Posted on 07/02/2014 7:15:58 AM PDT by SeekAndFind
US Foreign Account Tax Compliance Act (FATCA) that allows banks worldwide to reveal information about their depositors, takes into effect on July 1. Under the new act all foreign banks are required to reports all offshore accounts of the US citizens.
Banking centers like Switzerland and Luxembourg that agreed to the US Foreign Account Tax Compliance Act (FATCA) will have to begin turning over account names and other data to US financial authorities so that they can tax unreported income.
According to the Internal Revenue Service, US citizens will have fewer options to stash their cash offshore away from the US tax agency.
The new Act has forced thousands of US expatriates to give up their citizenship in order to escape the IRS's claims. FATCA has also targeted the business of offshore banking centers, which have long marketed account secrecy to depositors from around the world.
(Excerpt) Read more at voiceofrussia.com ...
What does the IRS plan to do to overseas banks that don’t comply?
seems they only have compliance by consent.
this law is probably one of those designed to catch “little people” since the larger depositors rarely use their own names and instead use trusts and simply keep profits offshore.
RE: What does the IRS plan to do to overseas banks that don’t comply?
FATCA turns foreign banks and other financial institutions into enforcement arms of America’s Internal Revenue Service (IRS). They must choose between handing over information on clients who are ‘U.S. persons’ or handing 30 percent of all payments they receive from America to Uncle Sam.
“What does the IRS plan to do to overseas banks that don’t comply?”
*****
A 30% withholding of all U.S.-sourced payments. In other words, confiscation of nearly 1/3 of any funds that go to the overseas banks from any U.S. source, including corporate dividends.
Which foreign countries’ banks have declined to comply?
WHY would a bank turn over it’s private account’s data to a foreign nation ?
This one regulation by itself may well cause another drop in GDP during the third quarter of this year, owing to both the uncertainty it engenders and the fact that it will drive out significant amounts of foreign capital.
This is one UGLY and un-American piece of law and I wonder why Republicans don’t make it an issue...
The regulations are vague about which non-bank entities are “financial institutions” — a definition that can be infinitely elastic.
As The British publication, The Economist notes, there is also confusion about the definition of a U.S. person.
Here’s what they observer:
“The definition is broad and includes not only citizens, but current and former green-card holders and non-Americans with various personal and economic ties to the United States.”
The America we live in now is NOT the America our founders envisioned it to be.
rather, why would a bank AGREE to such a scheme ?
This is stealth capital controls.
Even if you just want to be prudent and have some money out of immediate US gov’t reach, and you report it, the foreign banks won’t take your business, and the IRS has rules that are so difficult to interpret that you can easily make a mistake and be subject to a confiscatory penalty.
RE: WHY would a bank turn over it’s private account’s data to a foreign nation ?
The need not, if they don’t do business in the USA.
But if they do, they have no choice. Think about it, why did UBS ( a Swiss bank ) and Credit Suisse disclose the names of their American depositors, essentially making Switzerland’s bank secrecy laws null and void?
Simply — they have a HUGE PRESENCE in the USA.
FATCA turns foreign banks and other financial institutions into enforcement arms of America’s Internal Revenue Service (IRS). They must choose between handing over information on clients who are ‘U.S. persons’ or handing 30 percent of all payments they receive from America to Uncle Sam.
Gee. Does this include illegals sending money to banks in their homelands?
I didn’t think so.
Sure - that was the whole point. Gin up faux outrage about a few billionaires renouncing citizenship and use it to pass totalitarian legislation guaranteeing the US Government de facto ownership of all of its citizens and their assets. And hardly a peep (excepting Rand Paul) from any so-called "conservatives" in Congress.
This is about the US government running out of money to fund welfare and all the goodies the 47% needs ( yes, illegals included ). Where are you going to find the money to house these illegals, educate them, and pay for their healthcare?
Someone has to pay... and if they have money elsewhere, Uncle Sam wants it.
Re stealth capital controls:
It’s amazing that no one seems to notice, isn’t it?
When I was a kid, we’d hear about how the non-free countries, like Soviet Russia, Nazi Germany, or even the Latin American dictatorships, would trap their citizens’ assets in the country. Even if you could get out, you couldn’t take it with you. In Germany, people were sewing diamonds into their coats to get out a small fraction of what they’d worked all their lives for.
So, now, in the U. S., which used to be the home of the free in actuality as well as in name only, you can’t take it with you either, unless you forsake your citizenship. And even that is considered a capital transaction event, triggering income taxes. Now, you can’t even have a savings account abroad because no one will take you as a customer.
This will likely encourage “trusted” offshore underground microbanks, that will likely be lumped together with “money launderers”, though they are just avoiding this economic imperialism.
The underlying arrogance is in effect declaring all US citizens to be “subjects” of American law, no matter where they are. This is little different than what other tyrannical regimes have done by dispatching agents around the world to force compliance of their expat communities.
The groundwork for this was laid when congress passed a law that authorized US Federal Marshals to effectively kidnap, overseas, Americans and others the US government was irritated with, if the country they were in refused extradition.
But as long as these microbanks remain discreet, they can get away with it.
This sounds like a golden opportunity for the First Sovereign Bank of Sealand to accumulate some massive wealth from depositors who wish their financial affairs kept confidential.
Setup overseas with a foreign national to hold escrow collateral funds in their travel & expanse account not in a bank [or in a foreign real estate escrow account, not a bank.] matching those funds in a US bank; then Cash Out when you need it overseas.
Or figure out how politicians hide their money overseas then emulate them.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.