FACTA: A use case for darkcoin


Sep 20, 2014
Proxima Centauri
This isn't about avoiding taxes. No one likes getting FACTAd. If a system is collapsing under its own weight, it shouldn't drag you down with it.

The United States began the hunt for Americans worldwide with the assumption that anyone doing business outside the USA must be to hide money. They cannot grasp that there is world out there nor do they contemplate the fact that taxing Americans even though they do not live in the USA reduces them to slaves owned by the state. There is no concept of paying your fair share because you use something. In America, you owe something for just being born here.

The bad news, this site will reveal all the country agreements with FATCA. But hang-on – it is getting worse. Other countries are joining the mad dash to abuse their citizens. Other countries are now looking at WORLDWIDE taxation as the USA. Welcome to the new world of pretend democracy and a sort of “soft fascism” agenda.




Sep 20, 2014
Proxima Centauri
Swiss Banks Tell American Expats to Empty Their Accounts

The United States is the only developed country (the other one is Eritrea) that taxes its citizens who live overseas, even if their income is generated in a foreign country and they live abroad permanently. Due to the financial burden of double taxation – by their country of residence and the U.S.–growing numbers of US citizens take the drastic step of relinquishing their American nationality. This year, nearly 2,400 expatriates have given up their U.S. citizenship or turned in their green cards. While this number may seem miniscule, it represents a 33% increase over 2011; experts say the real numbers are much higher because thousands of applications are still waiting to be processed.

Because of its tax policy, the U.S government has created a myriad of requirements for other nations to follow in order to ensure that no foreign account belonging to an American goes untaxed by Uncle Sam. The latest such regulation is the Foreign Account Tax Compliance Act (FATCA), which was passed by Congress in 2010 and goes into effect on January 1, 2014. It requires foreign banks to report to IRS all the assets exceeding $50,000 that belong to US citizens – whether living in America or abroad. Additionally, in August Switzerland signed a separate treaty with the United States, ending a longstanding tax dispute between the two countries, that also gave the IRS unprecedented access to Swiss accounts held by Americans and US green card holders.

“My U.S. passport has been such a liability,” says a Zurich resident who identifies herself only as “Jeannie.” Not only was she not allowed to open a savings account at any of the four banks she visited last month, but even her Swiss husband was denied a mortgage because Jeannie’s name was on a joint account. “We were told that they don’t deal with Americans because of all the hassle,” she says. “This really makes me mad – how am I supposed to have a normal life if I don’t have access to a bank?”

A few months ago, Geneva journalist Christophe Ungar got quite a shock: without any prior notice, his local bank closed out his mutual funds account, resulting in considerable losses due to the early withdrawal. This was not an inadvertent mistake, but, rather, an intentional move to oust Ungar, a US citizen, from the financial institution where he had banked for years. “When the bank realized I was American, they started treating me like I had the plague,” he says.

This scenario is all too familiar to another American, Geneva financial adviser Anne Hornung-Soukup. Her accounts – including a pension investment fund – were suddenly closed in recent months by her two banks, each explaining in a letter that its services are no longer available to US citizens.

“This really ticks me off,” says Hornung-Soukup, who adds that the forced early withdrawal of her retirement fund meant she had to pay taxes on it earlier than she had anticipated.

Neither Hornung-Soukup nor Ungar’s case is unique or even rare. According to the Geneva-based expatriate advocacy group, American Citizens Abroad (ACA), which follows this issue closely, increasing numbers of US nationals in Switzerland are being denied banking services. However, according to ACA tax director Jackie Bugnon, the banks may not be totally to blame since they are “held hostage to US policies,” which require opening of American-held accounts to the scrutiny of the Internal Revenue Service (IRS).

The backlash against US clients has been building up since 2008, with the news that Switzerland’s largest financial institution, UBS, helped wealthy Americans hide billions of dollars in undisclosed offshore accounts to evade taxes. The bank had to pay a $780 million fine and release the names of 250 suspected American tax dodgers. In recent years, however, Swiss banks have stepped up their efforts to curb the flow of undeclared money from the U.S. and elsewhere.

Banks are reluctantly abiding by the new rules because of hefty fines – the IRS can withhold 30% of dividends and interest payments due to the banks from U.S accounts. Failure to comply with these regulations can seriously impact the Swiss banks’ ability to do business in America. “This is very risky for a financial institution because an indictment could bar the bank from the US capital market,” says Sindy Schmiegel, spokesperson for the Swiss Banking Association, an umbrella group for Switzerland’s financial institutions.

But the compliance with the US rules doesn’t come cheap – banks have to set up special logistics to deal with American clients and the Swiss government estimates the cost of FATCA reporting in a double-digit million figure for bigger financial institutions. Therefore, banks prefer the “better safe than sorry” approach that excludes American clients and the meddlesome oversight of the United States government. But for tens of thousands of US nationals living in Switzerland, no access to financial services means inability to set up retirement accounts, obtain loans, mortgages, or even rent an apartment.

Paradoxically, regulations that were intended to catch and punish tax cheats are making life difficult for ordinary, middle-class people who have always played by the rules. Many, like Hornung-Soukup, have lived overseas for decades, and others, like Ungar, have only tenuous ties to the U.S. — his father is American but he himself was born in Switzerland, never lived in the U.S. at all, and has no plans to move there.

The denial of bank services is most acute in Switzerland because the August agreement it signed with the US has accelerated the impact of FATCA. But once the law kicks in worldwide next month, an estimated 7 million Americans who live in other countries will likely face similar difficulties. In fact, some have already experienced problems; at an ACA town hall meeting held last week in London, about a third of the participants said they either had an account closed already or the threat of closing was held over their heads.

So far, no relief is in sight, but in October ACA’s executive director Marylouise Serrato wrote a letter to Robert Stack, IRS’ Deputy Assistant Secretary, noting that while the organization supports the government’s efforts to combat tax evasion, banking services would be more accessible to US nationals abroad if financial accounts located – and taxed – in the country of residence would not be subject to FATCA reporting.

The letter remains unanswered, which means that, for now at least, financial services are one commodity Americans living abroad can no longer bank on.



Sep 20, 2014
Proxima Centauri
'I was terrified we'd lose all our money': banks tell US customers they won't work with Americans
Thousands of Americans abroad are giving up their citizenship as the implementation of a complex new tax law causes banks to shut down accounts for US expatriates

The US government’s new tax regulation, FATCA, has pushed many American abroad to comply with complex tax requirements or give up their citizenship. Photograph: Efrem Lukatsky/AP
Angry Canadians are rare. But Patricia Moon qualifies.

Until 2012, Moon was actually an American – albeit one who had lived in Canada for 32 years. She settled in so well that in 2008, she added Canadian citizenship to her US one.

But Moon cut ties with America three years ago, after new banking laws aimed at tax evaders required expats like her to file more thorough US tax returns. She was five years behind on the news. “I was terrified we’d lose all our money,” she says.

After back-filing years of tax returns, Moon renounced her US citizenship in 2012. It was a defiant act she describes as being one of the first canaries to leave the coalmine as US banking laws make life more difficult for American expatriates. She wasn’t pleased she had to do it.

“It was like cutting off my right arm,” to not be American any more, says Moon, who only became a Canadian citizen in 2008. “Now, I’m simply angry.”

In February this year, the US and Canadian governments signed an intergovernmental agreement to co-operate on Fatca. The Foreign Accounts Taxation Compliance Act required all foreign banks to disclose the financial information of any American with assets over $50,000 sitting in banks outside of the US.

Steep penalties add muscle to the law. If a foreign bank – not just in Canada, but anywhere – fails to report even a single US citizen as a customer to the IRS, the US Treasury department would withhold 30% of the banks’ US income as penalty.

Foreign banks, some of whom earned a reputation as tax scofflaws, are now deeply afraid of the Internal Revenue Service.

The US government is policing foreign banks aggressively as it comes down hard on any company that helps tax evaders, money launderers and other criminals.

Scared of running afoul of US banking laws, foreign banks are taking extreme steps to limit US citizens to a narrow range of services.

The result for expats has been a chaotic brew of closed bank accounts, mysterious excuses and a scramble to find local banks that would allow them to park their money

'Americans are so arrogant and crazy

Moon considers the US-Canadian Fatca agreement akin to economic sanctions on Iran and North Korea.

Moon is on the board of the Alliance to Defend Canadian Sovereignty, a non-profit that in August filed a lawsuit against the Canadian government. The group claims that Fatca legislation effectively breaks Canadian laws governing the privacy of financial information of its citizens.

“Our bank is not allowed to report financial information to our tax agency [in Canada]. So it’s absurd that the US government can get this information,” says Moon.

Others are amazed they can’t find a foreign bank that will take their money.

A year ago, Brian Dublin, an American finance professional living in Zurich, received a notice from his bank in Switzerland. The note told him that the bank no longer served US citizens.

Citing mysterious “regulatory issues”, his bankers at the Swiss institution Raiffeisein gave him 30 days to close his account.

The reason? Again, the answer came: “Regulatory issues”.

The ‘regulatory issues’, here, encompass the fact that banks are panicking at the prospect of the long arm of the IRS, which works through Fatca.

Fatca has caused Dublin some ribbing amongst his friends in Switzerland. “When [George W] Bush was president, they made fun of us”, he says.

Now, his Swiss friends cite Fatca as the new stand-in for overreaching American policy. “They say, you Americans are so arrogant and crazy. You think you control everything.”

And they’re right, Dublin now concedes.

Swiss banking secrecy and the birth of a new tax law
It started with the Swiss banking scandals of 2009, when the US government aggressively went after banks that aided tax evaders. This effectively ended the reign of the famous, secretive “Swiss bank accounts” enshrined in thrillers like the Bourne Identity and James Bond films.

The new ‘Berlin Wall’
Expatriates such as Dublin spend several hours each year filing their US tax returns. Americans living overseas can exclude $100,000 a year of income from US taxes, according to David McKeegan, an international tax expert.

Many are caught by surprise. There has been no visible communication campaign to alert the millions of expatriates that they may be tax cheats.

“People are learning about this through websites, media, word of mouth and so forth. Where is the US government is in all this?” asks Victoria Ferauge, a Seattle native living in Paris who blogs about tax laws.

‘If they find out he’s married to an American, they might tell him to get lost’
Genevieve Besser, a dual German-American citizen and a communications consultant in Germany, says that among expats in Germany, the preferred term for the legislation is ‘Berlin Wall’.

“It’s shameful and humiliating that a country so free is so restricting,” she says.

Besser says her bank, ING-DiBa, told her that that it did not work with Americans anymore.

Besser was a co-signer on her daughter’s bank account. ING-DiBa closed it down because of Besser’s German-American dual citizenship.

Her husband had to take her name off their joint investment account. His checking accounts have so far been left untouched.

“But if they find out he’s married to an American, they might tell him to get lost,” Besser says.

Besser’s investment options are severely restricted as an expatriate forcing her to invest in financial products such as individual stocks instead of mutual funds. “I’m shut out because I live abroad,” she says.

The complications have become so prevalent that, as a last resort, thousands of Americans have asked US Consulates abroad to cancel their citizenship. In 2013, 2,999 Americans renounced their citizenship; in 2014 so far, it’s a little more than 1,500 people.

Possibly to stem the tide, the state department raised the fee for citizenship renunciation fourfold on September 12, from $450 to $2,350. Officials seem to be hoping the steep fee will discourage more people from giving up their passports.

Says Dublin: “For many years I’ve paid $500 for my blue passport. But it becomes a very expensive thing to have.”

American expatriates who have not taken the extreme move of renouncing are taking the rather precarious approach of waiting and watching for new legislation instead of complying with the current law.

“They just don’t pay [taxes] and hope it goes away”, says Besser.

‘My bank will not answer questions’

“A vast majority of Americans suddenly woke up to what’s going on,” Verauge says. She relates stories of fellow expatriates who have had to take their names off joint accounts – some holding small family inheritances – because banks would not accept US customers.

“My bank will not answer questions,” she says about her enquiries regarding their Fatca compliance.

The woes of the accidental Americans

Even those Canadians who might be called ‘accidental Americans’ don’t like the long arm of the IRS.

Courtney Welch’s Canadian bank found out that he was, in spite of possessing a Canadian passport for the last 41 years, a dual citizen of US and Canada. He was naturalised as a child when his parents moved to Canada, but retains a dual-American citizenship because he was a minor.

To avoid breaking any laws, Welch will have to renounce his US citizenship and file five years’ worth of tax returns as well as possibly thousands of dollars to the US government in taxes on income he earned in Canada. He will have to foot bills for airplane flights and miss out on wages – and that’s not counting the $2,350 fee to renounce a citizenship he never assumed in the first place.

Welch, who has no intentions of living in the US, finds the idea that he has to pay taxes to the US government ridiculous.

“I feel about the same obligation to file US tax papers as you would if the supreme court of Uruguay all of a sudden decided you were a citizen and had to file a tax return there,” he tells the Guardian.


Sep 20, 2014
Proxima Centauri
FATCA Fall Out Closes A Million US Bank Accounts

Around a million of the 6 million US expats living overseas have had bank accounts closed due to Foreign Account Tax Compliance Act (FATCA), says a new survey.

Banks, investment houses and other financial institutions claim they have terminated the accounts because the costs of FATCA compliance are too much.

FATCA is a US law that demand overseas financial institutions send the Internal Revenue Service (IRS) information about accounts and investments controlled by Americans.

For US citizens, the reporting threshold is accounts with a balance of $50,000, while the limit is a lot higher – $200,000 – for expats.

The figures for closed accounts come from a global survey by Democrats Abroad, the foreign arm of the US Democratic Party.

Under stress
The research also revealed a fifth of American expats claim their relationships with non-US partners are under stress if they have joint bank accounts and investments, as their personal information must be reported as well.

Many other expats allege employers are denied promotion at work and business opportunities are falling through because a company or partnership with a US taxpayer would mean revealing financial information to the IRS.

These problems are also leading more US expats to consider renouncing their citizenship.

“No matter where they live, FATCA seems to have a far reaching effect on all Americans abroad,” said Carmelan Polce, a Democrats Abroad spokesman.

“These Americans are suffering as unintended targets of FATCA rules and we would like this unfair fall-out to be relieved by changing the law.

“They have made clear that they do not support tax evasion but would like to see a less hostile way of handling the problem.”

How FATCA works
FATCA was brought to the statute book in 2010 by President Barak Obama as a tool for unearthing hidden money and assets of American taxpayers.

After a series of delays, the law came into force from July 1, 2014.

FATCA places no burden on taxpayers but requires around 750,000 foreign financial institutions to report the financial status of any American customers each year.

The data is compared with information provided on personal tax returns.

Foreign financial institutions who fail to provide data on their customers face a 30% withholding tax on any financial transactions in the US.

To date 101 countries have signed FATCA tax information sharing agreements with Washington, while around 100,000 foreign institutions from more than 200 financial jurisdictions have also registered on the IRS online FATCA portal.