Saturday, September 20, 2014

Kathy Keneally, Former DOJ Tax AAG, joins DLA Piper (9/20/14)

Former DOJ Tax AAG, Kathryn Keneally, will join DLA Piper.  Aruna Viswanatha, Former top U.S. tax prosecutor joins DLA Piper (Reuters 9/18/14), here.  Excerpts:
The former top U.S. tax prosecutor who helped secure $2.6 billion in penalties and a guilty plea from Credit Suisse AG on charges the Swiss bank helped Americans hide money overseas, joined the law firm DLA Piper, the firm said on Thursday. 
* * * * 
In an interview, Keneally said she expected the Justice Department to use more of the information it received through the program to pursue enforcement actions against banks in other parts of the world, which took the offshore accounts once they left Switzerland.
Prosecutors have brought cases involving secret accounts in India, Israel, and elsewhere. 
"The Swiss bank program was designed to get information from the banks about where else in the world the money went," Keneally said. 
"I think what you will see next is the department using the information they are getting from Swiss banks for a greater global expansion of enforcement," she said.


  1. I wonder if Jack Townsend has seen this “FATCA Research Project” made by DA.
    Jack Townsend thinks expats are a bunch of whiners and considers their complaints as being purely “anecdotal.”
    As a trial lawyer, he is probably a Democrat so perhaps the may open his “willfully blind” eyes once he sees the report from DA.

  2. Let me clarify what my thoughts are. I don't think expats are a bunch of whiners.

    I do think that some are because they would rather rail at the system than setting about solving the issues that confront people in a complex society. One of the complex issues in society is dealing with tax systems. That is just an issue to be confronted and solved.

    Now, I think you are referring to the bank access issues arising from FATCA. Some expats imagine seem to imagine that such issues are unsolvable.

    I don't think so. Bank access in some cases may be more difficult, but, so I am told, bank access is not unavailable (unless, for example, the expat is unwilling to meet the requirements of the FATCA regime).

    If that is true, then I do have a problem with the cries of wolf when, in the final analysis, most of those complaining are really complaining about the U.S.worldwide tax system. All FATCA is is an administrative mechanism to implement the system.

    I would suggest clarity in the focus of the complaints. Complain about the system. But comply with the system until your complaints move Congress to change the system.

    Jack Townsend

  3. Dear Jack, I agree with much of what you say. Personally, I am meeting the requirements of the FATCA regime. But I cannot tell from your answer whether or not you have actually read the Democrats Abroad survey report. Have you? It talks about a lot more than bank access issues. I trust you would find what it says to be interesting and I would love to hear more comment from you about the report.

    As regards the bank access issue, here is something that I received from a UK government minister as regards the investment in UK government savings accounts.

    David Gauke writes, "As the administrative costs of reporting are
    considered disproportionate and not a good use of UK taxpayers' money,
    NS&I is writing to customers affected by FATCA to let them know that we
    will close and repay the balance of their account(s)".

    I find it very worrying that even the government of an IGA signatory country finds compliance with FATCA so onerous that it decides to close the accounts of US persons.

    May I raise just a couple of other points. You write about "expats". Not everyone affected by FATCA is an expat. For example, I know people, UK citizens, who were born in the UK, to US citizen parents, but who personally have never visited the US in their entire life. Are these people really expats? I think most fair-minded people would think such people should have no US tax liability. Or is US tax liability something to be inherited, like hemophila?

    You say "But comply with the system until your complaints move Congress to change the system." But how can someone who has never lived in the US complain to Congress? I am not convinced that one should always tell people to comply. We know that in history there have been many times that civil disobedience has been necessary to affect change. The founders of the US did exactly that. Rosa Parks did that.

    If complaints are to be made to Congress, the burden of making complaints should not fall only upon the shoulders of those people who are affected. Those people often have weak shoulders. I hope are willing to sympathise with those who are quite clearly very distressed by the complex issue of the US tax system, and that you, within your blog and other arenas, can play a part in complaining about this system, lending support to those who are not as eloquent or able to reach a large audience.

  4. Dear Jack, This is not for publication, but just between us.

    After I wrote a comment just now, I then discovered your page called.

    Scope and Limitations of this Blog: It Is a Tax Crimes Blog, not a Tax Crimes Policy Blog

    I should have read this sooner. I appreciate what you say there and sympathise that you must limit the scope of your remarks. I hope what I say still falls within your guidance of "Readers wanting to post comments on tax policy issues -- even if just complaints as to what the law is now -- are welcome to do so."

    I do encourage you to read the Democrats Abroad survey in full.

    One thing that you might comment upon, as it is a legal rather than policy issue, is the law concerning the closure of accounts to persons affected by FATCA. Is it legal for the UK government to refuse savings products to FATCA-affected people simply on the grounds that it is too costly to comply with the reporting requirements?This really bothers me. It would be very hard for an affected individual to bring a case against the UK government. Even if the law were on my side, someone like me would simply not have the financial resources to do it. Is there grounds for the USG to take legal action against the UKG for this?

    Thank you for your blog, which I enjoy reading.

  5. Banking access is a huge problem for those overseas. Most (by far) banks are unwilling to take on the huge compliance burden of FATCA and are scared to death of the huge risks, so they will either refuse to deal with US persons or only on very restrictive terms (must be a resident not just of that country but of the area where the bank does business, and will allow only a bank account for direct payment of salaries and payment of bills, but no stocks, mutual funds, CDs or other investments.)
    For someone who is not resident in the EU but needs an account because of family there, it is even more difficult. In two large EU countries there is only on bank in each country which allowed me (yes, allowed me, not welcomed me) to open an account and that maybe only because it is a large account. Bank X will only allow me savings and demand accounts in various currencies and European stocks; no mutula funds, no US stocks. Bank Y does allow European mutual funds, but they will not have any communications with me to/from the US by email phone or mail, so I must communicate in person or have a relative outside the US forward and receive mail. Of course both banks are FATCA compliant.

  6. Anon
    You are inferring too many stereotypes- eg assuming Jack is a Democrat because he was a trial lawyer makes no sense. I dont care what his political makeup is, I just know he is a decent human being and is providing a lot of us the pro bono service of his blog
    I agree with Jack- if we dont agree with it, we need to change the system.
    I have talked to my Congressperson's office and am trying to get an in-person meeting- why don't you do the same and help bring about some meaningful change?

  7. "if we dont agree with it, we need to change the system"..... exactly but in the meantime pay your taxes and accept if you have been found willful by your examiner !


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