Author Archives: Tim

Full Reciprocity Under FATCA Is a Work in Progress, IRS Official Says

ORLANDO, Fla.–Although the United States has committed to achieving reciprocity regarding the exchange of financial transaction information under the Foreign Account Tax Compliance Act, domestic banks are not subject to the same reporting requirements as are their foreign counterparts, an Internal Revenue Service official said Jan. 25.

According to Ted Setzer, manager of IRS’s Large Business & International Division, although existing requirements on U.S. banks will provide other governments with similar information required of foreign banks under FATCA, “clearly existing U.S. rules don’t require U.S. financial institutions to provide the exact same information that a foreign institution has to under FATCA.”

“How we get to full reciprocity and how long it takes is something we’ll have to be working on.”

Ted Setzer, LB&I Division

Setzer made his comments during a session at the 2013 midyear meeting of the American Bar Association Section of Taxation on recently released implementing FATCA. [snip]

Responding to a question about reciprocity, Setzer said the United States had committed to such a concept. However, U.S. reporting rules for domestic banks “are what they are,” and do not require identification procedures identical to those required under FATCA, he said.

“How we get to full reciprocity and how long it takes is something we’ll have to be working on,” Setzer said.

I have a better solution lets FIRE Ted Setzer and strip him and his family of all US General Services Administration employee and retirement benefits.

http://nomadcapitalist.com/

I don’t know much about the show or the radio station in NYC but it should be available online both live and via archive. It looks this show which is fairly new has covered expat issues in the past such as interviewing Mark Nestmann. Interview air time looks to be 7:00PM Eastern.

Live webcast available.

http://new.livestream.com/pepperdinesol/lawreviewsymposium

Familar names attending:

Business/International Tax #2

Moderator:     Khrista McCarden (Pepperdine)

Papers:          Reuven Avi-Yonah (Michigan), Corporate and International Tax Reform: Proposals for the Second Obama Administration

Allison Christians (McGill), Putting the Reign Back in Sovereign: Advice for the Second Obama Administration

Susan Morse (UC-Hastings), The Transfer Pricing Regs Need a Good Edit

Commentary:  Robert Goulder (Tax Analysts)

http://taxprof.typepad.com/

I am not sure what time they will get to this last segment. Probably in the afternoon for those of you in the Eastern Time Zone

http://www.theglobeandmail.com/report-on-business/international-business/us-business/us-expats-in-canada-face-new-obamacare-health-care-tax/article7372249/

This has to be one of McKenna’s poorer articles. Is he or the John Stackhouse getting kickbacks from the Big Four and FATCA Compliance Complex. For one thing the status of the Obamacare Tax is not certain as to how it regards the US Canada Tax Treaty. It will be some time before a conclusion on this issue can made. The issue with US overall tax rates going up is real for people who live in Alberta but not necessarily for those in Ontario or Quebec.

http://opinion.financialpost.com/2013/01/11/gerard-depardieu-emerges-as-poster-boy-for-global-citizenship/

She also attacks Gerard Depardieu. I was trying post a comment asking whether she still pays taxes to the US and it was too bad her hubby didn’t have to go to Vietnam(he was a draft dodger). I find Francis rather hypocritical as she had no problem in the 1960s and 1970s with her own husband trying to avoid compulsary military service but bitterly complains about Global “Citizens” trying to avoid their national “obligations”.

Below from a commenter on Victoria’s blog:

Reading this post reminds me of a few years back when the Western Hemisphere Travel Initiative was created by the United States requiring passports to cross the border.  Many border babies, Canadians who were born in the United States because the nearest hospital was in a border states like Michigan, Maine, or North Dakota were in for a rude awakening.  In some cases mom and dad were also border babies (there are whole towns in Canada that are physically on the border), and some found that they were not Canadian Citizens, even though they had lived in Canada, and even voted for decades.

I work at H&R Block in Canada and I suppose I am a bit like bankers will soon be.  As soon as someone shows me a US passport, or a document that shows their birthplace in the United States I have to stop preparing their tax return and send it over to the US Tax Specialists, who charge an extra 2-3 hundred dollars, even when these people owe nothing in taxes.  I have occasionally had people swear they will renounce before they will file, and I tell them they can’t renounce until after they have filled.

In Canada the conservative government recently changed our citizenship law so that the second generation born abroad are not Canadian Citizens, but this has problems too.  Many Canadians were born elsewhere but grew up in Canada.  There are examples of people who were born abroad to Canadian parents, came to live in Canada when they were a year old and happen to be living in Belgium when they have a child.  In some cases these people’s children are now born stateless.  These are the cases where some show of attachment should come into play.  Its a nightmare for these parents.  While the new law allows for easy naturalization of these babies, they first have to physically arrive in Canada which is difficult when the child is stateless and qualified for no national passport.  Then these parents have to wait for their children’s files to be procsses.  Currently there is an enormous backlog and it can take anywhere from 6 months to 2 years to process a citizenship request.

I responded back saying what H&R Block Canada is doing completely outrageous and the CEO and Senior Management of H&R Block Canada should be less worried about spending time in US Club Fed and instead be worried about spending hard time at the Kingston Ontario Penetentary for violations of the Canadian Foreign Extraterritorial Measures Act.

Interesting article in the Globe and Mail and Canada, Russia, Adoption, and someone called Sergei Magnititsky.

http://www.theglobeandmail.com/news/politics/canada-urged-to-take-a-stand-in-us-russia-spat-over-corruption-adoptions/article6825685/

A couple of interesting sections:

However, the swiftness of the Russian retaliation to the U.S. legislation has sparked concerns over the application of similar measures against adoptions by Canadians. Jennifer Damiano has already met the 19-month-old child that she and her husband, Bert Lee, are hoping to adopt from Russia. She is worried by the possibility that Canada will follow the U.S. lead and use existing legislation against Russian officials.

“I hope and pray they do not use existing laws to pass something that would negatively affect all prospective parents in the process of adopting from Russia,” she said.

Ms. Damiano said her husband holds U.S. citizenship, which could complicate the planned adoption. Ms. Damiano said she hopes that Mr. Lee’s pending Canadian citizenship will be expedited to allow the couple to adopt as Canadians.

So we actually have some have someone who is a US Citizen in Canada who would appear to be in the process probably with legal assistance of getting expedited approval for Canadian citizenship.

http://www.cityweekly.net/utah/article-459-16910-a-very-nice-article-for-expats-but-the-author.html

Excerpt below:

Taxing Matters I also met another type of American expatriate,  particularly in London: high rollers who sported American accents but discreetly reminded everyone that they were no longer American. These were the tax expatriates, super-high earners who renounced U.S. nationality in large part to avoid the global reach of U.S. tax law. Facebook’s co-founder, a Brazilian-born U.S. citizen now residing in Singapore, recently denationalized himself in this manner. No doubt, just as legal persons (corporations) often decamp to more favorable tax locations, more and more natural persons will seek to expatriate themselves in the same manner.

As much as I think of myself as a practical individual, I am emotional to the extent that I believe that to take on a nationality, you should identify with and love the country in question. I love both the United States and Greece, and I would never renounce either nationality, regardless of some potential tax benefits.

U.S. citizens must file income tax, no matter where they live. Having said that, the vast majority of your foreign income is exempted,  unless you are a super high earner. As an American abroad, it’s important that you file your taxes and keep the IRS apprised of your income. Many Americans living and working abroad forget to do this, and it’s a potentially costly mistake.

Certain actions can cause you to lose your U.S. nationality, such as taking up arms against the United States, formally renouncing your U.S. nationality or, surprisingly, entering the U.S. on a foreign passport. This is a lesser-known detail passed on to me when I lived in London. We were registering our London-born daughter as a U.S. citizen, and the consular official warned us not to travel with her to America before she got a U.S. passport, “as she could forfeit her nationality.” When I took up Greek nationality, I consulted an immigration attorney with a specialty in dual nationality. The reader should do the same: Always seek legal advice when making such key decisions.

So all of you Brockers do you REALLY think this guy is fully compliant with US tax laws . Yes thats what I thought.

http://m.theglobeandmail.com/report-on-business/uncle-sam-wants-you-if-youre-an-american-in-canada-or-at-least-your-tax/article6799960/?service=mobile

Nothing we didn’t already know. The January 1st deadline has now been blown and supposedly IGA negotiations will continue to a “conclusion” over the next few weeks. Again we need to keep up the fight in the new year. I just wanted to let everyone know in case comments open up on the G&M website. I will be contacting Barrie myself later this evening.

http://www2.macleans.ca/2012/12/17/belgium-to-largish-french-movie-idols-welcome/

Belgium’s foreign minister Didier Reynders seems a jolly fellow. He should be, given that Gérard Depardieu has chosen to live in Belgium and engage in a shouting match with the French government over French income taxes, which are high. Today Reynders gave an interview to the centre-right newspaper Le Figaro, where critics of the socialist president François Hollande are made to feel comfortable.

Dépardieu’s arrival is a good-news story for Belgium, which could use one; Wikipedia’s entry on Belgium’s “2007-2011 political crisis” seems to me to have pretty arbitrary start and end dates. Reynders’ interview catches the longtime former finance minister in an ebullient and cutting mood. On French PM Jean-Marc Ayrault’s use of the word “pathetic” (minable) to describe Dépardieu: “These are words we would never use in Belgium, even when we are very angry.” On the French government’s desire to renegotiate tax collection between the two governments, the gentlest possible No Way: “We’re ready to examine many things, as long as the superior principle of free circulation of people, goods and services within the EU is respected. But if this is about recognizing some French power to tax people who live in Belgium, that’s a whole other matter. Every European country must accept that its citizens decide to live elsewhere.”

A couple of things this article was in Maclean’s magazine written by top Canadian political commentator Paul Wells who said in another article he published today that he was a select attendee at Laureen Harper’s Christmas Party at 24 Sussex. So Wells is big in Canadian political circles. I made two comments one about the situation vis a vis the US and Canada the limited coverage in the Canadian media including Maclean’s and the fact that neither Belgium or Canada have the rejected the US’s self determined right to tax US citizens living in Belgium or Canada respectively. As I said Wells is big and close to PM Harper so comment early and often.