Here is your chance to be heard by Congress on the FBAR mess and how the U.S. government now considers all of you expatriate Americans to be felons, incipient felons, or wanna-be felons. (Except you won’t be allowed to speak because they don’t care about you. And because they’re holding the trial then promptly passing sentence upon completion of the testimony. And they need to get that all done before lunch. But hey. If you submit written comments they’ll go into the permanent record.
Here you go. The announcement.
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON SELECT REVENUE MEASURES
House Ways and Means Select Revenue Measures Subcommittee Chairman Richard E. Neal (D-MA) announced today that the Subcommittee on Select Revenue Measures will hold a hearing on foreign bank account reporting and related tax compliance issues. The hearing will take place on Thursday, November 5, 2009, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 a.m.
Oral testimony at this hearing will be limited to invited witnesses. However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.
FOCUS OF THE HEARING:
The hearing will focus on non-compliance by U.S. taxpayers with foreign bank accounts, rules regarding foreign trusts with U.S. beneficiaries, and certain U.S. dividend equivalent payments to foreign persons to avoid U.S. taxes. The hearing will also focus on recently introduced legislation, HR 3933, the Foreign Account Tax Compliance Act of 2009.
According to the most recent tax year data available (2003), more than $293 billion in U.S. source income was sent to individuals and businesses residing abroad. The United States imposes withholding taxes when U.S. source investment earnings are paid to a foreign person. Those withholding taxes were largely designed to collect tax on income earned in the United States even though the income is earned by a foreign person not subject to the jurisdiction of our laws. Those withholding taxes also play a role in preventing non-compliance by U.S. persons holding investment assets in accounts overseas.
The Internal Revenue Service (IRS) has established the Qualified Intermediary (QI) program that authorizes foreign financial institutions to collect withholding taxes on behalf of the U.S. government. The program was implemented to improve compliance for tax withholding and reporting on U.S. source income that flows offshore through foreign financial institutions. The recent UBS case revealed problems with the QI program that permitted tax evasion by U.S. persons. Further, even with jurisdictions in which the United States has a tax treaty, effective information exchange used by tax enforcement agencies may sometimes be undermined by local laws providing for banking secrecy that conflict with U.S. law.
In March of this year, this Subcommittee held a hearing on bank secrecy and tax evasion at which the Commissioner of the Internal Revenue Service testified (Ways and Means Committee Hearing Print, Serial 111-12, Hearing on Banking Secrecy Practices and Wealthy American Taxpayers). In May, the President released a fiscal 2010 budget proposal including a number of new requirements on taxpayers with foreign bank accounts and foreign financial institutions holding those accounts. Last week, Representative Charles B. Rangel filed HR 3933, the Foreign Account Tax Compliance Act of 2009 containing, among other proposals, many of the proposals from the Administration’s budget, including a mandatory 30 percent withholding on payments to foreign financial institutions unless they disclose information to the IRS on accounts owned by U.S. individuals or close the accounts, and a requirement on individuals and entities to report offshore accounts with values of $ 50,000 or more on their tax returns (see Joint Committee on Taxation Technical Explanation, JCX-42-09). [Editor’s note: the new tax laws proposed by Rep. Rangel will not apply to Members of Congress.] [Editor’s note: Yes, that previous editor’s note is sarcasm.]
In announcing the hearing, Chairman Neal stated, For many years, I have sought to crackdown on individuals and corporations that are abusing overseas tax havens. With billions of dollars in revenue being lost each year, strengthening our tax compliance efforts is essential. I strongly believe the Foreign Account Tax Compliance Act of 2009, introduced this week in the House by Chairman Rangel and myself, gives the Treasury Department the necessary tools it needs to get tough with those Americans hiding their assets overseas. I welcome the support for this bill offered by President Obama and Treasury Secretary Geithner, and look forward to working with them to turn this proposal into law. It is my hope that this hearing marks the beginning of a vigorous campaign by Congress and the Obama administration to end the practice of offshore tax avoidance by U.S. citizens.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms. From the Committee homepage, http://waysandmeans.house.gov, select Committee Hearings. Select the hearing for which you would like to submit, and click on the link entitled, Click here to provide a submission for the record. Once you have followed the online instructions, complete all informational forms and click submit on the final page. ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by close of business November 19, 2009. Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical problems, please call (202) 225-1721.
The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.
- All submissions and supplementary materials must
be provided in Word or WordPerfect format and MUST
NOT exceed a total of 10 pages, including attachments.
Witnesses and submitters are advised that the Committee
relies on electronic submissions for printing the
official hearing record.
- Copies of whole documents submitted as exhibit
material will not be accepted for printing. Instead,
exhibit material should be referenced and quoted
or paraphrased. All exhibit material not meeting
these specifications will be maintained in the Committee
files for review and use by the Committee.
- All submissions must include a list of all clients,
persons, and/or organizations on whose behalf the
witness appears. A supplemental sheet must accompany
each submission listing the name, company, address,
telephone, and fax numbers of each witness.
Note: All Committee advisories and news releases are available on the World Wide Web at http://waysandmeans.house.gov.
You know, a cynic might see this whole FBAR thing as mightily influenced by the efforts of U.S. bank lobbyists. By making foreign bank accounts and foreign investment holdings into minefields they’ve created a powerful incentive for people to seek the safety [Editor’s note: Ha!] of putting their money into domestic investment vehicles operated by U.S. financial institutions. Where that money can be easily taxed by the FedBoys. Hey. One hand washes the other.