Category Archives: Issues regarding US persons abroad

http://www.compasscayman.com/caycompass/2013/10/08/FATCA-seminar-hears-of-stiff-penalties/

Acknowledging the welter of detail and difficulties in the law, part of 2010’s Hiring Incentives to Restore Employment Act, Mr. Cantor said the only people that like FATCA are lawyers and accountants.

“From the perspective of a U.S. international tax attorney, we love FATCA for four reasons: complexity; uncertainty, with all the changes since 2010; change, with all the amendments and reforms to the law; and fear-mongering,” Mr. Cantor said.

“One man told me it was the end of Western civilization as we know it,” Mr. Cantor said, explaining that “No, FATCA is aimed at foreign financial institutions and other financial intermediaries to prevent tax evasion by U.S. citizens and residents through use of offshore accounts.”

Audible despair gripped the hundreds of audience members when Mr. Cantor described eight IRS and Treasury Department forms required by the agency, followed by another five that might be needed.

Penalties are stiff for not filing, he said. For example, falsifying or failing to submit Treasury Department Form 90-22.1 could draw a $500,000 fine and up to 10 years for in prison. Tax evasion, he said, is liable to a $250,000 fine and up to five years. Failing to file a tax return attracted a $100,000 fine and up to one year imprisonment.

Following the presentation, Mr. Cantor, alongside Mr. McTaggart and KPMG partner and “head of tax” Doug Harrell, heard an hour of eager audience questions, most related to complex personal circumstances.

Mr. Cantor told one interlocutor that renouncing U.S. citizenship is unlikely to be effective: “First, you have to have another passport before you can do that. You cannot be stateless.”

An “exit tax” would also apply, he said, describing a law that “started when a certain resident here [Cayman] came from Belize.” Someone seeking to expatriate themselves, he said, could be forced to sell their assets, relinquish any trusts and pay state taxes.

“Until the State Department gives you a certificate [of expatriation], you cannot relinquish your passport, not until all your taxes are paid.”

A comment from Tim included:

I know some of you don’t want to hear it but I personally think we should back off the NDP for know. I am very confident at the end of the day they will be on our side as will the Greens. As difficult as it might seem lets take a breather on this front. Instead we should be turning our fire toward the Canadian Bankers Association and Maura Drew-Lytle and try to smoke out in the next month or two whether they have any pull to force Mulcair to switch stances on FATCA.

 

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Dear

You can see Tom Mulcair took the question asked at the forum and your letter seriously, and acted with dispatch. Murray Rankin, as Hoang Mai’s successor, was of course already working on this issue, so, as Tom’s letter notes, it made sense to reiterate the NDP’s deep concern in Murray Rankin’s September 25 letter in his role as National Revenue Critic. You may not be aware but Murray Rankin is a renowned and experienced constitutional litigator, and in an excellent position to be taking onboard the questions of applicability of the Charter of Rights along with our Justice Critic. I will remain available to assist Murray in his analysis, but I am confident one could not have a more qualified Official Opposition Revenue Critic to be in charge of this file.

All best,

Craig

Americans living abroad are generally treated about the same as non-resident aliens.  It can be very difficult for non-resident aliens, including Americans living abroad, to maintain a US bank account in the US.  With non-resident aliens now being thrown out of American banks in America, non-resident citizens will likely be treated the same.

With such cross-border economic activity, fueled in large measure by the maquiladora industry in Juárez, it is only natural for foreign businesses to maintain U.S. bank accounts in El Paso. Unfortunately, many of these commercial accounts are being closed by U.S. banks. Why is this happening?

…The regulatory cost to U.S. banks to comply with the Patriot Act and reciprocal reporting obligations under FATCA agreements limit the profitability of maintaining deposit accounts for non-resident aliens, and expose U.S. banks to hefty penalties for regulatory failures, as in HSBC’s case.

So what does a U.S. bank do under such circumstances, particularly when foreign deposit accounts are a small percentage of your book of business? Close the accounts and focus on more profitable, less risky investments.

Foreign investors: Why US bank may close your account Sunday, October 6, 2013 6:00 pm

At least non-resident aliens can have a bank account where they live, unlike some non-resident citizens who are being denied local banking services as well as US banking services.

But, don’t worry, Americans.   The Mafia Bank still accepts American clients and business is booming!

The Economic Club of Canada – Govt of Canada Minister – Jason Kenny http://t.co/L6heEq8qU4 … via @economiclub – Toronto – October 8/13

— U.S. Citizen Abroad (@USCitizenAbroad) October 7, 2013

October 8, 2013 – Toronto

Hi Linda.

In case you haven’t heard, your Leader, Tom Mulcair, has just issued a letter to a lot of us concerning the NDP’s position on FATCA, in tandem with a letter to Jim Flaherty by Murray Rankin, your party’s Revenue Critic. See link here https://isaacbrocksociety.ca/2013/10/04/ndp/

Hmm … how does this match your published statements on FATCA?

My colleagues and I at Isaac Brock Society and Maple Sandbox cordially invite you to dinner, with the set menu depicted in the following photograph.

Sorry it’s not exactly haute cousine; we couldn’t find a better recipe on short notice. I think this one suits you to a “T.”

You are welcome to bring your spiritual buddy, Diane “merger” Francis, along with you.

Enjoy the crow. Bon appétit!

Cheers.

Your Canadian neighbours at Isaac Brock Society and Maple Sandbox