Will Trump Keep Republican Pledge To Repeal FATCA?

6
2517

American expats are waiting with bated breath to see if President-elect Donald Trump will repeal the disliked Foreign Account Tax Compliance Act (FATCA).

FATCA was the brainchild of outgoing President Barack Obama and introduced to help the Internal Revenue Service (IRS) track down suspected tax cheats with secret money and investments hidden in overseas banks.

Since the law was introduced in 2014, the IRS has grabbed $10 billion from nearly 100,000 US taxpayers.

Thousands of other taxpayers have rushed to file late tax returns or amend filings to avoid falling foul of fines and interest penalties.

However, expats led by the lobby group Republicans Abroad claim the law is unfair to expats and breaches the right to privacy given under the US constitution.

Booking.com

Banks reject US expat customers

The group has funded several court cases in the US, Canada and Israel aimed at disrupting FATCA enforcement, but lost each case.

As a Republican president now sits in The White House and following senate and congress elections which give the party a majority in both houses, the expectation is FATCA may be repealed.

Expats would cheer this move as the law has made them banking outcasts.

Many have told the courts that they have had bank accounts closed, loans and mortgages recalled and been denied the right to open accounts by foreign banks.

The banks argue they do not want US customers due to the costs of complying with FATCA.

Republican campaign against FATCA

The law demands that foreign financial institutions must file a report every year identifying their US customers who live in America and have accounts or investments worth more than $50,000 or who are expats with accounts or investments worth more than $200,000.

Non-compliance by banks leads to fines and a ban on operating in the US banking system.

Although Trump has not commented on his standing towards FATCA, the Republican platform calls for the repeal of the law and for the IRS to levy taxes based on residency.

“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,2 says the platform [Page 13 Fourth Amendment]

6 COMMENTS

  1. The article should have been researched better and has these factual errors:

    Says FATCA reeled in $10 billion since FATCA was introduced in 2014. The link is to an IRS page stating that since 2009 OVP took in $10 billion. FATCA was in effect since 2016 in many countries, so this haul was before FATCA and lots of it was from cracking down on Swiss bank accounts.

    FATCA does not just involve privacy violation. The FATCA/FBAR lawsuit (not lost but still going) claims that FATCA/FBAR violate the Constitution on 8 counts (one one of them for FBAR excessive fines).

    Republicans Abroad did not fund the Canadian FATCA IGA lawsuit. This is funded from the Canadian ADCS. This lawsuit is getting geared up with chief claim that the FATCA IGA violates the Canadian Charter of Rights prohibiting discrimination based on national origin. That suit is against discrimination against US persons in Canada.

    The article says FATCA is aimed at US residents. True but importantly it is aimed at US persons no matter where they live, even if they have no money in the US and have lived overseas for decades, and even if they have never lived in the US. It is all unfair and against the American founding principles of no taxation without representation (and services).

    TRUE: Although Trump has not commented on his standing towards FATCA, the Republican platform calls for the repeal of the law and for the IRS to levy taxes based on residency.

  2. The Canada case is not lost but merely set back.

    The real sticking point for expats is we cannot live our lives as normal people. It is impossible to juggle two tax regimes: one jurisdiction allows, the other takes away. CBT goes back to Lincoln to combat deserters. It made sense then, but it does not make sense now. It is in fact as in-American as any law can get for it is taxation without representation (representation defined as services provided, not uncounted votes cast), the main reason Americans revolted in 1760s, and taxation based on ‘ownership’ is tributary slavery as defined by Samuel Adams. It is a completely disgusting practice, and these are the main reasons so many of us are handing in our citizenships. We actually consider ourselves very patriotic people, but one has to fight for their individual liberties first.

  3. There are numerous inaccuracies in this article:

    The $10B collected by the IRS is since 2009 not 2014 – and most of this will be from US residents hiding money overseas, not expats banking around the corner from their homes.

    The Canadian lawsuit was not lost – and is not affiliated with Republicans Overseas or the Republican party. It was funded by a grassroots effort with donations from around the world.

    The reporting requirements are different for the banks (financial institutions) and taxpayers (individuals). Banks must report on ALL US Persons (citizens and greencard holders) with accounts greater than US$50,000 – though most just report all US Person accounts regardless of amount. Individuals must also report this information on FBAR and IRS form 8938 (which have different thresholds).

    Non-compliance by banks will result in 30% withholding from all of their US transactions (not a ban), though this has not yet gone into effect.

    FATCA was enacted in 2010. Enforcement is supported by Intergovernmental Agreements (IGAs) with almost every country on the planet. These IGAs were negotiated by Treasury without Senate ratification. They forced other countries to amend their domestic privacy laws to enforce FATCA. Amazing what you can do when you threaten to withhold 30% of every transaction that clears through New York! After being bullied by the US, is it any wonder that foreign banks want nothing to do with US-tainted customers?

  4. FATCA makes American citizens toxic to foreign financial institutions (FFIs). Some 160,000+ FFIs are subject to 30% fees with all American transactions if they do not comply with FATCA. It has cost them at least hundreds of millions of dollars to implement, one estimate extends this to $2 trillion.

    The risk to Americans at home is exports. There were $21.2 trillion in export trade worldwide in 2015, and the USA exported some $2.2 trillion in goods and services. With Americans now toxic, my question is how much of this trade will the USA lose? It’s added a 30% incentive fro other nations to provide these services, and in case nobody at home is awake — most of us abroad wonder seriously about this, even before this election — the rest of the world is no longer a third world supply of indentured labor but is growing, industrial, and technologically advanced. The rest of the world is emerging from its imperialistic chains and is thriving.

    If America is to be great again, it needs to relearn how to compete. FATCA and CBT are in every sense anti-trade and anti-growth, for America.

    Future industrial projects which America has long promoted, supplied, and profited from will take hard looks at their suppliers, especially with bankers in the room approving decisions.

  5. USA stands for freedom , is this freedom, to catch one thief you punish the whole nation. This is some kind of revenge, losing trade and opportunities abroad, to hit some imaginary ghost. Great policy, killing a tine mouse with a cannon ball and destroying the whole house . No wonder why USA is a decaying nation.

    • I agree wholeheartedly Singh. Your use of the mouse imagery is apt as the elephant in the room is the OECD plans, already in play upon the back of FATCA for the rolling out of a global command and control centralised taxation system with its HQ in, yes, you’ve guessed it, as cover for the Federal Reserve, Washington DC. That being the real longterm global oligarchic Game Plan watch how cosy the Clintons now get with Trump post election. They are both merely paid for political mouthpieces for the real players.
      Fatca was always designed to just be the loss leader legalisation for GATCA or global indentured tax slavery, for an old style financial empire run for and by the unaccountable few plutocrat world dynasties. An expression of moral corruption in high places on a worldwide scale. All such empires end badly. But not before destroying the lives of millions of innocents.

Leave a Reply