Newly confirmed IRS Commissioner John Koskinen opened the filing season for the 2013 tax year in Baltimore on Friday. In a conference call with reporters he spoke of many issues including the fact that phone lines may be clogged as the IRS continues to suffer from budget cuts and also that despite low budgets, no further furloughs are going to be made.
During his phone conference, an important issue discussed was about the implementation of the Foreign Account Tax Compliance Act (FATCA), and he said it will be implemented very soon.
“We’re not going to have any delays,” Koskinen told reporters.
The FATCA was originally signed into law by President Barack Obama in 2010 and scheduled to go into effect from January 1, 2013. The date of effect was postponed to January 1, 2014 in 2011, and then in the middle of 2013, the date of implementation of the law was again shifted to July, 2014.
The lack of guidance regarding FATCA led some bank lobbying groups to again request the Obama administration in November, last year, to provide another six-month-delay to a law that has already been delayed twice from coming into effect.
The FATCA will require foreign financial institutions including banks, insurers and investment funds to send to the IRS, information about the offshore accounts of Americans where such accounts are worth more than $50,000. Businesses failing to comply will be subject to a 30-percent withholding tax on U.S. source income.
A Treasury spokeswoman said on Friday, “We are working diligently to finalize all related guidance to ensure that financial institutions have time to effectively prepare and comply, and there is no consideration for a delay of FATCA implementation.”
Apparently, the White House is keen on having the FATCA implemented without delay, but the IRS is yet to publish forms and guidance for financial institutions. And without such guidance in hand, there would be little time for financial institutions to respond before the FATCA comes into effect.
FATCA will swiftly grow into an unmitigated disaster. It is truly the worst law most Americans have never heard of – but they will very soon. Mark my words, Obamacare will be all but forgotten by future historians when they refer to the Obama years, but FATCA will live in infamy forever.
Very few people have offshore accounts or offshore corporations. Those in compliance will have little problems. Those that aren’t, expect a knock on the door from the IRS.
Only about 7.5 million US citizens around the world, with many more defined by the US, ‘US Persons’, many of them with no idea. Their “offshore” accounts or “foreign” financial accounts are foreign only to the US; they are local accounts to these people who live and work abroad, most citizens of other countries. They need their “foreign” LOCAL accounts just as people within the US need their local bank accounts to put a roof over the heads of their families, buy groceries, save for their children’s education and disability and save for their own retirements. If the US had resident-based taxation as the rest of the world (except Eritrea which the US condemns for doing so), this would not be a problem. The ‘tax evaders’ the US looks for reside in the US, sending their untaxed money offshore to tax havens. They are likely savvy enough to escape the witch-hunt. The US citizenship-based taxation law, combined with FATCA, will force US Persons Abroad back to the “plantation” or the “homeland”, the USA — or they will have to renounce to not have their families destroyed financially and emotionally. Too bad about the blow-back this poorly-thought-out law will have on the US economy and what the world thinks of the US. More of that good old US collateral damage
All my accounts here in Canada, where I have lived for 50 years (I’m 51), are foreign. I am in compliance with the Canadian government, but never knew until FATCA that I am a US slave…err I mean US taxpayer.
These IRS grunts all need to be hung out to dry. It is what it is and the grunts who work at the IRS are trained to be as ruthless as a Somali warlord. These people hide behind smiles, suits and ties but make mistake, given the opportunity they will bankrupt a poor widow given the chance.
Fatca will not come close to collecting what they think. It will prove to be far too costly for what it ultimately will take in.
Treasury foolish to believe they are going to reap a windfall with Fatca. Can you imagine countries like Pakistsn and India dual US citizens ? Do you actually think they are just going to expose themselves to this unjust hypocrisy ? Money will just go to non US relative and that’s that.
Treasury has no power whatsoever over that.
This disgusting piece of legislation is as wrong as slavery and segregation. I would hope people are just enough to call it wrong and disregard or work around it so it gets what it deserves- to provide little to nothing back to the US treasury. Do not keep yourself in a position to fall under its umbrella. The best and most important tool to use is to starve the US treasury of the money they
Are attempting to extort from innocent people who truly owe nothing.
Dual citizens just open an account as the citizen of their home country. No problem. We have a few in my family.
With FATCA, one will have to prove non-US citizenship to open an account, or be considered ‘recalcitrant’ and have their bank account data sent to IRS. It won’t be enough to open an account in your other citizenship.
THere are many local banks or small insitution in India who dont know FATCA or USA. Not the big banks like CItibank, HBSC which are the famous spies for US govt, not even big country wide banks which have head office in North India. The smaller local banks who speak same language. They just assume everyone is Indian citizen.
Experts present their viewpoint on FATCA Compliance
http://www.nwgn.us/1cT0UWS