Transparency

In my last post, one of the priorities listed was more transparency in FATCA reporting. What I meant was that everyone should have the right to know what is being reported about them to the ATO/IRS by their local (foreign to the US) financial institution, and the right to correct any errors in that information.

For those US taxpayers with US bank accounts, any passive income over a de minimis amount is reported to the IRS on form 1099 (there are various flavours for interest, dividends, etc.) AND the taxpayer has a right to receive a copy of the 1099. Why are the rights of US taxpayers abroad any less important than those of US taxpayers in the US? The original FATCA legislation should have required informing US persons that their data had been sent to the IRS. Any US citizens whose personal financial data has been reported under FATCA without a reasonable attempt to inform them, have been denied equal treatment under US law.

But, the focus of this site is on what the Australian government can do to protect Australian citizens from the injustices the US has seen fit to impose on its diaspora. As Australian citizens we have rights too!

I have searched through the FATCA IGA, the Australian implementing legislation, and the Explanatory Memorandum for the implementing legislation. I have not been able to find any mention of the right of account holders to request a copy of any information disclosed to the ATO/IRS. Many account holders may not even know whether their bank has identified them as a US person, much less whether their information has been disclosed. Principle 12 of the Australian Privacy Principles should apply to the information that your bank has about you – including whether you are a US person. One solution suggested in a comment thread over on the Isaac Brock website is to request your “AML-KYC” file from the bank to make sure the information is correct. This file would include all identifying information the bank has on you. A request for your personal information under Principle 12 of the Australian Privacy Principles should net you the same information (if anyone has tried this here in Australia, please let us know in the comments). Many who think they are not currently identified as a US Person by their bank would be afraid that requesting this information will place them under suspicion – this shouldn’t be a problem if your request focuses on Australian privacy law and a desire to ensure that all of your data is correct (and you don’t mention citizenship or place of birth specifically in the request).

However, the right to request this information is not sufficient. This information will only help you figure out whether the bank has anything that might be considered US indicia. You may already know that if the bank has required you to fill out a W9 form or disclose your SSN. But it does not tell you whether the bank has actually included your data in their FATCA data dump. Banks are only required to disclose accounts where the aggregate balance is above USD50,000 at year end. Some banks, however, may opt to disclose all US accounts.

Where data is being disclosed to a foreign government, it is our right as Australian citizens to know that this data has been disclosed and exactly what data is included in the disclosure. We should be automatically notified, just as US residents are notified when their data is sent to the IRS. Just knowing whether or not your data has gone to the IRS, and what was sent, will relieve a portion of the uncertainty and anxiety felt by those Australians who are claimed by the US.

 

 

2 thoughts on “Transparency”

  1. I would be interested in hearing what experience people have in other countries in regards to FATCA disclosure reporting back to the person being reported on.

    What I understand so far:
    Australia – no notification that your info was reported and no details provided
    Canada – notification that data was proved but no details (privacy law requirement?)
    Switzerland – some FFI’s notify, others don’t. Looks like company policies drive this, not regulation.

    Others?

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