DemsAbroad Warns Treasury That FATCA Pain Will Grow With Reporting Expansion

Democrats Abroad has written to Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig about the proposal included, amongst many other measures, in the American Familes Plan Tax Compliance Agenda, to introduce reporting, by banks in the United States and not in the United States, on total cash inflows and outflows of the accounts of U.S. taxpayers.  For Americans abroad we fear it will expand the bank lockout, further restrict access to savings and investment vehicles and exacerbate stresses in dual-national families.  You can download our letter here.

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On behalf of the 9 million U.S. citizens living, raising families, and retiring outside the United States, Democrats Abroad has written to the US Treasury Secretary, Janet Yellen and the IRS Commissioner, Charles P Rettig, with urgent concerns about the proposal to expand the reporting obligations of foreign financial institutions (FFIs) enshrined in the Foreign Account Tax Compliance Act (FATCA), to include account inflows and outflows.  We understand that the United States faces on-going challenges to close the gap between what taxes are owed and what taxes are collected and that this has prompted the government to search for new tax enforcement mechanisms.  However, FATCA has already perpetrated enormous disruption for ordinary working-class Americans living abroad who have financial accounts in the where they live.  Expanding FATCA reporting will further limit their banking, saving, and investing options and exacerbate family stress. 

In our letter we raise these matters, provided in greater detail in the Statement for the Record we submitted to the May 2021 hearing on “Closing the Tax Gap” held by the Senate Subcommittee on Taxation and IRS Oversight which we have attached as Appendix I.

We also re-state our support for the Overseas American Financial Access Act, an exemption from all FATCA reporting of the accounts of law-abiding working-class Americans abroad in the country where they live.  You can download our letter here.

DEMOCRATS ABROAD TAXATION TASK FORCE