According to an article by Michael Cohn in Accounting Today, a multi-lateral tax enforcement group has been formed. The Joint Chiefs of Global Tax Enforcement (or J5 for short), intend to “collaborate in fighting international and transnational tax crimes and money laundering.”
U.S., U.K., Canada, Australia and Netherlands form international tax enforcement group https://t.co/x3bX03Ardw Enough Already! We've got Treaties, #FATCA , #CRS When will it end? pic.twitter.com/4DRrjKSVhg
— Citizenship Taxation (@CitizenshipTax) July 1, 2018
Membership of the J5 includes the heads of tax crime and senior officials from Internal Revenue Service Criminal Investigation (IRS CI), Her Majesty’s Revenue & Customs (HMRC) in the U.K., the Australian Criminal Intelligence Commission (ACIC) and Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), and the Dutch Fiscal Information and Investigation Service (FIOD).
Leaders of the group met Thursday in Montreal to formulate their plans. The J5 plans to work together to gather and share information and intelligence, as well as conduct operations and build capacity for tax crime enforcement officials. Areas of focus include cybercrime and cryptocurrency, data analytics, and enablers and facilitators of tax crimes. The alliance will concentrate on building international enforcement capacity, as well as enhancing operational capability by piloting new approaches and conducting joint operations, to bring perpetrators who enable and facilitate offshore tax crime to justice
While it sounds like the planned operations will be aimed at bigger fish, what will be interesting to see is how Canada and the Netherlands proceed. Both countries have Mutual Collection Assistance provisions in their tax treaties with the U.S. (as do France, Sweden and Denmark) that indicate they will not collect from their own citizens if they were citizens when the tax was incurred. And of course, in the case of Canada, no collection of FBAR penalties. Unless I misunderstand, it sounds like the J5 intend to move into enforcement, which sounds like collection to me.
It appears that in addition to provisions in any number of DTA’s, we now have several “information exchange” programs/policies/statutes such as Foreign Account Tax Compliance Act (#FATCA) , the Common Reporting Standard (#)CRS and the OECD’s CONVENTION ON MUTUAL ADMINISTRATIVE ASSISTANCE IN TAX MATTERS . It is difficult enough to read ONE treaty and comprehend what is covered. How is one to evaluate ALL of the aspects that are touched upon by these different programs?
Up to now the one principle that protected one from extraterritorial collection was the revenue rule. A
paper I came across years ago (dated 2004) by Professor Vern Krishna was already predicting the fall of the “revenue rule.” This paper was written a few months after the U.S. passed the American Jobs Creation Act, (see page 154 from link) while removing the issue of intent* to avoid paying tax when renouncing, also created the notion of “tax citizenship.” When relinquishing or renouncing, the requirements of notifying the State Department and filing information with the IRS were added to the process. Four years away from the H.E.A.R.T. Act (the Exit Tax 877A) and 6 years from
H.I.R.E. Act ( FATCA).
In tax law, absent special enforcement treaties, sovereign countries do not enforce the revenue laws
of other countries (the “revenue rule”).To overcome this rule, many countries negotiate bilateral treaties for information disclosure and
mutual enforcement assistance to counter tax evasion.In theory, the common law revenue rule reflects the principle that a country has exclusive
sovereignty over its tax policy. However, Lord Mansfield’s rule has limited scope in a world of
increasing regulatory supervision and information exchange between countries on money
laundering and terrorism financing.The traditional rule that a country will not enforce the revenue laws of another country
and that no country is under an obligation to disclose financial information to foreign governments is very much on its way to extinction.
What do you think? Will all these actions eventually result in a system where there are no privacy laws concerning one’s finances, every bloody dime one earns will be owed to someone as tax?
*****
*removed the intent issue of renouncing for tax purposes by establishing 3 tests (income, asset, certification of tax compliance for 5 years on form 8854) to determine
“What do you think? Will all these actions eventually result in a system where there are no privacy laws concerning one’s finances, every bloody dime one earns will be owed to someone as tax?”
Yes, unless stopped.
And I see far too few who take these actions by these various governments seriously enough to work to stop them.
So, yes. That is the goal.
We’ll get pushed waaaaaaaaay back to the days of bartering.
Every time I hear some imbecile talk about how “cool” it would be to have a “chip” in them to pay for things I want to smack them in their idiotic mouth!!! Lazy morons are following the never-enough-for-me greedy sociopaths.
Bloomberg seems to think it’s more about blockchain.
https://www.bna.com/five-countries-tax-n73014476967/?amp=true
As regards collection, just speculating about probabilities, it seems to me USCs living outside the US don’t really need to fear cross-border collection. If the US wanted to pursue that approach, I reckon it would have done so long ago.
The American way is to scare the citizen into handing over the money out of fear of further penalties. Cross-border collection leaves the citizen still able to go to court – not a good solution from the IRS point of view. And even worse, it’s reciprocal, meaning that the IRS could find itself wasting resources on another country’s tax collection, as happened in the Denmark case.
And the US would probably get the short end of that deal, given that there’s apparently more hidden money in the US than in any other country in the world.
“… every bloody dime one earns will be (potentially) taxable by some jurisdiction … ”
Yes. Isn’t that already the case? I renounced my US citizenship to stop my dimes being taxable by two.
@Jane
“Every time I hear some imbecile talk about how “cool” it would be to have a “chip” in them to pay for things I want to smack them in their idiotic mouth!!!”
I went to pick up my drycleaning some days ago and (as usual) pulled out my debit card. However, the shopkeeper’s POS device was down. Worse, the local ATMs had also run out of cash, so I was unable to pick up my clothes. With all this talk about moving towards a chipped-up cashless society, it really does make me wonder…
Nothing I read in the longer Bloomberg piece suggests to me that the identification of non-resident citizens (presumably tax-compliant in their countries of residence) is on the list of priorities here. But that’s just me and my usual “yeah, whatever” approach to news like this.
There is a risk that any technologies developed could be deployed for more nefarious purposes, but I still hold to the basic view that no country wants to see another country takes its taxpayers’ (and particularly its citizens’) money. If present trends continue the US may have less leverage with which to bully.
USCs living outside the US can choose to file US tax returns and pay US taxes.
The US can’t bully them into it.
The problem is FATCA, which hinders bank access and puts the security of USCs’ information at risk.
“The problem is FATCA, which hinders bank access and puts the security of USCs’ information at risk.”
Yep.
CBC says:
@plaxy
Well that’s a relief. Since I’m not paid for any of this, I’m only an amateur facilitator of tax crime.
Nononymous –
What happened to the smiley?
Trying again.
Nononymous – 😉
B|
You don’t want to hear a solution to your problem…In fact you have the computer set to block it.
You are, my friends, dwellers of the swamp.
😎
That’s better.
Sorry – I’m stopping now.
@plaxy
Well done.
@Wilton
Piss off.
I was supposed to report all my accounts with 10k. Meanwhile, hundreds of millions in cash were laundered through BC casinos and nobody in government or the police gave a s***.
Next up Vancouver real estate as a money laundering machine.
Portland, if they are not looking, they (Government, Employees,…) are part of it. In addition, if Casinos are on native land, there has to be an agreement with those nations also, yet another tax treaty! Hahaha – yes this sucks for everyone.
What people really need to focus on is opting back into civil duties, involvement, voting, writing your representative and making personal appearances at their offices until the governments serve the people more than corporate and government exclusive interests. They all over spend with their budgeting process and are now in need of $$$$$. Example, just look at what happened in the U$A during the past year and a half, $1.5 TRILLION in corporate welfare / tax giveaways to the wealthiest and the masses were duped with a $20. / month tax cut, what a fucking joke! It’s Sad, It’s Real, It is happening now!
“Will all these actions eventually result in a system where there are no privacy laws concerning one’s finances,…?”
The 4th Amendment; The right of the people to be secure in their persons, houses, papers, and effects,[a] against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
The 4th, part of the original ten otherwise known as The Bill of Rights was, for all practical purposes, de-fanged and neutered by the 16th amendment; Representatives and direct taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers…[1]
Article I, Section 8, Clause 1:
The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.
Article I, Section 9, Clause 4:
No Capitation, or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken.
This clause basically refers to a tax on property, such as a tax based on the value of land,[2] as well as a capitation.
Article I, Section 9, Clause 5:
No Tax or Duty shall be laid on Articles exported from any State.
The 16th opened the door to a plethora of violations of not only the 4th amendment but also the 6th (speedy trial, assumption of innocence, jury of peers). 8th amendment (excessive fines). 11th amendment (judicial power/ reach of the federal government).
Whatever anyone may think today about the framers of the Constitution, they were principled men who understood only too well the dark side of human nature and the seduction of power. For this reason they expressly forbade direct income tax on the individual, seeing it as a path to corruption, coercion and, most dangerous of all, an out of control central government feasting itself endlessly on debt and vast revenue.
All this is academic I know but it helps sometimes to understand what birthed CBT. A progressive bastard named Woodrow Wilson sired a monster called the 16th Amendment and the IRS. It has been enslaving Americans ever since. Barack Obama is no less guilty. He signed FATCA in his first term. He knew what he was doing.
As far as I’m concerned CBT will forge ahead until the day the 16th amendment is repealed. I won’t hold my breath.
@Eric in Switzerland
“… the framers of the Constitution, they were principled men who understood only too well the dark side of human nature and the seduction of power.”
Such men no longer exist in that Yankee government, just career politicians and plutocratic mavericks.
“Such men no longer exist in that Yankee government, just career politicians and plutocratic mavericks.”
Or “kleptocrats” for short.
“Well that’s a relief. Since I’m not paid for any of this, I’m only an amateur facilitator of tax crime.”
Read it again. Its “initial focus”. Afterwards, who?
Also, as we all know, FATCA only affects the Fat Cats, so yeah, what could possibly go wrong?
“There is a risk that any technologies developed could be deployed for more nefarious purposes, but I still hold to the basic view that no country wants to see another country takes its taxpayers’ (and particularly its citizens’) money.”
One country actively opposes the ADCS lawsuit.
@JapanT
Oh ultimately you and I everyone here will end up in prison camps, but I will at least enjoy what freedom remains by not worrying about something I can’t change.
@ND
Indeed, and it’s a pity, but you can still write to a federal cabinet minister and they will reply back with a letter stating that “Canada will not help the U.S. government collect tax debts or penalties that arose when the individual was a citizen of Canada. Also, Canada will not help the U.S. collect penalties related to filing a Foreign Bank Account Report (FBAR), since FBAR filings are distinct from tax requirements.” Which is better than nothing.