This article, which provides perspective on FATCA from Russia is a very interesting read.
FATCA: A new generation of American laws – Of particular interest is a characterization of FATCA that:
It belongs to a new generation of American laws , which can be called extraterritorial . These are the laws that apply to a number of other countries , and sometimes even the whole world . These are laws that help build Washington Pax Americana.
FATCA: A new role for the IRS – The IRS Commissioner will govern the world
We are witnessing a unique alignment of the global system, “head” which is the U.S. agency , and all financial and banking organizations formally sovereign states coming under the administrative control of this department .
The article referenced in the tweet from FATCA_fallout is written in Russian by a Russian. I don’t understand Russian so I ran it through Google Translate. Assuming the accuracy of the translation, the article is revealing. I have bolded some of the more interesting parts.
This following comment appeared at the Isaac Brock Society.
Dash, a minor point on US CBT compliance and a comment on dual citizenship:
—USCitizenAbroad suggests that you might be one of the few who are capable of preparing a US return. I don’t believe that this is an accurate statement if, for example, you live overseas, are subject to the Obamacare surtax on investment income and wonder simply whether foreign tax credits can be used to offset this tax:
Last week, as part of doing my weekly IRS compliance homework for overseas US persons, I had a long conversation with the IRS International tax branch on this question in which we read together the final regulations on the surtax issue. IRS confirmed that the definitive answer will not be provided to US persons overseas as it now depends on the interpretation of the US tax treaty with each foreign country. I explained to IRS that I do not have the expertise to interpret the tax treaty and anyway it is only the IRS interpretation that counts (the fellow was sympathetic to my argument). IRS however refuses to interpret the US treaty with Canada and provide me with a straight answer and suggested only that I could take a chance in using foreign tax credits to offset the income– but I would have to somehow defend my position on treaty grounds if IRS challenged me and pay penalties etc if I were incorrect.
I am going to “appeal” to IRS in writing this lack of “guidance”, but my minor point here is only that the US does not make it easy to comply with CBT as the rules are often not even disclosed.
—You suggest that dual citizenship is/can be part of the problem. I agree. A practical issue however as others have mentioned is that terminating toxic US citizenship is difficult or practically impossible because of IRS penalties involved and the Reed Amendment nonsense. My recent submissions to the House W&M committee have mentioned RBT but are much more focused on changing US laws to let us leave the country humanely.
Please keep contributing to this site.
2013 has been a year of FATCA talk. FATCA has two components.
A. A public component for banks and governments.
B. A private component for Americans Abroad
The public face of FATCA – Banks and governments
2013 has a been a year of focus on on the public side of FATCA. This has included endless discussion about the compliance costs imposed on banks, the uncertainty of which countries will sign IGAs. (So far very few and even fewer countries of significance have signed IGAs. None of the BRIC countries (Brazil, Russia, India and China) have signed. Interestingly Canada (which is widely considered to be the most significant country has not signed. It’s obvious that 2013 has been a disappointing year (for the U.S. Treasury) on the IGA front. Furthermore, the U.S. has managed to anger each of the four BRIC countries in other ways. For example:
This is a companion to the earlier post I wrote suggesting why Swiss banks should NOT join the OVDP program for Swiss banks. In this post I argue that individuals shouldn’t join OVDP for people. At the moment that means that nobody should join OVDP.
I have written a number of posts about the OVDP program for Swiss banks. The banks should stay away from it. But what does it mean for Americans in Switzerland? The answer is that they are being asked to prove that they are U.S. tax compliant. Remember that proof has nothing to do with proof.
The Swiss banks are taking the lead in asking the question. One American in Switzerland reports receiving the following message from Post Finance:
Will FATCA ever be imposed on the world? The author wishes for no more FATCA delays. He claims, as only a Homelander could that: “Foreign institutions were blatantly assisting U.S. taxpayers in hiding assets from the IRS.”
But here is the gist of it:
I’ve argued before that the original delay of FATCA was disturbing from a separation of powers perspective and that a second delay would only call into question whether Treasury and the IRS will ever start enforcing withholding. Practitioners and effected taxpayers will always be clamoring for more guidance, more clarity, more safe harbors, and more time to comply. They will never be satisfied, no matter how many thousands of pages of regulations Treasury releases on New Year’s Eve or how many sets of detailed instructions the government puts together for revised forms. The tax community is seldom completely satisfied with guidance. It always wants more or different answers.
And the reality is that the IRS will probably never be done issuing FATCA regulations or form revisions. The law is very broad, with many moving parts. It is evolving as Treasury (rightly or wrongly) changes its implementation by using IGAs. If IRPAC and the financial industry want Treasury to wait for all the significant guidance to be finalized before the withholding regime is put into force, FATCA will be waiting a very long time to become law.
- #FATCA is sure to create and exacerbate tensions between Homelanders and #Americansabroad (renounceuscitizenship.wordpress.com)
- IRS Advisory Committee Calls For Further Delay in FATCA Implementation (taxcontroversywatch.com)
- Some compliance thoughts from @Mopsicktaxlaw – Responding to #FATCA (renounceuscitizenship.wordpress.com)
- Required reading for countries considering a #FATCA IGA with the US (renounceuscitizenship.wordpress.com)
- Learn About FATCA … The IRS Goes Global (youviewed.com)
- The tax man cometh: Are you ready for FATCA? (virginiabusiness.com)
- The #FATCA IGA aka #OVDP for countries (renounceuscitizenship.wordpress.com)
The following comment appeared to my recent post:
As usual, you put the narrative together VERY well, and are so correct! and they all clamor to comply…
See this comment…
December 7, 2013 at 6:44 am
The print-edition of the Handelszeitung (HZ) has an interview with the Paolo Cornaro (PC), CEO of Corner Bank, a credit-card bank in Switzerland. He seems to indicate that the tax deal between the Swiss and the US governments is more about extortion than about an agreement (translated):
“HZ: The US tax dispute is further along. How do you judge the agreement?
PC: This program, which I cannot characterize as an agreement with good conscience, strikes all banks as a block. It does not make a distinction between banks which consciously went on American soil to acquire customers and those banks, to name an extreme example, that opened accounts for two Swiss who were also coincidentally in possession of US citizenship. We know today which banks are Category 1. Since we never actively pursued American customers, we should be in Category 3. With this view, however, we are exposed to the risk in the event that documentation is not water-tight that we would have to accept additional liability.
HZ: You must decide no later than December 9?
PC: It certainly could happen that there are banks which will not be so far. We will classify ourselves in Category 2 in order to avoid further discussions and risk a penalty. We have American customers who are properly declared. The program’s concept is however that all are tax evaders. Then we must prove that this is not the case.
HZ: What kind of penalty are you looking at?
PC: I cannot and do not want to mention a number. We want to close a chapter by paying a penalty and then can we look forward again.
HZ: You will pay in order to have peace and quiet?
PC: Yes. We found ourselves in a similar situation in connection with the “unidentified accounts” matter. Our bank was founded in 1952 so there was certainly no unidentified accounts coming out of the war. We decided to pay anyway. Towards the end of the matter the actions were directed at all Swiss banks. If we wanted to continue with a US dollar clearing account, we had to pay. It didn’t matter whether we were guilty or not. We booked the payment as a solidarity contribution. Also at that time we wanted to simply conclude the matter.”
Do they really think this just conclude the matter so simply? Extortion at a grand scale.
as James Jatras so eloquently said…
Who is advising these people? How naive can they be? They really think an admission of guilt is the end of their ordeal, not just the beginning? Once the Mark of Cain is stamped onto their forehead it never comes off