In March, 2010 the Foreign Account Tax Compliance Act (FATCA) became law thanks to a join effort of Charles Schumer and Orrin Hatch, go figure.
It is no secret that Mitt and Ann Romney have many offshore accounts. Bain Capital was started with offshore accounts' investments.
Bain Capital started with help of offshore investors
When Mitt Romney launched Bain Capital in 1984, he struggled at first to raise enough money for the untested venture. Old-money families like the Rothschilds turned down the young Boston consultant.
The Real Problem With Romney's Offshore Investments
So he and his partners tapped an eclectic roster of investors, raising more than a third of their first $37-million investment fund from wealthy foreigners.
Most of the foreign investors' money came through corporations registered in Panama, then known for tax advantages and unusual banking secrecy.
Previously unreported details, documented in Massachusetts corporate filings and other public records, show that Bain Capital was enmeshed in the largely opaque world of international high finance from its very inception.
Romney has investments in a number of well known tax havens, including Ireland, Luxembourg, the Cayman Islands, and Bermuda. Until 2010, he held a few million in the Swiss bank UBS, which in 2009 was forced to pay the US $780 million in fines and penalties for helping more than 17,000 Americans commit tax fraud by hiding as much as $20 billion overseas.
So FATCA is an unpleasant factoid for the Romneys.
Schumer and Hatch actually passed the HIRE Act.
FATCA (almost FATCAT lol) is part of HIRE. FATCA will pay for HIRE:
How will this bill be paid for?
A series of measures aimed at reducing offshore tax noncompliance by strengthening the Internal Revenue Service’s ability to fight offshore tax abuse are expected to raise $8.7 billion over 10 years. That’s roughly half of the $17.6 billion anticipated price tag.
Some of these tools include:
A 30 percent withholding tax on U.S. source payments to foreign financial institutions, foreign trusts, and foreign corporations that are unwilling to disclose their U.S. account holders to the IRS
The requirement that taxpayers disclose their foreign account holdings on their U.S. tax returns
An increase of the statute of limitations to six years for failing to report offshore income and transactions
A provision to treat substitute dividends to foreigners as subject to U.S. withholding
Clarification of the rules that determine when a foreign trust is deemed to have a U.S. beneficiary
I wonder what new schemes are keeping the Price Waterhouses & Offshore Shelters
awake at night.
I am sure the 1%, their CPAs and tax attorneys are debating several questions as we speak. Questions like these perhaps:
Do we Disclose or pay the fine? Wait, the offshore bank has to disclose or pay a fine! Hmmm. We could offer to pay the fine...wait, it's 30% hmmm
How else can we HIDE INCOME FROM THE UNITED STATES treasury that needs the money to reduce the deficit, fund infrastructure, the military, and all that stuff poor people worry about?
Maybe we could set up bogus International Charities? Or buy dictators? Hmmm
Maybe we can (fill in the blank)
The threat of having to disclose all that tax haven stuff must keep Mitt Romney awake at night, too.
Actually, this could have been a major motivation for Ann wanting Mitt to run again.
AND THIS REPORT TODAY!
IRS Announcement Extends FATCA Timelines
The effective date for the FFI Agreement has also been extended from July 1, 2013 to July 1, 2014. Treasury and the IRS will incorporate all of the due diligence timeline changes in the Announcement in the final regulations.
The final regulations will also include that a participating foreign financial institution (“PFFI”) will be required to file the information reports with respect to 2013 and 2014 calendar years no later than March 31, 2015.
June, 2012 FATCA update from a 1% magazine, Forbes. Some snippets:
Latest U.S.-Swiss Deal Makes Clear: No Hiding Cash In Big Swiss Banks
The U.S. Treasury said today that it has reached deals with both Switzerland and Japan that will allow the U.S.—with just a few extra steps—to get the comprehensive reporting of foreign bank accounts held by U.S. citizens required by the Foreign Account Tax Compliance Act (FATCA).
And this from Deloitte.com
The new law requires foreign banks either to report annually to the Internal Revenue Service on all accounts owned by U.S. citizens (and by foreign entities owned by U.S. citizens) or to withhold as tax and send to the IRS 30% of the proceeds from U.S. source payments to those accounts.
Foreign banks must enter into a reporting agreement with the IRS by June 30, 2013 or else begin withholding on U.S. source payments on Jan. 1, 2014.
AN ASIDE: Notice the use of the word "regime", perhaps indicating a distaste for such an odious restriction on the .7% that actually earn, well claim to earn, more than $250,000 a year. That's right, less than 1% of the population earn more than $250,000 a year, and the Right Wing is holding up economic and job progress to protect this smidgeon from a small 4.6% tax increase. The world thinks the Republicans are nuts, and we are nuttier for putting up with them.
Back to FATCA
FATCA: A new disclosure and withholding regime
Under newly proposed U.S. Treasury Code Sections 1471 through 1474, effective for payments after December 31, 2012, all foreign financial institutions (FFIs) will be required to enter into disclosure compliance agreements with the U.S.
While the regulations have not been finalized to date, companies will likely need to make modifications to their internal systems, control frameworks, processes and procedures for timely compliance with these regulations on or before their effective date of January 1, 2013.
Take action now - Will risk intelligence be your asset or non-compliance your liability?
I think we can thank Chuck for this gem.
Orrin got some stuff for the Marianna Islands in the HIRE bill. AISLE CROSSING STUFF, you know.
Honestly, you would think the media might report on something lie this a bit more loudly.
Another Obama administration accomplishment. Add it to the list.
And another reason the 1% really, really want Mitt and the Right Wing to rule.
ADDITIONAL RECENT RESOURCES:
Washington Post, October, 2012
Switzerland, threatened by isolation, lifting veil on secret bank accounts
October 12, 2012
Jwala Rambarran: Foreign Account Tax Compliance Act (FATCA) – imperial outreach or hidden opportunity
What is FATCA?
Today, November 5, 2012
Ladies and Gentlemen, since FATCA was enacted in March 2010 by the U.S. government as part of the Hiring Incentives to Restore Employment (HIRE) Act, it has generated much heated debate and has been described in rather uncomplimentary terms. FATCA has been hailed as:
“A ticking time-bomb”;
“An attempt to convert foreigners into unpaid IRS agents”;
“A kind of U.S. backward imperialism”.
FATCA requires foreign financial institutions to report directly to the U.S. Internal Revenue Service (IRS) all clients who are U.S. citizens, green card holders living in the U.S. or abroad, or who are foreign entities in which U.S. taxpayers hold a substantial ownership interest.
Netherlands and New Zealand Pursuing Agreements with the U.S.
With FATCA data flood looming, US hunt for offshore accounts earns big court win
The case, known simply as In Re: Grand Jury Subpoena, bolsters the power of the government, particularly the IRS, to obtain the offshore bank records of US persons who are attempting to hide their money so they can evade US income taxes.