Victoria and Blaze ask in the article: How did the “simple premise” of “cracking down on illegal tax evasion and closing loopholes” become an attack on financial lives and personal integrity of millions of people living outside United States, their banks and laws and constitutions of their countries of residence?”
Category Archives: Issues regarding US persons abroad
Hong Kong Inland Revenue (Amendment) (No. 2) Ordinance 2013 does not permit automatic information exchange
Via Marvin on Twitter, we learn that Caplin & Drysdale partner Scott Michel is claiming (in Hong Kong Business magazine) that:
On July 10, 2013, the Hong Kong Legislative Council moved to enable Hong Kong to enter into stand-alone Tax Information Exchange Agreements and, more importantly for U.S. persons who have financial accounts there, to sign an “intergovernmental agreement” (IGA) with the U.S. for implementation of the Foreign Account Tax Compliance Act (FATCA).
It is expected that the U.S. and Hong Kong will agree on an IGA, and that financial institutions in Hong Kong will begin to comply with FATCA’s due diligence and automatic disclosure provisions next year.
This is the central point of the article, and also the only part that has anything to do with Hong Kong; the rest is merely another regurgitation of general FATCA information we all know already, though it’s nice to see that he mentions “quiet disclosure” as an option for coming into compliance in benign cases.
However, the claim that this amendment has anything to do with automatic disclosure is incorrect, as an informed reading of its actual text reveals. Furthermore, a speech about the amendment by a key pro-Beijing legislator provides striking insight into the attitude of the Hong Kong government (and quite probably, the attitude of Beijing as well) towards demands for information exchange which go beyond OECD standards — and despite the fact the speech doesn’t mention FATCA by name, it casts doubt on the seemingly-authoritative declaration that “it is expected that the U.S. and Hong Kong will agree on an IGA”.
Mopsick update on #OVDP, #FATCA and #americansabroad
@Mopsicktaxlaw update on #OVDP with comments on #americansabroad http://t.co/UF2KxmFI1d – Crucial to understand your #FATCA + #FBAR facts
— U.S. Citizen Abroad (@USCitizenAbroad) July 27, 2013
This is a must read for anybody considering cleaning up past problems. Anybody who is still thinking of entering OVDP should think long and hard. This thoughtful post ends with:
While FATCA creeps toward the starting gate, there appears to be scant progress on two fronts sorely in need of attention: (1) the plight of Americans abroad whose local bank is no more a “foreign financial institution” to them than the corner McDonalds is an English fish and chips joint to us, and (2) the hapless recent immigrant who was never told in citizenship class that as American taxpayers, they now had to register their worldwide assets with Uncle Sam in addition to report the income. The collateral damage of these two unintended FATCA consequences, particularly the former, account for the bulk of the internet chatter on this example of the gross tax injustice FATCA on Americans abroad.
The problem seems to be that of the five to seven million estimated Americans living abroad, few seem to vote. Add that to a Congress which for all practical purposes is frozen in place with no effective direction and leadership and the result is a broad based sense of frustration and disdain. Unfortunately there appears to be little hope any time soon of any attention to this problem.
James Jatras tells it like it is to iExpats
Rolled Back Deadline of FATCA Gives Critics Hope
Once again James Jatras of RepealFatca.com offers-up another succinct and pithy interview, this time to iExpats.
As Blaze over at Maple Sandbox commented, here’s the article’s takeaway quote about FATCA:
“There’s no way anyone can put enough lipstick on this pig to make it kissable.”
The USA is the foreign country we (US Persons Abroad) must turn our financial information over to?
Make sure your US social security number isn’t in the wind.
The IRS suggest care with this key number. Show your Social Security card to your employer when you start a job, the IRS says. Also show it to your financial institution for tax reporting purposes.
But in general, the IRS says you shouldn’t carry your Social Security card with you. For that matter, don’t carry other documents that display your number either. If your Social Security number is stolen, the IRS warns that someone else may use it to get a job. The unwitting employer may report the income to the IRS under your purloined Social Security number.
The IRS will assume when it sees that income reported to your number that you failed to report all your income on your tax return. Trouble will ensue. If you end up in this pickle, you can explain the fraud to the IRS and get our record updated. But you don’t want to go through this if you can help it. Be careful out there.
It has been my observation when in the US, people generally write a check more readily than using a debit card for such mundane purchases as groceries, etc., and it is common practice that their US social security number is inlcuded on their check. Boggles the mind.
American Citizens Abroad (@ACAvoice) Proposes “Interim” Comprehensive ‘Streamlined’ #IRS Compliance Program
ACA has written to Treasury and IRS officials recommending a proposal for a Comprehensive Compliance Program (actually an interim streamlined program) to Enable Tax Compliance by Americans Resident Overseas. You can read the letter here. This is part of the ongoing attempt by ACA to get attention in Congress, and it follows their harsh criticism of FBAR and OVDP abuse.
The key to the ACA proposal is that Americans resident overseas entering CCP will know exactly the amount due to the IRS, including the tax due, interest and penalty, if any. They will not fear that their life savings are at risk. They will not be treated as criminals and will come into compliance.
I hope I haven’t missed this letter being published somewhere else on IBS, but in light of these recent posts on IBS I have been ‘skimming’ this morning before I head out on the Pacific Crest Trail, I thought I would post it for greater visibility and discussion.
Tax lawyer Virginia La Torre Jecker interviews former #IRS attorney Bill Yate
Taxpayer advocate continues criticism of IRS execution of voluntary disclosure programs
#IRS abuse of Americans Abroad – The greater the effort! The greater the punishment!
and the recent article in Tax Notes…
The Personal Impact of Offshore Enforcement
Below are the ACA Conclusions
Tax lawyer Virginia La Torre Jeker interviews former #IRS attorney Bill Yates
If you have not seen these two interviews, I encourage you to read them. They provide interesting insight into the “Mind of the IRS” – the institution that “represents the American Taxpayer”.
Who is Bill Yates?
Willard (Bill) Yates, recently retired from the Office of Associate Chief Counsel (International), Internal Revenue Service after 31 years of service. During his tenure as a Chief Counsel Attorney, Bill was the recipient of 10 awards, including the Albert Gallatin Award, Treasury’s highest career service award. The Gallatin is awarded only to select federal employees who served twenty or more years in the Department and whose record reflects fidelity to duty. Bill received the Gallatin award for his work throughout his IRS career, including his work on implementation of some of the compliance requirements of the Foreign Account Tax Compliance Act (FATCA).
Most of Bill’s career at IRS focused on offshore compliance, including his participation in a massive overhaul of outdated foreign trust reporting requirements Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts and Form 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner). Bill was the principal drafter of the regulations under section 679, Foreign trusts having one or more United States beneficiaries, Notice 2003-75, RRSP and RRIF Information Reporting and Notice 2009-85, Guidance for Expatriates Under Section 877A.
Heading to the US This Summer?
AARO (Association of Americans Resident Overseas) and FAWCO (Federation of American Women’s Clubs Overseas) have an idea for how we can make the most of our summer vacations.
For those of you who are U.S. voters why not stop by and see your local Congresspersons while you’re in town? Think about it – haven’t we all dreamed of letting them know how we feel? Here’s your chance.
AARO has some suggestions for how to set up the meeting and topics for discussion (though I’m positive that folks here already have that covered, right?) They also include a link to the Overseas Vote Foundation’s fact sheets for each state.
I’m giving it a try. Asking for a meeting was easy since my reps have an automatic meeting request system on their sites. Thus far I have received one answer saying they will try to set up a meeting with my rep in person.
Some other ideas while you happen to be strolling around town:
1. Talk to local media. Ask them to reprint Colleen Graffy’s article so it gets the widest possible distribution. Point them to whatever site or organization you belong to that’s fighting FATCA/CBT.
2. Offer to provide more information to a reporter and accept any and all interview requests. Say that you can attest personally to the accuracy of Graffy’s article and give them a local angle.
3. Write up your experience and see if the local paper will print it.
Love to hear other ideas as well.
Will this do any good? No idea but I think it’s worth trying. My feeling is that it’s a win-win for us. If our reps are willing to talk to us then we win a chance to let them know how we feel up front and in person. If they won’t talk to us, then we have more ammunition for our argument that we are poorly represented AND we have a story for the local media.
But what I like the most about it is that it gives each and everyone one of us an opportunity to advocate and lobby for ourselves. Be persistent mosquitos, folks, and perhaps together we can unleash the perfect swarm.
Foreign Banks And Brokers Are Refusing Overseas Accounts for American Customers
By Patrick A Heller on July 19, 2013 9:10 AM
Commentary on Precious Metals Prepared for CoinWeek.com …..
A number of financial advisors who are concerned about the coming financial crises in America have recommended transferring some assets beyond the borders of the United States. For prudent wealth management, it is an option worth consideration.
#FATCA – How to Lose Friends, Citizens and Influence
In the past, one used to seek to win friends and influence people. Such was even updated for the digital age. Yet, now times are changing, as explained in this excellently written article:
How to Lose Friends, Citizens and Influence
The U.S. Foreign Account Tax Compliance Act seeks to co-opt foreign banks as long-arm enforcement agencies of the IRS.