Liberty and justice for all United States persons abroad

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Category Archives: Issues regarding US persons abroad

Another Victim of FATCA, retired Swiss/American woman living in (ex-Soviet) Georgia

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A Swiss-American woman who has had an account at the Banque Cantonale Vaudoise (BCV) for decades is being forced to close the account before end of December.   Aged 65, she receives her Swiss social security and disability payments in the account, and uses the account to pay her Swiss health insurance premiums.

Article (in French):  http://www.lematin.ch/suisse/bcv-supprime/story/16464128

The article says that she is being forced to close because she does not live in Switzerland.  But how can she draw her pension to which she has the right?!

Chinese central bank legal expert speaks out against FATCA

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Hong Kong-based financial news group Finet reports on remarks by Liu Xiangmin of the People’s Bank of China on FATCA; I’ve translated their article below. Risk.net and Reuters have similar reports in English: “US should show more respect over Fatca” and “China central bank official slams U.S. tax dodging law”.

人行：美國FATCA法案違反中國法律，並增不必要開支 People’s Bank: U.S. FATCA legislation violates Chinese law, unnecessarily increases expenses
http://finance.sina.com.hk/news/-39-5439199/1.html
人行條法司副司長劉向民表示，美國即將實施的「海外帳戶稅收遵循法案」(FATCA)法案對於中國的銀行會產生不必要的開支，亦令相關銀行因為向美國政府泄露客戶資料，而違反中國法律，他指出，兩國法律之間的相抵觸並非新事物，但因中國的公司近年才於海外設立辦事處或分行，有關的問題才浮現。 People’s Bank of China Department of Treaty and Law Deputy Director-General Liu Xiangmin stated, the United States’ soon-to-be-implemented Foreign Account Tax Compliance Act (FATCA) will result in unnecessary expenditures for China’s banks, and those banks which disclose customer data to the United States government will be in violation of Chinese law. He pointed out, conflict between the two countries’ laws is not a new phenomenon, but as Chinese companies have only recently begun to establish overseas representative offices and branches, the problem did not manifest itself until now.

 
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Are US renunciation figures being gamed?

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I describe this in more detail at the Overseas Exile blog, but here’s the issue in a nutshell.

For the first three quarters of this year the Federal Register has reported a little over 1,000 renunciations. However, one Swiss site reports that the US embassy in Switzerland has processed 411 US renunciations. This would mean that Switzerland, with somewhere between 2 to 5% of the world’s US expats, is reporting over 40% of the US renunciations. Perhaps the US expats in Switzerland have more wealth, but that 40% seems ridiculous.

However, Fox News has a story where unnamed “immigration officials” report a projected 8,000 US renunciations this year. If true, Switzerland will have approximately 5% of the world’s renunciations, a figure which makes much more sense.

So, how do we find out who these immigration officials are? Where did they get their numbers? Why is every indicator suggesting that US renunciations are increasing but the Federal Register reports that they’re way decreasing?

FATCA: To trap a US person – only way to escape is OVDP

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Cross posted from RenounceUScitizenship

Well, at least according to former IRS lawyer and Florida based lawyer Richard Lehman. This video is worth the hour it will take to watch. Those considering a FATCA IGA with the U.S. should watch it as well.

It explains how:

If Canada enters into a FATCA IGA, it will help the U.S. “trap” almost one million Canadian citizens. Once “trapped”, Canada will turn its own citizens over to the IRS for processing.

This is definitely one of the better presentations I have seen on the OVDP program, on form 8938, and the obligations of non-US banks under FATCA. He also does a good job outlining the incredible range of penalties that US citizens abroad may be subjected to. Mr. Lehman skillfully presents the threat of FATCA and introduces OVDP as the only way to save yourself. Although the video was made in October of 2012, it includes no reference to the “streamlined procedures” and no reference to the December 2011 FS. This makes it a very skillful ad for OVDP. Continue reading →

Mexico, US Sign FATCA Agreement

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Mexico, US Sign FATCA Agreement

by Mike Godfrey, Tax-News.com, Washington

23 November 2012

On November 19, 2012, in Washington, the Mexican Undersecretary of Revenue, José Antonio González Anaya, and the United States Assistant Secretary for Tax Policy, Mark J. Mazur, signed a government-to-government agreement for the bilateral implementation of the Foreign Account Tax Compliance Act (FATCA).

FATCA was enacted by Congress in March 2010 and is intended to ensure that the US tax authorities obtain information on financial accounts held by US taxpayers with foreign financial institutions (FFIs). Failure by an FFI to disclose information would result in a requirement to withhold 30% tax on US-source income.

FFIs across the world have all expressed concern about the legislation, particularly the changes to their systems it will entail, and the penalties that will ensue in case of non-compliance. Those concerns led the US Treasury to pursue government-to-government frameworks for implementing FATCA.

A government-to-government agreement, as signed between the US and Mexico, does not contain any exemption from FATCA, but, instead, a model for information sharing is offered based on existing bilateral tax treaties and allowing FFIs to report the necessary information to their respective governments rather than to the Internal Revenue Service.

The FATCA agreement has taken two years to negotiate between the two governments, and, while a copy has not yet been released, is said to be a significant improvement in the mechanisms for the exchange of banking and other financial information between the two countries.

In addition, after the signing of the agreement, the Mexican government believes that it is placed amongst the countries with the best practices for the exchange of information, as driven by the Organization for Cooperation and Economic Development and the G20.

How the term “US person” will give the US “de FATCA” control over other nations

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Cross posted from RenounceUScitizenship.

By attempting to impose FATCA on the world, the US is attempting to place the world, not in its hands but in its Iron Fist.

The US is leading the world  into a frightening Orwellian future. Those  of  you who have  read  Orwell’s  1984 will recall  the importance of language. Language is used  to shape our attitudes. Language  is used as a  means to enhance and contract our understanding of issues. Hence, the importance of “Newspeak”.

Today I had  an interesting thought (a rare  event). I realized that all of the discussion of  US tax laws uses the language of “citizenship-based taxation”. This is  misleading language. US tax laws  apply to far more than US citizens. The Internal Revenue Code  speaks  of “US persons”. Continue reading →

Effective Communication and Effective Leadership = Effective Change: Thanks, Sylvia D. Johnson

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A summary and a thank you…

A summary of what appears to be a breaking of the log jam we’ve seen for at least one of the US Consulates in Canada — Vancouver.

A thank you to one who took the time to listen — the Consul General of Canada, Sylvia D. Johnson.

Conversations took place. We’re seeing change. Communication works.

pacifica777 and calgary411 have had several discussions with Ms. Johnson — through email and a couple of lengthy phone calls, taking time from what we can only imagine to be her very busy schedule.

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UBS asks “US persons” in Switzerland to Renounce Swiss Data Protection – Let the Outrage Begin!

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Yesterday, Thanksgiving Day, UBS began the first step of complying with FATCA. How completely unhospitable, all things considered.

Americans, green card holders and non-US spouses of USCs received W9s, as well as a form which indicates they agree they will not receive protection under Swiss data laws for the information “requested or required by the IRS.” The explanation given was that FATCA begins January 2013. I wonder if they simply decided to go ahead in spite of the extension to 2014 or if it is a gigantic case of CYA in advance. The extra form suggests that this practice would normally violate privacy laws, but I don’t know if that is true or not.

Interestingly, the article states UBS previously asked USCs to tick a box, indicating their citizenship.  Do any of our Swiss posters know when this began? I am curious if was a regular practice or something that appeared after the 2009 debacle.

The clients have until March 31, 2013 to comply. If they do not, ” “UBS will be obliged to end its business relationship with you.”

“The letters and forms are to be returned to UBS wealth management offices in different parts of the country, the bank unit handling the paperwork. This detail could  have implications later for those who do sign the forms.

Bank employees advising clients who receive the letters have said that while, for now, UBS has opted not to refuse American clients, at some point in the future these clients may have to foot the bill for the higher cost of handling them.”  It is interesting that individual USCs may be required to shoulder the costs as opposed to the bank spreading them out to all clients. I wonder if this will become a practice across the globe. If so, it will put a dent in the idea that other nationals will be outraged by being charged and demand that FATCA or the IGA be refused/rescinded, etc.

I am not familiar with Swiss law and don’t quite understand why signing a document which is open-ended (timewise) may cause legal problems. Again, would welcome comments from our Swiss Brockers that would educate us as to what type of privacy laws there are in Switzerland as well as any other info that would shed some light on implications for the future.

 

“With this Authorization, the Client herby expressly waives any protection or right under Swiss bank-client confidentiality and data protection laws to the extent necessary for the reporting of any Data hereunder. Further, the Client accepts and acknowledges that any Data that the bank discloses hereunder to the IRS will be subject to the laws of the US and will not be covered by Swiss law.”

http://genevalunch.com/blog/2012/11/23/ubs-asks-us-persons-in-switzerland-to-renounce-swiss-data-protection/

 

Question: Are these FATCA IGAs considered a Tax treaty or not?

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There has been a lot of bantering across multiple threads about the nature of the FATCA IGAs which the IRS is entering into with other Treasury technocrats.  I have come to realize that I didn’t have a clear understanding of the difference between a Tax Treaty, which requires ‘Advise and Consent’ versus this animal called an IGA which apparently does not.

I asked the question of the two who I consider to be the resident IBS experts, Tim and Jim over on this thread here, but I think they missed seeing it.

I wondered if anyone besides me was struggling to understand the technical nature of these things, and so I asked again via email on this Thanksgiving, and to my surprise, in spite of the holiday,  I got a couple good answers.  It was very much appreciated.  Thought I would share it here for others that are looking for clarity.  Continue reading →

Ten reasons Canada MUST say NO TO FATCA! – updated

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This is excerpted from a post at RenounceUScitizenship.

He who has the gold, makes the rules!

Yesterday, I was talking to Bay Street Investment banker (think big bucks). I described the FATCA problem. His eyes glazed over and said to me:

“I am extending you a courtesy just by listening to what you are saying!”

The complexity and sheer audacity of FATCA is beyond the ability of people to comprehend. Make no mistake about it. A FATCA IGA with the US will end Canada’s fiscal sovereignty. Ever hear the saying:

He who has the gold makes the rules

If Canada allows the US to have control over its banks, and the gold is in the banks, it will give the US control over Canada’s gold. Got the picture?

Why would any country enter into a FATCA IGA with the US Treasury?

Leaving aside the technicalities of U.S. threats, there is one simple answer.

The answer is: No country should enter into a FATCA IGA with the US Not now, not in the future. Not ever. The time has come to imagine a world without the U.S  and to start  behaving accordingly. The time has come to gradually build a world financial system that is not “US centric”. Here are ten objective reasons explaining why Canada MUST say NO TO FATCA! Continue reading →