A few days ago, the IRS and Department of Treasury invited the general public and other Federal agencies to comment on two new forms related to FATCA, by October 15, 2012. These forms are specifically for the banks or other Foreign Financial Institution (FFI), so it seems the banks must fall under the category of the general public.
The forms must be filled out and submitted by the RO, Responsible Officer, of the institution.
Form 8957 is the Registration for Participating, Limited, or Registered Deemed Compliant Foreign Financial Institution Status.
Form 8956 Application for Foreign Account Tax Compliance Act (FATCA) Individual Identification Number.
We talk about USA standing for the United States of Arrogance. This is particularly apt when one considers that the IRS (which is known for underestimation of time spent filling out forms), estimates that 260,000 institutions will have to fill out each of these forms.
Form 8956: Estimated number of respondents 260,000. Estimated time per Respondent: 2 hours, 59 minutes. Estimated total annual burden hours: 759,200
Form 8957: Estimated number of respondents: 260,000. Estimated time per Respondent: 8 hours, 7 minutes. Estimated total annual burden hours: 2,116,400.
I would think that for this kind of legal responsibility, the Reponsible Officer will be some sort of VP within the bank. What is the average salary of a high ranking bank official? Let’s take what I think would be a lowball guess at $150,000, and then rounded to about $200 per hour. According to the published estimates, then, a total of 2,875,600 hours will be required to register for FATCA. At $200 per hour, that’s $575,120,000.00 that will be spent filling out forms that benefit only the United States. Arrogance? I’d say so.
It will be interesting to see how many institutions send their comments, and what those might be.
http://www.convey.com/2012/08/irs-seeking-comments-on-new-forms-for-fatca/#ixzz24Hzk598E
http://www.gpo.gov/fdsys/pkg/FR-2012-08-15/pdf/2012-19972.pdf
http://www.convey.com/2012/08/irs-seeking-comments-on-new-forms-for-fatca/#ixzz24Hs4LwUs
That’s an unbelievable amount of economic waste…I think that the EU, Canada, China and every other major immigrant source country/area for the US should pass an identical law to force US bank officials to scan through data of 40+ different nationalities at their own expense as well! We all know that the US wouldn’t stand for this breach of their sovereignty should that ever come to pass, so why should anyone else?
@Don: Exactly!
I’m glad you’ve joined us here.
See this article, which proves that the IRS is rushing through FATCA, without any concern for those they expect to comply. Similar to the GAO report in the spring this year, that had professionals and practitioners identifying that the FATCA and FBAR forms were duplicative and confusing – and prone to lead those filing to make inadvertant errors due to complexity of the forms and requirements. If those who comply are harmed, then whose fault will it be? The IRS has been warned by tax professionals, but did not take that into account, and is not concerned with making it easy to comply. After all, compliance isn’t what they really want – they want penalty revenue. Because the accounts reported on FBARs and FATCA are legal, post-tax, registered with the governments where we live, earn and were born, and are entirely transparent to the tax agencies where the assets are held. There is no money laundering, terror-funding, etc. Only our own already reported and taxed family savings – which the IRS would like to confiscate.
So according to the article below, the IRS is rushing things through that would make compliance more difficult and complex for those attempting to comply. Any inadvertant errors and resultant penalties, will be up to the taxpayer to deal with. This is proof that the IRS is recklessly endangering all those abroad forced to comply – and will gladly accept all penalties in the tens of thousands, and all indefinite extensions of the SOLs that result.
“Form to Certify FATCA Status May Spur Errors, Practitioners Say”
By Alison Bennett
Publication Date: 08/15/2012
“A new draft version of a form that intermediaries and other
entities will need to submit to withholding agents under the Foreign Account Tax Compliance Act is very complicated and will be difficult for many taxpayers to complete, practitioners told BNA in interviews Aug. 14.”…..
…“It is going to be very complicated to prepare,” Candace Ewell, a director in the Washington National Tax practice of PricewaterhouseCoopers LLP, told BNA. Noting that the form has gone from two pages to eight pages, Ewell predicted that in many cases, “this form is not going to be prepared properly.””….
…”Ewell told BNA that “at eight pages, this has just gotten worse.” Shesaid there had been suggestions that IRS create several shorter forms instead of combining all the reporting and certification requirements into a single form, but acknowledged that IRS is working against the clock.
New forms would have to go through the Paperwork Reduction Act and likely would have taken time that is in short supply, Ewell said. “There would be additional approval processes, so they don’t have the time,” she said.”….
http://www.bnasoftware.com/News/Tax_News/Articles/Form_to_Certify_FATCA_Status_May_Spur_Errors,_Practitioners_Say.asp