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Old 11.11.2009, 18:36
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US Citizens: Please read -US Foreign Account Tax Compliance Act

I saw this posting of an issue and a letter to congress regarding changes to Foreign Bank Accounts -- QI Regulations. The link is the full letter that ACA sent with objections. The text below is part of the letter.

I am sending a letter to my congressman with objections. I am personally concerned that banks here, will start to close accounts with US citizens if QI changes are approved.


http://www.aca.ch/joomla/images/pdfs/lthr3933.pdf

American Citizens Abroad is dismayed to see the contents of the proposed Foreign Account Tax Compliance Act which, if passed, will create a backlash from foreign governments in response to what is openly referred to overseas as the financial imperialism of the United States. This legislation aims to significantly expand the reach of the Qualified Intermediary (QI) regulations. Whereas the current QI regulations are concerned principally with investment accounts, the Foreign Account Tax Compliance Act would apparently cover all bank activity, including current accounts. As stated in the joint press release, “The Foreign Account Tax Compliance Act would force foreign financial institutions, foreign trusts, and foreign corporations to provide information about their U.S. accountholders, grantors, and owners, respectively. The nonpartisan Joint Committee on Taxation has estimated the provisions of the Foreign Account Tax Compliance Act would prevent U.S. individuals from evading $8.5 billion in U.S. tax over the next ten years.” This legislation would significantly enhance the authority of the Treasury in imposing the QI regulations and, in fact, requires foreign financial institutions to become policemen for the IRS. The administrative burden and costs associated with compliance will be significant for foreign financial institutions.

As stated by Chairman Rangel in the Congressional press release, “This bill offers foreign banks a simple choice – if you wish to access our capital markets, you have to report on U.S. account holders. I am confident that most banks will do the right thing and help to make bank secrecy practices a thing of the past.” In the same press release, Ways and Means Select Revenue Subcommittee Chairman Neal stated: “I believe this bill provides the Treasury Department with the tools it needs to crack down on those Americans hiding assets overseas.”

This legislation assumes that banks will submit passively to the U.S. rules and that business will go on as usual. But this will not be the case. UBS in Switzerland has already announced that it will no longer accept as a client any American person residing in the United States. Many other foreign banks are adopting the same policy in a more discrete way.
With regard to American citizens residing abroad, a group of major UK banks has already stated that they will close accounts of American citizens if the proposed QI regulations of January 1, 2010 become effective. We know for a fact that Swiss, Dutch and Spanish banks are refusing American citizens residing in their countries as clients and are closing accounts
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  #2  
Old 11.11.2009, 19:09
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Re: US Citizens: Please read -US Foreign Account Tax Compliance Act

Between this, FBAR forms, taxation of expats and the potential tax Americans will have to pay if the healthcare bill goes through as-is (they don't allow for Americans overseas - if you don't have American health care, you have to pay about $2k a year in tax according to the current version of the bill...), it is as if they are punishing anyone who would ever decide to leave the country. Frustrating, very frustrating.
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Old 11.11.2009, 19:15
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Re: US Citizens: Please read -US Foreign Account Tax Compliance Act

I think I'm going to start practicing what I say and how I throw my passport at the consulate in Bern...just not worth it anymore...
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Old 11.11.2009, 19:20
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Re: US Citizens: Please read -US Foreign Account Tax Compliance Act

Is it worth us as individuals to send the letters? I have the impression that an overwhelming majority of American expats systematically vote left. So will a Republican politician bother to consider our opinions. Does a Democratic one worry about losing our vote if they just do nothing for us.

I'm not trying to stir tension here, just interested in hearing opinions to justify the effort. I never hear of any of the politicians publicly responding to Expat concerns. At least, I was unable to find anything via online search. If I saw such commentary, then I think it would be more encouraging to send these letters out.
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Old 11.11.2009, 19:53
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Re: US Citizens: Please read -US Foreign Account Tax Compliance Act

typical US government reaction: bring a bomb to a fistfight.
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Old 11.11.2009, 21:00
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Re: US Citizens: Please read -US Foreign Account Tax Compliance Act

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Is it worth us as individuals to send the letters? I have the impression that an overwhelming majority of American expats systematically vote left. So will a Republican politician bother to consider our opinions. Does a Democratic one worry about losing our vote if they just do nothing for us.

I'm not trying to stir tension here, just interested in hearing opinions to justify the effort. I never hear of any of the politicians publicly responding to Expat concerns. At least, I was unable to find anything via online search. If I saw such commentary, then I think it would be more encouraging to send these letters out.
The representative for the last place I lived is Kucinich. Now he's someone I'd expect to pay attention to something like this, the little guy getting a bit screwed, but despite writing him about two of these issues I've never heard back from him. He did vote against the healthcare thing, but that wasn't the reason.

It is depressing.
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Old 11.11.2009, 22:04
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Re: US Citizens: Please read -US Foreign Account Tax Compliance Act

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Between this, FBAR forms, taxation of expats and the potential tax Americans will have to pay if the healthcare bill goes through as-is (they don't allow for Americans overseas - if you don't have American health care, you have to pay about $2k a year in tax according to the current version of the bill...), it is as if they are punishing anyone who would ever decide to leave the country. Frustrating, very frustrating.
Please explain this? I am sorry but I have only been living here for about a year and won't be staying for more than another. At least that is the plan.

You would pay taxes for not having health care? So not only do you not burden the US system but you would be required to pay a penalty for not being able to make claims?

Is this what they are saying?

Maybe I should be glad that my wife, who is english, is the primary account holder.

Thanks,
Brian.
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Old 11.11.2009, 22:46
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Re: US Citizens: Please read -US Foreign Account Tax Compliance Act

For clarification: No bank is required to be a QI (Qualified Intermediary); they choose to do so because it is better for their income. Therefore, the solution for US expats is painfully simple: petition your Congressman to amend the IRS' QI regs to merely preclude any QI from discriminating against (refusing to take an account from) a US citizen. That amendment is costless to the US treasury.

p.s. It is nice to see [name removed] our resident US Tax Dodger, back at work...complaining.

Last edited by Nickers; 12.11.2009 at 01:06. Reason: removed possibly damaging statement
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Old 11.11.2009, 22:51
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Re: US Citizens: Please read -US Foreign Account Tax Compliance Act

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For clarification: No bank is required to be a QI (Qualified Intermediary); they choose to do so because it is better for their income. Therefore, the solution for US expats is painfully simple: petition your Congressman to amend the IRS' QI regs to merely preclude any QI from discriminating against (refusing to take an account from) a US citizen. That amendment is costless to the US treasury.

p.s. It is nice to see [name removed], our resident US Tax Dodger, back at work...complaining.
It'd be nice to see you post something that makes some sort of sense, isn't actionably libellous, and doesn't garner you more red blobbies.

Last edited by Nickers; 12.11.2009 at 01:06.
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Old 11.11.2009, 23:11
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Re: US Citizens: Please read -US Foreign Account Tax Compliance Act

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p.s. It is nice to see [name removed], our resident US Tax Dodger, back at work...complaining.
Who said we are tax dodgers? Don't you know the famous revolutionary expression that Americans love to recite since the year 1750?

"No Taxation Without Representation"

Last edited by Nickers; 12.11.2009 at 01:07. Reason: name removed from quoted message
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Old 12.11.2009, 00:09
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Re: US Citizens: Please read -US Foreign Account Tax Compliance Act

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Who said we are tax dodgers? Don't you know the famous revolutionary expression that Americans love to recite since the year 1750?

"No Taxation Without Representation"
Hey, I resemble that remark! As an American I guess I shouldn't have had to pay taxes for the whole eight years of the previous administration. Errr, maybe that's not a good idea. If my observation was valid then the US government would be even more bankrupt than it is right now.

Brian.

Last edited by the_clangers; 09.02.2010 at 20:50. Reason: typo
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Old 12.11.2009, 00:13
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Re: US Citizens: Please read -US Foreign Account Tax Compliance Act

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For clarification: No bank is required to be a QI (Qualified Intermediary); they choose to do so because it is better for their income. Therefore, the solution for US expats is painfully simple: petition your Congressman to amend the IRS' QI regs to merely preclude any QI from discriminating against (refusing to take an account from) a US citizen. That amendment is costless to the US treasury.

p.s. It is nice to see [name removed], our resident US Tax Dodger, back at work...complaining.
Excuse me????????

Those who do not file taxes are tax dodgers. Those who do file, but resent it are not.

You are aware your statement is not only false, but is malicious and libellous, don't you?

Last edited by evilshell; 12.11.2009 at 01:10. Reason: [Nicky- name removed from quote] [Shell - Clarified what is a tax dodger]
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Old 12.11.2009, 00:33
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Re: US Citizens: Please read -US Foreign Account Tax Compliance Act

If this all really transpires I wonder if there is a way to speed up the process to become a Swiss Citizen - maybe under an asylum request

This is just plain crazy -- maybe I'll buy a case of tea bags while I'm home and them ship them from Switzerland.
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Old 12.11.2009, 00:52
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Re: US Citizens: Please read -US Foreign Account Tax Compliance Act

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Please explain this? I am sorry but I have only been living here for about a year and won't be staying for more than another. At least that is the plan.

You would pay taxes for not having health care? So not only do you not burden the US system but you would be required to pay a penalty for not being able to make claims?

Is this what they are saying?

Maybe I should be glad that my wife, who is english, is the primary account holder.

Thanks,
Brian.
It was discussed in this thread: Health care tax of $1900 for Americans Abroad?

I'm not sure of the current status of the issue now, to be honest. The article I linked to on the ACA website is now only available to registered users, it seems....
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