I would draw your attention to the recent post by Robert Wood at Forbes. It caught my attention this morning, and so I decided to post a comment back to him. Frankly, Robert is one of the regular and consistent writers on FATCA, FBAR and Citizenship taxation issues. He often quotes and references American Citizens Abroad. I sometimes joke that they must have him on their payroll. That is NOT true! LOL
Here is the link to the most recent posting…
I could not pass up the opportunity to post a comment back to him, and the text is produced below:
Excellent summary and compilation of previous posts. The US is the primary force in creating a world wide Tax Data exchange regime, and it may be like a force of nature, unstoppable. What is stunning to me is how little discussion there is on this subject in the MSM.
This statement of yours certainly is true… “the IRS began a compliance push like no other.”
Unfortunately, they started with a penalty hammer, and did nothing to lay the ground work with an educational outreach to Expats or new immigrants to America. In that they may have done some serious irreparable harm.
Ever since the 5 EU nation FATCA agreement, which would replace direct FFI reporting to the IRS with a Tax authority exchange program, there seems to be other countries now going along.
I point your attention to the Governor of the Bank of Mauritius, at the Seminar on Foreign Account Tax Compliance Act, as an example of that position.
In spite of being hailed internationally as:
“A US-centric law”;
“An attempt to convert foreigners into unpaid IRS agents”;
“A kind of US backward imperialism”;
“…a murder weapon and the US government the assailant”;
“An atomic bomb used to kill a fly”; and
“One of the worst pieces of legislations to be revealed in recent times
…the advice of this Banking Governor, is to modify their countries laws, join in a similar EU pact, and “Complain but Comply.”
Also, I am not sure that you are aware of the IRS US bank non resident interest reporting regime that is being opposed by some in Congress. This is the tool the IRS has created to make the 5 nation EU tax data exchange reciprocity work. It is the domestic equivalent of FATCA… for short, I like to call it DATCA.
There is a recent editorial in the Miami Herald by Senator Rubio and Congressman Posey Titled: A Destructive IRS mandate.
This was answered in a dueling editorial by Emily McMahon, acting assistant secretary for tax policy, Treasury Department
It was titled: Offshore depositors won’t be hurt.
(Note: these editorials have been previously posted at Isaac Brock here)
I believe the former, not the later, but neither of the editorials drew the link from this domestic IRS reporting regime to the FATCA reporting that Congress created. FATCA begat DATCA. It is that simple.
Even if you did not have an axe to grind in this debate, it certainly is an interesting one to watch, and more amazingly so, because it is totally off the radar for American’s generally, and totally ignored in the GOP debates.
Someday, we will look back at this, and there will be retrospective books written, and as sources of what was happening, folks will have to come to your blog to get the history which is well documented.
Thanks for continuing to shine the light on the subject.
PS: I would only take exception to one comment, and that is the so called “success” of the voluntary Disclosures programs. The IRS has only produced 2 numbers to make that claim, and any CPA knows, numbers without context have no meaning. There are some real disasters happening to Minnows inside those programs, and as a compliance tool it may not have been that successful. However, that discussion is for another time, and doesn’t otherwise distract of your fine work.