US citizens finding it difficult to open bank accounts

Some banks might even cease to provide banking to American residents

Published Monday, February 18, 2013

Some banks might cease to provide banking services to their American customers, while others are reported to refuse new customers based on their American nationality.

Why?

Supposedly, the recently enacted Foreign Account Tax Compliance Act (Fatca) by the US government is the reason for banks to close its doors to US citizens.

Since January 1 this year, all foreign financial institutions must report or disclose financial accounts and investments, balances, receipts, and withdrawals held by US persons/taxpayers or held by foreign entities in which US persons/taxpayers hold an ownership interest directly to the US Inland Revenue Service (IRS).

When institutions fail to report or disclose information the consequences can be grave, one of the penalties being the withdrawal of US Dollar clearing rights in New York, a penalty feared by banks.

“For a bank which operates in the United Arab Emirates which has its currency linked to the US dollar this would be nothing short of catastrophic,” wrote a bank in a letter to its American account holders.

In the same letter, it implies that the recently enacted law might lead the bank to decide to cease operating bank accounts for US citizens: “While we await further clarification from the IRS regarding reporting requirements, it appears on the face, that these will be onerous and will involve substantial costs for [the] bank in terms of people, process and systems.

“The bank is currently reviewing its options – one of which is to cease banking for individuals who fall under Fatca regulations. We are hopeful that it will not be necessary to adopt this course of action but it will depend a great deal on the requirement placed on the bank in continuing to maintain accounts for individuals covered by Fatca.”

Meanwhile, US citizens are reported to have been refused by banks when they wanted to open a new bank account. A woman speaking on an online forum for expats living in the UAE said that she, being an American citizen, tried to open an account at a bank but was flatly refused without a reason being given.

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According to the Financial Secrecy Index, America ranked #5 in 2011 in banking secrecy, trailing only after Switzerland, the Cayman Islands, Luxembourg and Hong Kong. It was only a financial secrecy leader in terms of its global scale weight of 0.208.

To solve this problem and become the world’s largest and most secret tax haven, America created FATCA to destroy its competition, forcing other countries to provide America with financial data while rejecting reciprocity.  With America pushing Switzerland, the Cayman Islands, Luxembourg and Hong Kong to drop down the ranks in financial secrecy, will America finally succeed in achieving its goal of becoming the world’s largest and most secret tax haven at the expense of innocent Americans abroad whom it harmed in the process?

Not only is America becoming the largest, most secret tax haven in the world, but it is also the only nation in the world, along with the dictatorship of Eritrea, which robs money from the coffers of other nations through citizenship-based taxation.  Were the G-20 to expel all major providers of financial secrecy, it would not only become more legitimate, but also significantly smaller (a G-15?), without the American tax haven.

As the world’s most secret and largest tax haven, America will lead in creating a criminogenic environment for a litany of evils that hurt the citizens of rich and poor countries alike through fraud, evasion and avoidance of financial regulations, insider dealing, embezzlement, wholesale bribery, non-payment of alimony, money laundering, tax evasion and much more besides.

The following comment was stated in response to the Swiss government’s approval of FATCA

Wir sind tot!!

Frau Widmer Schlumpf, wann werde ich mit meiner Familie verkauft, damit Sie den USA unser Vermögen übermitteln können dass wir in der Schweiz erwirtschaftet haben. Bin Doppelbürger, habe aber noch nie in der USA gelebt. Sie haben uns faktisch umgebracht, ist Ihnen das klar.

Translation:

We are dead!!
Mrs. Widmer Schlumpf, when am I going to be sold with my family, so that you can submit my Swiss-earned assets to the US government.  I am a dual citizen and never lived in America.  You have factually murdered us, is this clear to you?

Source  (comments section)

This is a skilled government mouthpiece sounding article, covering about 20% of the issue with lots of chatter about taxes, celebrities, government data and no mention of FATCA, banks, FBAR penalties and all the many other issues that the government doesn’t want for stateside Americans to know anything about.  This is a brilliant means of fooling gullible statesiders into being utterly clueless about the world beyond US jurisdiction with the threat of having “no more protection from the U.S. government” and the apparent evil concept of spending tourist dollars in the US.  So, enjoy!

Would you renounce your U.S. citizenship if it meant you’d be sending less of your hard-earned dollars to Uncle Sam?

As Americans face higher taxes and stricter enforcement, a growing number of them are, indeed, deciding to turn in their US passports. As of 2013, 77% of Americans will pay higher federal tax rates because the cuts in Social Security payroll taxes expired when Congress passed its tax package on New Year’s Day.

But the wealthiest households face the highest tax increases. From 2009 to 2011, the number of expatriates, or those who renounced their U.S. citizenship, doubled to 1,781.

More…

Representatives from American Citizens Abroad (ACA) and other groups advocating for overseas Americans are convening in Washington D.C. this week for the annual Overseas Americans Week (OAW). ACA and its sister groups will be discussing a Residency-Based Taxation (RBT) proposal with lawmakers and members of the Administration.

Geneva, Switzerland (PRWEB) February 12, 2013

Representatives from American Citizens Abroad (ACA) and other groups advocating for overseas Americans are convening in Washington, D.C. this week for the annual Overseas Americans Week (OAW). ACA and its sister groups are pushing for major tax reform for the estimated five to seven million Americans living outside of the United States. The groups’ proposal for Residency-Based Taxation (RBT), introduced to Washington D.C. legislators last November, will be discussed in detail with members of Congress this week. In meetings with legislators, ACA will stress that this vital tax reform would increase U.S. exports and create more jobs in the United States.

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The Market Oracle, Feb 12, 2013 – 03:18 PM GMT By: Jeff_Berwick

 Wendy McElroy writes: Anyone planning to permanently leave the US should give deep thought to whether they are emigrating or defecting.

The two concepts have so much in common that they tend to blur together. They may be best viewed as two extremes of the same axis upon which people can ‘grade’ themselves. But there is a significant difference between the attitude, motives, and actions of a straightforward emigrant versus a defector. And where you stand on the axis affects the most important aspect of who you are: How do you evaluate yourself?

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A7 Radio’s “Goldstein on Gelt” with Douglas Goldstein

Are you an American citizen now living in another country? If so, you might not be aware that you still have tax obligations to the IRS, even though you may be paying taxes to your current country of residence. On this week’’s Goldstein on Gelt show, Doug speaks to CPA Ron Zalben, who talks about the FBAR and FATCA tax forms, what they are, and why it is so important to file them.

10 Feb, 2013, 10.12AM IST, AFP The Times of India

US tax rules sour life for Americans abroad: Expats

GENEVA: Scott Schmith is a patriot and a US military veteran but he is no longer a US citizen: Sick of complex tax rules making his life in Switzerland miserable he recently handed back his passport.

“It was a pretty big decision and there was a bit of anxiety,” said the 50-year-old photographer who served in the 1990-91 Gulf war and has been living in Switzerland since 1993.

But once he received his Swiss passport and handed back his US one last September, “it was like a load of weight off my shoulders.”

Schmith is one of a growing number of American expats who are opting to give up their citizenship rather than deal with the increasing difficulties imposed on them by US tax authorities, observers say.

Khaleej Times

Why is Tina Turner switching from American to Swiss citizenship? The legendary singer, a longtime Zurich resident, told the Blick newspaper that she has been very happy in Switzerland and “can’t imagine a better place to live.” But some observers believe she may be one of thousands of American expatriates who have taken the drastic and irrevocable step of giving up their citizenship because of what they consider to be the unjust and discriminatory taxation practices of their government…

Read more: Time

ZURICH, SWITZERLAND – Ed. note: William Olenick has been active in Republicans Abroad in Switzerland, where he is a longtime resident. He sent the following email letter to friends 28 January; we reprint it in full as part of our coverage of the ongoing problems for US citizens in Switzerland.“Dear all,

Read the article below my comments and you will see why I also have my problems with the banks and I am tax compliant.

For the last 25 years I have been busting open nitch markets for American products, contributing to lowering the trade deficit, developing new markets for US producers, creating employment for my brethren back home, increasing the tax base where they live.

The only way to do this is to be on the ground in the countries you are selling.

In my case, my markets were Europe, North Africa and the Middle East so it made sense to set up a base of operations in Switzerland, as it was close to the markets, was a well run country, my wife happened to be Swiss, from a large, close-knit family, so it was a no brainer.

Two months ago my bank informed me that I could no longer make wire transfers to the states.

That being the case how will I pay my suppliers?
 
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