— Citizenship Lawyer (@ExpatriationLaw) June 11, 2014
Introduction – It’s about “disclosure” and penalties for “non-disclosure”
On June 9, 2014 U.S. lawyer Robert Wood wrote a short but interesting article titled: “Offshore Bank Letters, FATCA & IRS Penalties – Are There Any Choices Left?“.
The article included:
With the impending FATCA compliance rollout and the U.S. Justice Department deal for Swiss banks, there are lots of letters and phone calls being made to account holders with American indicia. American citizens, residents—even people with a U.S. address or phone number—should be prepared. Possible American status means proving you’re compliant with the IRS or proving you’re not American after all.
Some people react like a deer in the headlights. But the bank’s letter or call is unlikely to evaporate. Failing to respond in any way is likely to mean the bank will close your account, if it isn’t closed already. Banks routinely turn over the names of closed accounts, and may even be more likely to disclose closed accounts than active ones..
Swiss banks are the most serious, since they are trying to get better penalty categories for themselves. But FATCA, the Foreign Account Tax Compliance Act, is also taking some blame. The U.S. can penalize foreign banks if they don’t hand over Americans.
Mr. Wood’s article alludes to a number of different topics. FATCA is unrelated to the U.S. attack on Swiss banks. But, Americans abroad are clearly under siege. Those in Switzerland are under the most pressure (at the moment). The community of Americans abroad should pay attention. Without international “pushback” there is nothing to prevent the U.S. from using the attack on Swiss banks as a blueprint to attack the banks in other countries. Why would these banks be attacked? It’s because they are suspected of allowing those with a U.S. birthplace (can you imagine a greater crime?), to hold bank accounts.