Here is something different for those of you struggling with the tough decisions regarding U.S citizenship. Should you renounce or not? Should you become tax compliance with FBAR and FATCA, or not? It is a major decision in your life, and tonight, I am going to ask you to consider this:
FATCA Intergovernmental Agreement (IGA) Exposed as Bad Deal for ‘Partner’ Countries: by James Jatras
– U.S. Treasury official concedes promise of “reciprocity” falls short
– ‘IGAs’ no protection for firms, subject to cancellation by U.S. at will
– ABA: “no indication or evidence suggesting that the Treasury conducted the required due diligence for entering into such an automatic exchange” with Mexico
Darth Vader: I am altering the deal. Pray I don’t alter it any further.
Lando Calrissian: [to himself] This deal is getting worse all the time!
– from Star Wars: Episode V – The Empire Strikes Back (1980)
Internal Revenue Code severely punishes countries which impose extraterritorial taxation
Even more hilariously hypocritical than the 1974 Jackson–Vanik Amendment — which slaps trade sanctions on countries imposing unreasonable barriers to emigration of their citizens — I bring you 26 USC § 891: “Doubling of rates of tax on citizens and corporations of certain foreign countries”, a law originally passed in 1934 and still in effect today:
Whenever the President finds that, under the laws of any foreign country, citizens or corporations of the United States are being subjected to discriminatory or extraterritorial taxes, the President shall so proclaim and the rates of tax imposed by sections 1, 3, 11, 801, 831, 852, 871, and 881 shall, for the taxable year during which such proclamation is made and for each taxable year thereafter, be doubled in the case of each citizen and corporation of such foreign country; but the tax at such doubled rate shall be considered as imposed by such sections as the case may be. In no case shall this section operate to increase the taxes imposed by such sections (computed without regard to this section) to an amount in excess of 80 percent of the taxable income of the taxpayer (computed without regard to the deductions allowable under section 151 and under part VIII of subchapter B).
I’d love to see Homelanders get their taxes doubled every year until they stop spouting their ridiculous ultra-nationalist justifications for taxing those of us who don’t live in their damn country and imposing discriminatory burdens on our ability to save for retirement. Sadly, § 891 only applies to “foreign” countries.
Geneva Lunch: To renounce, go underground or move back to the US…
I just noticed a 29 January update on http://genevalunch.com/tag/fatca/ mentionning Tina, Wegelin, and some other issues. As of now, I see no comments there. Perhaps a good place for the Brocker SWAT (Special Writers And Theses) team to post a few comments against FATBARDT. It appears that all comments are moderated, but worth a try. I successfully submitted a comment mentionning the recent Time article and discussions using FireFox and Facebook login.
Iceland catches and expulses FBI spys
We learned from a previous post, agents of the United States government can do what they want, when they want. However, they can’t do it where they want, at least not in Iceland. The leaders of Iceland, who also had the hutzpah to say “no” to their banksters, have expulsed FBI agents who entered Iceland unannounced and were spying on citizens of Iceland.
Is it asking too much of our Canadian leadership to do the same, especially as it regards the residents and citizens of Canada and their banking information?
Parliamentary Finance Committee discusses Tax Havens next Tuesday
All I can say is myself and others will be watching closely. This first hearing looks to be mainly officials from the CRA along with yet to be named persons from the Department of Finance and RCMP. Hope no one for their sake at the hearing says anything stupid like that guy from the German Embassy in Washington DC.
Jack Townsend: Warnings on Continued Government Patience for Offshore Account Ostriches (1/31/13)
http://federaltaxcrimes.blogspot.ch/2013/01/warnings-on-continued-government.html
A Tax Notes Today article reports that the Assistant Attorney General for the
Tax Division, Kathy Keneally, has warned that amnesty for offshore account
evasion will not last forever…
What disturbs me about this article is that bone fide residents abroad appear not to be addressed.
George Mason University seminar on FATCA with Jim Jatras and Jesse Eggert
New videos have been posted of the GMU seminar on FATCA with Jesse Eggert and Jim Jatras.
Mister Taxman: Why Some Americans Working Abroad are Ditching Their Citizenships
By Helena Bachmann Jan. 31, 2013
Why is Tina Turner switching from American to Swiss citizenship? The legendary singer, a longtime Zurich resident, told the Blick newspaper that she has been very happy in Switzerland and “can’t imagine a better place to live.” But some observers believe she may be one of thousands of American expatriates who have taken the drastic and irrevocable step of giving up their citizenship because of what they consider to be the unjust and discriminatory taxation practices of their government…
Read more: Time
IRS admits FATCA reciprocity is a joke
Full Reciprocity Under FATCA Is a Work in Progress, IRS Official Says
ORLANDO, Fla.–Although the United States has committed to achieving reciprocity regarding the exchange of financial transaction information under the Foreign Account Tax Compliance Act, domestic banks are not subject to the same reporting requirements as are their foreign counterparts, an Internal Revenue Service official said Jan. 25.
According to Ted Setzer, manager of IRS’s Large Business & International Division, although existing requirements on U.S. banks will provide other governments with similar information required of foreign banks under FATCA, “clearly existing U.S. rules don’t require U.S. financial institutions to provide the exact same information that a foreign institution has to under FATCA.”
“How we get to full reciprocity and how long it takes is something we’ll have to be working on.”Ted Setzer, LB&I DivisionSetzer made his comments during a session at the 2013 midyear meeting of the American Bar Association Section of Taxation on recently released implementing FATCA. [snip]
Responding to a question about reciprocity, Setzer said the United States had committed to such a concept. However, U.S. reporting rules for domestic banks “are what they are,” and do not require identification procedures identical to those required under FATCA, he said.
“How we get to full reciprocity and how long it takes is something we’ll have to be working on,” Setzer said.
I have a better solution lets FIRE Ted Setzer and strip him and his family of all US General Services Administration employee and retirement benefits.