While the 2014 FATCA information transfer to the IRS was widely reported, since then we have had no idea how much data has been flowing from the ATO to the IRS. To get a better idea of the scope of the data exchange, Carl sent an FOI request to the ATO for a summary of the data sent to the IRS under FATCA for all three reporting years that have now been completed (2014, 2015, and 2016). The ATO complied with this request in a timely manner, sending us a pdf file of a printout of an excel worksheet that spans several pages both vertically and horizontally. 
FATCA requires Australian financial institutions (very broadly defined) to report account holder details as well as account balance, dividends, interest and other income paid, and gross proceeds from sale or redemption to the ATO for transmittal to the IRS. It is evident from the graphs below that the amount of data going to the IRS has exploded since the initial data transfer of 2014 data (transferred 30 Sept 2015).
One of the terrific things about living in a parliamentary democracy like Australia is that there are safeguards in place to facilitate transparency of the Australian Government and public services. One powerful tool is the Freedom of Information Act, or FOI, which provides individuals or organisations with the right of access to documents held by many government agencies. By law, most public authorities have to respond to an FOI request within 30 days. Their response will either contain the information requested, or give a valid legal reason why it must be kept confidential. Note that the government agencies may levy charges for locating and making the information available, based on prescribed rates.
Here at Fix the Tax Treaty!, we’ve often wondered whether the Australian Government adequately considered the impacts on Individuals (vs businesses) when negotiating and entering into the Australia – US tax treaty agreements and the FATCA Intergovernmental Agreement (IGA).
Clearly articulating our group’s vision, objectives and action plans is essential if we are to be effective in achieving our aims. Many of you will recall that the Steering Committee members (Karen Alpert, Caroline Day and myself) have long been working on a Strategy Roadmap document, as previous discussed in a number of blog posts:
A good advocacy plan will help our group decide where to spend time and effort to achieve our goals and assist us to be as effective as possible with our limited resources. The plan will be a key reference document that is periodically updated as we progress towards achieving our goals.
I’m pleased to announce that we have completed a final draft of our Strategy Roadmap. You can view it here.
From 1 July 2017, Australian financial institutions will be required to report account information of anyone with a tax residence outside of Australia to the ATO under the OECD’s Common Reporting Standard (CRS). Once the United States rolled out FATCA, countries in the OECD decided that cross-border reporting of financial accounts might be a good way to rein in use of tax havens for tax evasion. However, while the two are similar, there are some differences. The key features of CRS are a common standard for: the scope of reporting (type of information, which account holders and which institutions), the due diligence required, format of the data to be exchanged.
Have you opened a bank or investment account lately? Were you asked about other citizenships? Place of birth? Since mid-2014 Australian financial institutions have been ferreting out US Persons. At most institutions, every new account holder is asked these questions. And, if you are found to be a US Person, you must complete a form W-9 (or equivalent) disclosing your US connection and Social Security Number. This data will be sent to the ATO, who will forward it on to the IRS.
Think about that.
Private Australian financial information of Australian citizens and permanent residents is being sent to a foreign government.
Just over a week ago, I received a message through this website from someone who had submitted an FOI request to the ATO. “Sam” expected that one of his accounts had been reported because the bank had identified him as a US Person and the balance was above the bank’s reporting threshold. The response from the ATO puzzled Sam, and it puzzled me as well. The ATO response stated that they needed to consult with a “foreign government” about whether Sam’s FATCA records were exempt from FOI under Section 33 of the FOI Act: Continue reading “FOI Take 2”
On 29 November I submitted a Freedom of Information request to the ATO requesting copies of all data about my accounts that was sent to the IRS under FATCA. The fact that I had to ask is outrageous – account holders should be automatically notified when their data is sent overseas. But, current Australian privacy law does not require any notification. Continue reading “FOI Request”
It’s been ten days now since the US election. Many (including me) were surprised by the result. Regardless of how you voted (or didn’t – I’m no longer eligible to vote), the US electorate has spoken, and it’s time to move forward under the new regime. Over on the Isaac Brock website, they are organising a letter writing and Twitter campaign to encourage the Trump transition team to enact the planks in the GOP platform calling for the repeal of FATCA and legislation to enact Residence Based Taxation (here are two other currently active threads – , ). It appears now that the current FATCA repeal bills will be re-introduced when the new Congress convenes in January.
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. Continue reading “Transparency”