Bitcoin will be a big mess for both Bitcoin holders and the IRS

From Business Insider –

“Tax season is right around the corner, and most Americans are getting their W2s and paperwork ready.

And as virtual currency like Bitcoin becomes increasingly intertwined in consumer and corporate culture, the Internal Revenue Service may struggle to regulate and prosecute digital scofflaws.

But for the latest Bitcoin miners and traders trying to cash in on the cryptocurrency craze, the burden of staying within the complicated boundaries of the law are on them.”

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FATCA costs spiral beyond expectations

From Treasury Insider

“Only a third of financial institutions now believe that their FATCA compliance efforts will now be completed within budget, according to a new survey by Thomson Reuters.

Undermining the costs involved appears to be a common problem, with 27% of organisations surveyed saying that they expect their FATCA compliance spend in 2015 to be between $100,000 and $1m, compared to just 16% of those asked the same question at the beginning of the year. Over half (55%) expect the costs of meeting the new rules to exceed their original budget.

Last month, the UK and 50 other countries from the Organisation for Economic Co-operation and Development (OECD) signed up as early adapters of the Common Reporting Standard (CRS), an international agreement to create a new standard for the automatic exchange of information.

“The whole problem of FATCA has just become bigger,” commented Laurence Kiddle, managing director of corporate market EMEA for the tax and accounting business of Thomson Reuters.

“CRS is a game-changer. It dramatically widens the reporting scope and this puts massive strain on budgets. A financial institution needs to be able to identify the tax residence of each of their customers – not just whether or not they meet the definition of ‘American Person’ – and have the ability to report this to the relevant authorities. This increase in the scope, depth and complexity of reporting is a very significant challenge.”

Financial organisations will be required to submit FATCA reporting from the end of March 2015.”

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FATCA: How’s that for economic imperialism?

From Investment Watch

“Two weeks ago – July 1, to be exact – an obscure law called the “Foreign Account Tax Compliance Act,” or FATCA, came into effect.

The idea behind FATCA is simple: Demand that other countries enforce America’s imperialistic tax laws. And do so by the confiscation of foreign assets, if necessary.

Effective July 1, interest, dividends, rents, and similar payments leaving the US are subject to a 30% withholding tax. The only way that most foreign banks and other international companies can avoid this tax is to act as unpaid IRS informants. Non-US persons investing in the US are affected, too. If their foreign bank isn’t FATCA-compliant, their US income gets whacked 30%.

How’s that for economic imperialism?”

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Tax Technology Architecture

From Deloitte CIO Journal