Exposed: IRS Colludes With Banks To Unfairly Target U.S. Citizens Abroad is an excellent article about the real impact of FATCA. It comes from Occupy.Com.
It is one of the comprehensive and accurate articles on FATCA I have read.I wish the mainstream media would do as thorough and as accurate a job in covering the issues.
A woman in France speaks for many of us when she says:
“I hope someone, somewhere, sometime will say this is wrong.”
“In a panic,” she renounced her U.S. citizenship because of the upset it was causing her ill non-US husband. She is now “more and more depressed.”
Victoria Ferauge (aka Victoria) says:
“There are too many unintended consequences. It’s negatively impacting people who are not tax evaders. What I find astonishing is how it never occurred to the IRS how this could have an impact on regular people.”
“I said, ‘You want to apply the penalty based on my house?’ So then my penalty went from $90,000 to $172,000. I said, ‘This is ridiculous. For a tax failure that’s less than $20,000 over six years and a failure to file a form, you want to charge me a penalty of $172,000?'”
“In my view, a working system to address offshore accounts addresses offshore accounts,” said Itai Grinberg, professor of law at Georgetown University. “For a U.S. expat living in Berlin, having an account in a Berlin bank is not an offshore account. It’s an on shore account.”
Unfortunately:
“That’s my view, that’s not what FATCA says,” he added.
Victoria describes the situation well:
“We feel a little like David against Goliath here.”
Great article!
Ms. Featherston is to be congratulated for a comprehensive and well researched article. Those who have been following FATCA , FBAR and CBT for the past several years and reading some of the articles linked to at Sandbox and Brock will recognize many of the names mentioned with their stories and comments. I’m wondering if a Brocker, Sandboxer, or someone from ACA provided her with some research material.
At any rate, a job well done!!!!!!!
While reading the article and thinking of the Occupy movement, it struck me that FATCA and OVDI originated because members of the !% club used UBS to hide their money. The result of FATCA is that the other 99%, especially the expat community, are getting punished.
As FATCA evolved into a 544 page nightmare of obscure regulations, the opportunity for loopholes became greater. I’d bet my last U.S. dollar (if I had any), that there are teams of consultants out there devising ways around FATCA for those few who really are tax cheats. Meanwhile, everyone else suffers.
One other point, that is often missed, is the effect on immigrants in the U.S. who have bank accounts in their native country, jointly held with family members for the purposes of supporting their families. It has also been pointed out by immigrants from India, that it quite common for their names to be put on their parent’s bank accounts due to difficult probate procedures in India. Aside from having having their name on the account, the money in those accounts belongs to their parents and is not used at all by the immigrant. Yet, they get punished by FBAR and FATCA.
I am SO happy Occupy has finally taken this up! Thank you to everyone who contributed. Last year, I wrote them, I visited two Occupy sites and engaged in conversation there with the members. I contacted Occupy NYC, Toronto, Ottawa, Kingston. This was early on and only got a little bit of response. So after all of that, it’s great to see this!! I took hot chocolate and coffee to Ottawa on a bitter day to the people camped out there and got really into it with them on this topic. They were very receptive but, I didn’t see anything further. THRILLED to see this!
I find Itai Grinberg’s comment quite interesting considering he was one of the people instrumental in developing FATCA (or the idea of FATCA). He wrote an article for the UCLA Law Review in Dec. 2012 titled “The Battle Over Taxing Offshore Accounts” where he discusses ways to make a more cohesive system of international exchange of tax information.
Here is the link for the recent Law Review article: http://www.uclalawreview.org/?p=3814 and if you would like to read his original FATCA article it is here, written in January 2012. http://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?article=1162&context=fwps_papers
@Expat: Thanks for posting that. I wasn’t able to access the original article, but I did read a bit (not 382 pages!) of the other one.
He now seems to at least recognize some of the harm FATCA is doing. At a minimum, he understands the rather obvious fact that a bank account in Berlin is not an offshore account for someone living in Berlin.
The only reason I can’t think of why Congress does not understand that simple idea is because of what John Kerry said when he was in Berlin on his first international trip as Secretary of State.
That certainly explains FATCA, doesn’t it?