A Global #FATCA in the future

I found an interesting article on FATCA at Financial News this morning that for an “industry” publication is the first I get some sense that they are getting it. A couple of interesting quotes:

“Once countries have got the structure in place to comply with US Fatca, their governments won’t just say, ‘we’ll bear the costs of helping the US gather its tax and leave it at that’. Something will happen.”
That “something” will not be a repeal of US Fatca, Fleming said. The realistic options, he said, are either that every country develops its own version of Fatca, or that a “global Fatca” is developed, where every country has to disclose the assets of every other countries’ citizens under a common framework. He said: “There will have to be a ‘global Fatca framework’ – the alternative is even worse. We couldn’t operate on the basis of 27 Fatcas in the Europe Union, say.”
The significance is enormous, he said: “It will be a global tax system. It is impossible to comprehend how you maintain national tax integrity under such a system; how you get to a global Fatca is an immense challenge.”

A few points they seem to be making:

Many in the financial industry are increasingly taking the view that FATCA and any copy cat legislation is going to be an overriding issue for the rest of the decade.

In closing the authors state that they in fact think the US is playing a “long game” of trying to determine the world’s taxation model.

Unfortunately this article now seems to be pay-walled, but you can sign up for a free four week trial.



52 thoughts on “A Global #FATCA in the future

  1. There is just one problem in the global FATCA world, the US uses citizenship based taxation, the rest of the world uses residence-based. The tax revenue “pot of gold” is never going to be the same for residence-based countries as the US (as long as the US’s citizens abroad agree to comply), and then you have to throw in the issues of citizenship etc.

    It still comes down to the US doing more work than the other way around and its going to hit up against resistance.

    The contender is China, if China doesn’t comply and the US doesn’t enforce the 30% withholding, why should the rest of the world follow suit?

  2. What the US wants to do is the equivalent of a man who wants to practice polygamy. He gets many wives, they only get one husband. This *&%@ is not going to fly.

    They got away with this before because they only targeted the rich, now that they’re going after ordinary folks in other countries there will be alot of blow back.

  3. @Tim… This confirms for me what I have been saying, that we are in the process of creating a world wide tax data exchange regime, and the implications and consequences of that have yet to be determined. One thing we know for sure, it will have many negative unintended consequences that will lead to books 20 years from now, looking back and asking “How did it come to be?”

    And of course, the US media is totally silent, as they are only interested when the financial train wreck happens, not when the CDOs (collateralized debt Obligations) and CDSs (credit default swaps) are being created.

    History is in the making here. Move over, as this force of nature maybe unstoppable now that the USA has unleashed this Jeannie from the bottle.

    Carl Levin is leaving a real legacy! .

  4. @JustMe

    I think if you read many of the industry publications there is an increasing sense of panic in terms of actually how to implement all these requirements. I am not sure why this wasn’t displayed earlier but it wasn’t.

  5. Maybe this might wake people up. Whatever happened to privacy?? This sounds like a long pendelum swing!! I think the person who wrote that info. was day dreaming. The countries are not footing the bills, the banks are.

  6. @Tim…
    I try to read as much as I can, and appreciate you posting these types of stories that I haven’t yet got to or find. I still am trying to figure out why this story is not getting any attention in the MSM. NONE! Nada? Have you seen anything that I have missed?

  7. I wanted so badly to add this to the comments earlier, but I had to go to work. Somebody else on here said once that it is very common for immigrant communities in the US to put money into the names of family members. Well guess what! That’s what nearly everyone does here!! We even have a name for these people. They are called “Laranjas” – (oranges)! The US tries to curb this with gift tax limits to family members, but I *BET* [know] that it still happens in the US too.

    Many countries already have exchange controls in place to make sure that there are not violent swings in their national currency. The FATCA is exactly that – something to monitor dollars going out. Amazing isn’t it? Back in the 1970s – 1990s (and till today for CHINA!), the US was always pressuring countries to freely float their currency, and now the US is trying to control their own currency!

    The FATCA is yet ANOTHER case of the US changing the rules of the game whenever they see fit. Who cares if the minnows are trampled on by the backhoe! <- at least that's how Congress, the other policians, and the IRS see it.

  8. @John – laws can change. Sarkozy is proposing a citizenship-based taxation for the French. Will it fly? Maybe.

    What a global FATCA framework will do is give countries information about what is out there. For example, there are hundreds of start-ups in Silicon Valley run by French expats. Now I think it’s reasonable to assume that there’s money there but the French gov today doesn’t know how much. Data exchange would give them that information so they could go to the lawmakers and say “see, look at all the revenue we are missing out on because these people don’t pay French taxes. They may be living in the U.S. but they still have French passports and should pay something in the name of solidarity.” I think this argument would be VERY popular in France and in many other countries as well.

    Just my .02.

  9. Victoria, I think you might be on to something here, and Andy Sunberg’s Orwellian scenario (written in a deliberate hyperbolic manner) might be closer than we think…


    This statement from the Financial News was really a telling one, and confirms that others are thinking what I have been thinking for some time. They are much better positioned than I to make that analysis.

    Again, why this doesn’t get discussion in a broader media amazes me. Those that are thinking this, and identifying the trend towards Global Tax regime are not without influence or connections. Who are they talking to? So where is the story in the NYTs, or NBC nightly news.. ??

    “He said: “Once countries have got the structure in place to comply with US Fatca, their governments won’t just say, ‘we’ll bear the costs of helping the US gather its tax and leave it at that’. Something will happen.”

    That “something” will not be a repeal of US Fatca, Fleming said. The realistic options, he said, are either that every country develops its own version of Fatca, or that a “global Fatca” is developed, where every country has to disclose the assets of every other countries’ citizens under a common framework. He said: “There will have to be a ‘global Fatca framework’ – the alternative is even worse. We couldn’t operate on the basis of 27 Fatcas in the Europe Union, say.”

    The significance is enormous, he said: “It will be a global tax system. It is impossible to comprehend how you maintain national tax integrity under such a system; how you get to a global Fatca is an immense challenge.”

    The implication for the asset management and related industries would be huge. Fleming said: “We will have to redesign the flows of information all the way through the supply chain. It will completely change the way we do business, and move us to a degree of transparency that is currently unimaginable. It also means a complete change to the global custody and fund distribution industries. The cost, across the globe, will be billions of dollars.”

    The developement is not far off, Fleming warned. He said he anticipated the change within just a few years: “I cannot see the governments of the world just tamely putting up with US Fatca for as long as 10 years.

    “We have three to five years while we implement the US Fatca. We will get lulled into a false sense of security while we focus on the details, but in that three- to five-year window, things won’t stand still.”

    He said he thought the US authorities had foreseen this. By imposing its own Fatca first, the US will have set the template that every other country will follow. Fleming said: “Why did the US impose Fatca on the globe? I think they are playing a long game.”

    Again, another reason to stay informed and not pull a full Ostrich. Voluntary compliance is soon not going to be a choice if these guys have their way.

  10. @Just Me: Wow. That is a really interesting analysis. I’m no expert in this domain but it makes a lot of sense. I think the U.S. is playing with fire however. The U.S. is a “settler country” like Canada or Australia. There are huge numbers of people who have foreign parents or grand-parents. In a “tax the diaspora” game settler countries stand to lose big because their citizens could be tapped as citizens of their ancestral countries and theoretically taxed as well. I don’t know what the reaction to something like that would be. It might cause some Americans to migrate back to their parent’s or grandparent’s home countries. I get a lot of inquiries from Americans in the States who want to come to the EU. If they knew they had that option then perhaps Europe could solve some of its demographic issues by informing them that they could have EU citizenship if they wanted it. I just met one such person the other day – she’s a US citizen who is activating her Polish citizenship so she can stay in the EU.

  11. I’ve said this in another thread, but I’ll say it here again.

    Even the President of the US and his family would be affected by a global FATCA. Obama was born in the US to an American mother and a Kenyan father. His mother also took out citizenship for him in Indonesia when he was a child.

    So, using similar criteria to US, Kenya could claim Obama as a “Kenyan person” and Indonesia could claim him as an “Indonesian person.” Under Global FATCA (which I will now call (GATCA), Obama’s American financial institutions would be required to report Obama’s financial holdings to the governments of Kenya and Indonesia. If he holds joint bank accounts with his wife or has education savings plans for his daughters, those would also have to be reported under GAFTA.

    Of course, if GATCA is designed like FATCA, financial institutions would also be required to report on any financial transactions which the President of the United States has signing authority for.

    Obama’s half-sister, Maya Soetoro-Ng, was born in Indonesia to an American mother and an Indonesian father. So, Indonesia may consider her an “Indonesian person.” Her husband, Konrad Ng is now a US citizen, but he is also Chinese-Canadian. So, under GATCA, American financial institutions would be required to report to the governments of Indonesia, China and Canada on the financial assets of the President’s sister and brother-in-law. Their children could be obligated to report to US, Indonesian, Chinese and Canadian governments.

    Why can’t anyone see how insane this is? As Victoria said, countries with high immigration rates, like US, Canada, Australia, etc. will be the most dramatically affected.

  12. @Calgary411 – Thank you so much for your kind words and for linking to the Flophouse. It is a real joy to be a part of Isaac Brock and to meet people like you.

    @Blaze – Great analysis and example. But all entirely within the realm of possibility.Just for fun I checked to see how Americans can claim German descent. According to Wikipedia a whopping 50 million (about 17% of the US population). I wonder what the odds are that Germany would turn around and tap them? 🙂

    Oh the cat would really be among the pigeons if countries started playing this game….

  13. @calgary411

    Here Here! I love reading Victoria’s commentary! Thanks for highlighting it. I wished I could/would spend as much time as she does in thoughtful reading!

    @Blaze GATCA. I love it. FATCA, DATCA and GATCA. It just keeps multiplying! Thanks for re-posting your comments. You make good points.

  14. Well, couldn’t help my self. I just posted this comment on Robert Woods latest piece on FATCA


    Biblical Progression. In the Beginning… FATCA beget DATCA beget GATCA.

    We are progressing through the stages of the creation of a Global Tax data exchange with government to government reporting on all citizens / residents in a brave new world.

    Carl Levin launches FATCA as an amendment in the 2010 Hire Act.

    The IRS responds with the Domestic equivalent (DATCA) requiring all banks to report on non resident interest to the IRS for sharing with the world.

    Then, the 5 nation EU agreement puts in place the framework for a Global tax data exchange (GATCA) that other countries will fall into line with but a whimper of a “Complain by Comply” protest.

    A sea change is happening, and Robert, you are one of the few that are reporting on it in a meaningful manner. Thank you.

    Some hedge managers are waking up to this too. Google “Fund managers predict ‘global Fatca'”

    I hope someone with influence is looking at this and asking where are we headed and what is the consequence of these actions? Congress obviously is not! Neither is the President. 20 years from now, someone will be looking back and writing a book about “How did it all happen?”. Yours will be a rich resource.


  15. @Blaze…
    I have used GATCA about a dozen times this morning. I don’t know why I didn’t think of it, but never mind…. It is a good one, and thanks for sharing it….. I do extend credits where credit isdue! 🙂

  16. People who want to evade taxes will not be deterred by FATCA, DATCA or GATCA. It’s mostly law abiding citizens that are being terrorized by this stuff. The crooks will just get more creative.

    The key to success in the military and the financial world is the element of surprise. Who the hell hasn’t seen FATCA coming?

    If you’re a rich guy and you know your bank might report you to some tax authority, you’re not going to sit around waiting for it to happen.

    I think this is a no win situation for all tax authorities worldwide.

  17. @Just Me

    Regarding the reason why all of this is not covered in the MSM:
    Perhaps overly-simple, but the average, even reasonably-educated person in the US, would likely not understand what they are talking about. I wouldn’t either, if I hadn’t been dragged into this mess.

  18. @nobledreamer

    Unfortunately that is true. It is not a simple story, hard to understand, and I never thought I would have been interested either. Nothing like a $172K penalty to get your attention! 🙂

    Also, when you have such a high portion of the US population not paying income tax now, what do they care? It is like our voluntary and contracted out military. Doesn’t effect us anymore, so no interest and no protest about wars either.

    We need simple talking points without acronyms that can resonant and begin to get attention. Anything with Tax in it is an immediate turn off. We need to replace it with Sex, and then maybe that would work…Need the help of a Frank Luntz type…

    btw,l thanks for the tweet.

    Suggestion, I keep looking for things that are trending that I can insert something into the conversation, like #IfIMeetJustinBieber. Silly I know, but that may be the only way you will hook some of the disinterested. Also I keep copying in news organizations that interest me, and I hope someday they will wake up and read the FATeaCa leaves like @nprnews or @mktplaceradio or @planetmoney.

    I should try some others. Just thinking out loud now, I might try targeting Democracy Now. They are way to the left, but like to cover issues of government abuse, and often lead the mainstream on breaking news. Might look into that, as national public radio is disinterested apparently. http://www.democracynow.org/ FATCA or FBAR search of their web site turns up nothing either. Ok… time for me to start hitting them with unsolicited FATCA spam… LOL

  19. @Just Me – We are thinking along the same lines. I’ve been talking to a family about this. He’s been involved in homeland politics for many years and has been and aid/advisor to politicians in his state. He says (in a nutshell)
    1. we need a message that is simple and compelling. We have to strip out the complexity and come up with something that can be summed up in a 3 minute elevator speech
    2. we need people who can talk to the media. Harder then it looks. He says you have to keep on message even when the reporters try to sidetrack you. I’ve seen that happen in at least one interview about this – the person on “our side” never gets enough time to tell the story. See 1 – our story is probably way too long.
    3. we need to build a coalition and we all need to be singing the same tune. Look for allies – even people you don’t like. Doesn’t matter if you like them. If they are willing to support you, take the help.
    4. Politicians won’t even open their door in most cases unless you can demonstrate that you have x amount of money and can deliver x number of votes. So we need either a fund of some sort (PAC) or we need to show that there are a substantial number of votes at risk. This will get their attention.

    Oh and he strongly suggests that we get professional help. We need advisors and these can had pretty easily but it will cost. No one is going to help us for free.

    Interesting game, isn’t it?

  20. @Victoria…
    It is indeed an interesting game, and an expensive one if you want to be effective. I wished there was a Kony 2012 type video that would go viral, but FAT chance of that. There isn’t capital punishment associated with FBARS and FATCA yet.

    Thanks for the pointers. They are good ones. After I return to Fubarland in May, I might work on this full time as a project, well when I am not scrapping and repainting my mother’s house!

  21. Well, here is something else that Carl Levin and the IRS will ignore…

    GAO: Foreign Account Reporting Makes Extra Work

    They don’t care!!


    “A recent report from the Government Accountability Office found that the Internal Revenue Service’s Form 8938 and the Report of Foreign Bank and Financial Accounts, or FBAR, are “duplicative,” often asking for the same or similar information.”

    Oh really?

  22. @Just Me

    Aha, I wondered about that Justin Bieber thing (!)….being so new to this, I have yet to figure out much beyond actually how to DO the tweets……. will keep plugging away and thanks for the suggestions, will see if I can manage 🙂

  23. @nobledreamer…

    I so think this tweeting stuff is mostly a waste of time, but occasionally I pick up some new information, and get responses which surprise me. It is pretty easy to do, so I just will keep at it a while longer before I pack it in…

  24. @Just Me – Au contraire! I follow you faithfully every day on Twitter and I know others do to. Not a waste of time at all, m’dear. Trust me 🙂

  25. Just adding similar comment from a most recent thread

    This is a more recent story on similar topic is not behind a paywall…

    Fatca could send fund groups ‘back to the dark ages’
    Fund groups could go “back to the dark ages”, selling only domestically, if other countries adopt a version of the new US tax regime, an expert has warned.


  26. @Victoria, I like your four points in getting our message the right kind of attention. Your use of “diaspora tax” has gotten approval from a few here. Conjures up emotions of struggle, regression and exile better than the bland “extraterritorial taxation”. Roger wonders if it’s too closely related to the plight of the Jews in history and modern times. He did point out that it was used in reference to the UN resolutions against Eritrea in more recent history. Why not ride on those coat tails? He asks if I would find something newer than what his dictionary from 1989 offers that would broaden its meaning. Maybe you can help in diversifying the search, as Google thinks everything I search is for a man 55-65 (apparently I make the wrong kind of cookies for a woman in her mid fifties).
    As far as acronyms go, I like GATCA too, but I think I’ll use my FrankenFATCA when a monster is needed.

  27. @bubblebustin

    I like ‘riding on the coat tails of Eritrea’. The fact that Susan Rice, America’s ambassador to the UN, stood up and addressed the issue of the terrible extraterritorial tax on the Eritreans, perhaps, people could closely relate to the similarities.

  28. @bubblebustin – Roger is right that “diaspora” was originally a word used to describe the exile and scattering of the Jews but its meaning has expanded beyond that in recent times. Secretary Clinton has captured the modern sense of the term with her IDEA (International Diaspora Engagement Alliance)

    Gabriel Sheffer’s excellent book, Diaspora Politics, has a fine take on it and a very good definition/citeria which was the basis of this Flophouse post – Defining Diaspora

    I used that to argue for the existence of an American Diaspora

    Feel free to critique or refine my analysis.


  29. @Victoria, thank you.
    I just posted this on another thread:
    @Roger to answer your question I did a little research and according to Wikipedia:
    “The first mention of a diaspora created as a result of exile is found in the Septuagint in the phrase “esē diaspora en pasais basileias tēs gēs” translated to mean “thou shalt be a dispersion in all kingdoms of the earth”. Its use began to develop from this original sense when the Hebrew Bible was translated into Greek; in Ancient Greece the term διασπορά (diaspora) meant “scattering” and was used to refer to citizens of a dominant city-state who emigrated to a conquered land with the purpose of colonization.”
    “After the Bible’s translation into Greek, the word Diaspora then was used to refer to the population of Jews exiled from Israel in 587 BCE by the Babylonians, and from Judea in 70 CE by the Roman Empire. It subsequently came to be used to refer to the historical movements of the dispersed ethnic population of Israel, to the cultural development of that population or to the population itself.”
    “Expanding definition:
    In an article published in 1991, William Safran set out six rules to distinguish diasporas from migrant communities. These included criteria that the group maintains a myth or collective memory of their homeland; they regard their ancestral homeland as their true home, to which they will eventually return; being committed to the restoration or maintenance of that homeland; and they relate “personally or vicariously” to the homeland to a point where it shapes their identity. While Safran’s definitions were influenced by the idea of the Jewish diaspora, he recognised the expanding use of the term.
    Rogers Brubaker (2005) also notes that use of the term diaspora has been widening. He suggests that one element of this expansion in use “involves the application of the term diaspora to an ever-broadening set of cases: essentially to any and every nameable population category that is to some extent dispersed in space.”

    According to William Safran’s six rules defining a diaspora, it could be argued by some whether US citizens living outside the US should refer to themselves as diaspora, but with the ever-expansion of its definition, why not? By virtue of being taxed, we certainly are committed to the maintenance of the homeland. Or, if we aren’t diaspora are we better described as slaves?
    i see elsewhere that there’s been some research on the American diaspora. Here’s something from 2009 from the Harvard Business Review warning of the imminent American brain drain. I have read elsewhere how the current actions of the US are as much to with curbing the loss of intellectual capital as it is to create revenue. http://hbr.org/web/2009/hbr-list/looming-american-diaspora

  30. What extraterritorial Americans come to learn is what Gertrude Stein (also notable as “expatriate”) aptly expressed in these few memorable repetitive words:

    There is no there there

    With no respect to original context, I years ago latched onto this phrase as a good evocation of the native-born inlander’s expansive sense that everything is here and nowhere else is there. Intuitive imperialism.

    The melting pot turns everything into the same slush. The only wars that really left trace on both land and memory were the two that ended in 1789 and 1865. (Full apologies here to 1812 and to guiding light Isaac.)

    Some Brocker, I think it was Eric, posted data on percentages of citizens abroad for different countries – recollection is that US was at the bottom of the scale, under 1%.

    For me, that is argument enough against attaching to diaspora in the Brock context. We feel dispersed, but the numbers that remain in the “homeland” are far too great. So I like it when Victoria in her closing leans on the word “yet.”

    The word diaspora appears to have entered English language usage in 1876 in this sentence:

    [The Moravian body’s] extensive diaspora work (as it is termed) of evangelizing among the National Protestant Churches on the continent.

    Three subsequent citations from the 1880s all connect with the situation of the Jews.

    Sources: Oxford English Dictionary and Barnhart Dictionary of Etymology.

  31. It depresses me that even the most eloquent within our group can’t come up with a term that aptly describes who we are in terms of our struggle. Would “tax slave” be overly dramatic or too closely associated with African Americans for some?

  32. Individuals who were either born in the USA or naturalized US citizens who have changed their citizenship.

  33. Bruce Hutchings is writing about GATCA at the Financial Times again. It is behind a paywall, so here is the details for your information…

    He is saying what I have been saying…. FATCA begets DATCA begets GATCA


    There are some smart people living in America, and many of them work in the country’s Treasury department. The rest of the world is only just beginning to realise how clever they have been to issue legislation that is going, in all probability, to set the template for a worldwide tax system that most of us will not like…….

    In Conclusion, he says…

    People will also have to face the prospect that their personal financial details will be shared with every government from the middle of nowhere to the back of beyond.

    Criminals will be salivating with anticipation. The rest of us are not going to like it one little bit.

    And there is nothing, really, that we can do about it. We can hope that the tax raised by doing this will exceed the cost of putting the systems in place, but we can’t stop this ball rolling. It’s too late for us even to negotiate the basic shape of the Fatca, because that’s already been set – by those smart people in the US Treasury, who obviously saw this coming and decided to get ahead of the game.

  34. @JustMe
    You wrote “We can hope that the tax raised by doing this will exceed the cost of putting the systems in place”, which I hope is a typo. If not, is there some other logic at play here? I’m all confused now that you’re saying that a lot of good minds came up with FATCA.

  35. Bubblebustin – ask Victoria. She’s definitely more eloquent than I am. I don’t consider myself part of US Dispora; rather, someone who just wants to live his life overseas with no hampering from his place of birth. If I have to renounce to do that, I’ll do it.

    I went to a “despachante” (Roger will know this word) about an hour ago. The woman kept asking me questions and I kept answering. She only got suspicious when I pulled out my ID and I have this long foreign-sounding name on it. She said “You’re not Brazilian?” Being American for me here does absolutely nothing for me. I would imagine that being American does nothing for any of us since we are living in different countries with different sets of laws and rules.

  36. @bubblebustin

    Sorry for the confusion. That was NOT me saying that … It was the quote from the article. I should have put ” ” around it.

  37. Another story on FATCA going Global…

    Why every bank will soon be a tax collector for every government everywhere!

    Picking up the theme:

    “The whole thing very dramatically changes the investing and tax landscape for Americans with money abroad. Worse, the crazy US rules won’t be the end of it. No, read this piece 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.”

  38. How many banks will go bankrupt under the weight of what it costs to be an unpaid tax collector for the world’s governments? How will that affect the broader economy?

    Look at the suffering currently being experienced by Americans because they can’t get banks to loan them money to buy a house. There seems to be no end in sight for the misery. Is the solution really to make banking more difficult?

    What will a bank do if they get multiple governments making conflicting demands on the same tax payer? A bank cannot be put in the position of being judge and jury to the whole world. If the costs of meeting these demands don’t do them in, tax payer lawsuits will.

    If it costs $10 to collect $1 on someone else’s behalf, nobody will want to be in the business of banking.

    What the world’s governments want to do is the equivalent of me asking my neighbor to pay my mortgage. I don’t think I’ll try asking him.

  39. Global FATCA would be a dream come true for the G-20. Totalitarianism at its finest.

    It will be better to live in a banana republic.

    Less government = more freedom.

  40. Pingback: DATCA is not Dead! It lives on… | The Isaac Brock Society

  41. http://ca.news.yahoo.com/irs-rule-threatens-bank-capital-flight-analysts-234103596–sector.html
    There is another article re information sharing and opposition from US banks:
    “(Reuters) – Banks in Texas, Florida and other southern states could face a pull-out of non-U.S. depositors due to a new U.S. rule finalized on Tuesday, industry analysts said.

    The rule issued by the Internal Revenue Service will require U.S. banks, starting on January 1, 2013, to report to the IRS payments of interest made to non-resident aliens.”…………………”Guggenheim Partners financial policy analyst Jaret Seiberg said the new rule “raises the risk that depositors in border states will pull their cash from U.S. banks. At its worst, this could threaten the viability of some of these banks.”

    Capital from Latin America is a particular concern.

    “We would note that banks in Florida and Texas were especially active in arguing against this rule, which we believe indicates that they have the most at risk,” he added.

    (Reporting By Kevin Drawbaugh; editing by Andre Grenon)”

  42. @badger…

    BTW, the Kevin that wrote this story, is one of those in the past that has characterized everyone in the OVDI as TAX Cheats coming clean. I have written him before, and he never responds. I think he might be part of a mill that just works quickly from press releases and pushes articles out the door for quick release. I could be wrong, but that is my impression..

    Nevermind… I wrote him again today…

    Here is what I said. I do not expect a response…

    I read with interest your story.. Thank you for drawing wider attention to it, as it is an important issue not fully appreciated.
    IRS rule threatens bank capital flight: analysts


    The one important fact I think you may have missed, or was edited out due to brevity requirements, is the relationship of this domestic requirement by the IRS to the FATCA legislation passed in the 2010 Hire act.

    I call this DATCA as it is exactly the domestic version of FATCA. It is intended by the IRS as part of it’s strategy to get around other countries opposition to FATCA by offering US reciprocity of tax data exchange.

    The IRS noted that the regulations would facilitate intergovernmental cooperation on FATCA implementation by better enabling the agency, in appropriate circumstances, to reciprocate by exchanging information with foreign governments for tax administration purposes.

    “Finally, the reporting of information required by these regulations will also directly enhance U.S. tax compliance by making it more difficult for U.S. taxpayers with U.S. deposits to falsely claim to be nonresidents in order to avoid U.S. taxation on their deposit interest income,” the IRS added.

    I think you may be missing the BIGGER story…

    FATCA begets DATCA which begets GATCA or a Global Tax data exchange.

    That is the underlying point of this effort.

    Now you can argue endlessly about whether this is good or bad, but if you don’t even know it is happening, how can there be a discussion?
    This story at Accounting Today has a fuller explanation along with comments..


    Thank you for the reporting you do.

    Best regards

  43. And if you don’t believe a Global Tax Data Exchange regime (GATCA) is in the making, read this on Ireland. http://bit.ly/JcaSmO

    As the IFIA has pointed out, Ireland is negotiating the possible adoption of a model global agreement, which would not alter or amend the obligation to identify or report certain information under FATCA, but would outline an alternative pathway for reporting FATCA information. The IFIA expects this agreement to be concluded by the end of the year.

  44. Just entering the latest from Asia on this thread, where a DC lobbyist is saying that FATCA repeal is still possible.

    “Outside a handful of legislators who slipped it into the 2010 ‘Hire Act’ with no debate and a few Treasury officials tasked with enforcing it, hardly anyone here has even heard of Fatca,” Jatras says. The looming costs to domestic financial institutions are just beginning to be understood.

    “The window for impacted industries to delay Fatca’s enforcement and to set the stage for its repeal not only has not closed – it really is just beginning to open,” Jatras says. “If Hong Kong interests want to ‘fire back’ at Fatca, they have to aim at the right target: Congress.”

    You can read more here: http://ht.ly/1k9rhD

  45. @Just me, several of us have been posting, I’ve just discovered, about Jatras. I just posted a link on another thread, and then I discovered others here. I wonder if it would be worthwhile to pull them together and create a thread? He could definitely be an ally. Good news is, his negative reports on FATCA are being posted all over the place! Since he’s not a reporter, I’m not sure he’d qualify for the hall of fame, but he’s hitting both the expat problems, and pointing out how it will affect mainland americans, which is likely what is needed to get them to understand the issues.

  46. @outragedcanadian…

    I was thinking about making a post specifically about it, but when I discovered it in other threads, I just added it also to topic appropriate threads that was out there on FATCA/GATCA right now. My thought was that if we had newbies reading old threads they might find it interesting to read there too, like this one…. I don’t think it hurts to have multiple references.

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