How did I miss notice about public hearings on FATCA?

Public hearings on FATCA are taking place in Washington on May 15?

http://www.ft.com/intl/cms/s/0/8431a6d0-8d5d-11e1-9798-00144feab49a.html#axzz1taOxefA6

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45 thoughts on “How did I miss notice about public hearings on FATCA?

  1. @bubblebustin
    ‘is FATCA really a fait accompli?’ I truly believe some form of FATCA is a fait accompli. Wish I did not feel that way but I do not think it is ‘going away’. Perhaps with countries like Canada fighting for it, it will be in some form that we will be able to live with. However, we here in Canada, are faced with our banks having a large presence in the U.S. and the “Big 6” also pay taxes here in Canada and also want to continue to do business in the U.S.

  2. FATCA doesn’t look like its going anywhere soon. After the big 5 EU countries sold out it was downhill from there. Now we are even hearing that China and Russia are likely to give in. The only positive is that it looks like it will take years to actually get FATCA up and running properly, after which time most of the people in the know will be able to hopefully obtain a second nationality if they don’t already have one and renounce before withholding and all of the real problems start. It remains to be seen though how (or even if?) US only citizens in some European countries will be able to survive that long due to bank accounts being forced closed here. Those of you in Canada seem also to be much better protected by your government than US citizens in other countries are.

  3. @DonPomodoro

    I believe there is a real problem here in Canada with FATCA if implemented by the Canadian government into domestic law conflicting with the Charter of Rights and Freedoms(and yes no matter whatever you might think about the power of the US there is no getting around the Charter).

  4. @markpinetree;
    I read that Moody’s post, but there were no specifics – was it implying that there would be details soon?

  5. @Tim, that is why I was surprised to see the Moody’s page seemed to have been updated as of last week – it was dated late April 2012?

  6. @badger

    A few observations to make you might want to think about in terms of timeline

    1. Its now May which means we are very close to the hot and muggy season in Washington, DC (right now it is 23 degrees at National Airport). Do really think by July the staff at US Treasury and IRS is really going to want to be burning the midnight oil on any new initiatives.

    2. The Commissioner of the IRS is out the door in November

    3. The Secretary of Treasury is out the door in January even if Obama wins again.

    4. The head person role for tax policy at the US Treasury department is technically unfilled with that positions deputy(Emily McMahon) in the role in an acting capacity.

    5. You have an US election in November.

  7. Sorry @Tim, but I’m not astute enough to put it all together – would you say that means that all will stay status quo until after the election?

  8. @badger

    Yes. Unless it becomes a major crisis prior which not be in the interest of either the Republicans or Democrats. I also believe from studying the most recent FATCA comment letters FATCA will be delayed from July 1 2013 to July 1 2014. Again buying the US more time. Essentially we will continue to be in Amb. Jacobson hold tight for a while longer.

  9. not new news, but just to see what is out there today:
    http://business.financialpost.com/2012/05/15/canadian-bankers-head-to-washington-to-object-to-u-s-tax-regulations/
    “Canadian bankers head to Washington to object to U.S. tax regulations:
    Barbara Shecter May 15, 2012 – 12:04 PM ET

    “Canadian bankers have sent a continent to Washington to make a case against proposed regulations that some suggest conscript Canada’s financial institutions as an arm of the Internal Revenue Service.”

  10. Kind of pessimist. I don’t believe anything will stop FATCA and as we know it is very difficult to convince the US people that this is hurting innocent and law abiding citizens who live and work abroad. Apparently President Obama is not going to look at this and may be losing a lot of absentee votes. Insofar as I can tell the great majority of Americans Abroad, Dual Citizens and Greencarders still don’t know about FATCA and FBARS. In my worse moments I believe that this is desirable from the IRS side because then it can penalize them when they find out.I live in fear, waking up at night and this is affecting my mental well being. Yet I have not done anything wrong. I never had such a feeling since I became an American. Let me repeat things that are affecting my well being:
    Not having know about FBARS until 2009.
    Every year, with 79 years old, having to pay SS Self employment Tax to two countries.
    Pay US Tax on income that is not taxable in my country of residence: pension and savings.
    I feel there is not reason fro me to hide income because of the tax credits and earned income exclusion. SO I am not afraid of FATCA. Things like this.

  11. @badger

    “Canadian bankers have sent a continent to Washington…”

    Yes, the article really does say “a continent”. Wonder how they got that through the scanners at airport security 🙂

  12. @markpinetree;
    I empathize with your suffering at night and the toll on your health – I feel the same, psychologically speaking. It is not necessary, is not producing any good, constructive or desirable effect, and is not ethical – and cannot be justified.
    take care.

    @watcher: I wish the contingent was that large!

  13. Unfortunately, US doesn’t care if it shoots a mouse with an elephant gun. It gets the mouse and leaves behind the elephant. And, why should they shoot the elephant anyway?

  14. I don’t think so. Americans love this: public meetings ti legitimize what they will do anyway. The Treasury (USA) is indeed shooting in all directions, wildly, to collect money from what they say are tax cheaters. In this way they gain public opinion. And, they want to get us not on taxes because they can’t double tax us but on penalties for not knowing what to do. Smart indeed. But very unfair. I am not afraid of FATCA because I do declare in my FBARS all my bank accounts in Brazil. I am afraid of FBARS and penalties. They are a trap to collect money. We, Americans Abroad, need representation and the power to elect our representatives. In the mean time, let’s join ACA: http://www.aca.ch

  15. @Mark: Agree. All of this is a trap. That’s why IRS has a 72,000 (or is it 76,000?) page tax code so no one can figure it out.

    In an article I read in another thread today (There are so many, I’m losing track), someone suggested FATCA be simplified so bank employees who do not speak English can understand it. Whoever made that suggestion probably didn’t realize people who do speak English can’t understand it either. That’s the whole point of it. Confuse everyone and then nail them with penalties.

    Thank for the ACA suggestion, but I’m not joining anything which has American in its name. That defeats my position that I have not been a US citizen or even a US person since I became a Canadian citizen 40 years ago.

  16. @markpinetree, re; “Insofar as I can tell the great majority of Americans Abroad, Dual Citizens and Greencarders still don’t know about FATCA and FBARS. In my worse moments I believe that this is desirable from the IRS side because then it can penalize them when they find out”

    Ironically, here in Canada, there are delegations of real estate sales representatives coming up to try and sign people up to buy real estate and retire into the clutches of the US – see for example:
    http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/home-buying/real-estate-investments-head-south/article2432257/ in today’s Globe and Mail – with no mention at all of the looming threat of tripping over into the pitfalls of US ‘person’ taxpayer status, or the IRS and tax obligations that might develop, or already apply to those with snowbird, greencard, dual status, or ‘accidentals’.
    and
    http://www.theglobeandmail.com/report-on-business/rob-magazine/real-estate-investing-in-the-us/article2316131/page2/

    I urged someone here just recently, to get specialized legal and crossborder tax advice FIRST, before buying property in a retirement community in the US. They had no idea re the dangers to their RRSPs, FATCA, FBARs, etc. – they may reconsider, and buy in Canada instead. Someone told me about another retired couple who just got rid of a US house they were planning to live in for half of the year – when they found out the potential complications in the event of their deaths, and all the reporting they might be obligated to do.

    As you say, the silence and lack of public knowledge just reaps the IRS and the US more money from the unwary and innocent.

  17. Yes, and I just learned that if someone who became an US resident or dual citizen had a property in his country prior to becoming a resident, he will pay capital gain if he ever sells it. So, for anyone who wants a green card or wants to become a dual citizen please sell your real state before coming in!

  18. @ markpinetree
    Yes capital gains on your house is a significant factor but only if the property has a gain of over $500,000 (married) or $250,000 (single) which I admit is fairly easily attained in some markets around the world. Of course it has to be a primary residence. (A vacation cottage wouldn’t qualify.) What happens if you take a loss on your home? You guessed it — can’t deduct it!
    http://taxes.about.com/od/taxplanning/qt/home_sale_tax.htm

  19. @ markpinetree
    If it is not the primary residence then you pay capital gains on all of the gains — no $500,000 or $250,000 exemption. The tests for primary or main residence are in the link.

  20. You see. if someone – not me – inherits from his family real state and then becomes a dual citizen or green carder… the day he sells this real state he will pay capital gains to the USA even if he inherited them many, many years before he became a citizen or green carder.

  21. @ markpinetree
    It appears to be so but only when the real estate is sold of course. You know that sounds so far out unfair I’m hoping that maybe somebody else can tell us that it just isn’t so. Maybe the property would come under the estate rules and estates have a large exemption but this is all outside the USA so even that comes under far out unfair in my books at least. I’m afraid this is more convoluted than my limited knowledge base can handle. It seems that what happened prior to a person’s US personhood should not be of any concern to the IRS but we all know the IRS never sees it that way.

  22. From the IRS:
    Situation

    You are a nonresident of the United States. Thirty years ago you bought a piece of land in your home country for US$10,000. Now it is worth US$200,000.

    You immigrate to the United States, then sell the land for its current value — US$200,000.

    Question

    Do you pay U.S. capital gain tax on the entire $190,000 of capital gain?

    Answer

    Yes.

    Why

    Just because you change status from nonresident to resident of the United States, you don’t change the U.S. tax laws that apply to your transaction. Unfortunate but true. You calculate your U.S. tax results using U.S. tax law, despite the fact that you were a nonresident when you bought the property.

  23. @ markpinetree
    Well there you have it. Sadly the IRS never fails in the unfairness department. Good thing I sold my Canadian home well before I went to live in the USA. Back then, even on a primary residence, all the gain was taxed unless you bought a more expensive home afterwards. It might have had something to do with mortgage payments being deductible in the USA (they are not in Canada). Luckily that changed in 1997 just months before we sold our USA home. I am beyond totally convinced that citizenship based taxation is cruel and unusual punishment and should not be modified or codified. It should be abolished, big PERIOD.

  24. I guess the poor immigrant will have to pay capital gains in both countries…..This moves into prejudices.

  25. @ markpinetree
    Well at least in Canada there is no capital gains tax on the sale of a primary residence. I would have been spitting mad if I had sold my Canadian home AFTER getting the green card and then been forced to pay the IRS capital gains tax. Sometimes you do things in the right order without even knowing how lucky you are. I got plenty lucky there. We built our house in the USA from scratch, by ourselves, over a period of 10 years, so there would have been no getting out of the US capital gains tax for us using that buy another more expensive house exemption.

  26. No capital gains tax here in Belgium – period. I would be fuming mad if I were 30 years older, had just sold a house and just learned about US citizenship-based taxation and their expectation to bank on that sale. I wouldn’t pay them a single cent, even if it meant having to move everything I own to a local credit union or revert to a cash economy existence.

    I find it morally bankrupt and absurd to pay such a tax when it doesn’t even exist in my home country at all. I pay Belgian taxes for Belgian services…but I won’t pay foreign layabouts and bullies a tax that doesn’t exist where I live!

  27. Well, but I have to pay USA taxes on my small pension from my work in Brazil that is not taxable here. And I have to pay US taxes on the dividends I receive from my Savings in Brazil that also do not pay taxes here. So I can’t have Savings in Brazil… The worse part is that I know that Americans in France don’t pay US tax in their French pensions…

  28. @Don, and @markpinetree, as you say, it is very wrong that the situation is so unethical for those outside the US. Markpinetree, you should not have to face the taxes on your small pension. And it should be the same for all of us – no US tax when we lawfully pay in full in the countries where we live permanently and have other citizenship or resident status. The US is not ethical or just. And if we are brought below the poverty line eventually because we are prevented from saving like our fellows here (and in the US), it is our country of residence who will provide whatever assistance is available to us – and NOT the US. The US will provide us with nothing.

    I wake up everyday now, and look around me, and think about the fact that all those around me are subject to only one system of taxation, and can safely save for retirement, for school, and just live and save in general without fear of forms that are incomprehensible. But for the accident of fate and my parentage, I would be one of them. I am paying significant amounts just to keep abreast of the forms. It wipes out the tiny % any of the actual savings can achieve. This is all my family has for schooling and for retirement. My country of permanent residence urges all it’s citizens to be frugal and save, and gives us incentives to do so, but I can’t use those incentives. The difference between those around me and my family is that I have cursed mine with the burden of my USperson – and am cursed to be lifelong chattel for the US.

    I can’t help thinking that my family would be much better off without me. My non-US spouse would certainly have done better financially without me as a toxic economic burden dragging down our savings.

  29. And this is not all. I am 79 years old and because Brazil has no SS Treaty with the USA, I am supposed to pay SS Self Employment Tax in the two countries…having no return in either country. I6%. A donation I would say. What is left after all of this?

  30. @markpinetree. That is just beyond comprehension. It is so very wrong. Have you considered describing this to the Taxpayer’s Advocate? http://www.irs.gov/advocate/article/0,,id=212313,00.html
    I know it won’t help in the short term, but it might help to feel that you have been able to tell her about the injustice built in to the situation for those in Brazil – which she might incorporate (anonymously) as a ‘systemic issue’ in her next reports. “TAS also handles large-scale or systemic problems that affect many taxpayers. If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System.”
    http://www.irs.gov/advocate/article/0,,id=117703,00.html
    (ps. the IRS links often have to be cut and pasted into your browser search window to use).

  31. Thanks Badger. But there is more. I was able to contact Rep. Van Hollen from Maryland and told him about this. He sent my e-mail- without revealing mt name – to the IRS that responded with a formal letter saying that Americans all over the world had to pay taxes and had Earned Income Exclusion and Tax Credit. I answered to this e-mail through Representative Van Hollen and then I got another answer from the IRS (through him) saying that if this was so difficult for me that I should renounce the US citizenship. This startled me. I have two married daughters and one son in the USA, I lived and worked thirty years in the USA. I used to love this Country and be proud to be a citizen…

  32. @markpinetree, I remember that – it startled me too. I read that other post. I think that the Taxpayer Advocate Olson should be told about it. When it gets so that the IRS or any US official starts advising us that the only remedy is to renounce, then that should be flagged for the TAS’s attention.

  33. Actually, I have a lot of respect for whoever it was in the bowels of the IRS who put his balls on the line with that letter. It would have been much easier to write something mealy-mouthed.

    It’s clearly in the US national interest for as many long-term expatriates and accidental Americans to renounce – I’m surprised they don’t encourage it more formally, more often. Overseas tax returns (showing nil revenue) are a burden on their end, too. Dead-end revenue drain.

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