An excerpt from “Identity theft in a #FATCA and #CRS World: The Role Of the U.S. Social Security Number” cross-posted from citizenshipsolutions.ca
This morning I received a fascinating message from a third party who writes:
IDENTITY THEFT, SSN & CRS
With the creation of Social Security in the US after World War II, Americans were issued individual social security numbers for retirement contribution tracking and disbursement purposes. Over time, by convenience and not by design, these social security numbers morphed into national tax ID numbers and the only identification number used in all aspects of Americans’ lives — from getting a driver’s license, buying a car, enrolling in university, opening a bank account, buying health insurance and soon. The list is endless.
The IRS and the Social Security Administration regularly entreat Americans to be careful about to whom, why, and how they reveal their precious SSN. Indeed, identity theft is the fastest growing industry in the US and rarely a day goes by without yet another data breach making headline news (need a list??) or a warning of fake IRS forms (such as the W8-Ben) enticing people to provide private data never asked on those forms.
Europe, on the other hand, provides its nationals with distinct tax ID numbers. No single identifying number can provide access to and take control of all aspects of an individual’s life.
In comes FATCA and CRS.
And what does the IRS and USG compel us to do? Fork over our SSN to FFIs and foreign governments — and their myriad service providers, data bases and servers.
Aside from this requirement’s dubious legality under GDPR, having to fork over one’s SSN is akin to leaving your front door open with a big “Welcome” sign while you go off on holiday.
Americans get to choose between the risk of privacy violations and identity theft and the ability to bank. If they can find a bank that accepts them that is — not one online European bank will accept a client with the slightest whiff of “American-ness”, even if said client is a dual national. Discrimination anyone?
It’s not as if there were no other options and the USG had no CHOICE but to put its citizens at risk. The IRS could issue TIN numbers separate from SSN. Americans abroad could prove their identity with a passport number and show their compliance with redacted FBARs and 8938s. Most FFIs in Europe are not even aware that our SSN is the unique number that controls our lives and understand the Solomon’s dilemma once it is explained to them. Yet they cannot do anything about it, they too are victims of the IRS’ extra-territorial reach.
While we wait for various efforts to reform or repeal FATCA to bear fruit, solving this dangerous conundrum should be simple and SSN numbers must no longer be used.
The U.S. tax compliance industry regards FATCA as “The Gift That Keeps On Giving!”
For Americans Abroad, FATCA is “The Nightmare That Just Keeps Happening!
I have railed against the Income tax and the central government knowing when you go to the bathroom and their double talk about needing a picture ID for everything but voting.
Everything they do is a violation of what our founders tried to do to keep the King of England from doing what the U.S. Government has done since they amended the Constitution to allow the Income tax and have us all get a Social Security number we are required to use for everything but casting our vote.The reason the picture ID isn’t required for voting is the incumbents all want cheating so their side has an advantage and their side is all incumbent politicians. Be afraid, be vey afraid.
Which is why I cringe everytime either “compliance” or “do nothing” is recommended to anyone. Forget the F’in tax issue. The really big problem is the complete, wholesale lose of any and all privacy.
If tax numbers were distinct from other kinds of numbers, IRS employees would still be able to commit identity theft and steal payments.
“Forget the F’in tax issue. The really big problem is the complete, wholesale lose of any and all privacy.”
I agree, mostly because I now feel the need to protect myself from government and I can’t do that living in a financial fishbowl. It’s become quite clear to me over the years that doing nothing wrong is not enough protection from government any more, as any American with a small business overseas will now attest to.
As an aside, as if we really needed any confirmation, there is an article on Yahoo! right now about the Brits living in other EU countries being excluded from the free legal advice the EU is providing to UK residents with other EU citizenships.
In the comments section there is post after post of seething hatred of Brits who went to live in other countries, one poster suggesting they needed to be stripped of their passports and banned from ever returning for turning their backs on the nation.
Hatred of those who leave is pretty universals.
True, but it would limit the damage. As it is now, with the info the IRS has, and does not keep secure, each and every aspect of a USCs lives is wide open for just about anybody.
Interesting that Brits who have left are facing similar hatred from their own homelanders.
“Interesting that Brits who have left are facing similar hatred from their own homelanders.”
So the Brits are destined to become prisioners too. This is the ugly face of Nationalism.
It was Samuel Johnson who said
“Patriotism is the last refuge of a scoundrel”
I don’t have any intention or ever to hand over to a FFI my real number. FFIs have no way of checking. Make the IRS work harder to employ people to manual cross match DOBs with names. How can they prove you actually signed the form and not some clerk just filled in a number to get it through the system?
One version of “do nothing” is to say “no” when asked about US citizenship. If however FATCA reporting can’t be avoided, giving a garbage SSN isn’t a bad line of defense.
The real problem is that anybody can telephone a credit card issuer and apply for a credit card with your name, and if they have the required data, they can get a credit card with your name on it mailed to your new address, where you don’t live, and then they start charging up. That needs to be stopped. They could send credit cards via registered mail but oh, then the responsibility shifts to the government and its employees instead of the victim, to check identification before delivering.
In Japan we receive credit cards by registered mail. Anyone physically present in the residence at the time of delivery can sign[*] for it. If no one is physically present at the time of attempted delivery, then if someone goes to the post office to pick up the registered mail then they have to show ID, but if someone requests redelivery then again anyone physically present at the time of redelivery can sign for it.
[* A while back the post office started accepting signatures in lieu of name stamps. Most Japanese people still use name stamps though, since a lot of other situations still don’t accept signatures. Bank books used to contain stampings of name stamps, making them particularly useful to identity thieves, but fortunately that practice has stopped. Anyway, you’d better not lose your name stamp just like you’d better not lose your health insurance card.]
@Don and others.
Unless you have a fake ID, giving false info is not easy. I had to provide mypassport and National (Japan) ID card to my bank for them to photo copy.
@Norman: In Hong Kong and other Asian places, name stamps are still commonly used in lieu of signatures at banks, post offices, and government offices, particularly by the elderly.
Long ago I got one myself for amusement, and even registered it at my bank, until I thought better of it. Talk about ripe for identity theft! The style of individual chops is not so unique–in fact, tradition dictates adherence to particular calligraphic styles. One can go down to one of the alleys lined with chop makers, give any name, and the next day pick up a valid fake ID (the chop itself), largely indistinguishable from the “real” one. I’ve wondered why these are not discontinued, or at least required to be accompanied with other identification. “Tradition”, I suppose.
Maybe I should start ‘signing’ my 1040s with my Chinese or Japanese name chop.
My friends in Hong Kong said they obtained name stamps just for amusement and I’m not sure if they believed I would really use mine in Japan.
Ordinarily people in Japan don’t have to submit tax returns, but I am an exception for two reasons: my employer doesn’t calculate taxes on wages as they’re supposed to, and I have investments which (silly me) I report, which the Japanese government might not know about otherwise. I use my name stamp on them as usual, and I’m not sure if the tax office would even accept signatures.
Going a bit off topic here, though it does illustrate how one answer does not fit for all localities.
I too have to do me own tax returns as I am a “freeta”, or freelance employee. If I were a “regular” full time employee, my employer would (most likely) do metax return for me. My first employer in Japan did so as I was a “regular” employee at that time. Though I am far from fluent in Japanese, it takes no more than half a day to complete even with my multiple employers. Compare that with the time, difficulty and uncertainty involved with a US tax return.
Use of hanko/inkan/chop in Japan. There are at three kinds of these. One is of such a standard that you can pick them up at any ¥100 (Dollar) store. They are mass produced and are exactly the same for any given kanji name. They are used for every day tasks such as receiving registered mail.
Then there are the special registered inkan used for major banking activities, buying a house or car and other such important actions. These are very intricately carved and to my eye, often do not resemble in the least the name it represents. I doubt this is true for Japanese though. These would be very, very difficult to “fake” as they woukd leave the exact same impression each time they are used. You provide your bank with a “proof” impression of your registered stamp upon opening an account for them to campare with. This is why stamps are one of the items sought after by burglers.
A third kind is a more personalized version of the first. It can be in any of the three written forms of the language. These are the ones visitors get of their own names as souvenirs. The first type are of Japanese names in kanji only.
While true that banks now accept signatures, many companies do not. At first, I used my signature at my bank. However, my phone company, cable company and internet provider did not. So, I could not sign up until I changed my signature card to a stamp card, a process that took all afternoon and about 6 bank afficials.
BTW, in is customary for Japanese wives to carry and use their husbands inkan as it is she who takes care of the family’s finances. She has “stamp authority” over her husbands bank account.
In Switzerland, credit card applicants must go to the card issuer in person or visit a train station or post office and present their ID to the employee. The employee will then stamp the application to certify that he has verified the applicant’s identity. Consequently, one has virtually no identity theft in contrast to the US.
My understanding is that credit card companies in the US refuse to take even the most basic security methods to combat identity theft because the credit industry believes that it loses less money due to identity theft than it would if it slightly inhibited credit and discouraged people from applying. One has to question the sanity of a society where children and dogs receive pre-approved credit card offers in the mail. Additionally, one has no legal recourse in the US against the likes of Equifax, TransUnion, and Experian for inaccuracies, as the industry has lobbied politicians against the consumer.
I think people should think carefully before divulging unnecessarily personal information to large companies. Having worked in cybersecurity, I can assure you many large corporates have inadequate systems to protect personal data.
How about this?
Yesterday I received a package I ordered three weeks ago from China. The fact that it took so long to get here is not the most surprising part. It arrived with a USPS label and tracking number.
Now, why in the hell would a package sent from China to Japan enter the US postal system?
How does a package sent from China to Japan enter the US postal system?
Not the first package I have received from China, but it is the first that had any contact with the USPS.
Even though you ordered it from China they might have had some weird reason to mail it from the US. I ordered something from a company in China and it was mailed from Vanuatu. Some of us get letters from the US government that are mailed in Germany, the UK, Estonia, etc.
Ah, yes it often happens that the shipper and seller are in different countries but in this case it was mailed from China.
If you have a USPS tracking number, please input it in http://www.usps.com and see where it was really mailed.
Does the envelope have a postal meter? Was postage paid in China or the US?
By the way, one time a private company in the US mailed a newsletter to me in Japan in an envelope with US postage stamps on it. USPS didn’t cancel the stamps but Canada Post did. (If that isn’t amazing enough, the envelope holds A4 or US letter size pages without folding, which is the size of envelope most likely to disappear when mailed either to or from Canada. Playboy, Scientific American, and a letter from the Department of Justice – Canada are famous examples of mail that falls into Canada Post’s black hole and never comes out.)
Packaging has already been tossed. A much bigger issue is that my wife would blow a gasket if she saw that I received a package in the mail. Didn’t think of mentioning it here until after I through it out at a train station.
Using the link you provided, it says “Label created, not yet in system”. Which is interesting as I already have it.
Most likely the label is fake and the package was mailed from China.
No one will tell your wife that you received a package in the mail. The 9th Circuit ruled that the IRS and DOJ are supposed to disclose social security numbers to the public (the court wasn’t swayed by a DOJ publication saying the IRS should only disclose SSNs to the DOJ and they should not disclose to the public) but your information about your package will be kept confidential. I’m curious though, why would she blow a gasket about you receiving a package?
Not necessarily. I have received many packages from people I know in the States with tracking yet never was able to get any info other than “Label created. Not in system”. even after receiving it. Tracking seems, in many cases to be a complete scam. Those many cases are usually from the US.
My current life circumstances allow me only one of my once many interests to enjoy. This one interest has had me buying online from people around the world. No problems getting things from Europe, S.E. Asia, the Middle East quickly and very inexpensively. From the US? $50. postage for a $3. item. Rently was quoted $85. shipping for $46. worth of note cards. I rarely but from any seller in the States.
My wife does not like me spending any time or money on my hobbies, now hobby. She is less likely to explode over me receiving consumables for my hobby but will go off over the purchasing the primary components. Not sayin’ any more.