A great FATCA backgrounder from John Richardson, published in American Expat Finance yesterday. FATCA articles aimed at the general public often focus on the impact on individuals, but this one primarily covers the macroeconomic impact. It packs a lot in a short article, good for sending to people who want to know more about FATCA (friends) or who should know more about FATCA (policy makers).
American Expat Finance Editor’s introduction below, article itself continues next page. Reprinted with permission of American Expat Finance.
Over the last few weeks and moths, more media attention than usual has been paid to the 2010 Obama law knows as the Foreign Account
Tax Compliance Act (FATCA). And invariably, we have been noticing, journalists from respected media organizations like The Guardian and Financial Times newspapers in London keep referring to it as a “tax evasion law,” no doubt because that was its original purpose.
That may well have been true in 2010, says Toronto-based expat lawyer and expat rights campaigner John Richardson…
But, he argues here, as anyone familiar with FATCA’s massive impact on individuals who don’t live in the U.S. now – and indeed haven’t for decades and possibly never did, and are tax residents of other countries – it has evolved into an all-but- impossible-to-avoid “extra-territorial money-sucking machine.”
It has also made it very difficult for such individuals to engage in normal financial and retirement planning – or even to get, and keep, a local bank account.
And while it may remain a disincentive for Homeland Americans to attempt to hide their wealth (the way some used to) in Swiss banks, FATCA (along with the Common Reporting Standard, as the OECD’s global version of FATCA is called), is now playing a role in enabling the U.S. to act as a tax haven to wealthy individuals in other countries who are seeking to keep their personal wealth from their own tax authorities.
The fact that the U.S. hasn’t signed up to the CRS, arguing that it has no need to – because FATCA gives it all the information it needs to know about its own citizens – helps to make this possible, Richardson points out. Continue reading
There’s just no way to repay John Richardson for all the time, expertise and money he has put into trying to slay the three-headed monster — CBT/FBAR/FATCA and its new evil partner TT/GILTI. Here’s yet another great article written by him …
https://www.americanexpatfinance.com/opinion/item/282-fatca-the-2010-tax-evasion-law-that-s-now-an-extra-territorial-money-sucking-machine
Thank you, John.
Hear, here EmBee. Many of us would be lost without John’s incredible and tireless input. Same goes for the many others who work to help others get through this hell.
Better to avoid the hell completely than to go through it.
EmBee: I swear that’s John’s best article yet!! Thanks for the link.
Does Brock have a master list of worldwide media outlets? It would be good if a copy of this article could land on every editor’s desk!
FATCA: The 2010 ‘tax evasion law’ that’s ‘now an extra-territorial money-sucking machine’
October 22, 2019 By John Richardson
https://www.americanexpatfinance.com/opinion/item/282-fatca-the-2010-tax-evasion-law-that-s-now-an-extra-territorial-money-sucking-machine
Now I see EmBee’s post. I would like to uptick that one.
My point, admittedly not obvious in a short quip, is that for all his excellent work, JR rarely distinguishes between the compliant and the non-compliant, and this to me is a serious weakness, though perhaps understandable given that he’s a practicing lawyer. When he describes all the horrid limitations on Canadian investments by US persons, for example, he doesn’t add the essential qualifier: it’s only a problem for someone who files, and most Canadian duals really ought not to file. Of course everyone here knows that, but perhaps not someone whose only just had their OMG moment, and who finds one of his articles.
In recognition of John’s outstanding work two donations have been made to the Appeal. Onward and upward!
@RH
John doesn’t need to explicitly promote non-compliance – it permeates much of what he writes as a warning in doing so by describing the affects of complying. Again read “Impact of FATCA on individuals” and the increasing difficulties many people who have chosen to comply continue to face. If I could turn back the clock and again faced the choice of whether or not to comply, his words serve as more than a subtle warning against doing so.
Excellent article and thank you for all your efforts, John Richardson.
It is my opinion that during the next FATCA Charter Appeal, all this information be presented to the judge to force the Government Of Canada to protecting Canadians Living in Canada. It should also be pointed out that the IGA’s were signed without the consent of The Senate, which nullifies them, and the only one to speak out regarding that was Senator Rand Paul.
It may be of interest to note that google maps can reveal some interesting geographic information. For instance in Ottawa, the CRA is right next to the US Embassy, one would only have to walk across the street with a USB drive containing an Excel Spreadsheet of the information to hand over to US Authorities, Personally, I find that occurrence akin to Treason against Canadians, and our privacy rights as outlined in the Charter of Rights and Freedoms. If it is otherwise transmitted through the internet, well that could be a complete disaster for identity theft and fraud, hacking so on. In some countries, the uncovering of US Citizenship Identity is a great concern. This must not continue.
Continue the fight in the Canadian Court, once one domino falls,………….
Senator Rand Paul: https://www.youtube.com/watch?v=yVoYjfGpb9k&feature=youtu.be
Senator Rand Paul: In that video about at 5:39 He states the IGA’s have not been ratified by the Ssenate, had any oversight by Congress,…..
This video should be presented in the next Charter Challenge IN RE: FATCA
Interesting that Justice McTavish mentioned the US is a democratic country, implying that FATCA must have passed some kind of democratic muster for it to have become law, yet democracy was bypassed by failing to have the Senate ratify the IGA’s.
BB More to the point perhaps an argument can be made that Canada signed an illegal Intetational governmental agreement under duress!
BB & stephen arvay: Absolutely, the point about lack of ratification by the U.S. Senate needs to be underscored in the upcoming appeal. Do I understand correctly that the appeal process involves (is limited to?) objecting to the specific points made in the original judgment? The idea which Justice MacTavish put forth that Canadians cannot expect protection from a U.S. law because the U.S. is a democracy is one of the most egregious aspects of her judgment in my opinion. It means that right from the start it is more dangerous to be an immigrant from the U.S. (or any other democracy) than it is to come from, say, Syria or Eritrea. Heck, if you come from Eritrea the Canadian government will send the ambassador packing on your behalf!
Extortion is so democratic!
To keep this thread focused on the main thrust of the article, I’ve moved comments on the choice to comply or not comply to the Tax Discussion Thread, with the originating two comments copied to it.
UPDATE: We got some comments about moving comments. I’ve moved them to the Site Rules thread.
@MuzzledNoMore,
Re:
No, we don’t have such a list, but . . .
. . . @ All,
If you have a media contact list (or simply a media contact or two), please post it or e-mail it to me (pacifica at Isaacbrocksociety dot com). I’d be happy to collate the data and make a permanent page for it, which people can continue to update by adding new or amended contact info.
I just watched the Netflix show ‘The Laundromat’, and one of the lines at the end referred to a US tax law meant to stop money being hidden via shell entities and secret bank accounts (which early in the movie they described as most often located on islands). I think the law referred to might have been FATCA and/or TT/GILTI? And then in a punchline end twist I was happy to see – one of the last lines of dialogue notes that the US is the biggest tax haven of them all, and named Delaware, Wyoming, etc.
So how does tormenting ordinary people outside the US – in Canada and elsewhere, via USextraterritorial taxation – without any US economic connection, and based solely on birthplace or parentage or a long expired greencard, and our ordinary local bank accounts fit into the tax haven scenario? No-one is making that movie…..
It doesn’t fit. Unintended consequences.
Also, US tax compliance from the people you describe cannot be compelled, even after FATCA. Filing is a choice.
Pacifica: Great idea! Thanks!
“badger” no one is making that movie because it would not draw any interest from an audience. Of the only movies made about accounting, “The Accountant” starring: Ben Affleck, Anna Kendrick, J.K. Simmons, Jon Bernthal, Jeffrey Tambor, John Lithgow is not about accounting or filling in tax forms, it is more like an underground CIA, specially trained vigilante themed flick. If it were not for the adventure people would not have gone to see it.
Sadly, similarly, in today’s me me me society, where narcissism is accepted and materialism is applauded, most people do not care until a situation affects them.
This is why this site, and any unifying efforts made such as the Charter Challenge now on appeal are vitally important. Further, since the Canadian Government is standing by it’s “Expunged Provisions” for myself as a Canadian, It is offensive and should be argued that the Government’s representatives signed the FATCA IGA under duress, a 30 % – financial sector wide threat – ir-respectful of another country’s sovereignty, without the US Senate’s Ratification as required by the highest law of the land, The US Constitution. Hey, that’s not my argument, it has been brought by Senator Rand Paul. See the thread above. Keep fighting for justice!
Ron Henderson – in many countries where people have had their mortgages accelerated to an immediate due date, and have had their basic financial accounts closed, it is compelling. Ergo,… overreach!
That’s a FATCA problem, not a CBT problem. Banks closing accounts does not compel US tax compliance.
Ron Henderson – Semantics, what would you do and how would you feel when your mortgages have been accelerated to an immediate due date, and your basic financial accounts are closed? {Rhetorical Question, but you would be motivated to take some action!}