Category Archives: Issues regarding US persons abroad

By Patricia Hurtado & Christie Smythe – Feb 20, 2013 2:40 AM GMT+0100

A U.S. judge ordered five unidentified taxpayers to turn over information about their foreign bank accounts to a federal grand jury, rejecting arguments that they are shielded by the U.S. Bank Secrecy Act or a constitutional right against self-incrimination.

U.S. District Judge William Pauley in Manhattan said today that a federal grand jury in 2010 began investigating “whether each of the five subjects had a financial interest in foreign bank accounts that they failed to disclose to the Internal Revenue Service.”

In a victory for the government, Pauley said individuals can’t assert a constitutional right against self-incrimination and refuse to disclose bank records to a U.S grand jury.

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My comment:

I hope that the Grand Jury recognizes that Americans living abroad have local bank accounts where they live, not “foreign bank accounts”, unless they have a bank account in the US, which would then be a “foreign bank account”.  The Grand Jury should understand that an American who does not live in America does not live in America, unlike stateside Americans who may bank in other nations.  The difference is great and needs to be considered.  Tossing all Americans into the same bucket in regards to local bank accounts can create a lot of confusion and misconduct when seeking a problem that doesn’t exist.

from badger’s “Comments” to a “New Post”…

Maybe this is already noted on IBS, but here’s another famous renunciant. Judging by this article, he’d be a covered expatriate. Is his name on the Federal register list?
http://www.rferl.org/content/afghanistan-mahmud-karzai-enters-politics/24882541.html

‘Wednesday, February 20, 2013
Afghanistan
Karzai’s Brother Renounces U.S. Citizenship To Enter Afghan Politics’

from the article above:
…”Karzai, 57, is a wealthy entrepreneur whose business interests include banking, mining, and real estate.

He lived in the United States for many years and reportedly has owned restaurants in San Francisco, Boston, and Baltimore.

Media reports say Karzai controls a 7 percent stake in Kabul Bank, Afghanistan’s largest private bank.

Last year, an independent audit found that Kabul Bank was involved in a fraud that sent nearly $900 million outside Afghanistan. Karzai denied any wrongdoing…”

http://www.rferl.org/content/afghanistan-mahmud-karzai-enters-politics/24882541.html

And I’m wondering if he was FBAR and FATCA compliant?

Another untouchable too big (or politically important to the US) to prosecute? I wonder.

Are Karzai and his family (many US citizens who moved back to Afghanistan) all IRS tax and FBAR and FATCA compliant on their ‘foreign accounts’? Is the IRS fully cognizant of all of their Afghan ‘foreign accounts’ ? Would the IRS pursue Karzai and his clan the same as they are pursuing ordinary Canadians with TFSAs, Swiss, Swedes, and others?

Continue reading →

Just saw the play: The Power of Harriet T.

The scene where she crosses in Canada and said that the Fugitive Slave Act doesn’t apply up here gave me the creeps!

LE MONDE ECONOMIE  – 18.02.2013

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.