Author Archives: Deckard1138

It just gets weirder:

http://www.chinapost.com.tw/taiwan/national/national-news/2014/05/15/407761/Ma-promises.htm

TAIPEI, Taiwan — If President Ma Ying-jeou is indeed subject to U.S. taxes, he will take political responsibility by resigning, the Presidential Office said yesterday.

Next Magazine yesterday released a report claiming that the president has to pay taxes to the U.S. under the Foreign Account Tax Compliance Act (FATCA), saying that Ma is poised to turn himself into an “international laughingstock” by becoming the first R.O.C. president subject to U.S. taxes.

That the president of Taiwan has to pay taxes to the U.S. is an unacceptable shame to this nation, and more importantly, Ma has been dishonest, making all sorts of excuses to evade the fact that he became head of state while holding a valid Green Card, Democratic Progressive Party (DPP) Chairman Su Tseng-chang said in response to the Next Magazine report. “If Ma has a sense of shame and responsibility, he ought to step down immediately.”

Former DPP Chairmen Frank Hsieh and Yu Shyi-kun made similar remarks while speaking to the press.

The Presidential Office would like Su, Hsieh and Yu to promise that they will apologize to the nation for their unfounded remarks, Presidential Office spokeswoman Garfie Li said.

Next Magazine, IRS Beijing
A Next Magazine reporter apparently sent an email to IRS Beijing, claiming to be a Green Card holder named “Mark Y. J. Ma” born on July 12, 1950, and asked whether or not he — “Mark Y. J. Ma” — is subject to tax payments under FATCA.

The magazine explained that the inquiry was explicitly written using the president’s Green Card details.

IRS Beijing reportedly responded by saying that even if a person’s Green Card expires, “it doesn’t necessarily mean that (the person is) no longer (a) U.S. resident for tax purposes” and that the person “is required to report and pay (U.S.) tax on (his or her) worldwide income regardless of where (he or she) lives,” unless that person has voluntarily renounced his or her Green Card status “in writing” to the United States Citizenship and Immigration Services (USCIS) or if that status has been “administratively terminated” or “judicially terminated” by the USCIS or a U.S. federal court.

Response to Report, ‘IRS Reply’
According to sources, the president applied for a Green Card under the name “Ying-jeou Ma” as opposed to “Mark Y. J. Ma.”

Furthermore, the president was born on July 13, 1950, not July 12, 1950.

Experts said that legal action can be taken against the reporter for attempting to impersonate the head of state.

Sources said that IRS Beijing wrote a “general response” as opposed to a specific response to “Mark Y. J. Ma,” judging from the content of the reply.

Additional reports here:

http://www.wantchinatimes.com/news-subclass-cnt.aspx?cid=1101&MainCatID=11&id=20140515000077

http://www.straitstimes.com/story/taiwan-president-dismisses-report-he-holds-united-states-green-card-20140514

http://www.taipeitimes.com/News/taiwan/archives/2014/05/15/2003590395

And, for good measure:

http://hodgen.com/expatriation-and-the-expiring-green-card/

http://blogs.angloinfo.com/us-tax/2012/12/31/giving-up-your-us-green-card-make-sure-it-is-done-correctly-or-pay-the-price/

So, will he or won’t he? Inquiring minds would like to know.

http://www.executive-magazine.com/business-finance/finance/fatca-answering-to-uncle-sam

FATCA – Region preparing for Uncle Sam

Forthcoming US rules loom large over Middle Eastern banking sectors

An excellent article by Paul Cochrane, Middle East Correspondent for International News Services.

The word “sanctions” in relation to FATCA seems to be growing in common usage, and this story is no exception:

“If a country is not FATCA compliant it will be financially sanctioned in a new way, ‘the FATCA way’, and the readiness in the MENA is not sufficient in my opinion for a FATCA go-live situation,” said Camille Barkho, chief compliance officer at Lebanon and Gulf Bank.

The potential sanctioning of the Lebanese banking sector is a grave concern in Beirut, given the high degree of the economy’s reliance on banking.

The article also raises the issue of data privacy and security for US citizens in the Middle East:

More pressing in the immediate term is the issue of privacy and the safety of American citizens. “One thing the Treasury has not thought about is how do you protect US citizens? In a country like Lebanon, with Hezbollah and other US designated terrorist organizations, banks will identify US citizens, which could put them at risk,” said the BDL source.

Jim Jatras is also quoted in comments about the negative economic impacts of FATCA on the US:

Further questions may arise if there is a dawning realization about negative economic impacts on the US itself. “What happens when we start shorting payments on our Treasury bonds (TBs) by 30 percent? A sovereign holder is not subject to withholding, but for a private institution, what if the interest payment is done through SWIFT to a commercial bank that has not signed an IGA? Treasury will take the interest,” said Jim Jatras, Manager of RepealFATCA.com, which is lobbying against the law in Washington. “This is the kind of thing that could promote dumping TBs, and affect interest rates and the dollar as a global currency, which are issues nobody has thought out.”

From Life Behind the IRon Drape, a blog by Mark Hubbard which critiques New Zealand’s IRD (Inland Revenue Department):

FATCA: The (NZ) Officials’ Report – A Crime That Deserves a Revolution

Here is an excerpt from this powerful evisceration of New Zealand’s new tax policy report heralding that country’s own IGA with the US:

Yesterday IRD Tax Policy published a 310 page document, part of which was the officials’ response to the IGA between NZ and the US, and FATCA, and the submissions made against both by the public. That report becomes a good object lesson to all submitters of what a whitewash such exercises are, and what a sham our statist captured democratic processes have become.  The report proper started at page 112 of the document: it is sadly unsurprising the first 111 pages dealt with what you might have thought was such a simple thing as how employee allowances are to be dealt with (such is the complexity of our taxing legislation). Although I could only make it to page 117 before my eyes were so blurred with tears of fury, and I had no interest in reading on, even in these five pages, look at what this report says about our society, and our world, in 2014.

New Zealand tax officials have just confessed, quite casually, to the creation of the full, one-world police surveillance state under the auspices, sorry, the outright bullying, of our US masters.

Read more

Fiscaal Nieuws from the Netherlands reports on the case of a Dutch-American dual-citizen who appealed to the Dutch Board for the Protection of Human Rights after his investment account with BinckBank was closed following the signing of the FATCA IGA by the Dutch government on December 18, 2013.

Here is a translation of the article kindly supplied by Innocente:

FATCA unlawful discrimination by banning US customers

April 10, 2014

The American X has lived in the Netherlands since 1970 and also has US citizenship in addition to Dutch. He had an investment account with BinckBank (“Alex”). On December 1, 2013 BinckBank ended the relationship because X had not shown that he is not liable for taxes in the United States. X approached the Netherlands Institute for Human Rights to claim that BinckBank engaged in unlawful discrimination due to citizenship. BinckBank argued that it had terminated all 150 US customers who met the definition of “US Person”, used by the US Internal Revenue Service (IRS), because it refused to comply with requirements resulting from the planned Dutch legislation in response to the US Foreign Account Tax Compliance Act (FATCA) to provide all transactions and historical transaction data by US Persons to the Dutch Tax Authorities. According to BinckBank the discrimination was based on a generally binding regulation, because the agreement on December 18, 2013 between the Netherlands and the US Intergovernmental Agreement (IGA) for the implementation of FATCA forced it to do so . The Institute left open the question whether the IGA was a generally binding regulation because the IGA did not require BinckBank to close its customer accounts because of their US citizenship The Board also rejected the appeal by BinckBank for reasonableness and fairness, as the broad obligations required by FATCA brought disproportionately heavy costs. The law, in the General Equal Treatment Act (Equal Treatment Act), explicitly states that direct discrimination on grounds of citizenship was not only prohibited, except for exceptions included in the Equal Treatment Act itself. Honoring the appeal made by BinckBank on reasonableness and fairness would be contrary to the closed system of the Act. The Board concluded that BinckBank had engaged in unlawful discrimination in the provision of services on grounds of citizenship.

http://www.futd.nl/fiscaal-nieuws/7286/door-fatca-weren-van-amerikaanse-klanten-verboden-onderscheid/

UPDATE:

Russian Finance Minister wants to discuss FATCA agreement with US during visit to Washington

Innocente has provided a Google translation of a new Russian article from Vedomosti which is worthy of its own post.  It has also been added as a comment to this previous related post:  Why Russia’s oligarchy supports FATCA.

A week or two ago, it appeared that a FATCA agreement between the U.S. and Russia was close to being signed, despite the events in the Ukraine and Crimea.  Now there are fears that the U.S. may delay the agreement as a sanction for Russia’s annexation of the Crimean peninsula.

There appears to be much more at play here than meets the eye.  Russia has been demanding true reciprocity from the U.S. for any FATCA or FATCA-like deal.  The Crimean crisis may be just the excuse the U.S. needs to back away from a promise it has no Congressional authority to keep.  Empty promises haven’t kept dozens of other countries from signing IGA’s, but Russia has been steadfastly calling America’s bluff.  Now, FATCA may move to the very centre of the growing political, economic and military showdown between these two old Cold Warriors, especially once withholding penalties on pass-through payments begin to hit European and American banks.

Translated below is the Vedomosti.ru article dated March 31, 2014 entitled: “США могут отказаться подписывать с Россией соглашение о FATCA” :

U.S. may refuse to sign an agreement with Russia on FATCA
Russia is ready to join the U.S. law on the exchange of tax information. But the U.S. may refuse as a punishment for Crimea.
Margarita Papchenkova
Vedomosti.ru
31.03.2014

Last week, the Finance Ministry sent the government a draft directive on signing the agreement with the U.S. on the exchange of information, said two federal officials. Such an order was given to the Ministry of Finance at a meeting with First Deputy Prime Minister Igor Shuvalov said his representative, after the approval of the government will give directives to the Ministry sanctioned the negotiations with the U.S. . There are only technical obstacles, such as transfer agreements, says official familiar with the position of the Ministry of Finance. A ministry spokesman declined to comment.

In fact, we are talking about Russia’s accession to U.S. law FATCA (Foreign Account Tax Compliance Act). Requiring banks and financial institutions of all countries by March 31, 2015 to supply the U.S. Internal Revenue Service (IRS) information on operations of U.S. customers. If the bank does not attach to the system before July 1 this year, it faces sanctions: a payment to its address of any passive income from U.S. assets will be deducted 30 % tax (currently tax at source in the U.S. – 10% on dividends and 0% for percent). And in 2017 – with the proceeds from the sale of shares or bonds of U.S. companies, as well as ” transit fees “.

But the foreign bank can transmit information not directly but through the local tax authorities. To do this, the government should sign an agreement with the United States. This option was chosen, for example, by the UK and Germany.

Russia was going to conclude an agreement last summer but negotiations dragged on. It was decided not to sign an agreement on FATCA but a mutual exchange of information ( i.e., the United States is committed to providing information on Russian taxpayers). Draft agreement reproduces almost U.S. law, although FATCA it is not explicitly mentioned.

But now there may be a new unknown obstacle, which will determine whether the United States to sign an agreement, says an official involved in the discussion of the project: “As long as the signals from the United States have been reported, neither good nor bad .” Washington could delay the signing, the Ministry of Finance officials previously feared: it can become an informal sanction for the Crimea annexation.

Damage to the financial system can be overwhelming. 30% tax on payments to Russian banks and financial companies should hold not only American, but also any banks that joined the FATCA, including European. Also there is a danger that banks will close correspondent accounts of those who have not joined the FATCA, then may lock dollar payments feared Russian banker.

U.S. Treasury refused to comment on the talks. Last week, Finance Minister Anton Siluanov reassured: the worsening of relations does not lead to the transfer agreement not being signed – but officials will do everything so that banks can provide information to IRS.

The government is preparing a fallback really tells White House staffer – to allow banks to transfer information IRS directly. But you have to change Russian law.

By July 1, banks may have to choose: to fulfill the Russian law and incur losses or American, breaking  Russian law, laments the director ‘s compliance PSB Svetlana Yermolayeva. Legal risks arise due to retention and a 30% tax on income customers who have been recognized by the Americans, explains Yermolayeva, Russian law does not provide for retention of direct customer funds on the grounds set forth in FATCA.

Possible to meet the requirement of bank secrecy, even if not governed by law, according to the manager of another bank : finding American client to get his written consent, but better is directive for the transfer of information to the IRS. Technically it is possible, it is reassuring: system identification and interaction with clients been established in many banks.

In the performance of FATCA banks will face many other problems, warns the head of the group in the field of Compliance KPMG Dmitry Chistov. U.S. demand to disclose the accounts not only U.S. customers, but also the companies of which they are beneficiaries. At the same time under Russian law the beneficiary – the owner of not less than 25 % stake, and on FATCA – 0 or 10 % depending on the type of company, explains Chistov.

To start an independent exchange with the United States on July 1, banks should have until April 25 to register online IRS, obtain an identification code and enter into a contract with the IRS, reminds Chistov. Many from last year started to be registered at your own risk, employee knows Russian bank. “Given the political situation, it is possible that the agreement is not signed, and we can not wait that long – it is necessary to prepare for the execution of FATCA», – says the banker.”

http://www.vedomosti.ru/finance/news/24672711/nakazanie-dlya-bankov?full#cut

 

According to The Times of Israel, American ex-pats in that country are now facing dual threats from the IRS:

The US is gearing up to reach out to American citizens abroad that it believes have not paid their fair share in taxes. Israel is set to begin enforcing new US rules on reporting the existence and activities of accounts in Israeli banks held by American citizens or dual-citizens. That is in addition to a marked increase in audits and investigations of American ex-pats in Israel by the US — to the extent that a rumor has surfaced that the Internal Revenue Service has opened a “branch office” in Israel to handle the volume of audits.

Read more: Americans in Israel to face FATCA, IRS collectors | The Times of Israel

Judging by the comments so far, Brockers should find a receptive audience.  A good outreach opportunity.

As the initial shock wears off and the first emotional responses to Canada’s signing of an IGA with the US begin to coalesce into well-written, detailed submissions, Charter challenge fundraising and myriad other signs of a growing and sophisticated anti-FATCA movement, it is worth taking a moment to pay attention to what is currently happening in Quebec.

The drumbeat of yet another referendum is beginning to be heard, carried now by powerful voices like that of Pierre Karl Peladeau, a true Quebec oligarch who has now fully and publicly embraced the separatist cause.  Despite the obvious concerns about conflict of interest as a campaigning politician who just happens to control most of the media pie in Quebec, Mr. Peladeau seems determined to put his money where his mouth is and champion separatism in a manner which will no doubt be unprecedented in Quebec politics.

Against this backdrop, it is interesting to consider how these two stories will inevitably intersect, since they both deal with fundamental questions about self-determination, national sovereignty and the democratic process.  Meanwhile there is a vast ticking FATCA time bomb for Quebec which the PQ so far seems to be blissfully unaware of, but which it will have to deal with head-on if it truly believes it is Quebec’s destiny to become a sovereign nation.

A Full Comment article in today’s National Post focusses on the splash that Mr. Peladeau has already made and how it is clear that while he may be a most savvy and ruthless CEO, he still has much to learn about the realities of politics and the campaign trail.   Continue reading →

ACA Urges Congress To Adopt Residence-Based Taxation
by Mike Godfrey, Tax-News.com, Washington

07 March 2014

American Citizens Abroad (ACA) has provided testimony to the Senate Homeland Security and Governmental Affairs Permanent Investigations Subcommittee following its recent hearing on offshore tax evasion, and has recommended that the United States should implement a residence-based tax (RBT) system to avoid penalizing American expatriates.

The ACA, as the principal organization representing Americans overseas, has limited its comments to tax issues which impact US citizens and green card holders resident overseas.

Under the current citizenship-based tax (CBT) system, Americans abroad remain subject to US taxation as though they were still US residents. Under RBT, only US residents, whether Americans or foreigners, would be subject to US income, estate and gift taxation, while Americans resident abroad would be taxed under essentially the same rules applicable to non-resident aliens.

Continue reading →

Elizabeth May and the Green Party of Canada have spoken out against the recently announced FATCA IGA between Canada and the US.  On Monday, Ms. May raised the issue of Charter rights in Question Period.  From Open Parliament, here is her exchange with Finance Minister Jim Flaherty:

Elizabeth May Saanich—Gulf Islands, BC

Mr. Speaker, I rise to ask a question today of the Minister of Finance relating to the Foreign Account Tax Compliance Act, FATCA.

On the U.S. side of the border, there are concerns raised that because the treaties have not been ratified through the U.S. Senate, these may not be legally binding treaties in any case; and on the Canadian side of the border, no less a legal expert than Peter Hogg, former dean of Osgoode Hall Law School, has written the advice that this very likely will violate section 15 of the Charter by treating some Canadians differently from others.

More than 30 years ago, I learned constitutional law in a textbook he wrote.

What will the minister say to its constitutionality?

 

Jim Flaherty Minister of Finance

Mr. Speaker, I was taught by Peter Hogg as well. I got an A in the tax course.

Continue reading →

Politico’s Rachel Bade reports on the renewed efforts by Carl Levin and John McCain to pressure Senator Rand Paul into ratifying a long-delayed 2009 Swiss-U.S. Protocol that would allow the release of even more names of U.S. account holders at Swiss banks.  As Bade reports in this excerpt,

Paul, a libertarian Republican widely believed to be eyeing a 2016 presidential run, says his hold stems from concerns about Fourth Amendment protections against “unreasonable search and seizure.”

“These are people that are alleged, not convicted of doing anything wrong,” Paul said a few weeks ago. “I don’t think you should have everybody’s information from their bank. There should be some process: accusations and proof that you’ve committed a crime.”

Paul’s protest is also linked to his abhorrence of the soon-to-take-effect Foreign Account Tax Compliance Act, which will force foreign banks to disclose U.S. account information to the IRS, and domestic banks to reciprocate to other nations’ revenue departments.

A Treasury official recently told Paul’s staff that FATCA “doesn’t work” without the treaties — though there seems to be disagreement on that point, even in the executive branch.

That sent up red flags anew to Paul because the senator has legislation to repeal FATCA and hesitates to support a treaty that enables a law he views as U.S. government overreach.

Read more: http://www.politico.com/story/2014/03/rand-paul-tax-swiss-banks-104148.html#ixzz2usQjnrMo

 

This article could really use some commentary from Brockers – I encourage everyone to get over there. This is Politico, and it’s a great chance to educate some more of those “rich tax cheats sitting on the beach” Kool-Aid drinkers.