[Europe.justus] Law to Find Tax Evaders Denounced - NYTimes.com/consequences for American expatriates

Pierre Whalon bishop at tec-europe.org
Tue Dec 27 09:02:06 GMT 2011


Law to Find Tax Evaders Denounced

(Page 2 of 2)

“The Fatca legislation treats all Americans with overseas bank accounts as criminals, even though most of them are honest, hard-working individuals who happen to be living and working or retired abroad,” said Jacqueline Bugnion, a director of American Citizens Abroad.

United States officials say that in the final version of the law, to be released next summer, the pursuit of information will not be quite as expansive as some fear.

“Searches of the predominant number of pre-existing accounts will be electronic,” Manal S. Corwin, deputy assistant secretary of the Treasury for international tax affairs, said during a recent interview.

More extensive searches will be conducted mainly in the case of private banks, or individuals holding assets exceeding $500,000, she said, though the details are still being worked out. Ms. Corwin said the United States would not be asking any institution “to affirmatively ask every one of their account holders the nationality question.”

In Canada, where hundreds of thousands of United States passport holders reside, the outcry has been great. Andrea Taylor, director of the Investment Industry Association of Canada, said compliance costs could prove devastating for smaller investment firms already facing tough times. “This will kind of be the last nail in the coffin for a lot of them,” she said.

Mario Frankovich, chief executive of Burgeonvest Bick Securities, said his Toronto firm currently required no data from new clients that would show United States links, so any electronic search “would be showing zero U.S. passports.” He said his sense was that Fatca required companies “to prove your innocence.”

Enforcement of the law will be tricky, as many countries, including the 27 members of the European Union, forbid banks or companies to transfer such information directly to a foreign government.

Emer Traynor, a spokeswoman for Algirdas Semeta, the European Union tax commissioner, said talks were under way with the United States to permit European companies to transfer data to their national authorities, which would then pass that information on to Washington. A United States official confirmed this.

There are also questions about whether the I.R.S. will be ready for millions of complicated new filings each year, with critics charging that Congress failed to provide the agency with the capacity to handle the coming avalanche of data. An I.R.S. spokesman, Dean Patterson, said that the agency was “allocating the requisite resources and personnel to implement Fatca” and that “we are committed to laying out a constructive framework for implementation.”

Then there is a question of reciprocity: Would the United States accept the same demands for information from the tax authorities in other countries — say Russia or China?

Some analysts nonetheless see hope that, once the initial acrimony and confusion clear away, Fatca could lead to more cooperative information sharing.

Jeffrey Owens, a tax expert at the Organization for Economic Cooperation and Development, said catching tax evaders was “a concern that many member countries share.” If countries could agree to new global reporting standards for exchanging information, he said, then “maybe there’s a way forward.”

Mia Li contributed research.

Bishop (Mgr) Pierre Whalon
Convocation of Episcopal Churches in Europe
23, avenue George V
75008 Paris France
+33 1 53 23 84 06  (tel)
+33 1 49 52 96 85 (fax)
office at tec-europe.org

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