Barrie Mckenna has recast his article from yesterday to include the following information: Flaherty pleased with IRS partial tax amnesty decision.
Here is my response:
Category Archives: Issues regarding US persons abroad
Something new (maybe) from the IRS for taxpayers residing outside the U.S. and who have NOT been filing tax returns and FBARs
Cross posted from RenounceUScitizenship. I intend to update this in the next few days based on comments. Looking forward to your thoughts.
Interesting comment on "low compliance risk" and U.S. citizens abroad #OVDI #FBAR #FATCA http://t.co/GJECBvTU Shows risk of June 26 IRS ann
— U.S. Citizen Abroad (@USCitizenAbroad) June 30, 2012
Whatever this means was announced on June 26, 2012 under the title of New Filing Compliance Procedures for Non-Resident U.S. Taxpayers. Those interested in this topic should check back frequently for more specifics. The specifics should be available no later than September 1, 2012. I am certain that the “cross border professionals” will say that this is “nothing new”. After all the statute of limitations for FBARs is six years. This is a message from the IRS and therefore it needs to be read carefully. It also needs to be read in the context of:
1. OVDI – You are all criminals
2. The December 2011 FS – well maybe “reasonable cause” does really exist
3. Voluntary disclosure in general – always been there anway
You can be sure that the IRS chooses its words carefully. Therefore, we must read the words of the IRS carefully.
Continue reading
The disease of citizenship-based taxation spreads
Some of you might remember that during the French presidential campaign both Sarkozy and Hollande were proposing some sort of expat tax – Sarkozy wanted to tax those who “left for tax reasons”, that ever flexible political catch phrase, whilst Hollande wanted to implement a 75% income tax rate on earnings above 1 million Euros – A sure way to send many wealthy French expats flying towards London and Switzerland.
Anyway, I came across an article about the recent parliamentarian elections that have taken place and about how, for the first time, French expats will be represented by 11 deputies representing overseas constitutencies. Here is an article from the Guardian which has an interesting graphic of how they divided the electoral regions up and how many of the 2 million French expats live in each.
A response from John Weston MP on FATCA
Some of you are aware that I wrote to each of Canada’s MP’s expressing my concerns regarding FATCA. I’ve heard back from a few, but most importantly from my own MP, John Weston, a member of the Conservative Party and designated by Minister Flaherty to look into matters concerning US citizens in Canada. Many of us have been anxiously waiting for some indication of the stance our government will take on FATCA. I believe that we now have one:
Thank you for your letter. I share your concerns about the IRS’s actions in pursuing Canadians who also have US Citizenship.
I have taken the initiative among Government Caucus members to consolidate information concerning this matter and have worked closely with the Honourable Jim Flaherty, our Minister of Finance, who has taken our concerns forward effectively. Among other things, I arranged for prominent US tax attorney Mark Matthews to come to Ottawa on May 30, 2012 to brief Caucus members concerning these matters. Mr. Matthews not only works with Canadians who have US tax problems but he also served previously as Deputy Commissioner at the IRS.
Concerning the Foreign Bank Account Regulations (“FBAR”) matter, the IRS issued a directive in December 2011, “reviewed or updated June 13, 2012”, that appeared to acknowledge these concerns. You can find the IRS Directive [here].
However, as you will see in Minister Flaherty’s statements, which I have enclosed, you will see there is still considerable uncertainty. I join the Minister in recommending that you take US tax advice before making decisions on how to proceed.
Foreign Account Tax Compliance Act (“FACTA”)
Concerning the FACTA matter,
- FATCA has far-reaching implications as it would turn Canadian banks into extensions of the IRS and would raise significant privacy concerns for Canadians
- Since the beginning of last year, we have raised serious concerns directly with the US
- We strongly believe this is unwarranted
- Canada is not a tax haven and we already have joint arrangements in place to prevent tax evasion
- We strongly believe rigidly imposing FATCA on our citizens and institutions would not accomplish anything except waste resources on all sides.
- While we’re pleased the US has taken note of concerns we’ve expressed on behalf of Canadians by delaying FATCA’s implementation until 2014, clearly this only a first step
- As such, we have and will continue to express our strong concerns relating to FATCA with the U.S. government
- We are actively seeking a solution both countries will find agreeable
I wish you success and peace in resolving how to deal with the IRS. I will continue to work on your behalf and with Minister Flaherty to try to bring this situation to a more satisfactory conclusion for all Canadians.
I think we have cause for encouragement that the Canadian government will not just roll over. I also like how Mr Weston has the sensitivity to not refer to us as “duals”. If anyone would like me to post Minister Flaherty’s statements I will, but I believe many of us are already aware of their contents.
IRS Announces Efforts to Help U. S. Citizens Overseas Including Dual Citizens and Those with Foreign Retirement Plans
Here it is. Was this what you were waiting for?
IR-2012-65, June 26, 2012
WASHINGTON — The Internal Revenue Service today announced a plan to help U.S. citizens residing overseas, including dual citizens, catch up with tax filing obligations and provide assistance for people with foreign retirement plan issues. Continue reading
FATCA ‘failure’ will cost the US
I don’t know if anyone has posted the link to this news article from June 21st already.
FATCA ‘failure’ will cost the US
“The real liability of FATCA, legislatively or politically, is not what it costs you as US expats or foreign institutions, it is what it costs domestic US institutions to collect information for the foreign ‘partners’.” Some estimates have projected compliance costs of $7.5bn just for the top 30 banks.
A Poke at American Exceptionalism
I didn’t see The Newsroom last night but the rant of the anchor is worth a read. A Business Insider article (cited below) also lists 25 other facts, some of which won’t surprise but taken as a whole, the effect is quite disturbing. It will be interesting to see if there’s any effect on the mainlanders and how they see the reality around them.
A few of the more “telling” facts:
I think some of you will get a bang out of this
Dear Senator Schumer:
ACA’s Jackie Bugnion and J. Richard Harvey debate FATCA for two nights this week
Unfortionately I don’t know if there will be any way to see the event afterwards but here are the details:
Event in Geneva:
http://www.aca.ch/SCFAS_Fatca_2012_Invite_GE_Final.pdf
Event in Zurich
Debate: FATCA- The worldwide end of Bank Secrecy?
Anyone in Switzerland planning to attend and report back to IBS?
Amy Webster a dual Swiss-US Citizen, tells her FATCA Fallout banking story.
Amy Webster, a communications specialist who lives in Morges, Switzerland shared her FATCA fallout story recently on the Genevalunch blog. The link to her story was in one of the comments posted here on Isaac Brock. I have been in contact with her via email, and obtained her kind permission to also cross post it here for additional visibility. She said, “By all means, my story has gone public, so please feel free to do what you wish with it, as long as it can help our cause!” Her story follows: Continue reading