Sunday, December 08, 2013

Between a rock and hard place

It is getting rougher for expats.

The Swiss Post (which is also a bank) has sent out letters asking all those account holders with an American passport to provide them with officially certified copies of their FBars (the form all expats have to fill out that reports all their bank accounts and which carries heavy, heavy fines if not filed) since 2008.

Now Fbars are not certified. Even if someone sent them in return receipt required, that is still not considered an official IRS document.

Can you imagine if all 8000 or those Americans in Switzerland with postal bank accounts wrote the IRS demanding a document that said they filed their Fbars? Would the IRS send it. Ever try and get information from the IRS?

Other banks may be following suit in this demand.

Although I've renounced I tried emailing the Senate Finance committee to point out the damage FATCA legislation which requires banks all over the world to report on all their American account holders or face huge fines and/or be shut out of the US market. It is not reciprocal.

Countries are having to change their banking laws to meet US demands. That is why banks are choosing, not just in Switzerland but all over the world to not do business with Americans.

It also hurts American companies working overseas who want American employees in their foreign offices.

Many Americans with foreign spouses have put everything in their spouse's name. This creates a dangerous imbalance of power not to mention what will happen if that spouse dies.

Even if the American does not put everything in the spouse's name, the spouse, although not American and not having any money earned in the US, still is expected to report to the IRS.

And if the US can insist other countries change their laws, what happens when China makes the same demands?

There are two parts of this problem.

1. The damage it is doing to ordinary Americans.
2. A power grab that can affect the international finance system.

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