The number of Americans who’ve turned in their passports and renounced citizenship has increased more than tenfold in five years, to 3,000 in calendar 2013. [USA Today] Earlier on the burdensome expatriate tax and regulation measure here, here, here, and generally here.
“…than [against] almost any other group.” Can you guess which new federal agency is being referred to? [National Law Journal]
Headline, from WWJ: “Sterling Heights Gas Station Owner Says IRS Grabbed $70K From His Bank Account For No Reason” Mark Zaniewski, “owner of Metro Marathon in [suburban Macomb County], said the IRS emptied out his bank account twice over the course of a week this spring.” No charges have been filed; Larry Salzman of the Institute for Justice, representing Zaniewski, says the accounts were seized on suspicion of bank “structuring” (knowingly arranging deposits to fall below $10,000), even though some deposits were over that threshold. Salzman says his client has been waiting seven months for his cash and in the mean time is unable to get a hearing before a judge. IJ recently took on a structuring case involving a grocer in nearby Fraser, Mich. Earlier on structuring and its intersection with forfeiture law here, here, here, etc.
Update via Dan Alban on Twitter: “BREAKING: IRS voluntarily dismisses Michigan forfeiture cases, will return seized money to owners of family grocery store and gas station. Doesn’t get feds out of IJ’s separate constitutional lawsuit re: right to prompt hearing, Dehko v. Holder.”
So how exactly did it wind up in the hands of a patent troll? [Mike Masnick, TechDirt]
How “money laundering” regulations give the U.S. Treasury power to destroy foreign banks [Stewart Baker, Volokh] Meanwhile, if Canadians imagine that the Foreign Account Tax Compliance Act (FATCA) is something only Canadian-Americans need to worry about, they should think again [Maclean's]. Excerpt:
To say that FATCA is controversial is an understatement. The law is so complex and onerous to implement that some foreign banks have reportedly kicked out their U.S. clients in order to avoid dealing with it. Americans living abroad are queuing to give up their U.S. passports over it. The other problem with FATCA is that it asks foreign banks to do things that are often illegal in their home countries, such as passing on certain private information.
Earlier on “know your customer” here and on FATCA here.
Kevin Funnell, on “The Long-Range Consequences Of Adopting The Mating Habits Of A Praying Mantis,” quotes Matthew L. Brown in Boston Business Journal on the consequences of slamming the institution that agreed to help rescue WaMu and Bear Stearns, and is now paying for their sins: “It’ll be a long time, indeed, before a big bank answers the federal help line.” Related: Daniel Fisher, Forbes.
My new Cato post tells how on-site feds increasingly direct big business decisions.
P.S. Related thoughts on deferred prosecution agreements from Brandon Garrett and David Zaring at NYT “DealBook.”
The Institute for Justice is defending the owners of a grocery store in Fraser, Mich. who saw their bank account seized under forfeiture law on suspicion of structuring deposits (keeping them below $10,000 on purpose to avoid reporting). Video here. We’ve been covering the results of structuring law, and its intersection with forfeiture powers, for a while now, and its nice to see the issue attracting the notice of a group as formidable and high-profile as IJ.
Many previous posts in this space have addressed the Foreign Account Tax Compliance Act, which presumes to regulate overseas banks and financial institutions that do business with Americans, and which goes into effect next June. So it’s nice to see the Paper of Record running a reasonably informative introductory piece on its problems, even if at too late a date to get the thing stopped. “Global banks and investment firms have made their dislike of the law known, though they are reluctant to speak out individually” — and how common that last point is these days, given the retaliatory potential of the U.S. government’s vast regulatory and enforcement apparatus for a business that does dare to speak out. Still, a few critics are willing to show their heads above ground, including
Georges Ugeux, a dual Belgian-American citizen, a lecturer at Columbia Law School and the founder of Galileo Global Advisors, an international business consulting firm. He described the law as “bullying and selfish.” The United States, he said, “is acting outside its borders as if they were its home.”
Sen. Rand Paul of Kentucky has introduced legislation to roll back part of the law, and there is a site called RepealFatca.com. [Lynnley Browning, NYT via TaxProf]
Matt Levine concludes that a large share of it was for making dumb trades, as opposed to intentional malfeasance. (Earlier on whether regulators had taken a bead on Morgan because of chief Jamie Dimon’s perceived bad attitude.) Will Morgan’s admissions materially help plaintiff’s lawyers in the inevitable shareholder class action? Don’t be so sure [Alison Frankel, Reuters] More: WSJ (sees politics), Hank Greenberg via FedSocBlog, Iain Murray.