A new post from Mopsick Tax Law offers interesting insights into the “FATCA Safe Harbour” rules the IRS has offered FFIs during the first two years of FATCA. The post (if I am reading it correctly) strongly suggests that the purpose of the delay is to assist the “foreign banks” (you know, the Bank of Nova Scotia branch near your house) to “search and destroy” Canadians of U.S. origin.
The post referenced in the above tweet includes:
A quick read of the IRS Notice makes it very clear that this new delay is solely for the purpose of making sure that foreign financial institutions have enough time to get it right when they start “outing” their American depositors. It says nothing at all about any liberalization of the draconian and absurd FBAR penalty provisions or how to streamline the cumbersome voluntary disclosure procedures, nor does it add one whit of common sense to the OVDI process when the 27.5% tribute is ten times or more the amount of tax due on unreported income. …
The Notice says absolutely nothing about the heavy burden FATCA places on individual taxpayers. It says nothing about whether 85 year old pensioners are at risk for six and seven figure penalties for willful failure to file FBAR’s for past years, or whether Americans abroad will ever get through to anyone at all in Washington on why one size does not fit all when their neighborhood bank is the Royal Bank of Canada, France’s BNP Paribas or the Bank of India. …
While the message of the Notice is “FATCA is here to stay,” we would respectfully suggest that if the IRS could simply dedicate the same amount of resources to publishing some safe harbors for Americans abroad and recent immigrants to the United States as it did with this ten page notice, it might help repair the now dubious assumption that part of the IRS’s mission statement conveys the concept of “service” to the people it is supposed to serve.
The IRS Mission: “Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.”
The comment, at the Isaac Brock Society, referenced in the above tweet includes:
Adding on to @Anne Frank……………..
Looking into Pandora’s box five years from now……
The USA would have had five years to analyze all these data submissions. Some members of Congress will calculate out the maximum FBAR penalties due, income tax due, penalties on late payment of income tax plus three and six year interest calculations as applicable.
The total amount due the United States will be huge. It will be largely than the Switzerland estimate solely because there are more Canadian “fish” in the frying pan. The financial accounts of one million will have lots of FBAR penalty exposure.
The US Congress will then agree to pass FATCA Collect 2019. This will naturally be a reciprocal agreement in which the IRS will help CRA collect and the CRA will help the IRS collect, subject to an IGA otherwise there will be a 30% cross border financial penalty for non-co-operation.
The Liberal Government now in charge in Canada will agree to sign the 2019 IGA because they will claim their hands were tied once the Conservatives signed the first IGA in 2014.
That is the future if we do not win.