# FATCA expat bank notice



## Zendo

I am a dual citizen most of my life in Switzerland. I first became aware of my so-called US filing obligations after having received an unsettling notice from my bank, which included a "W-9" form that I had to fill out. One of the stipulations on the form was as follows:

_With this Authorization, the Client hereby expressly waives any protection or right under Swiss bank-client confidentiality and data protection laws to the extent necessary for the reporting of any Data hereunder. Further, the client accepts and acknowedges that any data that the bank discloses hereunder to the IRS will be subject to the laws of the US and will not be covered by Swis laws. The laws and regulations in the US may follow different principles of bank-client confidentiality or data protection that Swiss law._

Is this really happening? I had no choice but to sign the form and return it to the bank. It feels like coercion.

Does anyone have an informed opinion as to what the ramifications are from the above quote? How is one to interpret the term "data"? Am I no longer a Swiss citizen in my own country?

For someone quite near retirement, with very moderate assets, and no connection to the US in any way; this is a real knock out.


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## Zendo

Zendo said:


> I am a dual citizen most of my life in Switzerland. I first became aware of my so-called US filing obligations after having received an unsettling notice from my bank, which included a "W-9" form that I had to fill out. One of the stipulations on the form was as follows:
> 
> _With this Authorization, the Client hereby expressly waives any protection or right under Swiss bank-client confidentiality and data protection laws to the extent necessary for the reporting of any Data hereunder. Further, the client accepts and acknowedges that any data that the bank discloses hereunder to the IRS will be subject to the laws of the US and will not be covered by Swis laws. The laws and regulations in the US may follow different principles of bank-client confidentiality or data protection that Swiss law._
> 
> Is this really happening? I had no choice but to sign the form and return it to the bank. It feels like coercion.
> 
> Does anyone have an informed opinion as to what the ramifications are from the above quote? How is one to interpret the term "data"? Am I no longer a Swiss citizen in my own country?
> 
> For someone quite near retirement, with very moderate assets, and no connection to the US in any way; this is a real knock out.


I would like to add that I am currently overwhelmed with fear and trepidation after reading all kinds of horror stories about average citizens getting caught up in what I would now call the "compliance syndrome". The "wake-up" call from the bank has added to my confusion.

Although I have nothing to hide and am a peace loving tax paying citizen I now find myself in a highly confusing situation and am trying to sought out how to proceed. That is probably the main motivation for the above post.


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## BBCWatcher

Zendo said:


> Although I have nothing to hide and am a peace loving tax paying citizen....


If that's true, there's no impact whatsoever related to the notice you received. Your previous and current U.S. IRS (tax) and U.S. Treasury Department (FBAR) filings will correspond to the information your bank shares with U.S. authorities, and nothing will happen. Except....



> I first became aware of my so-called US filing obligations....


Nothing "so-called" about them. The U.S. legally requires all its citizens to file an IRS "1040" form and a U.S. Treasury Department "FBAR" form if they meet the respective thresholds for filing. There are various penalties for noncompliance.

My suggestion would be to file -- better late than never! -- using the IRS's "streamlined" compliance process if you qualify.


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## Bevdeforges

You happen to have the "privilege" of living in one of the couple of countries the US IRS has been focusing on. Switzerland has definitely been the target of the IRS investigations into "tax havens" and "secret bank accounts."

Germany has been the other country we've heard lots from - in part because the Germans generally follow the rules they are given, and partly because so many of the big German banks have commercial interests in the US, and that's the compliance route the US has been taking on the bank issue. (I.e. give us all the information we ask for on "US persons" holding accounts or we'll cut off your banking rights in the US.)

Austria has supposedly been similarly hit by the US authorities.

Here in France, my bank apparently hasn't heard a word about any of this stuff (though I suspect it's because they aren't an international bank). But now the French President is talking about requiring the French banks to disclose information about their foreign subs (and we already have to disclose all foreign bank accounts and "assurance vie" policies) "just like the Americans."
Cheers,
Bev


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## maz57

I'd hide my money under the mattress or bury it in the backyard before I'd ever sign my rights away like the OP. Then I'd be spending some of it on a lawyer to sue the hell out of the bank, the Swiss government, or any other entity that could facilitate such a travesty. 

Here in Canada there is a class action lawsuit waiting to happen if and when the Canadian banks start with this crap. The US needs to be stopped. I am so glad to be rid of my US citizenship!


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## Zendo

BBCWatcher said:


> If that's true, there's no impact whatsoever related to the notice you received. Your previous and current U.S. IRS (tax) and U.S. Treasury Department (FBAR) filings will correspond to the information your bank shares with U.S. authorities, and nothing will happen. Except....
> 
> 
> Nothing "so-called" about them. The U.S. legally requires all its citizens to file an IRS "1040" form and a U.S. Treasury Department "FBAR" form if they meet the respective thresholds for filing. There are various penalties for noncompliance.
> 
> My suggestion would be to file -- better late than never! -- using the IRS's "streamlined" compliance process if you qualify.


Yes, I understand and share your opinion. And most important, thank you for the link. 
I joined this forum to get this kind of advice.

However, I posted this to draw attention to other issues, partly contained in the question: should governments use banks as potential collection agencies? 
Personally, I don't think so. 

There are quite a few issues here that go beyond the fact that expats should be compliant according to US law.


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## Mr_I

*Fatca*

I hope there are enough governments in the world who have the balls to tell the IRS to go screw themselves. I also hope that most expats in the world are smart enough not to sign 
any form waving their right to privacy in whatever country your in. 
Start dealing in cash before you submit to any IRS strong-arm tactics.


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## BBCWatcher

Zendo said:


> However, I posted this to draw attention to other issues, partly contained in the question: should governments use banks as potential collection agencies?


They already do, practically worldwide, as part of anti-money laundering efforts. Banks have legal obligations in most countries to comply with court orders (even in private disputes), report large or suspicious cash and non-cash transactions, report any suspected counterfeit currency, report "marked" currency presented for deposit or exchange, to "mark" currency issued to particular depositors, to freeze particular assets upon government order (such as in times of war or economic sanctions), to recover stolen assets (such as Nazi loot), and much more.

I don't see why banks should be exempt from cooperating with governments in crime prevention and related reporting when, as examples, taxi operators and telecommunications companies are expected to cooperate. Why should banks be treated any differently?

Why _shouldn't_ banks be potential collection agencies for the government, just like a homeowner in Watertown, Massachusetts, was a "collection agency" for an uninvited guest staying in his backyard boat who allegedly bombed the Boston Marathon? I can understand why defense attorneys should have a limited ability to protect their clients' confidences, and probably also spouses, and maybe doctors (with limitations), but why should banks be special? I can't think of a good reason.


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## Bevdeforges

Unfortunately, the OECD and other international organizations that are trying to combat money laundering and the whole "tax haven" phenomenon are applauding the US FBAR and FATCA drill as a way to root out hidden wealth and tax evasion. And actually, there is nothing wrong with requiring banks to report accounts held by foreign residents.

The real issue here is the US policy of taxing their citizens, regardless of their country of residence. However in the current climate, there is no chance in hell that Congress would even consider the issue of releasing non-resident citizens from their US tax burden.
Cheers,
Bev


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## BBCWatcher

Bevdeforges said:


> The real issue here is the US policy of taxing their citizens, regardless of their country of residence. However in the current climate, there is no chance in hell that Congress would even consider the issue of releasing non-resident citizens from their US tax burden.


Less than zero chance in hell, if that's possible. Also, the global trends are against it as countries like Australia, the U.K., and Japan (among others) are increasingly flirting with non-resident provisions in their tax systems.


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## Bevdeforges

BBCWatcher said:


> Less than zero chance in hell, if that's possible. Also, the global trends are against it as countries like Australia, the U.K., and Japan (among others) are increasingly flirting with non-resident provisions in their tax systems.


Actually, there are some valid reasons for having US source income subject to some form of non-resident taxation. I've often said that I acknowledge the fact of owing taxes on my IRA funds when I start withdrawing them from the plan (in a few years). That was the deal when the IRAs were set up, and therefore I feel I do owe the taxes - but only on that and on a "non-resident" basis.

However, like you say, less than zero chance is probably the better way to express this one....
Cheers,
Bev


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## maz57

Actually, if a few more major countries implemented citizenship-based taxation it would expose the insanity of the concept. If governments fought over who gets to tax who and experienced having their national wealth diverted to a foreign jurisdiction they would soon see how unworkable it really is. The only reason the US gets away with it is they are the only one presently. (Save Eritrea which is not much competition.)

In today's mobile world economy can you imagine having to file a tax return to every country for which you have a passport or have ever lived as a permanent resident? Or how about effectively being prevented from saving or investing because of conflicting rules of multiple tax agencies? Can you imagine the hue and cry in the US if China required the US banks to send the financial information of Chinese citizens living in the US (or maybe US citizens who once lived in China) to the Chinese tax agency? Or hit those banks with a 30% withholding on any Chinese transaction if they didn't comply?

So, yeah, bring it on Australia, UK, and Japan! 

To the OP....yes, due the extraterritorial application of US law you have now been forced to sign away your rights or (presumably) face having your accounts closed. Where is the Swiss government in all this; I do not know.


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## Nononymous

It's not often I have something good to say about the current government, but at least in Canada they have been reasonable: 

(1) Canada will not collect US taxes on behalf of the IRS if the tax is owed by dual citizens (it will help collect any obligations incurred before a person had Canadian citizenship)

(2) Canada will not collect FBAR fines (should any ever be levied - not clear that this has happened) because it's a "reporting requirement" not covered by the tax treaty

(3) the government is not at all happy about FATCA, and working to act as an intermediary so that banks will not directly communicate with the IRS, and is generally trying to have it watered down

So I feel fairly sanguine that we won't be completely hung out to dry. I think Canada will be an interesting case because there are so many duals, many of whom inherited the citizenship and have little connection to the US - psychologically, at any rate, they are quite different from expats who left the US as adults, and may have no other citizenship. FATCA really isn't on the radar yet, and when it is, things will get ugly.


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## Zendo

BBCWatcher said:


> Less than zero chance in hell, if that's possible. Also, the global trends are against it as countries like Australia, the U.K., and Japan (among others) are increasingly flirting with non-resident provisions in their tax systems.


There is likely to be the contrary trend. In a globalized economy it will become increasingly more evident that citizen-based taxation is a contradiction.

Of course, there will be some sort of automatic information exchange, but not in the form which at the moment is collaterally affecting some of the wrong people. This insight is yet to come.


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