Skip to main content

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.

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.

The Real Problem With Romney's Offshore Investments
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.

Hmmmm....

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).

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.

And this from Deloitte.com

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?
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.

Today, November 5, 2012

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.
Poll

News to me.

50%24 votes
41%20 votes
8%4 votes

| 48 votes | Vote | Results

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Tip Jar (10+ / 0-)

    It's difficult to be happy knowing so many suffer. We must unite.

    by War on Error on Mon Nov 05, 2012 at 04:16:59 PM PST

  •  I say breaking, because the media is almost nil (2+ / 0-)
    Recommended by:
    cassandracarolina, Creosote

    on the FATCA and/or the connection between the implication of FATCA and the Romneys who have offshore accounts in several countries.

    It's difficult to be happy knowing so many suffer. We must unite.

    by War on Error on Mon Nov 05, 2012 at 05:12:27 PM PST

  •  i like this: (2+ / 0-)
    Recommended by:
    War on Error, SlightKC
    “An attempt to convert foreigners into unpaid IRS agents”;
    this would describe every employer, bank, brokerage house in the US, also required (depending on which one) to report/withhold/deliver to the IRS. the big problem these people face is that it's nearly impossible to not leave a paper trail of some kind, when moving large sums of money around. as well, most countries have international tax treaties, which provide tools for each country's revenue agency to more easily find and capture taxable income.

    the noose is tightening. soon, the only real way to hide money will be to put it in an unmarked cave, which then makes it a lot harder to use.

    no wonder the less-than-1% are getting irked.

  •  Important report! (1+ / 0-)
    Recommended by:
    War on Error

    This whole paragraph is powerful stuff:

    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.

    . . .

    Perfect that they will just keep extending the timelines on perpetrators!

    The amount of detailed, deeply informed work going into these regulations and legislation must be phenomenal.

    Without it mass quantities of this country's wealth slides under the door and is never seen again, our society stagnates and sickens, and those running the con wear the most expensive suits of invisibility bespoke tailors can create.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site