Breaking News! Reuters is reporting IRS Is Delaying Key FATCA Dates.
According to this, FIs now have until January 1, 2014 to have procedures in place for reporting.
I’m a bit confused. I thought it was already that FIs did not have to report until January 2014, but they must advice IRS by January 1, 2013 if they will comply. Can anyone clarify that for me? Tim?
Also, FIs now are not required to withhold until 2017. The longer this is pushed back the greater chance we have of fighting this. As Flaherty said recently, delay is not enough.
IRS Delays Key FATCA Dates
Breaking News! Reuters is reporting IRS Is Delaying Key FATCA Dates.
28 thoughts on “IRS Delays Key FATCA Dates”
Thanks Just Me who tweeted this Summary of New FATCA TImelines.
Here is Just Me’s (known as @FATCA_Fallout) tweet.
Marvin Van Horn @FATCA_Fallout
Summary of New Timelines for #FATCA freight train. Compliance deadlines slipping. Can we kill this monster? http://bit.ly/QGXB8q
Here’s my reply to Just Me:
@FATCA_Fallout #FATCA freight train is running behind schedule and seems headed for derailment.
Just Me also tweeted another link:
Marvin Van Horn Marvin Van Horn ?@FATCA_Fallout
An IRA announcement that only FATCANATICS could love. The rest of us glaze over. , End the long nightmare, please! http://bit.ly/SvpuA6
Don’t you love the word FATCANTICS as much as you hate FATCA?
To make your eyes glaze over even more, here’s information from Accounting Today.
I know this is supposed to be a more mature site than Brock so accept my appologies. This is biggest clusterfuck I have ever seen. Yes, this whole thing has been delayed. Compliance for “new” accounts need not occur until January 1st 2014 however, “pre-existing” accounts need not be compliant until December 31st 2015. So we are all going to be dead before this thing actually gets off the ground. Additionally there will be no “transmission” of accountholder information to the US government until September 1st 2016.
It appears that the delay is simply giving more countries the opportunity to jump on board. Take, for example, Barbados. It’s prime minister is all excited about joining FATCA:
Barbados might pursue FATCA agreement with US
Another story on the delay:
“Commenting on the delay, Colin Camp, managing director of products and strategy at Dion Global, anticipates the delays are down to negotiations for inter-governmental agreements (IGAs) taking longer than expected.
‘These have complicated an already intricate and delicately balanced situation, and have made the implementation of this major piece of legislation even more challenging, because of the variety of requirements that they introduce,’ Camp said in a statement”.
Thanks both Tim and Hazy2. It seems IGAs continue to be a huge roadblock–one which could be responsible for the ultimate derailment of FATCA.
It sounds like each country could have their own requirements and US banks are already in a snit over the agreement with the Europe Five. That could cause a head-on collision between DATCA and FATCA.
Tim, other than thinking we will all be dead by the time FATCA actually happens (in which case IRS will go after our estates when we can’t fight them! Remind me not to put my place of birth in my obituary.) what do you think the significance of this delay means?
There are many more articles out today and tweets are atwitter about the delay. I haven’t yet seen anything from Barry McKenna at Globe and Mail or any other Canadian media.
At a minimum, the delay gives Canadians more time to diversify our assets among FIs to stay below the threshold. Does anyone have a clear understanding of whether RRSPs are considered part of the $50,0000?
It also gives Saddened some breathing room as she waits for her Canadian citizenship ceremony and the ability to relinquish. Any news on that Saddened?
Unfortunately, the delay does nothing for our friends in Europe, Asia and South America who are having bank accounts closed or who can’t open accounts or renew mortgages simply because they were born in US.
And, to add more interest to the mixture, we have a US federal election next month, a Congressional/Senatorial US election in November 2014, and a Canadian federal election probably some time in 2015.
Now plot those revised FATCraAp dates in amongst the above.
If a week is a long time in politics, one-to-about-four years (depending on which benchmark worries you most) is an eternity, both in politics and in international treaty negotiations.
It ain’t over ’til the Fat Lady sings, and I don’t see any Fat Ladies queueing to do any serious singing for some time yet. Everyone take a deep breath, do what you gotta do for your own sanity, and get on with our lives. And watch the gong show south of our border continue to unravel.
In other news, a good US friend who is a life-long liberal Democrat watched the “third-party” debate a couple of nights ago and emailed me today saying she’d prefer to vote for almost any of those contenders than either Romney or Obama. But that kind of thinking got Nader enough 2000 votes in Florida to elect Dubya, and look where that got the world. What a conundrum. The deciding factor in her case will be the latest Neanderthal terminal foot-in-mouth Republican foray into what God does or doesn’t intend about pregnancy arising after a rape … say goodbye to the female vote, MitWit and friends.
My wife asks me why, after ditching the US more than forty years ago, I keep following US political news. I liken it to the morbid curiosity one has upon viewing from afar two trains charging full-speed at each other on the same track. As a friend likes to say, you couldn’t make this stuff up.
I daily thank Whatever that I live a safe distance from and above the track, as I watch the trains.
@Schubert: Does your friend know Roseanne Barr is running for President?
@Tim: I never thought I was terribly naive, but I had to Google clusterfuck. I found it means something different than the rather racy image I had in my mind when I read the word.
According to Urban Dictionary, CF means: Military term for an operation in which multiple things have gone wrong. Related to “SNAFU” (Situation Normal, All F.$#*ed Up” and “FUBAR” (F$#*ed Up Beyond All Repair).
Today, however, CF is commonly used to descriptively generalize any situation with a large scale of disarray.
Yep, that describes FATCA. Did everyone else know what CF meant? Interesting that Victoria and others have often used FUBAR as a substitute for FBAR.
Now, Outraged will have to decide if she is going to send me to the penalty box for some time out.
I don’t care if Center for Freedom and Prosperity is right wing, left wing or a turkey wing. I like what they have to say about FATCA. Their headline says Latest FATCA Delay Bolsters Case for Repeal.
They also call FATCA a “misguided foray into fiscal imperialism,” and conclude “FATCA is sheer madness.” Amen!
Those who speculated that FATCA would be delayed were absolutely right on. The delay was probably known some time in advance by the Canadian government and the financial industry, but they had agreed to not say anything.
This may explain the “deafening silence” that has been mentioned a number of times.
Regarding whether RRSPs would be considered as part of the aggregate for FATCA threshold purposes, I have contacted a number of sources for an answer to that question. No one knew the answer because the final regulations hadn’t been drafted. The best quess I received was that there was an 80% chance RRSPs would not be counted in.
The answer to that question is crucial for those who are trying to FATCA proof themselves.
That’s great news! The longer that the implementation of FATCA is delayed, the greater the number of expat Americans who will receive their CLNs in time before the deadlines.
Here’s another article from Financial Times. Not much more than what was in some of the other articles, but we have to love this comment from Colin Camp:
There is now “more onus on US banks than on foreign ones, which is probably different to what they imagined.”
US banks are kicking up a fuss over Europe Five. Wait until more jump on the train. All aboard! Caution: Head-on collision and derailment ahead.
I can certainly see why there is now more onus on US banks than there used to be (practically none) but “more than foreign banks” ??
I haven’t seen anywhere that says US banks would have to look into where someone was born, or whether they have a green card, or what their citizenship was. It seems that all they might need to worry about is residence, which shouldn’t be that hard to figure out, (although it could get very complicated if there are multiple IGA’s with different requirements).
Wow, I go away for a week and after weeks of nothing, it looks like there is now a delay. I don’t have the time to read everything here and at Brock to ‘catch-up’, but it sounds like things are ‘looking up’ in FATCA world.
I know Maple Sandbox rules prohibit name calling, but there are a couple of interesting articles out today which have great names for FATCA.
In the first, FATCA is called “Backward US Imperialism.”
Tim, I realize you are not a big fan of Robert Woods, but in his article in Forbes, Woods says FATCA “has been growing like Jabba the Hut. It’s now a global juggernaut.” (Exactly what Just Me predicted months ago!)
I view Robert Woods as very much of status quo guy just like Steve Mopsick. Basically if you oppose FATCA you have the “blood” of tax evasion on your hands. At the end of the day most US tax lawyers think the law is the law and if you attack the law you are somehow attacking them personally as lawyers by saying the law is crap.
I am starting to wonder though if pressure is being directly applied by Obama to the NDP. I just get the sense that neither Obama or the NDP though Flaherty and the Conservatives would holdout for this long. I know one the top civil servants in Finance someone named Brian Ernewein has spent multiple days in all day meeting with the US Treasury over FATCA and yet the US was unable to get Canada to come to an agreement like the UK, NZ etc. I really don’t like the NDP and Hoang Mai palling around with Canadian for Tax Fairness. Yes some of that is the Conservative in my speaking but some of the people who are involved in CfTF and Tax Justice Network have said some very nasty things about of US expats abroad. More to Follow
Check out this blog post:
That is the group the NDP and Liberals invited to do a presentation in Ottawa on Monday Night. Interestingly enough the Conservatives in the House of Commons out lashed quite dramatically against CfTF and TJN calling them both radical left wing groups(I belive Alberta Conservative MP Jim Hilliyer was one of the lead attack dogs during QP). Now I give the NDP and the Libs the benefit of the doubt but then again I am tired of educating people on this. Someone like NDP MP Craig Scott who knows about our issues should do some research before associating himself with a group that published trash like what I linked to above. I would just assume the Harper PMO Command Center find out about that blog post and unleash the hounds on the Libs and the NDP. At least we would finally know where the Conservatives truely stand on this issue.
Here were some comments from that trash blog post by TJN the same TJN Liberal MP Scott Brison, Liberal Senator Percy Downe, NDP MP Hoang Mai, NDP Leader Thomas Mulcair, and NDP MP Craig Scott were praising two nights ago as fighting for fairness:
This is far and away the stupidest article I’ve read on FATCA since I first heard about it. I don’t know what point the author is trying to make, but he is horribly ill-informed about what sort of people will be affected most by this extremely dangerous legislation. Most of the six-million or so U.S. expats worldwide are NOT high rollers sitting at Tiki bars by the beach. No, most of us are just working class chumps trying to make an honest living and provide for our families – AND PAYING TAXES IN THE COUNTRIES WHERE WE LIVE. I live in Canada, which no one in their right mind has ever mistaken for a tax haven. I could go on, but what’s the point – the ignoramous that wrote this drivel clearly couldn’t be bothered to do a little bit of research the first time, so why should he start now?
Anonymous, what a charming style you have. The fact is that the US has to be able to stop criminal tax evasion by U.S. citizens. It is absolutely legitimate to do that. People will soon learn how to deal with it, doubtless modifications will be made to it along the way in line with the complexities of the real world. You should note that the European Commissioner is on your side, it seems. http://www.ft.com/cms/s/0/5ed9458e-1880-11e1-b16b-00144feabdc0.html
A friend of mine got a twitter response earlier this evening from MP Hoang Mai. The position of the NDP on FATCA remains the same. I do have to admit some frustration that the NDP as an opposition party does not take advantage of that status to be perhaps a bit more militant that the government can be.
@Tim: Do you know if Thomas Mulcair has made any statement on FATCA? Does anyone know what Justin Trudeau’s position is (he seems to be Liberal heir apparent)?
Flaherty continues to be frustratingly quiet.
I did a search for Hoang Mai and FATCA on twitter. Was your friend the one who asked about Canadian sovereignity and FATCA? Mr. Mai’s reply does not exactly instill confidence that NDP is taking a strong position on this.
@hoangmai_npd Any discussion of US “FATCA” legislation. Impact on Canadian Sovereignty.
Here’s the reply:
Hoang Mai Hoang Mai ?@hoangmai_npd
@CanadaFan124 we have raised our reservations with FACTA to US legislators, things are not finalized yet.
I’m going to do a follow up tweet and see what kind of response I get.
Running the numbers in a FATCA commentary:
– The unsubstantiated revenue projection for FATCA is $800 million annually.
– Based in its 2011 budget, the US Federal Government spends $435 million PER HOUR!
– So FATCA covers less than 2 out of 8766 annual expenditure hours.
Here is an interesting video featuring the Co-Chairman of the Americans Abroad for Obama. Thanks again to Just Me for tweeting this. http://www.youtube.com/watch?v=u5foXDWnv18
Discussion of FATCA begins at about 3 minutes into the video.
Charles Adams calls FATCA a “colossal pain in the neck” that has caused non-US banks to treat US persons as “Typhoid Mary.”
Mr. Adams is, however, optimistic that “vehement” concerns have been heard in Washington. He predicts delays will lead to “revisiting” FATCA and changes so FATCA will be more targeted.
Mr. Adams also suggests it is not banks in Switzerland or Singapore who need fear FATCA, Try telling that to our friends in Switzerland who have already been threatened with closure of their accounts!
Mr. Adams suggests US citizens trying to hide their money are far more likely to do it in places where they can easily “visit their money” from mainland US on weekends. Does that sound like Canada or Mexico to anyone else? I hope that’s not what he is implying because the Canada-US tax treaty has addressed that issue for 70 years.
Yes that was my friend. The impression I got was basically no change in position from the NDP and no new news. Hoang Mai is the actual NDP Revenue critic so I would say he represents the party additionally several other front bench NDP MP’s such as Don Davies and Megan Leslie have spoken out on FATCA. What is disappointing is Mai response was very Flaherty-like when I for one would have liked to see a little more oomph from the official opposition. The official opposition hence its name is their to oppose not govern. I don’t see the need for the NDP to be polite and diplomatic towards the US in the same way Flaherty has to.
@Tim: Here are the tweets between Hoang Mai and me today:
@hoangmai_npd @CanadaFan124 What about Cdn Sovereignty? How will ensure Canadian banking, privacy. human rights laws in #FATCA?
Hoang Mai Hoang Mai @hoangmai_npd
@LynneBlaze @CanadaFan124 we agree w/ and are trying to address these concerns w/ our US counterparts #FATCA
hoangmai_npd @CanadaFan124 NDP must insist Cdn gov tell Cdn banks they must follow Cdn law & Cdn law won’t be changed for #FATCA.
Tim, I share your concern NDP has now become far too diplomatic and far less “militant.” They should be pushing government to ensure Canadian laws are upheld in Canada instead of trying to work with US on FATCA.
I also sent tweets to Justin Trudeau and Bob Rae. No response yet.
I tweeted Jim Flaherty too. Considering Flaherty has only sent a total of three tweets announcing campaign events in April, 2011, I’m not optimistic he will reply–or even see my tweet. I’ll try tweeting Finance Canada and see if that gets a reply.
Excellent tweeting, Blaze. I’m glad you’re out there keeping on them.
If you have some free time you should watch the movie Too Big to Fail that I linked to below on youtube.
Given my professional experience in Financial Service and Banking I can vouch for its accuracy. A lot of the key players in the movie are still in the US government. I suggest watching the movie from beggining to end but there are some good scenes you might find rather ironic at about 23 minutes, 35 minutes in, and 40 minutes in. Lesson I take from this movie(and myself and contacts of mine can vouch for its accuracy) is the so called geniuses at the US Treasury Department are not really that smart tend and only slam on the brakes a few second before they are about to go over the cliff.
@Tim: “You can lead a man to Congress, but you can’t make him think.” (Milton Berle)
What is your best prediction? Do you think they will slam on the brakes before they hurl themselves and the rest of the world over the financial cliff?
It’s not exactly what I planned for relaxation, but I’ll check out the video over the weekend.