FATCA: The need-to-know basis is not satisfied

Soon after I finished my PhD, I had the experience of teaching as an adjunct professor in Ontario.  Eventually, I quit because I felt that the working conditions for contingent labor in higher education sucked–and they do:  just google the terms “adjunct hell”.  Then, I worked another job which I soon quit.  But to damage my reputation after I quit, one of the people from the second job asked for a reference via e-mail from the first employer and soon a flurry of e-mails had damaged my reputation among about a couple dozen people.  The first employer had even gone so far as to accuse me of “unpleasant breaches of trust”, not realizing that the term “breach of trust” is legaleze, usually for criminal behaviour related to money or the virtue of young women.  Later, the man apologized to me, saying that what he meant is that I had let them down.

This whole incident made me look into privacy laws in Ontario, and soon I found that I could have sued my first employer for defamation of character and the improper divulging of private information with malice.  Employers must be circumspect about information:  about what information they share with outsiders; about the recipients of the information; and about who within the company gives out the information.  Since the recipient of the information was no longer my employer, it no longer served any purpose as a reference.  Since the person who wrote the damaging reference evidently felt malice towards me, he should have found someone else to write the reference.  Since the information could potentially damage my reputation, the first employer should have made sure that they followed proper protocols as an institution in order to avoid a defamation or privacy of information lawsuit.  The guiding principle is:  Information is on a need to know basis.  Never divulge private information to someone who is not in the need to know.

This is the curious thing about FATCA.  The Canadian government has announced that it has serious concerns about FATCA.  Furthermore, Finance Minister Flaherty has insisted to the Americans that Canada is not a tax haven, and therefore there is little likelihood that the IRS will glean information through FATCA that will help with tax enforcement.

So if FATCA isn’t about tax enforcement, what then?  Well, as our own renounceuscitizenship has so adeptly pointed out, the most valuable FBAR to the IRS is an unfiled FBAR.

I believe that this is all part of a master plan:  The first part of the plan is to saturate the media with the OVD offer.  Then, those who still remain can no longer use the excuse of ignorance; the IRS will say,  “Where the hell were you, in Timbuktu, that you didn’t hear about FBAR and OVD programs?”  So any remaining undeclared accounts that they find will now be subject to wilful penalties up to 50% of the contents of the account.  But the perennial problem of FBAR is this:  since the account is in a foreign country, the only way that the US government can learn about it is if you tell them.  So if you don’t tell them they won’t know.

So the second part of the master plan is FATCA:  they will force your bank to rat on you.

Now the Canadian government has said that it will not collect FBAR fines.  So if you don’t have to pay the fines, and the information is useless for tax enforcement, why then does the IRS need the account information?  In other words, the basic test for divulging private information is not satisfied:  the IRS is not in the need to know because the information should be useless to them.

But it won’t be useless to the IRS, because the third part of the master plan is this:  the IRS will start sending fines to Canadian residents, based on the FATCA information that the Banks have sent them.  These fines will consist of 50% of your account balance, for wilful failure to file FBARs (this is implied by what the IRS has official stated).  Even though the Canadian government has said they won’t collect these fines, the IRS is hoping that there will be some very frightened people who will nevertheless pay the fines to them directly, either the full amount or a settlement of a portion of the extortion.

Thus, the banks are preparing to divulge information to the IRS that the Canadian government has said is unnecessary since Canada is not a tax haven.  Not only so, but that information can do great damage to many Canadians residents who have undisclosed accounts.  This is a disaster and this is why we must stop the  Canadian banks from implementing FATCA and giving millions of account numbers with names and addresses to the United States.  We must plead with the Canadian government to stop them.  If that doesn’t work, we need to begin protests and other actions against the major banks.

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39 thoughts on “FATCA: The need-to-know basis is not satisfied

  1. Great post. I particularly like this bit:

    ” The Canadian government has announced that it has serious concerns about FATCA. ”

    Is it just me, or do lots of governments around the world just seem to have “serious concerns about FATCA” and leave it at that. Some countries have already said that they will not implement FATCA (China, Japan, Australia, etc.), but we NEED Canada and the EU to reject it as well. Without this muscle nothing will happen, since I imagine that the vast majority of “US persons” live under these two jurisdictions.

    Also love the “Master Plan” terminology. I am currently imagining that devious James Bond villain from the 60s who always has that white cat on his lap having planned the whole IRS “Expat Package” with a menacing laugh and grin on his face.

  2. I found some interesting text from the agreement the US and Switzerland signed a few years back regarding UBS. The text below actually comes from a technical annex to the main US Swiss Tax Treaty. Here are the two types of account information Switzerland/UBS sent to the US.

    A. US domiciled clients of UBS who directly held and beneficially owned “undisclosed (non-W-9) custody accounts” and “banking deposit accounts” in excess of CHF 1 million (at any point in time during the period of years 2001 through 2008) with UBS and for which a reasonable suspicion of “tax fraud or the like” can be demonstrated, or

    B. US persons (irrespective of their domicile) who beneficially owned “offshore company accounts” that have been established or maintained during the period of years 2001 through 2008 and for which a reasonable suspicion of “tax fraud or the like” can be demonstrated.

    Now I am going ignore B. for a moment because I think I know what they actually looking for in that circumstance. (A) is quite interesting because Switzerland effectively can refuse to give any information on any US Person not residing actually in the US hence the word “domicilied”(either in Switzerland or outside of Switzerland). Now this agreement while it involved UBS specifically was essentially an agreement between two governments and the Swiss largely stuck to their own view of tax law which is the countries don’t have business prying into the business of their non resident citizens. What is VERY interesting is for the US sanctimous view of citizenship based taxation they went along with this agreement.
    I’ll say a few more things. First this agreement has been viewed as a template for handling further disputes between the US and Switzerland on tax information sharing issues. Second, I have not seen these issues dealt with to such a detailed level in other tax treaties so the language could conceivable become a model for the future(It is inline mostly with current practice on information sharing between the US and Canada). This agreement also has nothing to do with FATCA at the moment.
    The last comment I’ll make is I believe (B) is concerned with the issue of US expats living overseas. hiding assets, then coming back to the US and not declaring them.

  3. @Peter,

    Great post!

    Not only should we be lobbing the Financial institutions regarding FATCA…the population should also be aware not to sign any documentation that takes away your privacy… which is the solution to navigating around ones individuals rights (hence the second class Canadian).

    I think that this would warrant an IBS press release advising people of the dangers of granting authorization to a foreign Government when the time comes…..

    Like I said…i will jump through the hoops with becoming compliant TO A POINT..but i will not sign my privacy away…bank closure or not.

    There has to be a ‘master plan’ to all of this or they would be satisfied with the 1040s, FBARs, and any information CRA can grant them through the QI.

    I still cannot believe that the Banks (can only speak for RBC) have no information or direction on what they are going to do when FATCA arrives…and it is less than a year away!

  4. … but they have commented in July — RBC Capital Markets Comments to IRS re FATCA http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/Tax/us_tax_RBC_072111_090811.pdf

    and other such letters:

    “Foreign Account Tax Compliance Act (FATCA) Comment Letter to IRS and Responses

    http://www.deloitte.com/view/en_US/us/Services/tax/global-business-tax/business-tax/Tax-Controversy-Services/ffba750a5bbea210VgnVCM3000001c56f00aRCRD.htm

    The below comment letters were submitted to the Internal Revenue Service (IRS) regarding Foreign Account Tax Compliance Act (FATCA). Any responses from the IRS or other government agency are posted as well. Comments and responses are posted as soon as they are made public. Tell us about a new comment submission by contacting us at FATCA@deloitte.com.”

  5. @Peter, I MBA’d in America and most of my Professors were adjuncts who were high-level managers for large corporations in Dallas. Before that, I had a Professor Emerutis from the University of South Carolonia for Economics that I loved. He reminded me a lot of Roger– he just stated facts!

    I don’t think the IRS intention was nabbing innocent people outside o America, but they liike donations! Peter, why not try to get the IRS ** on the record ** specifying their target? I’m tired of reading 3rd party trash articles from about-to-be-redundant journalist saying that we are crooks. The people in America don’t know the REAL truth. Let’s show them…..

  6. From the horse’s mouth:

    Taxpayers with undisclosed foreign accounts or entities should make a voluntary disclosure because it enables them to become compliant, avoid substantial civil penalties and generally eliminate the risk of criminal prosecution. Making a voluntary disclosure also provides the opportunity to calculate, with a reasonable degree of certainty, the total cost of resolving all offshore tax issues. Taxpayers who do not submit a voluntary disclosure run the risk of detection by the IRS and the imposition of substantial penalties, including the fraud penalty and foreign information return penalties, and an increased risk of criminal prosecution. The IRS remains actively engaged in ferreting out the identities of those with undisclosed foreign accounts. Moreover, increasingly this information is available to the IRS under tax treaties, through submissions by whistleblowers, and will become more available as the Foreign Account Tax Compliance Act (FATCA) and Foreign Financial Asset Reporting (new IRC § 6038D) become effective.

  7. Re Privacy concerns, and Canadian compliance with FATCA. See update: http://www.theglobeandmail.com/report-on-business/us-poised-to-soften-offshore-tax-crackdown/article2314687/
    ‘U.S. poised to soften offshore tax crackdown’ Globe and Mail
    Published Wednesday, Jan. 25, 2012 2:40PM EST

    Am I just too paranoid, or could Canada be poised to amend the tax treaty with the US, or make another crossborder agreement that would allow FATCA to proceed – with federal cooperation (as a major *trading partner)? See full article, below is an excerpt:

    “Treasury’s international team also has been talking with several U.S. *trading partners about how to overcome legal obstacles to compliance, Ms. McMahon added.

    One problem with compliance is that privacy laws in many countries may prohibit financial institutions from reporting directly to the IRS, Ms. McMahon said.

    One option being explored is having financial institutions report to their home countries’ government, which could transmit information to the IRS, she said.

    The proposed regulations are in the final stages of clearance by the Treasury and IRS and will be released soon, she said…”

    Perhaps it will be quid pro quo:
    Our Canadian federal government is worried about loss of tax revenue as well, and a parliamentary committee did hear from a guest speaker – Mr. Scott D. Michel (President, Caplin & Drysdale) who spoke about the recent OVDIs. Some of his comments underscore problems with OVDI, while other participants seemed to feel that it was a success that Canada should emulate. See: http://www.parl.gc.ca/HousePublications/Publication.aspx?Language=E&Mode=1&Parl=40&Ses=3&DocId=4937782&File=0 Standing Committee on Finance NUMBER 057 , 3rd SESSION , 40th PARLIAMENT
    EVIDENCE Tuesday, February 8, 2011
    re: study of tax evasion and offshore bank accounts, pursuant to Standing Order 108(2).

    If you are interested, I think it is worth reading through these committee minutes – (I can’t summarize them here meaningfully). It has been worrying me that there have been no further statements from Flaherty since his public letter to selected US newspapers, and not many Canadian politicians have come forward (with a few exceptions, and as a party, primarily the NDP) touched on the issue of the IRS and impact of OVDI, FBARs, FATCA on their constituents – despite the growing publicity.
    Any thoughts?

  8. You know.. I left America because I didn’t like the wars and everything else America was doing. I come to a different country, live for some years, and everything is the same, as if I never left. Goshh.. I can’t wait to renounce.

  9. My understanding is the Canada already gets information sharing from the US with regard to Canadian resident account in the US and in return gives the US info on US “resident” accounts in Canada on a government to government basis(Thus when the US started pushing FATCA to get info directly from Canadian financial institution the belief was they were going after dual nationals that Canada Revenue would not give them info on). I believe there would be major charter issues with Canada trying to give information dual citizens living in Canada to the US. The Federal government as a matter of law cannot use national origin as a legal criteria to collect information so I can’t see how the could make you disclose on your T1 or T5 whether you were born in the US for example. In addition Flaherty has stated it won’t under the current tax treaty attempt to collect taxes or penalties owed by Canadian citizens to the US.

  10. @petros – and I could scream the same ******* message every day: There needs to be announcements in MANY languages advising people WHY they should avoid the USA like the plague (due to being the ******* roach motel). I already said, I can do the Portuguese and Spanish. If you guys think it’s worth it to get back a little at the US and possibly deny them some penalty money, just let me know. The key is though, it should be an English message that is translated into the other language so that it has uniformity.

  11. http://www.moneyweek.com/blog/banks-tax-collectors-for-governments-everywhere-58203

    This is quite clearly an admin nightmare (what is an ‘indirect client’?)…..”
    “…’Fatca’ (Foreign Account Tax Compliance Act). Fatca is an extraordinarily wide-ranging, arrogant and intrusive piece of legislation (enacted in 2010) that requires all “foreign financial institutions” – that’s non-US banks, fund managers, custodians and so on, to tell the US taxman about all US taxpayers they deal with both directly and indirectly by the middle of next year….”

  12. sorry Petros – can you erase the repeated portion of the quote – posted in error, apologies…

    and please add instead, the rest of the excerpt
    from http://www.moneyweek.com/blog/banks-tax-collectors-for-governments-everywhere-58203 as below:

    …..”Worse, the crazy US rules won’t be the end of it. No, read this piece (below) by William Hutchings in Financial News, and you will see that Fatca is about to go global. …“In the last three years, the Federal Reserve, Bank of England, European Central Bank and Bank of Japan have taken on an extra $10 trillion of debt, according to risk management consultancy CheckRisk, taking their collective balance sheet to $15 trillion.

    “They are looking at every possible way to help pay it off. Ramping up their powers of tax collection is one of the few things they can do to help themselves. It is not such a big jump from there to the introduction of a global Fatca, an international framework obliging foreign financial institutions everywhere to act as tax collector for every government.”…….

  13. I just posted that Money Week link over at the FATCA going Global thread too… Didn’t realize it was already here.

  14. @badger…
    No apologies necessary. As many posts as there are, sometimes it is hard to know where best to place something new. It probably helps to have it in multiple threads. I understand about it being hard to keep up! :)

  15. another article re FATCA:

    http://www.mccarthy.ca/article_detail.aspx?id=5798

    “More on FATCA … and More to Come: The Internal Revenue Service and Treasury Department Release Proposed Regulations”
    April 2, 2012 by Nigel Johnston
    Excerpt;
    ………………”Canada was not a party to the Joint Statement, but it is understood that there are ongoing discussions between Canada and the United States relating to the application of FATCA, having regard to:

    the relatively large number of U.S. individuals who reside in Canada;
    the fact that Canada is not a low-tax jurisdiction; and
    the fact that the Canada Revenue Agency (CRA) already automatically exchanges information with the IRS with respect to certain payments made to persons with U.S. addresses. Publicly available documents indicate that the CRA automatically exchanges details of payments made to U.S. addresses and reported on Canadian NR4 forms such as dividends, interest and trust distributions. However, as U.S. taxpayer ID numbers are not collected in Canada, the information provided is not associated with U.S. taxpayer ID numbers that would facilitate matching. It is also understood that there is no exchange of information relating to proceeds from the sale or other disposition of property. In addition, payments to entities in third countries that may be owned by U.S. persons are not reported.

    This update provides a high-level overview of the FATCA regime, followed by a discussion of some of the proposed exceptions to “full” FATCA compliance that might be available to certain Canadian entities. “…………………………..

  16. From a practical matter, I have wondered how compliant, or deemed compliant FFIs are supposed to determine those that are “non compliant”? Is every transaction, transfer or pass thru payment, going to have to check for compliance status with an IRS data base, or are FFIs supposed to maintain their own data base and keep track of this themselves. Imagine the complexity and confusion about who is and who is not compliant, and when inadvertent errors occur and a compliant FFI transfers funds to a non compliant, but does not withhold the 30% tax.

    Are FFis supposed to report on themselves for each failure, or just reach into their balance sheet and submit the money themselves? I would hate to be a data processing manager trying to put these procedures into real world practice. You can also foresee FFIs refusing to deal with each other if there are compliance questions as the risk is too great. Or, maybe not, if the enforcement of the 30% withholding is so weak as to be ineffective. Then you would have a FATCA in name only. Humm.

    Carl Levin and the IRS can sure dream up things, with no practical idea in hell how it is supposed to work.

  17. If Canada implements FATCA in 2014, will this be on a “go forward” basis? To be more specific, will this apply to opening new accounts where the banks require furnishing nationality information?

  18. That would be one reason, in my opinion, that go-forward compliance with FBAR is all that is necessary. Even if FATCA is implemented, and that is not certain, the banks would not be sending a detailed history of your account, only the current balance–please correct me if I’m wrong.

  19. Paraphrased from the FATCA regs from February:
    Transition:
    Identifying information to be reported in 2014: name, address, TIN, account number
    In 2016, add report on income
    In 2017, add report on gross proceeds

    Preexisting individual accounts:
    Accounts with balance or value < $50,000 are exempt (unless FFI chooses to)
    Certain cash value insurance and annuity contracts of $50,000/250,000, but $1,000,000 both electronic and non-electronic search required for US indicia.

    NEW accounts:
    After the date the FFI signed the agreement,
    Required to review info at opening of account for US indicia. If any are found, then FFI must obtain additional documentation or treat the account as recalcitrant.

  20. @punklitch11

    I am going to try provide a link to you of a court case here in Canada back in the 1980s that dealt with some of the issues you mentioned above. Basically the IRS tried to attach a levy on the New York branch of Toronto Dominion Bank in order to freeze the account of Canadian citizen they believe had unpaid taxes. However, the Ontario Superior Court ruled that TD essentially had to eat it and there was no way under Canadian law to freeze the account on behalf of the IRS.

  21. @ Tim That’s an interesting case. My own lawyer advised me to move out of TD to a bank with no US branches in order to avoid the IRS/USA using the US assets of TD to collect on me. But that court case would help show the improbability of such a strategy ever being used again.

  22. @Petros

    We were just talking about it only like four days ago unfortunately its tough with WordPress to go back chronologically in terms of thread postings. When I get a chance I’ll try to look for it again. It was in like 1988 or 1989,

  23. @Tim: Van deMark v. Toronto-Dominion Bank, http://uniset.ca/other/cs6/68OR2d379.html

    The case may be limited to its facts. Those who argue for dealing only with a bank having no branch in the USA ignore the issue of correspondent banking and US assets. For that reason using a Postbank (won’t help in Canada) that has sovereign immunity may be a better bet. I recall Swiss private bankers (Pictet comes to mind, but also some of the cantonal banks) vaunting their lack of US branches. But that hasn’t helped in certain cases; think Wegelin & Co. http://www.mi2g.com/cgi/mi2g/press/010212.php And Forbes thinks they are now Swiss cheese: http://www.forbes.com/sites/robertwood/2012/01/09/irs-makes-swiss-cheese-of-swiss-banks/

  24. Extraterritorial taxation by US, and FATCA called ‘Imperial Overreach':
    see;

    http://www.bloomberg.com/news/2012-05-01/wealthy-americans-queue-to-give-up-passports-in-swiss-capital.html

    “Imperial Overreach”
    ……..
    “There is incredible frustration at the audacity and imperial overreach of this law,” said David Kuenzi, a tax adviser at Thun Financial Advisors in Madison, Wisconsin, referring to Fatca.

    Failure to file the 8938 form can result in a fine of as much as $50,000. Clients can also be penalized half the amount in an undeclared foreign bank account under the Banks Secrecy Act of 1970.

    “It’s a big brother concept,” said Brent Lipschultz, a partner at New York-based accounting firm EisnerAmper………..

    “The additional compliance costs for companies to ensure that Americans they hire are filing the correct U.S. tax returns and asset-declaration forms are at least $5,000 per person, said Ledvina. Where individuals are getting their returns prepared, the expense may amount to $1,500 to $2,000, which is pushing expatriates to consider giving up citizenship.”………

    “The compliance costs are high and they’re getting worse,” Ledvina said. “It’s hard to serve two authorities and the problem for Americans abroad is that the IRS doesn’t care.”

    To contact the reporter on this story: Giles Broom in Geneva at gbroom@bloomberg.net

    To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.ne

  25. Here’s another story citing the Reuters one by Atossa Araxia Abrahamian, but with additional content re FATCA – and it is very critical of the burden on those the US deems taxable ‘persons’/citizens living outside the US.

    http://amyalkon.mensnewsdaily.com/2012/04/17/the-irs-turns-being-an-american-expat-into-a-nightmare/

    “The IRS Turns Being An American Expat Into A Nightmare
    April 17, 2012
    By Amy Alkon ”
    “Preposterous Foreign-Income Disclosure Rules”
    …..
    ….”Let’s see, what do you suppose might happen when Washington makes life a living hell for every foreign bank that dares do business with Americans?”…
    and,
    It also has a link to this story:

    http://reason.com/archives/2012/04/16/top-5-new-ways-the-irs-is-screwing-ameri/singlepage

    “5 New Ways the IRS Is Screwing America
    Dumb disclosure laws, xenophobic banking regs, and worse” by Matt Welch | April 16, 2012″
    …..”the immovable object of a debt-financed $3.8 trillion federal budget is incentivizing the irresistible force of rapacious government to scrounge for any and all spare change in the country’s cushions.

    Some of these desperate collection measures are new, internationally unprecedented, and already damaging to innocent individuals and institutions. Others are mere proposals so far, or accumulations of water torture-style outrages that comparatively tax-compliant Americans have tolerated for too long. What they have in common is an utter lack of demonstrated concern for the time, privacy, and freedom of U.S. residents.”………

  26. @badger

    Thanks for that link to Men’s News Daily above. I went an posted a quick simple comment…

    Readers that live in the Homeland probably have no idea of the nightmare that has been created by the IRS with its offshore jihad. You can read more stories of these impacts on Isaac Brock.com A Canadian blog comprised of US persons from around the world that are uniting to push back on these disgraceful actions. The core problem is the unique nature of U.S. Citizenship Taxation which is totally out of sync with the rest of the world which practice a territorial system. For U.S. homelands, that is exactly what Kansas, California and the rest of the 50 states practice. It is logical, simple and fair. Get it?

    Read more here…

    http://isaacbrocksociety.com/2011/12/14/about-the-isaac-brock-society/

  27. @Steven Mopsick, Michael J. Miller, and RoyBerg:
    Would you any of you weigh in on the following from the link that punktlich11 provided? Specifically regarding the possibility that the lawyer with POA, representing an individual in a dispute with the IRS, could be turned into an agent to serve notices etc. on it’s behalf. See excerpt, but have to read the full text at

    http://newsgroups.derkeiler.com/Archive/Alt/alt.politics.bush/2010-03/msg00155.html

    @punktlich11
    re: April 29, 2012 at 10:45 am “on IRS powers to litigate and collect claims when the (non-)taxpayer remains abroad with his/her assets:”

    http://newsgroups.derkeiler.com/Archive/Alt/alt.politics.bush/2010-03/msg00155.html

    If I read one portion correctly, then it is very disturbing if the US can use the individuals’ attorney (once they have a power of attorney to represent them in dealings with the IRS) to serve notices on the individual in order to collect IRS judgements ‘abroad’.

    see extract below:
    “If the taxpayer is out of the country, Rule 4(f) of the Federal Rules of Civil Procedure governs service of process. 9 When the usual methods
    of service are unsuccessful, the U.S. Government may fall back on a “catch-all” provision. Rule 4(f)(3) allows service in any manner directed by the court that does not violate an “international agreement.” Under this provision, the U.S. Government may obtain
    jurisdiction over a taxpayer outside the country by having the court approve service on an agent in the U.S. 10

    (my emphasis ***********) An individual who submitted
    a *power of attorney to the IRS for the taxpayer during the administrative proceeding where the taxpayer was contesting the merits of the tax liability or an *attorney who represents the taxpayer in a related, or unrelated, criminal investigation or proceeding are *likely
    agents. In this way, the U.S. Government can *obtain jurisdiction over the taxpayer without actually locating and serving the individual
    abroad.”

  28. http://taxpol.blogspot.ca/2012/05/beyond-fatca.html

    Sunday, May 6, 2012
    “Beyond FATCA” by Allison Christians
    …………………………..
    ……….”Grinberg includes a discussion about how compliance with FATCA may require financial institutions to violate laws in their home countries, citing remarks by Acting Assistant Secretary Emily McMahon that acknowledge the difficulty and suggest the US is working hard to make this a bilateral or multilateral matter rather than a unilateral one.

    This makes me think that FATCA could be to information sharing what 30% flat rate withholding on passive income is to tax treaties: a blunt force object meant to induce other countries to try to negotiate a better deal.

    If that’s so, then it may be only a matter of time until Canada, the main victim of FATCA, gets a favorable resolution. But the arm-twisting effect seems to make FATCA even more pernicious from a sovereignty/democracy/diplomacy point of view. “

  29. This is a recent page with a link to a very well written analysis of many of the points made against FATCA. It also touches on expatriation rates and the reporting burden. It underscores that the US is not ready for reciprocation, and may never reciprocate. Delaware and other tax havens INSIDE the US is also mentioned, as well as other serious flaws with the goals and design of FATCA, and the threat of increasing de-investment in the US.

    http://www.eduardomorgan.com/blog/?p=1989

    The link at the bottom (in tiny font size) leads to the fulltext article from International Tax Notes.
    “U.S. Senate’s Passage of Anti-Tax-Haven Provisions Would Be Counterproductive”
    Reprinted from Tax Notes Int´l, April 9, 2012, p. 139
    By Bruce Zagaris http://www.eduardomorgan.com/blog/wp-content/uploads/2012/04/LevinAntiTaxHavenBillCounterproductive.pdf

  30. Petros or site administrator – please repost this elsewhere if it would be better placed on another thread?

  31. @badger

    I think the article you mentioned makes a good point about recipriciocity. I personally don’t think Canada could go along with FATCA for example without true recipriciocity in the current political climate some of which is created by those of US here at IBS. So when you here about intergovernmental “discussions” between Ottawa and Washington I would continue to view them with some sceptism.

  32. Here is what I thought was the key text

    Except for the proposed regulation on extending
    reporting of interest earned on U.S. bank deposits and
    the Financial Crimes Enforcement Network’s advance
    notice of proposed rulemaking on customer due diligence
    issued on February 23, 2012,16 the U.S. Treasury
    may not yet have taken all the necessary steps to reciprocate,
    and it remains to be seen whether it will be able
    to do so, especially without action from the U.S. Congress.
    However, on March 6, 2012, Treasury International
    Tax Counsel Michael Caballero said the FATCA
    information sharing agreements would reflect ‘‘a commitment
    to provide some similarity of information.’’
    He explained that automatic exchange of information
    is never the same information going both ways

  33. http://www.tax-news.com/news/IRS_Told_To_Improve_FATCA_Plans____55507.html

    “..the GAO has found out that the IRS plans to compare multiple sources of information to identify US taxpayers and FFIs failing to comply with the FATCA requirements and, more broadly, taxpayers failing to report their overseas income. However, while the IRS has begun to discuss how it will use information to improve compliance, it has not yet completed or fully documented a broader strategy for doing so…”

    …”Nor, it is said, has the IRS developed a comprehensive resource estimate for FATCA implementation. Without a timeline to develop the estimate, the GAO concludes, the IRS may not be able to develop a reliable cost estimate and therefore risks not communicating key cost information to Congress and IRS management in time for them to make decisions affecting the implementation of FATCA.”

  34. Does the US want to be compared to Rome, with the IRS a modern day Roman tax collector?

    “FATCA akin to Roman tax”

    http://cnsbusiness.com/content/fatca-akin-roman-tax

    Posted on Wed, 05/23/2012 – 10:26
    (CNS Business): “The Foreign Account Tax Compliant Act is a tax information collecting measure the likes of which has not been seen since imperial Roman times, according to Andrew Miller, partner with Walkers.”…………..

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