Below is a copy of the submission the Democrats Abroad Global Taxation Task Force submitted to the House Financial Services Committee on the Hearing Entitled: Oversight of the Financial Crimes Enforcement Network (FinCEN) that took place on February 14, 2024.
Click here to download a pdf of DA's submission to the House Financial Services Committee in full.
|
Dear Chairman McHenry, Ranking Member Waters, and Members of the Committee: Democrats Abroad greatly appreciate the opportunity to comment on these two important hearings. We recognize the importance of the Financial Crimes Enforcement Network’s mission to combat money laundering and terrorist financing and the IRS’s critical role in ensuring that Americans, wherever they may reside, comply with their tax obligations under the law. The first-hand experiences inform the comments we submit today of our 200,000 members and aim to ensure that ongoing efforts to combat financial crimes – while well-intentioned – do not place undue and unnecessary burdens on low and middle-income Americans living abroad. Since the passage of the Currency and Foreign Transactions Reporting Act (commonly known as the Bank Secrecy Act) in 1970, ordinary U.S. citizens who reside abroad have increasingly been caught in the middle of the fight against tax evasion and malicious actors. While we recognize that battling money laundering and terrorist financing are critical priorities, substantial adjustments to FinCEN Form 114, the Report of Foreign Bank and Financial Accounts, or “FBAR,” are needed to ensure that the impact on ordinary law-abiding citizens is proportional to the financial law enforcement benefits. Recently, the National Taxpayer Advocate (NTA) reiterated this concern in her annual report to Congress, twice emphasizing the need to eliminate duplicative reporting obligations in FBAR and the Foreign Account Tax Compliance Act (FATCA). This acknowledgment of a longtime priority for Democrats Abroad underscores the necessity of providing timely relief for the more than 9 million Americans living abroad. The National Taxpayer Advocate’s annual report highlights at least four major reasons to eliminate the duplicative reporting requirements in FATCA and FBAR:
The Government Accountability Office (GAO) has also called attention to the overlap and redundancy in information submitted to the Treasury, calling for consolidation and simplification to alleviate the burden on Americans living abroad. Democrats Abroad further suggest that the administration and processing of duplicative aspects of the FBAR regime are consuming resources that could be better utilized in activities more effectively targeting tax evasion and malicious actors. We strongly support the National Taxpayer Advocate’s and GAO’s call to consolidate these reporting obligations. We are grateful to the committee for the opportunity to offer commentary informed by the first-hand experiences of our members. Thank you for your attention to the challenges facing Americans living abroad and for your consideration of our input. Sincerely,
|