Victoria got online before me. I did manage to ok the comment on yesterday's post that had this link, but now, for those of you who did not look at those comments, here is the video conference, part 1, with our hero, Sophie in 't Veld, in the preview photo. Her intervention starts at 39 minutes. There's a little bit at the start that was translated, but bear with it; it goes back to all English:
and here is part 2:
Thursday, May 30, 2013
Wednesday, May 29, 2013
Spring in Brussels
Yesterday, I attended the EU hearing on FATCA, on behalf of AARO, in Brussels, with Victoria Ferauge, B.J., and M.E. Apologies for not letting Brussels friends know that I was coming. I didn't know, either, until late last week and once it was decided I'd go, I knew that it would be a packed day with no time to meet up or call.
First of all, you can also read about our day from Victoria's perspective on her blog, The Franco-American Flophouse. I really recommend her blog for the variety and interest of her subjects and her excellent writing.
Victoria and I were both traveling from Paris to Brussels and I managed to get on the same train and into the same car, so we sat together and got better acquainted. We'd already met once last year at the library. I'm always amazed at how little time it takes -- less than an hour and a half. I had a scare on my way to the station, though; the RER A was having one of those days of slowly limping from station to station and then sitting in the stations for a while. I was afraid I'd be late. But I wasn't and we had a good trip.
We got to Brussels, hopped into a cab and were delivered to the restaurant, where one of our little group was already waiting for us. He's also a dual national, living in Scandinavia. Surprise! The weather report for Paris was for more cold and rain and we are so used to that now that the sun and warm temperatures were almost a shock. We ate outside on the terrace! And we ate well, in case you're interested: Pasticcio.
The EU hearing on FATCA was scheduled for 3:30, so we had plenty of time. The Altiero Spinelli building is imposing, modern and the plaza in front of it is hosting a beautiful photo exhibit. What on earth inspired us to scout the area and find out if there was any particular procedure to get in? I have no idea, but we were well-inspired. It turns out that a meeting open to the public does not mean that J. Q. Public can just go in and sit down. You need an escort to get into the building. And we discovered that wifi access was not as easy to find as we thought. M. found the phone number of the MEP Victoria had been in contact with, Sophie in't Veld, MEP from the Netherlands. My phone to make the call and Victoria, as the one who had been the contact person, speaking, we got through to Emily, who immediately called us back to tell us to meet her at the entrance. I imagine we were interrupting her work, but if we were, she did not show it. She and another staffer, Thomas, took us to the registration office, got us our badges, and escorted us into the building and all the way to the meeting room in the most friendly and welcoming way. If you are reading this, Emily and Thomas, you should know how your taking care of us made us feel so welcome. Thank you.
So pampered, we were there early enough to choose our seats. There are only about 20 "public" seats in the room and once the meeting started, it was S.R.O. The official attendees straggled in, but Sophie in't Veld was early enough for us to be able to introduce ourselves to her and chat. Lucy Laederich, president of AARO and US Liaison for FAWCO, had sent her a letter earlier and although there will be more in our report, I can say here, that in the hearing, it was obvious that she took it to heart.
B.J. arrived a little later. She had been delayed by the procedure to get in. I have since learned that another AARO member came, but was not able to get in. If only we'd known that he was coming, we could have gotten him in with us.
The hearing was streamed on the Internet and, from comments, it looks like it was OK. I think this is it - it seems I don't have the proper extension on my browser to watch. Here's a briefing describing what's going on, so far concerning the US and the EU on the FATCA front.
After the hearing, in the hall outside the meeting room, we more or less ran into some of the participants at the meeting and were able to chat with them. This was exciting because they were truly interested in learning how EU citizens, not just banking institutions, were being affected, because of their dual nationalities or partnerships with Americans. There is a real problem of discrimination that they had no idea of. They also gave us good tips to contact other important MEPs and EU commissions.
We had time for a short, informal debriefing around a beer or a coke and walked a bit before catching a cab back to the station. It was a good thing we had our jackets, because the bad weather did come to Belgium, although we did not get rained on too much. On the ride back to Paris, we learned that the wifi access on the train is not all it's cranked up to be.
First of all, you can also read about our day from Victoria's perspective on her blog, The Franco-American Flophouse. I really recommend her blog for the variety and interest of her subjects and her excellent writing.
Victoria and I were both traveling from Paris to Brussels and I managed to get on the same train and into the same car, so we sat together and got better acquainted. We'd already met once last year at the library. I'm always amazed at how little time it takes -- less than an hour and a half. I had a scare on my way to the station, though; the RER A was having one of those days of slowly limping from station to station and then sitting in the stations for a while. I was afraid I'd be late. But I wasn't and we had a good trip.
We got to Brussels, hopped into a cab and were delivered to the restaurant, where one of our little group was already waiting for us. He's also a dual national, living in Scandinavia. Surprise! The weather report for Paris was for more cold and rain and we are so used to that now that the sun and warm temperatures were almost a shock. We ate outside on the terrace! And we ate well, in case you're interested: Pasticcio.
The EU hearing on FATCA was scheduled for 3:30, so we had plenty of time. The Altiero Spinelli building is imposing, modern and the plaza in front of it is hosting a beautiful photo exhibit. What on earth inspired us to scout the area and find out if there was any particular procedure to get in? I have no idea, but we were well-inspired. It turns out that a meeting open to the public does not mean that J. Q. Public can just go in and sit down. You need an escort to get into the building. And we discovered that wifi access was not as easy to find as we thought. M. found the phone number of the MEP Victoria had been in contact with, Sophie in't Veld, MEP from the Netherlands. My phone to make the call and Victoria, as the one who had been the contact person, speaking, we got through to Emily, who immediately called us back to tell us to meet her at the entrance. I imagine we were interrupting her work, but if we were, she did not show it. She and another staffer, Thomas, took us to the registration office, got us our badges, and escorted us into the building and all the way to the meeting room in the most friendly and welcoming way. If you are reading this, Emily and Thomas, you should know how your taking care of us made us feel so welcome. Thank you.
So pampered, we were there early enough to choose our seats. There are only about 20 "public" seats in the room and once the meeting started, it was S.R.O. The official attendees straggled in, but Sophie in't Veld was early enough for us to be able to introduce ourselves to her and chat. Lucy Laederich, president of AARO and US Liaison for FAWCO, had sent her a letter earlier and although there will be more in our report, I can say here, that in the hearing, it was obvious that she took it to heart.
B.J. arrived a little later. She had been delayed by the procedure to get in. I have since learned that another AARO member came, but was not able to get in. If only we'd known that he was coming, we could have gotten him in with us.
After the hearing, in the hall outside the meeting room, we more or less ran into some of the participants at the meeting and were able to chat with them. This was exciting because they were truly interested in learning how EU citizens, not just banking institutions, were being affected, because of their dual nationalities or partnerships with Americans. There is a real problem of discrimination that they had no idea of. They also gave us good tips to contact other important MEPs and EU commissions.
We had time for a short, informal debriefing around a beer or a coke and walked a bit before catching a cab back to the station. It was a good thing we had our jackets, because the bad weather did come to Belgium, although we did not get rained on too much. On the ride back to Paris, we learned that the wifi access on the train is not all it's cranked up to be.
Wednesday, May 22, 2013
Calming down - but not completely
I've had a few conversations with Fidelity reps in the days since I got that horrendous phone call. They all repeat that this is the new policy. I haven't received any letter. My kids, who also have similar accounts, have not received telephone calls or letters. I asked if, perhaps, the new policy had been rescinded, but was told that no, it had not and that my letter had gone out on May 9. Well, it's the 22nd today and I still don't have it. I have made some suggestions -- that such important letters that indicate tremendous changes to our accounts should be sent out be registered mail and the clock ticking on the new policy should not start until the date received, not the date sent, that changes to the welcome page on the website that require you do accept or decline should allow you to see the options of what happens if you decline before you actually click the button, not once you have clicked. (Really bad website design!) I did not click; I called and asked what the options were, and since the international options are not available to US citizens, of course, I ended up clicking the "Accept" button.
I've been following an excellent blog, The Franco-American Flophouse, and its author, Victoria Ferauge, is a much better writer than I am, much more articulate, a journalist, really. She has been writing about all sorts of subjects, which I'll let you discover, but one of her pet peeves, like mine, is US tax law concerning residents abroad. Today's post announce a meeting in Brussels on the EU and FATCA next week. I won't be able to attend, but if any of my readers are able to, I strongly recommend attending.
No other news of great import. It's been raining a lot, but it looks like today may be nicer. Sacha is growing. Claire and Geoff are weeding through girls' names and it looks like they've settled the matter, but I'm keeping mum until the baby is actually born. Anne is home for a few days between Prague and a visit to England with a couple of days in London at the end. Emma is off to Switzerland for a few days. Paul and I are finished with our bad colds, although he's still a bit congested. I'm still trying to scan a few photos a day to finish reproducing our old albums. I'm up to 1997 and from 2006, we already have the newer, printed albums, so with less than a decade to go, I hope to finish this before the end of the year.
I've been following an excellent blog, The Franco-American Flophouse, and its author, Victoria Ferauge, is a much better writer than I am, much more articulate, a journalist, really. She has been writing about all sorts of subjects, which I'll let you discover, but one of her pet peeves, like mine, is US tax law concerning residents abroad. Today's post announce a meeting in Brussels on the EU and FATCA next week. I won't be able to attend, but if any of my readers are able to, I strongly recommend attending.
No other news of great import. It's been raining a lot, but it looks like today may be nicer. Sacha is growing. Claire and Geoff are weeding through girls' names and it looks like they've settled the matter, but I'm keeping mum until the baby is actually born. Anne is home for a few days between Prague and a visit to England with a couple of days in London at the end. Emma is off to Switzerland for a few days. Paul and I are finished with our bad colds, although he's still a bit congested. I'm still trying to scan a few photos a day to finish reproducing our old albums. I'm up to 1997 and from 2006, we already have the newer, printed albums, so with less than a decade to go, I hope to finish this before the end of the year.
Thursday, May 9, 2013
Ranting and Raving Mad - Second Class Citizenship
I am not a tax professional. I am an active member of AARO. As an active member, I was privileged to participate in Overseas Americans Week in February 2013.
If what I write below is erroneous, please send me a comment so I can correct it.
Let us start with FATCA and take a cool-headed look at how FATCA affects us US citizens (and non-citizen US taxpayers).
Depending on Intergovernmental agreements (IGAs), or their absence, foreign financial institutions must declare, to their government or directly to the IRS, the existence of your accounts and the amount in them. For bank accounts, they will not have to report holdings under $50000 and for other investment accounts, amounts under $250000. We, however, may be required to report these accounts, even if the banks do not. That depends on the total amount in our accounts and our filing status.
Single or married filing separately. If the total amount in all the accounts outside the US is not greater than $200000, then we do not have to file form 8938. If the total amount in all the accounts outside the US is greater than $10000, we must file form TD F 90-22.1 (the FBAR form).
Married filing a joint return. The threshold for form 8938 is $400000. For the FBAR, it's still $10000.
So much for the filing requirements, which are simplified, here. If there is an exceptional short-term deposit which carries the total amount in the accounts above the threshold, there are other dispositions, and these are covered every year in the AARO tax seminars.
Many Americans abroad do not have to file form 8938. They do not have such savings abroad. That does not mean that FATCA has not affected them. It has made opening or maintaining accounts in the countries in which we reside difficult, if not impossible, because banks are reluctant to hold these accounts that will create such expensive reporting requirements, and in some countries, these requirements are contrary to local law on privacy. There has been a modification to the FATCA rules that requires banks to not discriminate against US persons, but it is not clear how that rule will be enforced. If you live abroad, either full time or part time, and you need a local account, FATCA has affected you.
Many Americans who live abroad do not have significant savings abroad because they have maintained an investment account in the United States. Now, US brokerages are closing or restricting accounts held by US citizens with foreign addresses. There's no law telling them to do this; it's their new policy. Policies from one brokerage to another are not consistent. The closures or restrictions seem to depend on the country of residence. There's no clear explanation, but it looks like it may be linked to which countries have entered an IGA with the US about FATCA. If any of us were thinking that we were lucky not to have to deal with the FATCA business because our money was still in the States, we are now stuck.
I'm going to skip the long diatribe about how the FBAR and FATCA filings affect us finding jobs, creating companies and partnerships, taking on responsibilities with associations -- anything to do with our having a signature on a bank account. Short story -- negative effect.
What are we to do? Where are we supposed to be investing our savings? How?
There is a second issue. Some Americans who live abroad do not have bank accounts in the US. Either they have never lived in the US, or they left and closed their accounts when they realized they would be residing abroad indefinitely. Since the passage of the Patriot Act, banks have refused to open accounts to US citizens who do not have a local address. This is not part of the law, but it is the policy based on the “know your customer” requirement. It is discriminatory. The workaround solution is to claim residence at parent's, sibling's, or friend's homes. In fact, the bank clerk might suggest this solution. In effect, they will know you to be a liar and that is okay. I have never done this. To claim one address to a bank and then another, foreign address, to the IRS, seemed hypocritical.
I have lived in France for over 40 years, having married a Frenchman while still a student. The money in the States has its origins in the States, from my very modest saving account and mostly thanks to the success of my parents. It is not money that was earned in France and stashed in the US. Likewise, the savings my husband and I have here in France originate here, our savings. I closed the checking account as I no longer used it; that was a mistake because when after my mother died, it would have been easier if I had a checking account, but I couldn't open one. (Well, the clerk did suggest I use a bogus address and I balked since the reason I could not use my French address was the "know your customer" rule!) The investment account is my sole account in the US.
Is it the intent of US financial institutions that we remove our funds and import them to our country of residence? I could do that. And I suppose, that over time, that is what will happen. Can you imagine what life would be like for US citizens who move from country to country (for work)? If they have not maintained an address in the States, they no longer have a home base.
My own dilemma is Fidelity Investments phone call this week warning me that I would be receiving a letter with the details of the new restrictions on my account: I can sell, but will not be able to buy securities. I will not be able to deposit new funds to the account. My investment account, in effect, over time, becomes a cash account in which I will only be able to withdraw funds, to my understanding. My children, who have accounts at Fidelity, are in the same predicament. The restrictions are linked to our living in France. What has France done, or not done, to warrant US financial institutions treating US citizens like this?
Please, do not imagine that money is my sole connection to the US. No, it is not. I still have family and I still feel American. I am proud to be an American. I am sick of America making me feel unwanted. I have been a member of AAWE and AARO, organizations that fought for our rights to transmit our citizenship to our children and grand-children and to vote, fought for more reasoned thought into how we are taxed by the US. I am sick to find myself telling my children it might not be such a good idea to burden their children with US citizenship.
Can financial institutions in the US have such discriminatory policies? Is it legal? There is no law, it seems, that imposes these policies; it's the instituion's new policy; like it or leave. But leave for where, since all the institutions are doing this? And at what cost. If I had to sell all my mutual funds and stocks in a single stroke, I'd have excessive capital gains taxes.
As I noted at the beginning, I am mad. My discourse is not as well-organized as I'd like it to be. I have already written to my Representative, Chaka Fattah, to my Senators, Bob Casey and Pat Toomey, to Representative Carolyn Maloney, who is the chair of the Americans Abroad Caucus and the House Committee on Financial Services and who is also the sponsor of HR597 To establish a commission to study how Federal laws and policies affect United States citizens living in foreign countries.
You can support HR597. You can write to your Congress people: If you, yourself, live outside the US, this letter. And if you are in the US and have family or friends who live abroad, use this letter.
And to give your opinion on tax reform -- in favor of RBT (Residence Based Taxation) for we who live overseas, consideration of accounts in one's country of residence as local, not foreign accounts, elimination of FATCA requirements that are strangling financial services.... Or maybe you disagree.
If what I write below is erroneous, please send me a comment so I can correct it.
Let us start with FATCA and take a cool-headed look at how FATCA affects us US citizens (and non-citizen US taxpayers).
Depending on Intergovernmental agreements (IGAs), or their absence, foreign financial institutions must declare, to their government or directly to the IRS, the existence of your accounts and the amount in them. For bank accounts, they will not have to report holdings under $50000 and for other investment accounts, amounts under $250000. We, however, may be required to report these accounts, even if the banks do not. That depends on the total amount in our accounts and our filing status.
Single or married filing separately. If the total amount in all the accounts outside the US is not greater than $200000, then we do not have to file form 8938. If the total amount in all the accounts outside the US is greater than $10000, we must file form TD F 90-22.1 (the FBAR form).
Married filing a joint return. The threshold for form 8938 is $400000. For the FBAR, it's still $10000.
So much for the filing requirements, which are simplified, here. If there is an exceptional short-term deposit which carries the total amount in the accounts above the threshold, there are other dispositions, and these are covered every year in the AARO tax seminars.
Many Americans abroad do not have to file form 8938. They do not have such savings abroad. That does not mean that FATCA has not affected them. It has made opening or maintaining accounts in the countries in which we reside difficult, if not impossible, because banks are reluctant to hold these accounts that will create such expensive reporting requirements, and in some countries, these requirements are contrary to local law on privacy. There has been a modification to the FATCA rules that requires banks to not discriminate against US persons, but it is not clear how that rule will be enforced. If you live abroad, either full time or part time, and you need a local account, FATCA has affected you.
Many Americans who live abroad do not have significant savings abroad because they have maintained an investment account in the United States. Now, US brokerages are closing or restricting accounts held by US citizens with foreign addresses. There's no law telling them to do this; it's their new policy. Policies from one brokerage to another are not consistent. The closures or restrictions seem to depend on the country of residence. There's no clear explanation, but it looks like it may be linked to which countries have entered an IGA with the US about FATCA. If any of us were thinking that we were lucky not to have to deal with the FATCA business because our money was still in the States, we are now stuck.
I'm going to skip the long diatribe about how the FBAR and FATCA filings affect us finding jobs, creating companies and partnerships, taking on responsibilities with associations -- anything to do with our having a signature on a bank account. Short story -- negative effect.
What are we to do? Where are we supposed to be investing our savings? How?
There is a second issue. Some Americans who live abroad do not have bank accounts in the US. Either they have never lived in the US, or they left and closed their accounts when they realized they would be residing abroad indefinitely. Since the passage of the Patriot Act, banks have refused to open accounts to US citizens who do not have a local address. This is not part of the law, but it is the policy based on the “know your customer” requirement. It is discriminatory. The workaround solution is to claim residence at parent's, sibling's, or friend's homes. In fact, the bank clerk might suggest this solution. In effect, they will know you to be a liar and that is okay. I have never done this. To claim one address to a bank and then another, foreign address, to the IRS, seemed hypocritical.
I have lived in France for over 40 years, having married a Frenchman while still a student. The money in the States has its origins in the States, from my very modest saving account and mostly thanks to the success of my parents. It is not money that was earned in France and stashed in the US. Likewise, the savings my husband and I have here in France originate here, our savings. I closed the checking account as I no longer used it; that was a mistake because when after my mother died, it would have been easier if I had a checking account, but I couldn't open one. (Well, the clerk did suggest I use a bogus address and I balked since the reason I could not use my French address was the "know your customer" rule!) The investment account is my sole account in the US.
Is it the intent of US financial institutions that we remove our funds and import them to our country of residence? I could do that. And I suppose, that over time, that is what will happen. Can you imagine what life would be like for US citizens who move from country to country (for work)? If they have not maintained an address in the States, they no longer have a home base.
My own dilemma is Fidelity Investments phone call this week warning me that I would be receiving a letter with the details of the new restrictions on my account: I can sell, but will not be able to buy securities. I will not be able to deposit new funds to the account. My investment account, in effect, over time, becomes a cash account in which I will only be able to withdraw funds, to my understanding. My children, who have accounts at Fidelity, are in the same predicament. The restrictions are linked to our living in France. What has France done, or not done, to warrant US financial institutions treating US citizens like this?
Please, do not imagine that money is my sole connection to the US. No, it is not. I still have family and I still feel American. I am proud to be an American. I am sick of America making me feel unwanted. I have been a member of AAWE and AARO, organizations that fought for our rights to transmit our citizenship to our children and grand-children and to vote, fought for more reasoned thought into how we are taxed by the US. I am sick to find myself telling my children it might not be such a good idea to burden their children with US citizenship.
Can financial institutions in the US have such discriminatory policies? Is it legal? There is no law, it seems, that imposes these policies; it's the instituion's new policy; like it or leave. But leave for where, since all the institutions are doing this? And at what cost. If I had to sell all my mutual funds and stocks in a single stroke, I'd have excessive capital gains taxes.
As I noted at the beginning, I am mad. My discourse is not as well-organized as I'd like it to be. I have already written to my Representative, Chaka Fattah, to my Senators, Bob Casey and Pat Toomey, to Representative Carolyn Maloney, who is the chair of the Americans Abroad Caucus and the House Committee on Financial Services and who is also the sponsor of HR597 To establish a commission to study how Federal laws and policies affect United States citizens living in foreign countries.
You can support HR597. You can write to your Congress people: If you, yourself, live outside the US, this letter. And if you are in the US and have family or friends who live abroad, use this letter.
And to give your opinion on tax reform -- in favor of RBT (Residence Based Taxation) for we who live overseas, consideration of accounts in one's country of residence as local, not foreign accounts, elimination of FATCA requirements that are strangling financial services.... Or maybe you disagree.
Sunday, May 5, 2013
Wow, another month has gone by
It's been a busy month. Not that I can remember much of any importance. I just finished our French taxes. So all that has been taken care of: US and FR. AARO had its annual general meeting at the ambassador's residence, with the US ambassador, Charles Rivkin, as our speaker. And he was a fine speaker. Paul and I have babysat a few times. Sacha's sitter has been on sick leave, so we got to fill in. Now, Paul and I both have sore throats and bad colds, probably caught from Sacha. That family has gone off to visit more family in England and Norway and everyone should be all better by next week, when they get back. I've taken Sacha to the lap-sit story hours at the library -- he likes it.
And that is it.
And that is it.
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