In the words of the famous fictional character, Homer Simpson, “D’oh!” I made a mistake. And I’m not going to waste any time in fixing it. This isn’t the first time I have made a mistake and it most likely won’t be the last. While no one likes to make mistakes, I’ve learned from my experience as an improviser and performer on an “improv” team that “mistakes” are often times gifts.
This makes me think of the famous quote by John C. Maxwell:
“A man must be big enough to admit his mistakes, smart enough to profit from them, and strong enough to correct them.”
The mistake I’m referring to appeared in a recent blog I authored on TaxConnections entitled, “Ten Facts About FATCA … A Law That Is Changing Banking Worldwide.” In that blog, I stated the following:
“Because non-compliant institutions could be saddled with onerous penalties and isolated from U.S. markets, financial institutions have become as submissive in their willingness to comply with FATCA as a Labrador Retriever who rolls on its back after being given a treat. Very simply, virtually every financial institution is complying.”
The ink was barely dry on this blog before several readers posted comments that, shall I say, did not require any “reading between the lines” to realize that I had misstated a critical fact. Yes, they were not too flattering.
Now for the nitty-gritty: Not all financial institutions are “rolling over” on their backs to comply with FATCA. On the contrary, in an article entitled, “FATCA FFI Update and it Doesn’t Look Pretty. September Did Not Break 100,000,” author William Byrnes — my former professor of international tax law and a man who I have enormous respect for — reported a dismal increase in FFI registrations for FATCA for the month of September.
According to Professor Byrnes, only 99,861 FFIs were registered on the IRS’s September list. That represents an increase of just “4,500 registrations since the August list,” which contained 95,239. This anemic growth has caused industry watchers to sound the alarm:
“Most pundits thought at least 20% of the FFIs requiring FATCA registration would have done so by September – with only 120 days left before the precipice of 30% withholding begins against IGA countries. 120,000 is the minimum number brought up by industry for the September list that would need to be registered to show wide compliance buy-in. The declining increase is indeed troubling. Total global compliance remains less than 20% by both the IRS and foreign government estimated numbers.”
What is the takeaway? FATCA isn’t gaining widespread acceptance — at least not yet. As Professor Byrnes eloquently states, the “disappointing September result is a harbinger of the rough waters ahead for general FATCA compliance.”
For all of you who posted comments bringing this to my attention, I express my sincere gratitude. If I learned anything from this experience, it’s that I will be more thorough in doing my research next time.
Original Post By: Michael DeBlis
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