Jim Jatras at Repeal FATCA has a great new article out which says what most of us 
believe. FATCA: A Tool of the Electronic Surveillance State.
I’m too FATCAed out tonight to read it in detail, but I wanted to post it for others to see. It is a good companion to Hazy’s Elephant In The Room. Neither of them are what any of us should be reading shortly before bedtime!
Tag Archives: IRS
"Nothing Against Canada." Nothing Against United States (Until Now)
Ted Cruz has “nothing against Canada.” Likewise, many Canadians born in US have”Nothing against United States (until now).
Here is an article by Lynne Swanson (aka Blaze) which appeared on the Congress blog at The Hill today.
This tells Senator Ted Cruz he has nothing to fear from Canada for renouncing Canadian citizenship–unlike what happens in reverse
Senator Cruz, Canada respects your decision to renounce your Canadian citizenship. When it is granted, I assure you Canada will not stalk you for information about your private finances and will not demand taxes or penalties from you.
Senator Cruz, will you and your Congressional colleagues do the same to protect Canadians and others around the world from outrageous demands of IRS and US Treasury?
Ted Cruz Renouncing Canadian Citizenship For US Presidential Aspiration
Ted Cruz Is Renouncing Canadian Citizenship.
Cruz is a US Senator from Texas who was born in Calgary in 1970 to an 
American mother and a Cuban father. His father was working as an engineer.
Cruz only recently learned he is still considered a US citizen. He moved to US as a child and thought he was not a Canadian citizen because he had never claimed Canadian citizenship and has had only a US passport since high school.
“Because I was a U.S. citizen at birth, because I left Calgary when I was 4 and have lived my entire life since then in the U.S., and because I have never taken affirmative steps to claim Canadian citizenship, I assumed that was the end of the matter.”
Sound familiar? Well, at least he knows Canada won’t try to FATCA or FBAR him.
Cruz insists he is entitled to serve as President because he was American at birth” through is mother’s citizenship.
Hmm. He’s a Tea Party Republican. I wonder what all those birthers who insist Obama should not be President because he wasn’t born in US (despite a birth certificate from Hawaii) will say about this.
Allison Christians sums it up nicely in Only Reason Why Ted Cruz’s Citizenship Is Interesting.
In the grand scheme of things Ted Cruz’s citizenship is a non-story. But for what it illustrates about citizenship-based taxation, it could be the story of the century.
Now, how do we make this work for us?
Carl Levin: FATCA For Law Enforcement, National Security
I had posted this earlier in another thread, but I think this letter from Carl Levin to IRS is so significant, it needs a thread of its own. 
In Obama’s 2009 press conference on FATCA, he credited Carl Levin for being one of the masterminds on FATCA for combating offshore tax evasion.
In 2012, Carl Levin wrote a letter to IRS, demanding (page 11)
Although FATCA is structured to address offshore tax abuse, offshore account information has significance far beyond the tax context, affecting cases involving money laundering, drug trafficking, terrorist financing, acts of corruption, financial fraud, and many other legal violations and crimes. Given the importance of offshore account disclosures, FATCA guidance and implementing rule should create account FATCA forms that are not designated as tax return information but, like FBARs, may be provided to law enforcement, regulatory, and national security communities upon request. FFIs are not, after all, U.S. taxpayers, and will not be supplying tax information on behalf of their U.S. clients; they will instead be providing information about accounts opened by U.S. persons. The U.S. Supreme Court has long held that bank account information is not inherently confidential but is subject to inspection by law enforcement and others in appropriate circumstances. Foreign account information is too important to a wide range of civil and criminal law enforcement and national security efforts to be designated as tax return information bound by Section 6103’s severe restrictions on access.
Why bother with a warrant or surveillance when you can simply declare someone a “US person” and FATCA them?!?
FATCA: A Simple Premise Gone Terribly Wrong
Here is FATCA: A “Simple Premise” Gone Terribly Wrong
This was coauthored by Lynne Swanson (aka Blaze) in London, Canada and Victoria Ferauge (aka Victoria) in Versailles France and was published today in The Hill Congress blog.
In the article, we ask
President Obama and members of Congress, how did the “simple premise” of “cracking down on illegal tax evasion and closing loopholes” become an attack on financial lives and personal integrity of millions of people living outside United States, their banks and laws and constitutions of their countries of residence?
Is this how “common sense measures” will “restore fairness and balance in the tax code?”
In reporting on how complex, costly and convoluted FATCA has become Victoria and I also ask:
Mr. President and Members of Congress, is this what you intended?
"Boy, I Sure Wouldn't Want To Have To Fill Out That Form"
Thanks to Badger for posting in What’s New Part 2 of the Interview with Bill Yates, former Associate Chief Counsel (International) with IRS
The interview relates to residence-based taxation, but also deals with OVDI and FATCA.
My favorite comment from the story is this:
“I’ll tell you one thing. I’ll never forget what someone said after one of our many, endless Form 8938 drafting sessions.”
“Boy, I sure wouldn’t want to have to fill out this form.”
That sums it all up, doesn’t it?
On FATCA, Mr. Yates says
I thought it was bad policy. We shouldn’t be pushing U.S. citizens towards expatriation.
He recognizes FATCA is hitting U.S. taxpayers living overseas with unforeseen consequences, such as having their foreign bank account(s) closed.
When asked if he thinks FATCA was a mistake, he replies:
It doesn’t matter what I think, now. FATCA is inevitable.
On OVDI, he gives an example of an Accidental American born in a US hospital to Canadian parents. He insists this was not and should not be the target of OVDI. But,
Believe me no one at the IRS Field level is going to speak up about the inconsistencies inherent in OVDI as far as “accidental citizens”
One more confirmation to stay away from OVDI!
Here is the Part 1 of the Interview with Bill Yates, which was earlier posted under What’s New.
Should Lex Americana Be Universal?
An impressive ally in the FATCA fight has appeared in Georges Ugeux
The former Group Vice-President of New York Stock Exchange and present CEO of Galileo Global Advisors is a Belgian-born dual US citizen.
In his Should Lex Americana Be Universal: FATCA Turns Foreign Banks Into Tax Informants article for Columbia Law Review, Mr. Ugeux writes:
In my first course on International Private Law at the Catholic University of Louvain, we were taught that tax laws could not extend beyond the borders of the taxation authorities.
Yet, he points out:
The US applies Universal tax Law
He writes about technicalities of FATCA, but also reports from a personal perspective.
FATCA raises fundamental questions of privacy, but also raises questions about how it can be properly executed. Why, as a Belgian-born, dual-citizen, grandfather, am I no longer allowed to use or send money from my Belgian account for my granddaughter in Paris by using Internet banking? Why is my account subject to all kinds of FATCA restrictions while I am not required to disclose the account because its amount is below the IRS thresholds? Why can I not view the balance of my account on line?
Effectively, those accounts become useless, and it is equivalent to inciting US tax persons to close those accounts, pushing them to less regulated and transparent jurisdictions if they need capital abroad, whether it is for their business or their household…
Not surprisingly, one by one, banks refuse to open accounts for US residents or nationals. A friend of mine was refused the opening of a bank account last week in Tokyo…
This will affect Americans working outside of the United States who are not going to be able to use local banking facilities. It’s a strange version of a self imposed Yankees go home.
He suggests a delay in FATCA to ensure equity between countries.
The United States has to ask itself the question of whether its actions are legitimate and question its objectives and the ways it goes about achieving them. This is especially pertinent at a time when the United States seems to reserve a right to eavesdrop upon foreign nationals.
He asks:
Is US foreign policy using all its weaponry, including the FCPA and FATCA to impose a Lex Americana (i.e., American law regime) upon the rest of the world? Shouldn’t the US first look more closely at its own taxation system and corruption? International tax law is in urgent need of modernization with a focus on equity and fairness rather than threat and blackmail
FATCA: IRS Troubles Go Global
Thanks to Saddened for sending me this fabulous find. IRS Troubles Go Global
The author gets it!
As would be expected, this regulation, which is U.S. financial imperialism of the worst sort, is causing great resentment among foreign governments, financial institutions and citizens, as well as Americans living and working abroad. It is very costly for foreign financial institutions to administer, and puts their executives at risk for both civil and criminal penalties for any failure to administer the law as the IRS may wish.
It seems he knows about Maple Sandbox and Brock.
Many Canadians, for good reason, are upset about these impending regulations, and there are groups in Canada who have said they will bring Canadian constitutional suits against the government under human rights violations if Canada signs on to the Foreign Account Tax Compliance Act.
Austrians are resisting too.
Austria is being forced to give up much of its traditional financial privacy, in part, because of the actions of the IRS and U.S. Justice Department. Many here in Vienna remember well losing their freedoms first to the fascists and then to the communists, which is one reason they have so resisted the efforts to destroy their financial privacy.
It seems folks in US might finally be waking up.
Americans are now learning that once tax authorities have the ability to peer into their bank accounts and to monitor their financial affairs, these authorities will abuse this power, and an essential freedom is lost.
Let’s keep up the pressure!
ACA: IRS Systematically Targeted Overseas Americans
Here’s a report from Geneva Lunch published today: IRS Targeted American Citizens Overseas: IRS Systematically Targeted Overseas Americans
American Citizens Abroad (ACA) has provided evidence “of the arbitrary and questionable IRS (US tax office) management of the Overseas Voluntary Disclosure Programs” (OVDP) to members of three US Congressional committees working together to investigate IRS abuses, ACA said Tuesday 4 June.
The Geneva-based international group says that the 2009 OVDP in particular was “extremely prejudicial to Americans living overseas who sought to become compliant with their taxes due to errors or omissions under the OVDP. Believing they could come back into the system by simply filing the appropriate paperwork and paying any outstanding tax burden, these individuals were later told they would be hit with a standard penalty of 20% of the highest value of their bank accounts over a five-year period.”
Jackie Bugnion calls it entrapment to hit people with ruinous penalties.
“There is no question that the IRS targeted Americans living overseas,” says ACA Director Jackie Bugnion. “By luring them into the OVDP in a form of entrapment then hitting them with ruinous penalties based on the overseas assets, instead of using the discretion which was within IRS purview for benign actors, the IRS treated ordinary, hard-working Americans like criminals. Most of the unreported accounts were pension funds and basic financial accounts used for living expenses and were not being used to hide assets.”
So, does anyone think this will get the same kind of media and Congressional attention that Tea Party is currently getting?
They're Watching!
Yikes! (I am saying that far too often these days!)
US News is reporting some pretty scary stuff about IRS High Tech Tools To Track Your Digital Footprints
The Internal Revenue Service is collecting a lot more than taxes this year–it’s also acquiring a
huge volume of personal information on taxpayers’ digital activities, from eBay auctions to Facebook posts and, for the first time ever, credit card and e-payment transaction records, as it expands its search for tax cheats to places it’s never gone before.
IRS is no longer content to just have income, financial and banking information:
The IRS has brought in private industry experts to employ similar digital tracking–but with the added advantage of access to Social Security numbers, health records, credit card transactions and many other privileged forms of information that marketers don’t see.
Of course, they’re not shy to talk about it. In fact, they are bragging:
“Private industry would be envious if they knew what our models are,” boasted Dean Silverman, the agency’s high-tech top gun who heads a group recruited from the private sector to update the IRS.
The article does not say if their spy mission is restricted to US. Based on what we know, we have every reason to believe it is spreading around the world.
What the heck are they going to do with FATCA information?!? Canada and other governments, Don’t Let US FATCA You!