A new resource on all the issues faced by expats, #AmericansAbroad, #AccidentalAmericans, #US persons, et al:
FATCA: Citizenship-Based Taxation,
Foreign Asset Reporting Requirements and
American Citizens Abroad
I don’t think there is anything else which is so extensive or thorough. This is brilliant research and gives reference to many, many court cases. Definitely a resource we are fortunate to have. (Brock SWAT to compliance community: “Watch out!”)
Thank you Andrew Grossman!
It is permanently located on the sidebar at Brock under the Important Information box – Introductory and Essential Material on CBT, FATCA, Citizenship Issues.
As for the VanDeMark case, that appears to be unrelated to CBT or FATCA or IGAs.
http://uniset.ca/other/cs6/68OR2d379.html
““Not YET.”
And not ever. The IGA 1 agreement specifically requires banks not to close “recalcitrant” accounts; and IRS regs published last year allow the banks to retain “FATCA-compliant” status if the accountholder doesn’t supply SSN and W-9. So the disputes are about not being allowed to open some types of investment accounts. A problem for USCs, absolutely, and a factor in the rise of renunciations, but no more scary than other forms of AEOI.”
That ignores the US Congress history of overriding treaties. FATCA itself is a treaty over ride.
AEOI is FUCKING SCARY. Automatic exchange of all one’s financial data between all countries signed up without even the reasonable suspicion of wrong doing. The more people who see something the great the chance of leaking. Do you post all this data on Facebook or twitters or any other social media? Might as well with AEOI.
“As for the VanDeMark case, that appears to be unrelated to CBT or FATCA or IGAs.
http://uniset.ca/other/cs6/68OR2d379.html”
Any prudent bank manager will be thinking how this and FATCA may possibly interact and plan accordingly.
Sorry, thought you were in Canada, hence the continued references. But they are going great guns? Really? Were they successful in their attempt to prevent data sharing until the case is decided? They can win but will still have their financial data available to the IRS and the criminal element, such that they may not be same thing.
I am shocked how little so many are concerned about their financial privacy.
“That ignores the US Congress history of overriding treaties. FATCA itself is a treaty over ride.”
FATCA’s not a treaty override. The IGAs are treaty overrides.
The IGA 1 could be renegotiated, certainly, or either party could withdraw. It’s extremely unlikely either party would want to change the agreement in a way that would give accountholders a right to sue.
As far as identity theft goes, the risk is always there with any exchange of data. FATCA exposes accountholders to that risk, so does CRS. Shouldn’t be allowed, but it is. And as you say, it’s not only AEOI but email providers, ISPs, and all the social media platforms.
“Any prudent bank manager will be thinking how this and FATCA may possibly interact and plan accordingly.”
In what way?
Doesn’t seem to have any bearing on FATCA or CBT.
“As far as identity theft goes, the risk is always there with any exchange of data. FATCA exposes accountholders to that risk, so does CRS. Shouldn’t be allowed, but it is. And as you say, it’s not only AEOI but email providers, ISPs, and all the social media platforms.”
Yes, but one has the option of choice to use these or which to choose.
Seems that FATCA over rides treaties and the IGAs were offered to make this fact more palatable.
“that he is not a taxpayer of the United States and that he has never been served with any assessment or notices of assessment with respect to taxes owed to the Government of the United States”
So the IRS forces a branch of a Canadian bank located in the US to pay what it says is owed by a Canadian citizen. No, a bank manager should not be concerned about having clients who might actually be US Persons….say wha!?
If they can force that then it should be much easier when the client is a USC or US Person.
“Seems that FATCA over rides treaties and the IGAs were offered to make this fact more palatable.”
The IGA which became Model 1, was agreed between the US and the G5 because it suited both parties, and also was far more palatable to the banks than 30% withholding.
Later, the Model 2 version was developed which does not save the banks from the withholding threat; that’s why USCs and suspected USCs are much more dangerous for a bank in an IGA 2 country, than for a bank in an IGA 1 country.
““Seems that FATCA over rides treaties and the IGAs were offered to make this fact more palatable.”
The IGA which became Model 1, was agreed between the US and the G5 because it suited both parties, and also was far more palatable to the banks than 30% withholding.
Later, the Model 2 version was developed which does not save the banks from the withholding threat; that’s why USCs and suspected USCs are much more dangerous for a bank in an IGA 2 country, than for a bank in an IGA 1 country.”
Yes, we are more dangerous to banks in IGA 2 countries. That does not mean that we are not dangerous to banks in IGA 1 countries, just less so. And, only as the current situation stands.
Why are we more dangerous to IGA 2 country banks than IGA 1 country banks? My bet is that the US was not happy with the limits against its wishes that the IGA 1 has. So they threw it out, or offered it to countries that were unlikely to sign an IGA 2.
Once the US gathers the low hanging fruit, people like me, and get ahold of all they can of our assets and revoke our passports, grab us by the ankles and shake the lose change from our pockets and find far less than that what they believe is hiden overseas, they will over ride whatever previous agreements stand in their way in their search for the pot O’ gold at the end of the rainbow.
They will not stop of their own accord. They can not. The US is bankrupt, despite record revenue. Unless the cut spending, they must find money somewhere. Senators and Congressmen get elected promising goodies paid with other people money. Cutting off these goodies means they will not be reelectec and keep the cushiest job known to mankind. Raising taxes on their constituents will have a similar effect. Thus the look abroad. They will not stop. Your IGA 1 will not even slow them down once they come up short from other areas.
The UK is which, type 1 or 2 IGA?
“My bet is that the US was not happy with the limits against its wishes that the IGA 1 has. So they threw it out, or offered it to countries that were unlikely to sign an IGA 2.”
The partner country chooses. Not all governments are willing or able to bring in legislation allowing them to circumvent privacy. So they sign Model 2,
I’d still bet that once the US does get as much as it expects from Model 2 countries that does whatever it needs to get those in IGA 1 countries. Again, they have no choice, in their minds. They are not going to give up their plush positions for some words on a piece of paper.
“I’d still bet that once the US does get as much as it expects from Model 2 countries that does whatever it needs to get those in IGA 1 countries.”
Banks in IGA 1 countries are nearly all FATCA-compliant.
“Your IGA 1 will not even slow them down once they come up short from other areas.”
It’s not “my” IGA 1.
“Once the US gathers the low hanging fruit, … they will over ride whatever previous agreements stand in their way…”
The IGA 1 doesn’t stand in their way.
What stands in their way is the difficulty of collecting. Some countries will collect (though not from citizens); most will not.
“So the IRS forces a branch of a Canadian bank located in the US to pay what it says is owed by a Canadian citizen. No, a bank manager should not be concerned about having clients who might actually be US Persons….say wha!?”
Did you actually read the case? He wasn’t a US citizen and he wasn’t suspected of being a US citizen and he didn’t owe the IRS any money. There’s no CBT/FATCA connection.
Eactly, and the IRS still got their money from the Canadian bank. Just imagine the ease in which in which they can get money from Canadian banks based upon what actual USCs are supposed to owe.
“Just imagine the ease in which in which they can get money from Canadian banks based upon what actual USCs are supposed to owe.”
No. Under the IGA Model 1, banks are obliged to report USC accounts to the local tax agency, and try to get a SSN and W-9. There’s no liability for paying customers’ taxes. The FATCA threat to banks is 30% withholding, which can be applied without the IRS ever needing to go to court, plus loss of FATCA-compliant status. IGA 1 protects banks from withholding, IGA 2 does not. Neither IGA offers protection against loss of FATCA-compliant status.
Not that I think anybody here would care in the slightest if the whole bunch of banks worldwide would be forced to pay the IRS what they demand and leave the rest of us alone. So this particular scary-scary is a bit of a waste of breath.
The IGA-1 is no more secure than any treaty that the US Congress has over ridden. It is a paper wall only. If/when the Congress realizes they are not getting the amounts they believe are hidden overseas, they will over ride the IGA-1 just as FATCA over rides previous tax treaties.
Sadly, my country has a long history of over riding or ignoring treaties. Just ask the American Indian.
“The IGA-1 is no more secure than any treaty that the US Congress has over ridden. It is a paper wall only. ”
It’s not a wall at all. It’s a tactic to legalize reporting the accounts of USCs to the IRS.
No, it’s a tactic to skirt US law to get information that it has no right to without a warrant and all that would entail.
“a tactic to skirt US law to get information that it has no right to”
The IGA doesn’t skirt US law. The IGA implements US law extraterritorially.
Sure it does. The Fourth Amendment to the Constitution of the United States is law, and this skirts it.
Also, although this essay says differently others have reported that the Treasury Dept. does not have statutory authority to enter in to these IGAs.
Then there is the question of juristiction.
And we have this, from the essay, “It is considered by the U.S. Government that constitutional, international law and privacy issues are bypassed through the recruitment of foreign governments and foreign financial institutions to undertake implementation.”
“Bypass” or “skirt” choose your verb, the reality remains the same. They want something that US law stands in the way of, so they bypass it by going abroad and forcing non US entities to do it.
Really not much different than what they accuse us of.