent to an agricultural work camp we were still abused. My mother did end up as a whore in a desperate effort to save me but at least that worked. She made me learn a trade and paid for a partnership in a small mechanic workshop before she died.” Calming down but keeping the anger in his tone he finished: “Now, what is all this about?”
“Mr Nguyen, all this misery is very fresh in our memories” Trong said in a more conciliatory manner, “I am sorry you were mistreated. I am also an orphan of the war” he lifted his sleeve to show the familiar napalm burn marks going up his arm. He didn’t add that the sacrifice of his family to provide a human shield to some military operation had earned him a good life in one of the better orphanages. It had taken them days to die from the same impact that had damaged a large part of his body. Fortunately, it didn’t show when he was dressed and it almost made him a war hero; napalm was not a wound common to the collaborators. “And I am proud to have helped rebuild our country”. Nguyen agreed: “I apologise, I know we all suffered; times are better now. We all worked hard.”
There was a silence during which Nguyen thought for himself, some had to work harder. For all the years he had know Trong, the small government official had enjoyed one of the frugal but easy jobs which the communist government bestowed upon its better subjects. Trong broke his train of thought by retrieving a couple of sheets of paper. “There is this new law” he said. “We now have to declare your accounts to the Americans. I need you to fill the following forms”. Nguyen was surprised: “Since when do we have to tell the Americans anything?” He asked. “We are Vietnamese, in Vietnam, my company is Vietnamese. The name is just for trade, it isn’t even registered and I will change it soon anyway. I am a sole trader under my own name. Is that a new Vietnamese law?”
Trong interrupted him as he saw the line of queries was not going to stop. “It is an American law that all the banks in the World have to comply with. I have just participated in a seminar on the subject and it is quite simple and inoffensive: all U.S. Persons anywhere in the World are liable to taxation in the U.S.A. and must file income returns and disclose all their financial accounts. You can ask an accountant to prepare all that for you, and you should as I understand the penalties for not doing so are high.”
Nguyen was taken aback. “I have to file income tax returns to the U.S.A.? But I have not even been there once! Why would they be interested in me?”
“Talk to an accountant.” Interrupted Trong. “This is not my specialty, nor my concern, but you don’t need to worry, there are all sorts of agreements and dispensations, I am sure you will only have to pay very little. After all, you can go and live there anytime, surely that’s worth a few thousand dollars.”
Nguyen’s anger flared back. “You well know I don’t have thousands of dollars. And how do you think I’ll get a passport? Do you believe my mother asked for the papers of the man who raped her? And why would you think I want anything to do with America? Can’t you imagine how much I hate them? Why are you helping them? I thought we had won the war! Didn’t you pay enough yourself?” Now standing and in shock, Nguyen added breathless “This is like being raped again!”
As Nguyen was obviously gathering his strength for more abuse, Trong decided it was time to close the conversation. It was the fourth time he had to go through all this today and his patience was running low. Couldn’t all these people just accept the rules? He had spent decades seeing people react quite unreasonably to the State’s Bank policies and having to be quite firm with them. People always wanted their money immediately, they always needed more time to pay their mortgage, they always needed a few more Dong than they were allowed to withdraw. And now! Now was even worse with the return of commercialism which allowed little half-breed bastards like Nguyen to prosper beyond what good, orthodox communists like himself ever did.
“This is out of my hands” he said coldly, typing on his computer. “Standard procedure now”, he lied, “is to freeze your accounts until you have filled the forms. Bring them to the counter when you’re done. Good day.”
Nguyen sat down, realising how serious this had become. You didn’t stand up to the State Bank; you just accepted whatever they said. The deference he owed his customers didn’t apply to their customers. He imagined asking one of his clients for a certificate of birth before fixing his car. Is that where the world was heading? He picked up the forms and looked at the dense print for the first time. “But they’re in English!” He exclaimed. “What does all this mean?”.
“You’re the American, you figure it out.” Said Trong unkindly, burying his face in a file while showing the door which was already open, held by a secretary obviously waiting to escort Nguyen out. This was not the time to explain that his English consisted of 500 words, mostly related to mechanics. Nguyen wondered how many times the carefully prepared choreography had saved Trong from deserved abuse. But what difference would it make? The little official was just as powerful now as when he had been a petty communist bureaucrat, dealing misery as a matter of fact with no trace of empathy whatsoever. And this intrusion by the U.S.A. What sort of country needed to insert itself so thoroughly in the workings of another? What could they take from him that they didn’t already have a thousand times? As a child, he had often thought about his mother’s ordeal, such a fundamental part of his life, but it is only when he became a young adult that the image of a mythical, overpowering monster started to take a more realistic shape. The visualisation had come progressively of this large body, drunk with power, several times the size of his thirteen year old mother, crushing her, uncontrollable.. As the image became more and more realistic, he almost longed for the monster metaphor of his childhood. This is like being raped again. Is that what America was?
JC: I woke up with a massive headache and realized I was being hit over the head with the fact that, with his request for three “compromises”, Mark Meadows has opened the door to the switch to RBT. I sat down at my computer to make this suggestion and found that you have beaten me to it.
So YES, I heartily endorse your Compromise #1! They can keep their FATCA and simply alter its requirement from searching for US Persons to searching for US addresses! Presto! The switch to RBT is off and running!
My headache is gone. Thanks! 🙂
Oops! My suggestion doesn’t help the immigrants to the US who still have accounts in their home countries. THAT would have to be worked out as well because that money should be sacrosanct as well. Anybody have a suggestion on how to deal with that?
@MuzzledNoMore See the press conference after the hearing. I’ll add comment in the morning AEST.
EmBee: I was so excited to find JC’s 3 compromises I missed his reference to your “Get Out of Jail Free” suggestion. ABSOLUTELY! If they will not change the current imprisonment of “US Persons” via FATCA and CBT then they MUST get rid of the preposterous and illegal renunciation fee.
Under my current domestic situation I am absolutely forbidden from contacting members of the US government directly so I am deeply grateful to anyone who is passing on the ideas put forward in this forum to Congressman Meadows (or to one of those who were in attendance at the hearing).
In response to Heidi.
Excellent point about CRS. If the Republicans push to repeal FATCA, that opens the door to CRS. What does that mean for their precious Delaware loophole? Or the US having no obligation to share information with foreign countries in general under FATCA? What happens when they realize that Fatca is the lesser of two evils? Flip flop time. Let’s see how quickly we get thrown under the bus once again.
It is disgusting and a disgrace that the US government has backward thinking jackass
bureaucrats like Bean who so abusively twist truths to their own end.
Who is this disgrace really speaking for?
All the compliance idiots? Why keep it so complicated?
Does she really believe the stupidity she is spewing?
And how would any man like to be married to this heartless pile of flesh and bone?
Something smells a little Dolce Gabbana here if you know what I mean.
I will do that, JC.
My foggy brain has cleared. I do have an idea about how to sort it out for the immigrants:
Accounts opened and deposits made prior to an individual’s date of emigration would NOT be reportable.
I’ll go watch that video link now.
Just finished watching the press conference. Very compelling remarks, many of which I wish had come out more strongly at the hearing itself. This includes particularly Mr. Bopp’s comments about what it would really take and what it would really cost the United States to honour the reciprocity agreements it has signed. The US actually agreed to implement … at the expense of its OWN banks … FATCA x all the countries it has signed reciprocity agreements with! That is the financial sentence that FATCA’s exponents want to impose on their own country. Truly, this testimony alone calls for the complete repeal of the nonsense.
Why is it so difficult to have a press conference with proper sound and lighting. All we could hear properly was the questions.
@MuzzledNoMore
“Accounts opened and deposits made prior to an individual’s date of emigration would NOT be reportable.”
I can’t see that banks would go for all this extra work in identifying when the person emigrated.
Would the Banks really go for another layer of complexity on top of FATCA?
@Viral Shah
As you noted, there is no automatic procedure in place to inform bank customers that their information has been sent to their tax authority to be sent to the IRS (at least in Canada), however,
“CRA will respond to requests
While the government has no plans to inform people whose bank account information has been shared, those who want to know can contact their financial institution or the CRA, Luciani-Girouard said.
“The CRA will respond to any request to confirm whether information relating to a particular individual or entity has been reported and provided to the U.S. under FATCA. To date, fewer than 10 such requests have been received by the CRA,” she added.”
I am one of those 10, and it took several months to get a response from the Revenue Minister. This is not adequate, considering the fact that should an account holder receive a notice from the IRS as a result of their into being sent to the IRS, they may be denied the ability to enter a tax amnesty program offered by the IRS, should they feel that’s the best way to deal with the problem. A real gotcha moment for many.
http://www.cbc.ca/news/politics/taxes-cra-irs-banking-1.402879
@ Anonymous by necessity
Thank you for writing that. It’s very good, very poignant.
Brava Unforgiventoo.—i haven[t posted for some months but your post compelled mine.—– my great XXXXX paternal grandparents arrived in 1620s I believe in US. nearly 400 years of history trashed . —– I studied abroad, married a foreigner, and stayed overseas to be able to have my family life with my hubby. I gained my 3x masters degrees in UK, built my professional life and retrained for 3 diff careers. — I also went through the breakdown with vomiting, sleeplessness and mental anguish,— both when I had my OMG – moment in early 2012 and after my consulate appointment .–FATCA not only opened my eyes but made up my mind. —- KUDOS to Jim Bopp and all those who gave evidence. the Oxygen of Publicity to CBT can only force it to wither in the strong sunlight of truth (OK mixed metaphors but whatever !!) BROCKERS ROCK as ever
Muzzlednomore: unfortunately reporting of foreign accounts now seems to be the norm. Although I don’t condone this, I accept that it is up to each country. If someone moves to the US I see no reason why they should be exempted from reporting requirements that apply to US residents. Obviously they would not be penalised for anything prior to immigration to the US, but would become taxable and reportable from day 1. Actually I had never thought of that. You move to the US and immediately become liable for FBARs and FATCA. But that’s life. The true problem is CBT.
RBT would negate the effects of FATCA for US persons living abroad. However FATCA would remain a nuisance for banks around the world. But probably in the same league as CRS. And it would remain a pain for US residents who want to use accounts elsewhere.
FATCA reporting vs. CRS reporting? I tried to look it up quickly and only found overviews. My impression is that FATCA is far the greater requirement of reporting? Income & Sales Proceeds?
@JC
I believe CRS is reciprocal, Fatca is not (not yet anyway). CRS reports on the accounts of non-residents, Fatca reports US persons regardless of whether they live in the same country as their bank accounts.
I`m guessing that if FATCA is finally scrapped, then it will be because the well has run dry. WHY continue to implement FATCA when it brings in too little revenue….. AND when it costs more to the government to enforce than it brings in? When all the penalties have been collected and only a few pennies in taxes are left to collect from abroad – maybe then they might come to the conclusion that it isn’t worth it anymore because it costs more than it is worth and in addition, hinders free enterprise. Then all these arguments about constitutionality etc can just fall by the wayside- because it will be about dollars and cents. Sad but true. One just doesn’t want to pay more than it brings in and this is what will happen. Seems to me they still think they are going to catch a handful of rich tax cheats – doesn’t seem to me that what is left to gain is going to cover the costs. That should be clear NOW already. What really is left to argue about under these circumstances?
Shadow Raider (Heitor David Pinto) has an excellent review of the hearing.
https://m.facebook.com/groups/334650186701060?view=permalink&id=783290775170330&refid=18&_ft_=qid.6414183012382963161%3Amf_story_key.783290775170330%3Atop_level_post_id.783290775170330%3Atl_objid.783290775170330&__tn__=%2As