Ireland and FATCA – “Going a step further”

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If you want to be free, there is but one way; it is to guarantee an equally full measure of liberty to all your neighbors. There is no other.

Carl Schurz (1829 – 1906)
How free are the citizens of the “land of the free”?
We here at Q Wealth have reported on a bit of legislation called FATCA (the Foreign Account Tax Compliance Act) many times.  If you need a reminder as to what FATCA is we’ve described it before as, ” America’s most daring extra-territorial legislation ever, FATCA (the Foreign Account Tax Compliance Act) that aims, seriously, to draft all banks and other financial institutions in the rest of the world as unpaid spies and tax collectors.”
In other words the US, far from promoting freedom at home or abroad, is taking away freedoms from their neighbors.  This act, by design, both directly and indirectly reduces the freedoms of US citizens.

FATCA Ireland, Ireland tax agreements
FATCA is massively extending the reach of the IRS. Photo via… I {heart} Rhody
Just this past week the government of Ireland caved in agreed to become the latest country to sign the FATCA agreement…

Irish and American officials today signed an agreement whereby Ireland has pledged to collect data on accounts in Irish financial institutions held by Americans, and provide it to the US tax authorities.  As reported, details of the so-called intergovernmental agreement between the two countries were hammered out earlier this month, as the US has increasingly sought the help of foreign governments in its enforcement of the Foreign Account Tax Compliance Act, a piece of US legislation that is aimed at cracking down on US citizens who use foreign accounts to avoid paying US taxes.  While existing Ireland-US tax agreements already provide for the exchange of information for tax purposes, the agreement signed today “goes a step further by providing for the automatic exchange of more detailed information on an annual basis”, according to a statement released today by the Irish Finance Ministry, and posted on its website.  In that statement, Michael Noonan, Ireland’s Minister for Finance, noted the fact that Ireland was one of the first countries in the world to formally sign up to the FATCA regime, and predicted the agreement would “have a positive impact on trade and investment between Ireland and the United States”, while also providing “certainty and clarity to Irish and American financial institutions” that are interested in doing business with one another.  Via...International Adviser.

So there we have it.

Not content with current tax information agreements, the US is taking things “a step further” by providing the automatic exchange of more detailed information on an annual basis.  Since there are no protest riots in the streets (or any resistance at all as far as I can tell!) you can bet that there are more steps to come.

Bit by bit, little by little.  Death by a thousand cuts.

The good news is that you don’t have to rely on other people to fix this for you.  You don’t have to wait for the next election hoping that “this time they get it right”.

You can dramatically mitigate your personal and financial risk yourself by simply by doing what others are not.

Start by learning the real definition of diversification (hint: if all your assets are held in one country, you are NOT diversified!).  Learn about high level living strategies such as the Five Flags Theory.  Challenge your beliefs about what money is and isn’t.  Make friends with people who have this sort of knowledge.

If you haven’t yet, join ourfree email list and get to know us better.

Better yet consider our low cost, high value membership, where you will gain access to higher level information, email consultations, and a host benefits and services from our private contacts around the globe.

What are your thoughts?  How free are you?  Leave a comment below!

 

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17 thoughts on “Ireland and FATCA – “Going a step further””

  1. Really no surprises here…truly a move of stealth imperialism. I wonder, is Ireland still worth considering as a second (or third) home for U.S. citizens?

    • Good question Christopher. As far spending time in the country (either as a resident just as a "place to spend time") Ireland is still a wonderful place to be. NB – Friends in the area have reported that home values have come way back down and that there are lots of potential real estate deals to be had.

      Ireland was never a banking haven to begin with and there are much better options for banking in other jurisdictions! If you are a US citizen living in Ireland and banking locally however, there remain the normal range of compliance issues that apply to foreign held banking assets.

      Find more on this topic on the blog – or in the members area if you are one.

  2. You can just feel the noose tightening…Makes the 5 flags even more important… Is there a way to know which countries are leaning toward compliance?

    • Thanks for the comment and question Ken. We are keeping a close watch on the (many) countries that are nearing deals with the US and have some blog posts in the works on the subject.
      Also see Marvin's response in the comments here.

  3. Liberty for Americans is toast, especially for those living abroad.

    The strategy of five-flags is a step in the right direction. However, the only real solution for escaping an increasingly tyrannical government is to formally renounce/relinquish citizenship.

    For a step-by-step guide on how to do it, see renuniciationguide.com.

    • I don't disagree you! There are many levels of freedom and privacy that can be achieved to suit ones comfort level and needs. However, for those who consider a US citizenship a burden too great – renouncing citizenship is as you say " the only real solution" .

      We here at the Q Wealth, of course, specialize in providing just this sort of up to the minute, trustworthy information to our members. If you are looking for information on this topic and would like to receive the wealth of other benefits available to our members, please don't hesitate to join us today.

  4. I read that enforcing FATCA costs the US as much or more than the expected "revenue." Maybe they will run out of steam on recruiting new allies.

    • G Fendley – Unfortunately that would require that we live in a world where governments are run by reason and logic. Look for FATCA to continue on course with some 50 or so nations in talks to comply in the coming year.

      We don't want to dwell on the negative too much though, there is always a reason to be optimistic! We focus on actionable solutions here and will continue to provide this service no matter how bleak things get!

  5. Ken,

    Right now, there are 4 countries who have signed these IGAs: Denmark, Mexico, Ireland and the UK. The Swiss have 'initiated' one, and others say they are entering into negotiations, like New Zealand, Australia, Luxembourg, Germany, Spain, France, Italy, Israel, Canada, etc.

    The IRS is proclaiming that they are in negotiations with 50 such countries, and trying to create the impression that the momentum (FATCA Freight Train) is unstoppable. However, that still leaves ~147 to go if they actually get those 50 to sign up. What about them?

    You won't find Pakistan on the list of eager compilers. From NPR, this chuckle: http://n.pr/V9QTe8

    So, maybe FATCA it isn't inevitable, unless "Good men, do nothing" to oppose this Draconian and ill conceived law. In search of one good intention, it is creating Financial mayhem around the world! If you haven't read this, I would recommend the 11 Reasons why FATCA must be repealed as published by Bloomberg BNA. http://bit.ly/RBcJZl

    I personally was pleased to see that their timetable keeps slipping as reported in Reuters, and blogged about here. http://bit.ly/UerEqv

    Let's hope this implies real administrative problems that will allow more time for opposition to wake up and try to slow down or seriously modify FATCA to something more reasonable, like working within normal TAX Treaties we have now!

    Also, we do not need new sources of BIG DATA with all the security risks, identity theft and fraud that comes with them. FATCA with its insistence on identifying its "US Persons" around the globe is putting Americans abroad in the cross hairs of some pretty unsavory governments and institutions. Why does America treat its citizens this way, you might ask? http://bit.ly/X1J8ES

    If you are interested, these IGAs are called Executive Agreements, although 'Cram Downs', is a more appropriate expression of what they really are.

    After signing between technocrats, the countries will still require enabling legislation to put into place. Privacy laws will have to be modified to fit the U.S. demands. IE. "WE, America, don't like your local little privacy laws, so change them!"

    Maybe those Parliaments will balk at this arrogance, and maybe not. They are being offered a 'face saving', yet very unequal reciprocity morsel. It might be enough to hood wink them and their population into thinking they will get something tangible back in return.

    Hardly! It is a joke on them. It is faux reciprocity!

    However, we must recognize, that all the Treasuries in the developed countries are looking for additional revenues. Offshore taxes seem like low hanging fruit. "Let's get our rich evaders that are hiding money in America, the LARGEST Tax haven in the world!"

    That is Treasuries hope and strategy to change the unworkable FATCA (as passed by Congress) into a government to government automatic tax data exchange with very unequal requirements. A tiny carrot backed up with the BIG stick of 30% with holding on US sourced income.

    BTW, no matter what they call them, they are TAX Treaties. Normally, that would require the 'Advice and Consent' of Congress, but by calling them IGA Executive agreements, the Treasury is trying to by pass Congress and claims the right to do this under their regulatory power.

    This is a prime example of Technocratic rule. The Bureaucrats decide and enforce their version of US policy with no further input from Congress required or wanted.

    Hopefully, some in the Senate will wake up to what the Treasury is doing, and reign these efforts in. Especially when they see the systemic damage and cost to the world's economy from this preposterous regulation.

    More likely, it will take capital flight out of U.S. Banks due to the domestic version of FATCA (Call it DATCA, if you like) which is promised in the IGAs. Maybe banks losing capital reserves will wake them up to the harm Treasury is doing in their name.

    Congress did not vote for DATCA, and had no idea that would be the result of FATCA. It is very hard for Treasury to make the case that DATCA is the 'Will of Congress".

    Setting aside the IGAs. Even if there are none signed, FATCA law still requires all of the Foreign Financial Institutions (FFIs) in the rest world to register and be compliant. Given the thousands and thousands of FFIs around the globe, not sure how the IRS manages and oversees that given the current staffing and budget cuts. It is a good question ask. It is a staggering task! It is totally unworkable, and more importantly, it drains away IRS resources that should be focused on homeland evasion and fraud. That's were the money is! You need not read farther than Treasuries own Auditor General semi-annual reports to see the glaring truth of misplaced efforts. http://1.usa.gov/SZQV9X

    Only in America can we dream up such hubristic legislation to think our International Revenue Service can really do this. Can you imagine any other country in the world trying to require this of America? Me either.

    So, yes the noose is tightening, as this thing is also becoming global. FATCA was really just the "tip of the Spear" in a global effort to stop tax competition around the world. We live in a copy cat regulatory environment, and want is good for America, is often copied as good for others. With cheering on, by the OECD and the EU, there is a global GATCA in the works. http://bit.ly/TfVHwW

    There is a global tidal movement occurring against what is seen as offshore tax evasion. It has become a force of nature. As time passes, it is harder and harder to build seawalls against it. We are heading towards a GATCAwellian future, I fear.

    Sadly, in America, the press is almost TOTALLY silent on the subject. It doesn't sell to be against what is marketed as a War on Offshore Tax Evasion. (WOOTE) Never mind, the unintended collateral damage from a misguided FATCA drone strike. It is not as precise as what Congress thought they were launching. With Treasury taking over the guidance system, we are carpet bombing the world. We didn't care about these issues with the 'Shock and Awe' of our imperial war of preemption on Iraq, and we don't care about it with our financial FATCA preemptive imperialism either.

    Not a hopeful future. The impacts on the world's economy have yet to be seen, and given the lack of interest in US media, we will only be reading about it in retrospective books, like after the financial melt down of 2008. So it goes.

    • Marvin,

      Thank you for taking the time to post this. Since you are so well versed on this topic I'd like to encourage you (and echo the reply I left for G Fendley) to put energy into finding the solutions.

      Yes the noose is tighter, yes its getting increasingly bleak…but the noose has been tight before.

      That is why we do what we do here at the Q Wealth. In spite of everything there are lots of opportunities around the world that we are very excited about. We are also excited to share these solutions and opportunities with our members.

      Thanks again for the thoughtful and insightful comment.

      • Thanks for your comment, and sorry for the delayed acknowledgement. I do put energy towards solutions to stop this FATCA idiocy. Its good intentions are totally over shadowed by the negative consequences that is harmful to so many that are not part of the original problem or targets.

        Frankly, FATCA will do great harm to the worlds economy, and U.S. standing if it isn't recalled or seriously modified. That is where my my energy is going.

        You might be interested in the resistance occurring in Canada, and a Fact Finding Forum that was held.

        Here is the YouTube link to one presentation by James Jartas http://bit.ly/VBbunA and a recent interview that might interest you. http://bit.ly/W8taYy

        and here is a recent story in The Globe and Mail by Barrie McKenna who has been writing on the subject over the past year… http://bit.ly/10CH3Fx

        cheers

        • Thanks again for commenting here and sharing your knowledge on the subject – thanks also for your work in alerting people to the consequences of FATCA for citizens worldwide. Keep up the good work and stop back by here anytime to update us on your findings.
          Best,
          Adam

    • That it does Mark, but at least we know the game that is being played!

      As the "noose" tightens we respond by becoming more fluid and dynamic – even as we speak there are new opportunities arising in answer to FATCA . I see it not as becoming more difficult per se, rather just evolving and changing into something new. The challenge (and choice) presented to us is, do we remain static and wish these changes weren't happening?..or do we evolve and change too?

      We here at Q Wealth think the choice is pretty clear – and we help our members and clients to stay ahead of the curve. Yes, it may take a little more involvement but is far preferable to the alternative of having your assets swept away by inaction.

      Thanks for the comment.

  6. This is quite perplexing. Having lived overseas for the past ~5 years, my family and I were anticipating returning to the US this year. However, the timbre of life (and government) in the States now has become so uninviting that we have decided to stay overseas, and we will be living in Switzerland. We absolutely love it, but are a bit concerned about banking and taxation as the IRS gets increasingly 'grabbier.' We are considering pursuing Swiss naturalisation, as we will likely remain for at least six years, but that is not a speedy process (twelve!) by any stretch of the imagination… There are a lot of options on this site to peruse, that is for sure! Thanks for the inspiring info…

    • Thanks for this comment. Congrats on seeing the glass as "half full" and choosing to make a life in a place that you enjoy (and that treats you well!) You are right in that there is a lot of information on this site…if you haven't yet read this recent blog post – https://www.qwealthreport.com/offshore-bank-a… – I think you'll find it useful in that it mentions some faster EU citizenship options. If there is ever anything we can help you with please consider becoming a Q Wealth Member so that we can give you more personalized information. All the best, Adam

  7. After putting all — and I mean ALL — into a project for the last 8 years it will finally pay off in a big way later this year in the form of a one-time payment. I will be retiring and have concerns about investing, etc… Must pay taxes but want to do it taking the least hit possible. Have a brother with dual citizenship in Ireland.

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