The fate of ‘”FATCA”” now hangs in the balance. Arranged to be a January 2014 regulation, it is now a July planned regulation, ostensibly to give the F.F.I’s (Foreign Financial Institutions) time to get their house in order and then register and be accepted. Internal Revenue Service Notice 2013-14 authorizes the decision, and that is supported by the U.S. Treasury Dept., administered by Treasury Deputy Robert B. Stack.
The reason given for the delay is because the FFI’s are overwhelmed by closures of accounts by consumers and customers all over the world Apparently FATCA is a law that everyone seems to dislike, and everyone needs the time to be compliant (ref: Forbes Mag., Dec 2013, and Jan 2014). In and out of the USA, Banks and other FFI’s must report account numbers, balances, names and addresses, US tax identification numbers and Jamaican of course, of any and every substantive owner with a U.S. status, bank account, and other US Income sources.
At the very outset, when this law was being introduced, I was of the impression it was further control of the bandits that operate in our region, with Drugs, Guns and Ammunition, and human traffic, and I calculated that all that was required of a Jamaican FFI was a complete and accurate source of funds of any client, which is true: But that is only a mask. What is more important to the US Government, and by exchange with Foreign Governments, their equity in the various incomes, is the matter of Taxes, or rather Tax Evasion in the USA; and then by association Tax Evasion In Jamaica or any country.
What is deplorable and dishonest is that the presentation made to business people like myself four years ago that this was a major criminal search; in part perhaps, but basically intended for one having any type of asset, money, property, whether personal or belonging to a spouse, not declared but still taxable to make it worthwhile for Governments to extract more. Spouses no longer should make decisions to have joint accounts for fear of being incorporated into a wider issue.
It appears now that the IRS has made dual taxation agreements called IGAs, meaning Intergovernmental agreements, and will swap information about Jamaicans vs. Americans, and has made this pact with 50 other countries, and pursuing the matter with 80 others. IGAs are the preferred instrument with larger countries, for instance the G-8 countries. Yet I do not understand how they can circumvent the laws of Jamaica and pass an act that defies the constitution of the Country.
If a business does not approve the changes, nor comply with instructions by declaring and accepting the terms of FATCA , then 30% of outstanding funds and assessments will be held in lieu of any declaration; another frightening thought. We are now liable to pay for someone else’s tax evasion.
Finally, anyone who contradicts this rule can be charged as a voice for Tax Evasion. Many Americans cannot open new accounts, for failure to close old ones. Americans and Expatriates face an impossible situation, as their mortgages are being called or denied. To the extent that an expatriate faces an obligation to IRS, the efforts of his local employer may come under scrutiny.
Do we now have a form of economic totalitarianism?