tag:blogger.com,1999:blog-1519969502186924526.post5860996683589299048..comments2023-10-24T08:00:53.865-05:00Comments on Federal Tax Crimes: The Vatican Signs On To FATCA (6/10/15)Jack Townsendhttp://www.blogger.com/profile/14469823736335455874noreply@blogger.comBlogger36125tag:blogger.com,1999:blog-1519969502186924526.post-43532145788724480552015-06-22T12:52:40.988-05:002015-06-22T12:52:40.988-05:00Well thought out comments.
I would add that not on...Well thought out comments.<br />I would add that not only do almost all countries practice residence-based taxation, but so do the US states. Though I have the right to reside in the state where I was born and other states where I've lived, as well as states I've never set foot in, the moment I mover from one US state to another I am subject to the new state's taxes, driver licensing, voting, etc. States seem to be able to administer this effectively. There does not seem to be a big problem of people falsely claiming residency in another state in order to evade taxes.<br />Likewise, the IRS seems to be able to effectively aspply the foreign earned (salary) income credit. <br />So it would not seem to be an administrative problem to deal with residence based taxation.Anonnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-46690038907697224602015-06-19T12:26:49.337-05:002015-06-19T12:26:49.337-05:00http://www.justice.gov/opa/pr/two-more-banks-reach...http://www.justice.gov/opa/pr/two-more-banks-reach-resolutions-under-justice-departments-swiss-bank-program-1UStaxnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-49269844341841446542015-06-19T07:22:47.005-05:002015-06-19T07:22:47.005-05:00Andre,
Thanks for the information and the link. ...Andre,<br /><br />Thanks for the information and the link. I think DOJ will be posting a press release on this. Perhaps, given the number still to go, it will do a periodic -- say weekly -- announcement with multiple banks in each announcement. Before posting on it, I will see if anything comes out today.<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-9984134309744956522015-06-19T04:40:11.815-05:002015-06-19T04:40:11.815-05:00According to finanzen.ch Bank Sparhafen has entere...According to finanzen.ch Bank Sparhafen has entered the Swiss Bank Program and agreed to pay a $1.81 fine. Here is the link to the article in German: http://www.finanzen.ch/nachrichten/aktien/Bank-Sparhafen-Zuerich-einigt-sich-im-Steuerstreit-mit-den-USA-1000681045<br />They made the announcement on Wednesday evening according to the article. I haven't seen any mention of this anywhere else. The article doesn't say much of interest other than the penalty amount.<br />Is it no longer news when a Swiss Bank joins the program?Andre Weissnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-89556547246428985112015-06-18T06:34:11.024-05:002015-06-18T06:34:11.024-05:00I'd like to make some constructive criticism f...I'd like to make some constructive criticism for all sides:<br /><br />1.<br /> Many commenters on this website seem to assume that US residents are <br />patriotic "homelanders" who support CBT. I live in the US and I can tell<br /> you that this is not true. The vast majority of Americans don't even <br />know that CBT exists. When I inform them, I get various responses: some <br />say that the US should not tax foreign income or demand information on <br />foreign assets because it's none of their business; many sympathize with<br /> the problems of Americans abroad (complex paperwork, fear of penalties,<br /> financial restrictions); some try to justify CBT with consular services<br /> or the right of return, but when I reply that these things are not <br />funded by taxes (or don't actually cost anything, in the case of the <br />right of return), they concede; only a few invoke patriotism, but as a <br />joke.<br /><br />2.<br /> Many here also seem to believe that "homelanders" see Americans abroad <br />as "tax cheats". I don't know where you got this idea. I've only seen <br />this as a brief mention by a US politician from the 19th century, and I <br />don't think anyone else believes that. I've certainly never heard anyone<br /> say that here. US residents correctly assume that people move abroad <br />for various reasons. Many of them have family or friends who lived or <br />are living abroad.<br /><br />3.<br /> Condemning US patriotism while praising Canada is inconsistent and <br />alienates those who are not from Canada. CBT applies equally to all <br />countries outside the US, and the Canadian government has done the same <br />as the rest of the world regarding FATCA, it's not a special case. I've <br />also seen some commenters focus too much on issues in specific countries<br /> such as the various 4-letter Canadian accounts or Australian <br />superannuation. People outside these countries have absolutely no idea <br />what these things are. The problem is CBT in principle, not the details <br />of how it affects specific investments.<br /><br />4.<br /> Some people, like Republicans Overseas, are focusing way too much on <br />FATCA. Blocking or repealing FATCA is very unlikely, and even in that <br />case it would not solve the myriad other problems caused by CBT.<br /><br />5.<br /> Expatriate lobbying groups seem to be ridiculously afraid that the US <br />government will not pay attention to their demands if it looks like they<br /> don't love the US. Seriously? Michael Kirsch cleverly pointed out the <br />inconsistency of identifying yourself as part of US society while <br />requesting to be taxed as someone from outside that society. It would <br />make much more sense if they just stated the truth: they are actually <br />more attached to the countries where they live, but want to keep US <br />citizenship simply for the peace of mind that they could return to the <br />US one day. Maybe the CBT debate should be centered on whether the right<br /> of return constitutes membership in the society or merely the <br />eligibility for membership.Esquirenoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-3829784358488609802015-06-17T03:48:34.201-05:002015-06-17T03:48:34.201-05:00$CS : “The court has decided on an individual case...$CS : “The court has decided on an individual case and has not determined that<br /> the cooperation under the authorization by the Swiss Federal Council is<br /> generally illegal.”<br /><br />The Geneva ruling is the first by a court that concretely determines the transfer of personal employee details was illegalUStaxnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-33442633313146893762015-06-17T03:38:14.999-05:002015-06-17T03:38:14.999-05:00Pakistan’s FBR has stated that $200 billion stashe...Pakistan’s FBR has stated that $200 billion stashed in Swiss <br />banks accounts by Pakistanis cannot be recovered. It seems that FBR and <br />Federal Government is unaware that on the basis of a formal request by <br />Nigeria, $700 million in Swiss bank accounts belonging to corrupt late <br />former head of state General Sani Abacha have been returned to Nigeria <br />in 2013. This fact has been confirmed by Swiss Ambassador to Nigeria Dr <br />Hans-Rudolf Hodel and Switzerland. Both Switzerland and Nigerian <br />government have also agreed to request the World Bank to review use of <br />all funds on welfare projects.<br /><br />Under pressure from OECD and G20, the Swiss Government decided in <br />2009 to abolish distinction between tax evasion and tax fraud in <br />dealings with foreign clients. International agreements signed in 2013, <br />sponsored by OECD, approved by Swiss Parliament require Swiss banks to <br />align banking practices with those of other countries and in effect end <br />special secrecy that clients of Swiss banks enjoyed in the past. No <br />American citizen can open a Swiss bank account unless he declares in a <br />signed legal document they have no outstanding financial obligation to <br />IRS. In 2013, Swiss Parliament approved a law that allows Swiss banks to<br /> cooperate with US tax authorities as specified in FACTA.<br /><br />If Pakistan, its executive and FBR have political will to recover tax<br /> evasion by Pakistanis who hold over $200 billion in Swiss accounts, the<br /> least that can be recovered is tax evaded which comes to between $50 <br />billion at 25 per cent and $60 billion at 30 per cent tax rate. But this<br /> can only occur if tax recovery is on agenda and priority of our <br />establishment, bureaucracy and political elite of Pakistan. <br />Unfortunately, the sad bitter reality is that nobody wants to set this <br />precedent of tax recovery. Almost one-third of all worldwide funds held <br />outside their country of origin amounting to $2.6 trillion are in Swiss <br />bank accounts, mostly black money belonging to corrupt politicians, arms<br /> and ammunition dealers, dictators, mobsters, drug dealers, tax evading <br />traders and terrorists.UStaxnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-49614807330317841692015-06-16T02:03:47.048-05:002015-06-16T02:03:47.048-05:00This could turn into a major issue for the Swiss B...This could turn into a major issue for the Swiss Bank Program. The turning over of employee, advisor and lawyer names as part of the program has been a big topic in Swiss news but there has not been much discussion in English language news. There are an estimated 400 cases pending out of 40,000 estimated affected people. I'm surprised there is not more than 400 cases pending since there is a lot of anger about turning over names on the part of employees, advisors and attorneys.<br />If it is illegal to turn over names, then banks will not be able to fully comply with the Swiss Bank Program. If they turn over the names anyway then they will open themselves up to numerous lawsuits from those named. It is not an easy choice.<br />Also, treaty request for enablers can then easily be challenged because the names were acquired illegally.<br />Of course, it changes the cost/benefit analysis of continuing in the program. A new cost is the potential lawsuits from employees, etc. It may also give the banks an easy out by claiming that their continuation in the program would violate Swiss law and subject the bank to lawsuits. The less culpable banks may take that opportunity to get out.Andre Weissnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-48145290073739827812015-06-15T13:09:21.883-05:002015-06-15T13:09:21.883-05:00https://twitter.com/JohnXHanson/status/61022344231...https://twitter.com/JohnXHanson/status/610223442319814656/photo/1Guestnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-76180621088253852242015-06-15T12:42:29.634-05:002015-06-15T12:42:29.634-05:00Court challenge to Credit Suisse providing names o...Court challenge to Credit Suisse providing names of its employees to US government:<br />http://www.swissinfo.ch/eng/credit-suisse_court-says-disclosure-of-bank-employee-s-data--illegal-/41491064Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-62711674744749403692015-06-15T12:28:02.321-05:002015-06-15T12:28:02.321-05:00The European Savings Tax Directive was created and...The European Savings Tax Directive was created and implemented before FATCA. The US could have joined, but of course that required reciprocity.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-4288052143046688192015-06-15T12:24:43.215-05:002015-06-15T12:24:43.215-05:00"zero or de minimis is key." Since curr..."zero or de minimis is key." Since current interest rates are so low, US banks can offer foreign depositors no reporting to the IRS if they keep their money in a non-interest bearing account. Long term, the money can be shifted to US real estate. Miami and NYC are two such places favored by foreign money.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-34437893074767430452015-06-14T07:26:37.173-05:002015-06-14T07:26:37.173-05:00Andres, good points. However, there might be some...Andres, good points. However, there might be some incentives on the Category 1 banks to be turning over data sooner than the final resolution of their cases. Given how this as developed, I think the Swiss authorities may respond more readily to group requests perhaps of the type that were made for UBS. And, keep in mind that the really bad U.S. depositors would likely be willful for FBAR purposes and to have engaged in fraud for income tax purposes. The fraud conduct will keep the income tax statute of limitations open forever, but it is true that the FBAR SOL is ticking. Of course, the really bad actors probably did not close all accounts in 2009, but likely kept them going for some number of years thereafter, perhaps until 2012 or 2013 (on average for the really bad actors).<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-87022046773787723002015-06-14T02:53:37.884-05:002015-06-14T02:53:37.884-05:00A few hundred years ago kings used to ask the Pope...A few hundred years ago kings used to ask the Pope to bless their actions in an effort to give them moral authority. King Koskinen and the DOJ have received the Pope's blessing judging by the context of the Pope's speech.<br />When Pope Clement refused to annul Henry VIII of England's divorce from Catherine of Aragon, Henry seized all of the Church's property in England and started the Church of England. If the Pope had refused to bless FATCA then they would only have seized 30% percent of all the income. It seems that King Koskinen and the DOJ are much more benevolent than Henry. They only want 30% and haven't chopped off any heads yet. I guess we should see that as a blessing.Andre Weissnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-85911208599265748202015-06-14T02:18:25.984-05:002015-06-14T02:18:25.984-05:00Jack, I think you are right about the Category 1 b...Jack, I think you are right about the Category 1 banks. I read somewhere that the DOJ plans to finish with Category 2 banks by the end of the year but probably won't resolve the cases with Category 1 until some time in 2016. I shouldn't have assumed they were doing them sequentially. Probably the Category 1 banks are just going to take longer for any number of reasons.<br />The SOL expirations that I was talking about were for the account holders not the bank. As I understand the SOL rules, 2008 will be out at the end of the month. If the Category 1 banks issues aren't resolved until next year then 2009 will also be likely beyond the SOL. Given that a one year account will receive more lenient treatment because of a zero balance on the date of violation(I know some dispute this interpretation of the statute) the window of opportunity for the DOJ/IRS to assess penalties is getting smaller.<br />I'm assuming that, if someone had an account for several years and closed it in 2009, then that would be the same as having a one year account after the end of the month. This would be because 2008 and before become irrelevant due to the expiration of the SOL.Andre Weissnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-91836465906604205382015-06-13T09:15:40.755-05:002015-06-13T09:15:40.755-05:00Jack, a good read for you : Worldwide Taxation and...Jack, a good read for you : Worldwide Taxation and FATCA : A Constitutional Conundrum Or The Final Piece Of The Tax Evasion Puzzle <br /><br />http://civilrightslawjournal.com/issues/25.217.pdfUStaxnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-31277509553911904562015-06-13T08:22:11.874-05:002015-06-13T08:22:11.874-05:00This IGA clearly has no standing but the beauty is...This IGA clearly has no standing but the beauty is that it does not matter because when it comes time to report, the report will be a NIL report. Why do I say this?<br />You and I can not open an account with the Vatican Bank as it exists to serve the Catholic Churches and its related employees. The Vatican pension plan is excluded.<br /><br />How many Priests with a US Place of birth overseas do you think are going to have an account with more than $50,000 in it? NONE<br /><br />It was signed so their would not be withholding on their US investments.UStaxnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-23589445533052039892015-06-13T08:02:35.241-05:002015-06-13T08:02:35.241-05:00The effect of there being on comparable pre-existi...The effect of there being on comparable pre-existing treaty with the <br />Vatican is that there is absolutely NO U.S. statutory authority for the <br />Vatican FATCA IGA. The Vatican FATCA IGA is a public relations gesture to suggest that FATCA is truly the will of GodUStaxnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-79397929603397844722015-06-13T08:00:49.959-05:002015-06-13T08:00:49.959-05:00If a country doesn’t have a pre-existing tax treat...If a country doesn’t have a pre-existing tax treaty or tax sharing agreement then no FATCA IGA is possible.<br /> This allows Treasury to claim that they are NOT entering into a new <br />treaty without statutory authority, but rather that they are simply <br />extending a pre-existing authority.UStaxnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-1388208688054804902015-06-13T07:59:26.563-05:002015-06-13T07:59:26.563-05:00As Jack is not a FATCA expert let me remind the re...As Jack is not a FATCA expert let me remind the readers here again that the FATCA legislation provides NO authority for the U.S. Treasury to enter into Intergovernmental Agreements (the IGAs). Professor Allison Christians, Jim Jatras, Congressman Bill Posey and others<br /> have repeatedly made this point. What Treasury appears to have done, is<br /> to “add on” to or “extend” EXISTING tax treaties, to include what <br />eventually becomes the FATCA IGA.UStaxnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-72231856046417659302015-06-13T07:46:21.622-05:002015-06-13T07:46:21.622-05:00Andres, I don't think DOJ has postponed resolv...Andres, I don't think DOJ has postponed resolving Category 1 banks until Category 2 resolutions are concluded. They are on different tracks being handled by different attorneys in different sections of DOJ. And, I would suspect that, for at least some of the Category 1 banks, if there is a statute of limitations problem, DOJ will request and likely receive an extension on applicable statutes of limitations. (The result of refusing such an extension is an immediate indictment that is tougher than the target thinks might be negotiated otherwise.)<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-13523652328391404722015-06-13T07:43:15.317-05:002015-06-13T07:43:15.317-05:00Andre, I don't think the DOJ has postponed wor...Andre, I don't think the DOJ has postponed working on Category untilJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-53428926333797136782015-06-13T07:37:28.824-05:002015-06-13T07:37:28.824-05:00Thanks. I see your point and an eventual merge wo...Thanks. I see your point and an eventual merge would make sense. I think it will take some considerable political will to pass a law requiring US banks to do their part. With a Republican controlled Congress and, maybe soon, Presidency, the votes may not be there.<br />On another topic, I find it curious that the DOJ/IRS would attempt to conclude the process with Category 2 banks before Category 1 banks. The Category 1 banks seem to be more culpable and may well have larger numbers of undeclared accounts in both number of accounts and total dollars. Yet they have decided to postpone working on those resolutions until next year.<br />That lets another year expire under the SOL.Andre Weissnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-24327760015341257012015-06-13T07:35:09.282-05:002015-06-13T07:35:09.282-05:00The Administration promised reciprocity and “Congr...The Administration promised reciprocity and “Congress has now spoken, NO FATCA reciprocity.”UStaxnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-28027740799508973022015-06-13T07:30:48.229-05:002015-06-13T07:30:48.229-05:00I think it’s quite unlikely they would have used i...I think it’s quite unlikely they would have used it to reinsert the <br />interest-reporting provisions: Homeland politicians on either side of <br />the aisle do not want to see their own banks subject to the same garbage<br /> which they’ve imposed on the rest of the world with FATCA, they want to<br /> put competing tax havens out of business so that #1 Tax Haven USA is <br />the last one standing.)UStaxnoreply@blogger.com