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Category Archives: Issues regarding US persons abroad

UK FFI’s face compensation claims under FATCA

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From Out-Law.com:
UK financial institutions may face compensation claims if they send inaccurate data under FATCA regime

Excerpt:

In its document, which sets out answers to ‘frequently asked questions’ on the issue of data protection and FATCA, HMRC said that financial institutions could face claims for compensation from US nationals if they provide inaccurate information to the US authorities.

“In addition to any rights you may have to claim compensation from the US authorities, the DPA (Data Protection Act) gives individuals the right to claim compensation from a data controller where they have suffered damage because of a breach of the DPA,” HMRC said in its guidance. “As both HMRC and the financial institutions are data controllers for the FATCA information, you can make a claim for compensation to either (or both).”

Inaugural Address quote of the day

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“Preserving our individual freedoms ultimately requires collective action.”

Thank you, Mr. President, for providing the clearest rationale yet for the necessary existence of The Isaac Brock Society. As you begin your second term in office, may you spare even a nanosecond of thought for U.S. Persons worldwide untainted by the assumption that we are all rich tax cheats like your outgoing Treasury Secretary.  Have a nice day.

Royal Bank of Canada: FATCA webpage

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The majority of RBC clients are not U.S. persons and, in most cases, FATCA should have little impact. If you have an existing account and there is an indication that you may be a U.S. person, or if you are opening a new account, RBC may ask you to provide additional information or documentation to demonstrate that you are not a U.S. person. (link mine)

From the RBC’s FATCA page.

Hat tip: Suki

IRS should NOT be able to license tax preparers

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As you know the IRS wants to require a license, issued by the IRS, in order to charge money to prepare tax returns. For the moment this requirement has been struck down by the courts.

https://twitter.com/FATCA_Fallout/status/292905409373683712

 

I believe that the discussion on this is missing the most important point which is captured in this exchange:

 

 

 

The problem is that that if it is the IRS that is issuing the license, then tax preparers will think that they must please the IRS instead of being fair to the client. It is like the problem of the lawyer who wants to put everybody into OVDP and the lawyer who considers a number of compliance options.

This case is likely to go to the Supreme Court. I suspect that the decision that the IRS can’t regulate will stand.

 

 

U.S. citizenship and a possible marriage penalty

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This is an interesting topic to solicit comments on. I am increasingly of he opinion that the manner in which the U.S. imposes citizenship-based taxation may be a human rights violation. The reporting rules, threats, intrusion into the family finances, keeping the non-US spouse out of the family finances, disallowing a child deduction for children who are NOT U.S. citizens, making it difficult for the non-citizen spouse to inherit …

Does U.S. citizenship-based taxation interfere in marriages?

Subject to your comments, I think this would be worth a more comprehensive post.

 

 

 

Pepperdine #ObamaTaxAdvice Tweets and Conference

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Results For #obamataxadvice :
The first tweet gives a link to the video of conference! Although the whole conference is interesting, the panel of most interest (FATCA, etc.) – Allison Christians – starts at about the 6:35 mark.
FATCANatics
The FATCANatic response starts at the 7:27 mark. He refers to the Drone analogy and acknowledges that it is a case of the U.S. telling foreign banks what to do. He makes three  interesting points:
1. FATCA is the wave of the future for lawyers;
2. Surprised that FATCA has not been done sooner;
3. Thinks that other countries will follow the U.S. into FATCA.
Make sure you listen to it.
Discussion of matters of interest to #americansabroad:
Professor Allison Christians (starts at the 6:50 mark) introduced the conference attendees to FATCA and U.S. citizenship-based taxation.
At the 7:36 mark she answers a question from the audience which seems to be (I infer this from her answer) a two part question:
1. The questioner thought FATCA was reciprocal, so what’s the big deal?
2. Why on earth would Canadians object to filing U.S. tax returns?
Professor Christians gave a good description of the problem.
Prognosis:
After watching this you may want to consider where the tax environment for U.S. persons abroad is going. We DO know where the career prospects for lawyers are headed! Begins with “F”.

Overall impression of the conference:

Tax policy is simply to important to allow the discussion to be shaped and dominated by tax professionals! Perhaps they should not even be included in the discussion.

Advice:

Enjoy the video!

 

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Tax Law Conference discusses FATCA

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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

Treasury and IRS Issue Final Regulations to Combat Offshore Tax Evasion

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US Department of the Treasury News Release

Treasury and IRS Issue Final Regulations to Combat Offshore Tax Evasion
1/17/2013

NOTE:  This document is scheduled to be published in the Federal Register on 01/28/2013 and available online at http://federalregister.gov/a/2013-01025, and on FDsys.gov

Treasury Advances Efforts to Secure International Participation, Streamline Compliance, and Prepare for Implementation of the Foreign Account Tax Compliance Act

WASHINGTON – The U.S. Department of the Treasury and the Internal Revenue Service (IRS) today issued comprehensive final regulations implementing the information reporting and withholding tax provisions commonly known as the Foreign Account Tax Compliance Act (FATCA). Enacted by Congress in 2010, these provisions target non-compliance by U.S. taxpayers using foreign accounts. The issuance of the final regulations marks a key step in establishing a common intergovernmental approach to combating tax evasion.

These regulations provide additional certainty for financial institutions and government counterparts by finalizing the step-by-step process for U.S. account identification, information reporting, and withholding requirements for foreign financial institutions (FFIs), other foreign entities, and U.S. withholding agents.

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