Important updates on FATCA and on provisions in the Tax Cuts and Jobs Act that impact Americans abroad

On Monday 2 April there were two important developments related to expat taxation:

1. Supreme Court denies reviewing FATCA lawsuit

The Supreme Court announced on Monday 2 April that it will not review the decisions of the lower courts on the FATCA constitutional challenge.  The denial of certiorari means that the issue did not rise to the level, at this time, that merits the Court's review. 

If the Court had heard the case (Crawford et al v U.S. Treasury) then the question of whether FATCA violates 4th, 5th and 8th Amendment protections of the U.S. Constitution, as well as whether the Intergovernmental Agreements that implement FATCA are enforceable without Senate ratification, would have been addressed.  Many would have welcomed an answer to these questions.  

However, the Court's decision makes no difference at all to our work advocating for relief for Americans abroad from the enormous burden brought by FATCA.  We continue our support of H.R. 2136 - the Overseas Americans Financial Access Act - which would eliminate all FATCA disclosure of the accounts of Americans living abroad in our countries of residence.  We will continue to ask members of the House to support the bill and encourage our friends in the Senate to introduce a parallel bill.

2. IRS issues guidance on Transition Tax filing extension

Further to our recent communications about the imposition of further tax burdens on Americans abroad built into the 2017 Tax Cuts and Jobs Act, on Monday 2 April the IRS issued guidance affirming that 15 June 2018 is the deadline for filing and payments due in relation to the Repatriation Tax for taxpayers with a 15 June filing deadline (as opposed to the 17 April 2018 filing deadline).  This provides some relief for the non-resident owners of businesses abroad who face not only the Repatriation Tax but also a new GILTI tax regime as a result of the switch to a system of Territorial Taxation for Corporations enacted by Congressional Republicans in December.  

We strongly encourage Americans abroad whose businesses fall under the definition of Controlled Foreign Corporations (consult your accountant or tax advisor) to take part in our grassroots campaign demanding relief from these "transition taxes" for Americans abroad.  Take the time to draft a few sentences that explain how your business will be impacted.  Many businesses abroad will not survive if forced to bear this additional tax burden and Congress needs to hear that.

Please push this campaign out to your friends and over your social media channels.  The flow of letters has dropped off materially since the campaign was launched 2 weeks ago; this is not the time to let up!  Let's keep up the pressure on lawmakers and regulators.  You can participate in the campaign even if you are not the owner of a business.

As always, please send any questions or comments to TaxationTF@democratsabroad.org and thank you for your on-going support for our tax advocacy work.

 

Democratically yours,

DA TAXATION TASK FORCE

Julia Bryan - ex-officio (Czech Republic)

Jennifer Cederwalls (Sweden)

DeeDee Gierow (Sweden)

Rebecca Lammers (UK)

Carmelan Polce - Chair (Australia and New York)

Michael Ramos (Australia)

Joe Smallhoover (France)

Orlando Vidal (UAE)