Swiss Bank Accounts

Stupid New Washington Law Blocks Americans From Opening Bank Accounts Abroad


This is a picture I took, from the smoking balcony of worldwide Nestle HQ, of Cato's Jim Harper posing proudly in front of Mont Pelerin

Here's a fun new Obama-era law you may not have heard about: It's called FATCA (get it???), or the Foreign Account Tax Compliance Act. The New York Times has a story out about the wonderful things Uncle Sam is demanding of the rest of the world, in the name of scrounging maybe an extra $800 million a year for the I.R.S.:

The law demands that virtually every financial firm outside the United States and any foreign company in which Americans are beneficial owners must register with the Internal Revenue Service, check existing accounts in search of Americans and annually declare their compliance.

Noncompliance would be punished with a withholding charge of up to 30 percent on any income and capital payments the company gets from the United States. Under the law, for example, if Deutsche Bank, having agreed to register with the United States authorities in compliance with the law, were to transfer $25 million to a noncompliant Polish bank, Deutsche Bank would be required to withhold part of that sum, transferring it to the I.R.S. The Polish recipient would then have the option of challenging that withholding by filing an American tax return, claiming the money, despite not being an American citizen. […]

"They're trying to force every financial institution in the world to sign onto this regime," said Denise Hintzke, who heads the global tax compliance initiative at Deloitte in New York.

Well, that's OK, right? I mean who cares about stupid foreigners! Whoops….

[B]eginning in 2012, many American expatriates — already the only developed-nation citizens subject to double taxation from their home government — must furnish the I.R.S. with detailed personal information on their overseas assets. […]

"The Fatca legislation treats all Americans with overseas bank accounts as criminals, even though most of them are honest, hard-working individuals who happen to be living and working or retired abroad," said Jacqueline Bugnion, a director of American Citizens Abroad.

The article doesn't really get into it, but one totally predictable consequence of this has already been that banks in foreign countries–particularly the ones that, unlike China, actually give a rip about maintaining good relations with U.S. regulatory authorities–are just stone cold not allowing Americans to open up bank accounts. This was told to me by numerous Swiss bankers I talked to last month during a week-long junket to Switzerland paid for by the American Swiss Foundation, a nonprofit that boosts relationships between the two countries while not (they organizers say) taking money from their respective governments. Grain of salt, etc., but it's all a timely reminder that no amount of your tax money is too trivial for the I.R.S. to hunt down, and no amount of total international outrage at our idiotic ideas is enough to derail a shameleslly populist and outrageously expensive law.

NEXT: Ron Paul, on Murray Rothbard and Lew Rockwell: "They enjoyed antagonizing people, to tell you the truth, and trying to split people"

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  1. And exactly which Republican controlled House voted for this?

    1. The US one? What’s your point?

      1. We’re all a bunch of partisan Republicans etc etc… you know the drill.

        1. I thought we were drug-addled liberals?

          1. Why can’t you be both? The worst of both worlds!

            1. Commie, libertine, fascists. Libertarianism in three words or less.

        2. Ah, I forgot. Fortunately I have this upper-thigh tattoo of George W Bush spacedocking with Ann Coulter to remind me.

          To the Tax Shelter, team!

    2. Not sure if serious.

      Anywho, this was a Democratic affair with marginal Republican support.

      1. yeah it passed in 2010 before team red had any power.

  2. According to Heather Butthurt, the executive director of the National Security Network, “A foreign policy that lets our trading partners collapse (in Europe); fails to engage with new ones as they are busily building ties with each other (Brazil, Turkey, Korea, Indonesia); and lets new disease incubate in the food we import and pollution concentrate in the winds we breathe will kill citizens and impoverish our national treasury as surely as the wars Paul critiques.”…..?page=full

  3. Stupid New Washington Law Blocks Americans From Gamboling about Plain and Forest

    It’s called “privation property rights.” Get it?

  4. It’s not just Americans abroad who have to deal with new reporting requirements. US Citizens with foreign financial assets other than bank or financial accounts also have new reporting requirements, on pain of a $10,000 standard fine.

  5. Congress isn’t filled with Nostradamuses who could predict the consequences of their legislation.

    1. How could they know what’s in it until it is passed?

    2. Seeing as Nostradamus was just a nut who made shit up, I’d say that Congress is in fact filled with Nostradamuses.

      1. What are you talking about, moron? He predicted the Axis of Glib.

        Seven conspirators at the banquet will cause to flash
        The iron out of the ship against the three:
        One will have the two fleets brought to the great one,
        When through the evil the latter shoots him in the forehead.

        1. There are only six of us, fuckwad. Who is this seventh conspirator? Your mom?

          1. They hadn’t fully invented numbers back then, numbskull. I can’t believe you didn’t know that.

            1. I knew it, shitwit. I was just testing you. Yeah, that’s it.

          2. Ooh! Ooh!

            [waves arms emphatically]

          3. Soon there will be six, glorious in awakening, struggling with the knowledge of their true selves, the pain of revelation bringing new clarity, and in the midst of confusion, he will find her. Enemies brought together by impossible longing, enemies now joined as one. The way forward at once unthinkable, yet inevitable. And the seventh, still in shadow, will claw toward the light, hungering for redemption that will only come in the howl of terrible suffering.

        2. Nostradamus wasn’t wrong, he’s just been mistranslated.

          1. He was right about the Gua. Long live Cade Foster.

            1. I’ve got some undiscovered quatrains in my basement.

              1. Crazy Eddie, is that you?

                1. . . .and I’ll sell them to you cheap. If you act now, I’ll also toss in tapes of Orson Welles reading them. Unedited!

                1. A quatrain is only 1/100th of a quatloo.

      2. maybe they should start writing all legislation in the form of vague quatrains.

        1. In Latin.

        2. Are you implying that they don’t?

    3. Most Congressmen probably aren’t smart enough to figure it out, but the brains that dictate what Congress does knew exactly what they were doing with this legislation: its consequences were not unintended.

      Collecting tax revenue is not the primary purpose of this legislation; this legislation effectively prohibits capital flight before the house of cards collapses. Of course, the 1% can still get around this sort of capital control by creating foreign corporate entities to own foreign accounts. The fixed costs of setting up such entities effectively bar the 99% from using a foreign account to protect their assets from a domestic financial collapse.

      For some time it has been extraordinarily difficult or impossible for a non-resident American to open a bank account in many countries, not because of oppressive foreign laws but because of oppressive American laws. It’s amazing that anybody still calls the Unites States a free country. I guess a lot of people just don’t pay attention.

  6. The IRS is going to track down every penny that it is owed, no matter what the cost.


      1. I bought myself that movie for Christmas since Netflix doesn’t carry it on instant, and there are just sometimes you need stop motion claymation hamburgers singing Van Halen.

        1. I’ve always wanted a Pigburger t-shirt.

      2. Look. My little brother got his arm stuck in the microwave. So my mom had to take him to the hospital. My grandma dropped acid this morning, and she freaked out. She hijacked a busload of penguins. So…it’s sort of a family crisis. Bye!

      3. I just learned that he was the same actor as the one who played the assistant bully in A Christmas Story.

        1. Farkus’s toady? Nice pull.

          1. Never recognized him as being the same actor. I found out when I read an article about the current whereabouts of the actors from A Christmas Story.

  7. One more small step towards going FULL EMPIRE. I wonder when we start plundering the provinces to make up for our budget shortfalls?

    1. And how do I get a job as a tax farmer?

      1. Farming and Taxing goes hand in hand.

      2. Aren’t you more of a blood farmer?

      3. I am reading a book on the French Revolution right now and all I can think is how similar we are to the ancen regime. All we need to do is privatize the IRS and sell it to tax farmers and we are there baby.

        1. What book? I need some new history books.

        2. We do have tax farming of a sort here in the U.S.

          IRS Qui Tam Lawsuits

          1. I sugarfreed the link:

            Since December 2006, tax whistleblowers who report tax fraud, tax evasion, and other tax liability of at least $2 million can receive awards of 15% to 30% of the amount recovered by the IRS.

            My brother asked me my thoughts on getting into this racket, and after a short direct exchange of views decided to stay out of it.

      4. Remember the tax farmers had to make up any…err…um …”shortages”.

      5. If you own a business that sells things, you already are a tax farmer for the government.

      6. I thought you wanted to be a Fannie Farmer

        1. And really I should apologize for making a crack at her name; Ms. Farmer was a true giant in the culinary world, introducing really scientific methods to the culinary arts. Quite a success story.

    2. …(civilization) working out for you?

  8. So the Swiss, the Panamanians, and pretty much everyone else who keep banking records actually private will no longer allow ‘Murcans to bank with them. Swell. Now I need to find a non-citizen who I can trust to only steal 10% of what I want to bank outside of America and not go the full Sharon-Stone-in-Casino on me.

  9. I’ve been warning people about FATCA for over a year now.

    I’ve got my appointment in two weeks to give up my U.S. citizenship, then I only have to pay my 30% expatriation tax on unrealized capital gains to buy my freedom my title owner.…..45,00.html

    Being a U.S. citizen sucks and no I’m not a bit worried about the U.S. military not being there for me.

    1. Enjoy your new Title Owner.

      1. Try thinking outside the box, I won’t have a new title owner.

        1. Check the name of your new passport.

          You know, that document like a hall pass from a school marm.

          You’ll get spanked without it.

          1. Actually I know several stateless people that are not poor refugees but live on some very nice yachts.

          2. Nope, UN Travel Documents are usually obtained in your country of residence for stateless people. At least where I live, they don’t last as long as passports, and they are more expensive, but it’s a good substitute! I probably shouldn’t have said that….

      2. Try thinking outside the box, I won’t have a new title owner.

      3. Obviously you haven’t felt the pain. This is very true. Americans, who hold only the blue passport, are treated like lepers abroad. I’m also gonna tell the consulate to take the passport and shove it. For Americans who are thinking about moving abroad: don’t do it unless you can and will get citizenship in another country very quickly!

    2. How do they enforce this expatriation tax? Couldn’t you just move all your stuff into accounts of your new country and then renounce?

      1. I like sleeping at night, figure 30% tax allows me to be free and clear.

      2. you can’t get back into the US to visit is my understanding

        1. Likely, but if you’re willing to give up your citizenship, then that’s not too big a deal.

        2. Who cares I’m never coming back to that police state.

        3. False, I asked the consulate and they said that you have to apply for a visa like everyone else from where you live. Their #1 criteria is “are you going to America to live and work” – if yes, then you will probably be denied. But they are idiots– who actually believes in the American dream anymore?

    3. I’m confused, do you already have citizenship in another country? If so, why bother formally renouncing your American? Just stop sending money to the IRS and throw away your passport.

      There’s little the IRS can do to you if you don’t plan on returning.

      1. The IRS could forward information to the CIA that Rick is a terrorist. Since taxes are the lifeblood of the state, no crime against the state is more terroristic than tax evasion.

      2. The problem is that I live in another country (have for a long time). I want to move assets out of America, but am told I can not because I was born in the 50 states. How in the #$%#$ is that FREE?

  10. OT:

    23 to 28 minutes, roflmfao

    1. All I saw was some kids who need to know what a punch to the mouth feels like. I’m not saying that they need to be beaten, per se, but they need to know about being beaten.

      1. “I expect them to obey the rules, whether we are right or not.”

        yeah, his kids will turn out great.

        1. and that guy’s wife is just the picture of blissful matrimony.

  11. We can’t open bank accounts and they reserve the right to hunt us down and kill us anywhere in the world.
    Uncle Sam has morphed into a paranoid abusive husband.

  12. So is this already a law or just a bill? I can’t seem to find that anywhere in the article (and since the NY Times demands that I eat their cookies to view their site, I can’t consult them either).

    1. The title is correct. It is in fact already law: http://www.journalofaccountanc…..102736.htm.

    2. Passed March 18th 2010

      Here is a link to the Tax Docs for FATCA…..67,00.html

      And don’t forget about your FBAR…..49,00.html

  13. Time for me to ditch that US passport.

    1. Don’t forget about the 30% Expatriation Tax…..45,00.html

      1. Actually, I don’t think I could take the full leap (at least not yet). But I don’t understand the expatriation tax at all, is that for assets held in the US?

        1. The Expatriation Tax is on all your assets worldwide that you have a gain on but haven’t yet paid a tax on.

          1. So they won’t let you officially renounce citizenship without paying this tax? Pay to leave? If that’s the case that’s really fucked up.

            1. Don’t forget, it’s taxes that are the price of civilization. Or some other horseshit.

              1. No? Now who’s full of horseshit?

            2. Kinda like the Berlin Wall, only with taxes instead of landmines and machine gun nests. USA!USA!USA!

          2. 4th Plank of the Communist Party Manifesto:

            “4. Confiscation of the property of all emigrants and rebels”

            The IRS taxes worldwide income of US citizens. Of course the tax applies to worldwide assets.

    2. You’ll have to wait in line. I think it takes years to renounce US citizenship, and you’re on the hook until the US recognized your renunciation. Tossing the passport isn’t sufficient.

      1. It depends on the region. For Europe, I hear it takes forever. Where there are smaller concentrations of Americans is much faster!

  14. “Outrageously expensive”?

    It costs us nothing; we make the furriners do our police work for us.

    Any day now, all American merchants will be forced to ascertain whether or not the funds used to purchase their goods were obtained legally.

    1. This is already close to the rule if you’re in any way connected to federal funding, grant, loan, contract, etc, no matter the tier (subcontractor, supplier, subgrantee, etc.). See False Claims Act and Fraud Enforcement and Recovery Act.

    2. Don’t laugh! Cuba does that.

  15. But I don’t understand the expatriation tax at all

    Think of it as ransom, and it makes perfect sense.

    1. If I have no assets or unrealized capital gains in the US then there’s nothing to ransom, right?

      1. The Expatriation Tax is on all your assets worldwide that you have a gain on but haven’t yet paid a tax on.

        If you are thinking about tossing your U.S. citizenship better do it now because who knows what the expatriation tax rate will be in a few years could be complete forfeiture all worldwide assets.

        1. Or else what? They send in the drones? I can’t visit the US again? Are they going to try and extradite me from the Czech Republic?

          1. I have altered your social contract. Pray I do not alter it further.

            1. Why do the Austrians suck up to it?

              They’re useful idiots.

          2. Sure you can risk not paying, but if they decide to put out a warrant for your arrest, plenty of U.S. friendly countries will arrest you and deport you if you pass through their airports.

            1. But how do they know you’re you? You’ve got a different name and a different country’s passport.

              1. Sure you could be lucky, but more and more countries are doing electronic fingerprints.

                1. I agree, it’s not a very realistic option. This is real life not a spy film.

        2. Hopefully this is an “end of the world” prediction that will never come true. Look carefully at the DOJ success stories, all of them are about people living in America who were really committing tax fraud. At least I have never heard of a bonafide residet of a foreign country being extradited to serve time in American prison because he/she didn’t declare their bank account with $5,000 worth of foreign currency. But if you know of such stories, I’d love to hear about them.

      2. Just the blood of your firstborn.

        1. Right, and don’t forget your children are tax property of the U.S. government as well and need to file proper tax returns and disclosure forms.

          1. I told my story on a Canadian blog. If you never register the child, the child doesn’t exist to the US Government. I think dual citizenship should be a choice for children. Kind of a cool choice to have, since I was never offered that. That wording on the IRS website is under-handed and just an attempt to scare honest people out of money. If the child never registers and never goes to the US, then they don’t owe the US 1 penny. The real responsibility is to comply with tax authorities where they live. The US citizenship based taxation almost tries to undermine local taxation, which, in the countries with large amounts of American expats, I’m surprised those countries haven’t done more complaining. After all, taxes are due where services are provided, not where someone was born. The US system is just idiocy.

  16. already the only developed-nation citizens subject to double taxation from their home government

    A couple of the Europeans also tax their expats, I’m pretty sure France is one of them, I believe the UK will tax you for a year or two after you move abroad. Either way this statement isn’t as definitive as it used to be.

    I’m thinking the German/French complaints about Switzerland and Monaco are prompting changes in this direction.

    1. Incorrect, Currently, the United States is the only major country which taxes based on citizenship rather than residency. A 1995 study by the U.S. Congress found that at the time only the U.S., the Philippines, and Eritrea tax based on citizenship rather than residency. The Philippines switched to a residency-based system the following year, thereby not taxing its citizens on worldwide income.…..itizenship

      1. I think people get confused on this because most countries tax RESIDENTS on worldwide income. This is fair, IMHO. I think that the US system conflicts with this sometimes and I’m a little surprised more countries haven’t complained.

        For example, if I made $10k on a stock deal in a brokerage account in America, but I pay 15% to America. The country where I actually live goes without. But whose services am I using? See my point? This puts US interests above all others and really somewhat subversive.

    2. J_L_B – no, on taxing, no. No other country is as stupid as the USA-SSR.

      Actually, most European countries have negotiated treaties with Swiss and offshore banks in the Channel Islands so now there is a withholding. The privacy rights are still there, but being tax free.

      Amazing how politicians are doing this when interest rates are at all-time lows. Who can actually live off interest nowadays?

  17. Oh for fucks sake. Can’t our “Tea Party” reps do anything? Or are they just more of the same bullshit?

    I’m getting tired of this crap.

    1. To do anything about this they have to get Obama to sign a bill or have enough Democrat votes to override a veto. They have two chances to change this in the current Congress: fat and slim.

  18. One more reason to obtain a foreign passport. If you want to open a bank account in another country, do so as a Bahamian/Israeli/Kenyan citizen and you’re good to go.


    1. All of those passports will show your birth location as the United States and the banks will require a certification of loss of citizenship from the United States, a friend of mine has had to show it to several banks to prove he is no longer a U.S. citizen.

      1. Correct. And this is why we have to pay $450 to renounce, just to get that darn paper. I think that fee is the highest in the world. Hopefully more articles like this will bring this to the light of many continental americans. This situation is absurd beyond belief. The sky IS literally falling!

  19. Today I learned I should have been filing taxes while living in Canada for the last 9 years.

    1. Mike, I hope you have been filing your FBAR disclosures with the US treasury.

      $10k fine per year per account not disclosed.…..49,00.html

  20. I’ve been waiting for Reason to cover this disastrous legislation. As an ex-pat wannabe, I’ve been hearing about it for quite some time. It’s causing thousands of retirees and others living abroad to renounce their citizenship. Apparently, even when you physically escape from the US, you can’t truly be free. So, I guess I’ll have to 1) live abroad for a year or more depending on the host country’s rules, then 2) apply for permanent residency, 3) renounce US citizenship and 4) open a bank account. Hooray.
    ?that’s assuming of course that I even have any $$ left to take out of the country after they’re done taxing me.

    1. Linguist, I moved, got married, filed for residency, got a bank account, opened a business in my wife’s name, had a kid, – am applying for citizenship very soon – then I will renounce. I’m probably going overboard by renouncing, but these laws are just so insane with no end in sight. I remember there was a clamp-down under Clinton, then Bush, and it got REALLY BAD under Obama. There has never been any relief. It only gets worse. If you don’t have any money or anything to lose (like some people I know), they never file American tax returns and say f*ck off Uncle Sam, and nothing happens to them. But if you intend on acquiring assets or opening businesses, you really need to renounce. It’s about as simple as that.

  21. You can give your heart to Jesus, but your ass (and your money) belong to Uncle Sam.

    1. No, this isn’t about money. The extra tax revenue brought in from expats is really low, from every source I read. Personally, I have never owed anything. I really think that this started out as a mission to catch tax frauds but then morphed into an operation using us expats (in vain) to try to control the world banking system. But I don’t think it will work. Banks just tell blue passport holders “No”!

      1. I actually think it’s about trying to prevent capital flight — targeting the increasing number of people who realize that the merry-go-round is about to screech to a halt, and who might be inclined to move assets out of the country rather than keep them where they’d be subject to the grasping, greedy hands of Washington politicians.

  22. You left out a consequence in your article. People who are living outside the U.S. due to marriage are having their foreign spouses and children swept up in this. You don’t even have to be American to be told you MUST report your bank accounts to the U.S. All you have to do is be married to an American. If the American in the family makes ZERO of the income, that’s too bad. If that person has the gall to have a joint checking account with you then Uncle Same says you must turn over your account numbers and information to the treasury dept.

    People are being forced to choose between foreign spouse or child who they might share a checking or savings account with and their country of birth. People are lining up to renounce feeling they have no other choice since their foreign spouse who has never been American, lived or worked in the U.S. doesn’t want to have to give out private banking info to a foreign government.

    This IS happening. And it’s not only ludicrous it is draconian. In Canada there has been a huge uproar over it and the Canadian government is furious it’s citizens are being put through such a bullying new law.

    It was Carl Levin who lead the charge on this and Obama signed it into law. They need to pull this and go back to the drawing board. It’s harming families abroad and making the U.S. citizen in the family a complete liability to their loved ones. Horrible and not warranted.

    I agree with geez, Bush was bad but, it has gotten completely insane under Obama. This is causing people to have to renounce who never would have before and most don’t really want to. You cannot force your foreign family to go along with something like this though. Sad.

  23. The US model of citizenship-based taxation is an outright HUMAN RIGHTS ABUSE because the citizen is taxed without having access to the corresponding benefits of being a resident of his/her country of citizenship nor the right to representation in the legislative body, ie congress. This is the case for the American Diaspora, many of which hold dual citizenship.

    The current US model is far out of step with the rest of the world (except Eritrea) and needs to be abolished!

    FATCA was created to enable the US to locate and confiscate the assets of its citizens living and working abroad.

    Americans abroad have already begun renouncing their citizenships due to FATCA. The numbers will continue to climb until FATCA and citizenship-based taxation is abolished.

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