I’VE BEEN AN outspoken critic of this fatally-flawed law, which turns American expats into financial pariahs, for several years. Indeed, with a change of administration in the White House; the Republicans controlling the Senate and Congress; President Donald Trump pledging to rescind several former President Barack Obama’s ill-judged executive orders; and, of course, Trump’s highly anticipated 2017 tax reform package, now could well be the ideal – and only – time to repeal the Foreign Account Tax Compliance Act (FATCA).
But we must act fast.
As such, we have put together a team of experienced Washington DC professionals, including former United States diplomat and long-time Senate leadership staffer Jim Jatras, plus several influential congressmen and senators, to push the repeal effort into the stratosphere.
Rolled out in 2014, FATCA is virtually unknown to the majority of Americans, but has been causing mayhem with the global financial system outside the US.
Hyped as a way of catching serial fat cat tax evaders “stashing” funds offshore, FATCA requires all non-US financial institutions in every country across the globe, (including banks, credit unions, insurance companies, investment and pension funds) to report data on US accounts to the Internal Revenue Service.
Should any nation refuse to comply with FATCA’s regulations, their financial sector will be slapped with hefty penalties that could be catastrophic to the economy.
In essence, FATCA is an extraterritorial diktat that infringes on countries’ sovereignty rights; burdens other countries’ financial institutions; and is highly detrimental to consumers and taxpayers.
Moreover, the law is irrevocably damaging to the eight million Americans residing overseas, which, in turn has led to record numbers of expats renouncing their US citizenship.
Significantly, the 2016 Republican platform called for FATCA’s repeal (FATCA and the Foreign Bank and Asset Reporting Requirements result in government’s warrantless seizure of personal financial information without reasonable suspicion or probable cause.
Americans overseas should enjoy the same rights as Americans residing in the United States, whose private financial information is not subject to disclosure to the government except as to interest earned. The requirement for all banks around the world to provide detailed information to the IRS about American account holders outside the United States has resulted in banks refusing service to them.
Thus, FATCA not only allows “unreasonable search and seizures”, but also threatens the ability of overseas Americans to lead normal lives. We call for its repeal and for a change to residency based taxation for US citizens overseas).
Indeed, abolishing FATCA whilst Obama was still president was almost impossible, despite repeal bills set up by Senator Rand Paul and Reprepresentative Mark Meadows. However, with Trump now in the White House, and his tax reform package being introduced this year, the position has changed.
These are certainly exciting times ahead, with an extremely positive chance that we can banish this toxic law to the history books, where it belongs.
Nigel Green, founder and chief executive officer of deVere Group in the United States and leader of a new campaign to repeal FATCA.