KPMG Analysis of Final FATCA Regulations

This report just out at end of January from KPMG: KPMG Analysis of Final FATCA Regulations

11 thoughts on “KPMG Analysis of Final FATCA Regulations

  1. @Rick: I really do think you are safe. Even if Canadian banks ask for proof of birth (which they cannot legally do!), your birth certificate is Canadian.

    As I mentioned above FATCA regs do not include any direction or comment on anyone born outside US to an American parent.

    There are over 550 pages of regulations. If IRS had meant to include people like yourself, I am certain they would have done that.

    Note, this is my personal opinion. I have no legal or accounting qualifications. Just lots of information from trying to remain current on Mr. FATBARDT.

  2. Thanks all for the clarifications and links. My situation is Canadian, born in Canada to an American citizen. My concerns have been assuaged by the comments here, although I realize the situation is still somewhat fluid.

  3. @KalC: Actually, Canadian banks cannot ask for citizenship under Canadian banking, human rights and privacy laws. Canadian citizenship certificate or passport are among the pieces of ID they can accept, but they cannot demand them.

    They also cannot accept a foreign birth certificate as ID–only Canadian birth certificates.

    Therein lies the dilemma for Canadian banks–and our saving grace. If they dare to ask, that is when lawsuits begin. I hope it won’t come to that.

    Plus, I personally pulled any investments I had in US mutual funds out as soon as news of this hit the press in 2011, so there is no US source income for withholding.

    I also will cease traveling to US after the death of my elderly mother. I would far rather stay in Canada or travel elsewhere to spend my money.

    Senators Casey, Levin and Schumer, my trips have always been to my home state of Pennsylvania or nearby states of New York and Michigan.

    Is this what you intended with FATCA? Less investment in US and fewer tourist dollars being spent in your states? That is what you are getting!

  4. @Rick, thanks for letting us know about the link. Turns out the IRS has changed their website. I have found a new site, and changed the link.
    http://www.irs.gov/Individuals/International-Taxpayers/Classification-of-

    Taxpayers-for-U.S.-Tax-Purposes
    The term ”United States person” means:
    A citizen or resident of the United States
    A domestic partnership
    A domestic corporation
    Any estate other than a foreign estate
    Any trust if:
    A court within the United States is able to exercise primary supervision over the administration of the trust, and
    One or more United States persons have the authority to control all substantial decisions of the trust
    Any other person that is not a foreign person.

  5. Here is information from Canadian Bankers Association which includes a brief synopsis of “US person.”
    http://www.cba.ca/en/consumer-information/40-banking-basics/597-us-foreign-account-tax-compliance-act-fatca-information-for-clients

    You may want to read Have You Just Learned US Consider You a US Person from our Building Blocks.
    http://maplesandbox.ca/2012/have-you-just-learned-that-the-united-states-considers-you-a-us-person/

    As the Vice-President of my credit union said today, US and IRS are “being very clever” in how they define US person–i.e. it is not just US citizen. (I think “clever” was a code word for sneaky or even despicable).

    Welcome to Maple Sandbox. We hope you learn and explore with us and also join with us in standing up to IRS bullies. Please feel free to share your questions, knowledge and experiences with us.

    • I think “clever” also in that financial institutions (Canadian at least) may purposely not be looking for indicia for “Accidental Americans” (or at least those born in Canada to US citizen parent(s). To include that subset just opens financial institutions up to enormous complexity in the illegal questions they would further have to ask to illegally (per existing Canadian law) identify USPs. Whether this is fair to other USPs is another question.

      (I am interested in this observation in that it would affect my son who has a developmental disability (and others like him) for whom the US Department of State indicates a Parent, Guardian or Trustee does not have the right to renounce on their develpmentally delayed or otherwise mentally incapacitated family member’s behalf (and such is now partially stated on a Bern US Consulate page devoted to “Renunciation” (http://bern.usembassy.gov/service/renunciation5.html)

      “…Thus, such a person can be said to lack a full understanding of renouncing citizenship and/or lack the necessary intent to renounce citizenship, and the Department of State will not approve a loss of citizenship in such instances.”

    • @Calgary: Even the regs themselves are silent on people born outside US. I don’t think that was an oversight.

      I don’t think IRS has any intention of pursuing them under FATCA. If they did, there would be a huge outcry from countries around the world.

      Of course, I thought there would be a huge outcry internationally on FATCA generally, but that has not gone as I thought it would.

      The outcry now is in US as IGAs are being signed forcing US banks into a much more limited information gathering on residents of other countries.

    • Not only will they not pursue those born in Canada of a US parent, they will not pursue a Canadian born in the US who states ‘Canadian’ when asked citizenship when opening an account. ‘Don’t ask, don’t tell’ is the MO

  6. It would be nice if KPMG could have included a definition of “US Person”. If it was there then I missed it. I have not found a concise definition (assuming one even exists) on this site either. The link on the right of this page under citizenship for “US Person” takes me to IRS Error redirect page which directs me to IRS Home page. Is there a definition? Could someone kindly post it or link to it.

    Thank you for your work and effort in producing this site.
    Rick

  7. Risk.net: “Little incentive for China to implement Fatca”

    http://www.risk.net/asia-risk/news/2241791/little-incentive-for-china-to-implement-fatca

    From the article:

    “There is little incentive for Chinese authorities to sign an intergovernmental agreement (IGA) to enable China’s financial institutions to comply with Fatca, as any benefits to it from an exchange of information with US tax authorities are likely to be minimal, say consultants.”

    “Speaking at a PwC Fatca roundtable in Hong Kong on February 6, Anthony Tong, US tax consulting leader for Greater China, said it is the US that would gain the most benefits from such an agreement – as it would be onerous for China to comply with no obvious benefit.”

    “Although China was not on a list of 50 countries the US Treasury said it was in negotiations with for signing an IGA in November last year, market sources believe that the US is actively engaging with the Asian state to come to an agreement behind the scenes.”

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