Yesterday the New York Times published an Op-Ed about FATCA entitled “An American Tax Nightmare.” The piece is a fairly accurate portrayal of the problems FATCA has created for ordinary Americans living abroad.
The piece goes on from there with less accuracy and a measure of speculation dressed up as fact. Importantly, the piece suggests that Democrats Abroad and the Democratic National Committee have neglected the interests of Americans abroad where FATCA is concerned.
As you know, Democrats Abroad established the FBAR/FATCA Task force in 2011 and has been working to reform FATCA for the last four years. Our recommended FATCA reform is the Americans Abroad Safe Harbor. This provision would exempt from FATCA reporting the accounts of American citizens who are legally resident in the country in which the account is held. The non-partisan organisations representing Americans abroad also support the Safe Harbor reform and are actively advocating for it. Further, the Democratic National Committee demonstrated its support for FATCA reform with a resolution passed at its meeting in August 2014.Read more
Democrats Abroad responded to this invitation from the Senate Finance Committee to provide input and ideas on reforming the US tax code to one or more of five Tax Reform Working Groups. Democrats Abroad made a submission to the Individual Income Tax Reform Working Group and the International Tax Reform Working Group promoting our recommendation to reform FATCA, the FATCA Safe Harbor for Americans Abroad. Our submissions and attachments to the papers are attached herewith.
During the week starting Monday February 23, 2015 Democrats Abroad was part of a "delegation" of representatives** from the following organisations representing Americans living outside the US which had a series of meetings in Washington DC about FATCA:
- American Citizens Abroad (ACA)
- Association of Americans Resident Overseas (AARO),
- Democrats Abroad (DemsAbroad), and
- Federation of American Women’s Clubs Overseas (FAWCO) and FAWCO Alumni USA (FAUSA).
Subgroups of the members of the delegation conducted 35 meetings across the five days** with the offices of these officials and discussed 1) the adverse impact FATCA is having on Americans abroad and 2) reforming the FATCA implementation rules to create a Safe Harbor from FATCA reporting for Americans abroad and the banks and brokerage houses they have accounts with.Read more
The Democrats Abroad FBAR/FATCA Task Force has some interesting developments to report, starting with the addition to the Task Force of two new members: DeeDee Gierow of DA Sweden and Jim Black, formerly of DA Germany, now living in the Washington DC area. We also provide herein a briefing on the FATCA Congressional “door knock” happening the last week in February and on an Obama administration proposal to provide tax relief to “accidental Americans” seeking to renounce their US citizenship.Read more
51 COUNTRIES AGREE TO COLLECT FINANCIAL ACCOUNT INFORMATION FROM FINANCIAL INSTITUTIONS FOR EXCHANGE WITH OTHER SIGNATORY COUNTRIES
In the course of our work advocating for reforms to FATCA the Democrats Abroad FBAR/FATCA Task Force also tries to keep an eye on efforts being employed elsewhere to address the problem of illegal tax avoidance. More nations are recognising that in an increasingly globalized world, it is correspondingly easier for taxpayers to move assets into offshore financial institutions in order to potentially evade tax. The Organisation for Economic Coordination and Development (OECD) has responded to long-standing concerns about the use of offshore accounts to hide assessable earnings from tax authorities by developing a coordinated, world-wide program to crackdown on tax evasion.Read more
Democrats Abroad is very pleased to present the report of our four month study of the impact that the Foreign Accounts Tax Compliance Act ("FATCA") is having on Americans abroad - FATCA: Affecting Everyday Americans Every Day.
Please find posted below the following documents.
These reports have already been sent to selected members of Congress and senior officials at the US Treasury and IRS. Discussions with them about the urgent need for reform are on-going.
Seeking your support for our work to effect relief from the burdens of FATCA
Following on from our March 2014 meetings with US regulators and legislators (link to report on website), the Democrats Abroad FBAR/FATCA Task Force has invested the last 6 weeks (exempting the Easter break) taking advice from academics and experts to create the survey for DA’s next round of international research on the unintended adverse impacts of the Foreign Accounts Tax Compliance Act (FATCA). We continue to receive reports from overseas Americans who are being denied banking and investment services in their country of residence due to the reporting requirements imposed on Foreign Financial Institutions by FATCA.Read more
FBAR/FATCA Task Force meeting with regulators yields valuable feedback
During the 2014 Democrats Abroad Congressional door knock, the FBAR/FATCA Task Force scheduled a comprehensive slate of meetings with regulators and legislators in order to advance our recommended reforms to the law’s implementation rules. Meetings included the following groups: Congress’ Joint Committee on Taxation; the Senate Committee on Finance; the IRS; the IRS’s National Taxpayer Advocate; the Department of Treasury; the General Accountability Office; and myriad Congressmen including Senators sitting on the Senate Finance Committee Carl Levin, Bob Casey, Bill Nelson, Bob Menendez and Ben Cardin and ranking Democrats on the House Ways & Means Committee Sandy Levin and Charlie Rangel.Read more
Democrats Abroad Position on FATCA
Democrats Abroad supports strong policy that discourages and apprehends tax cheats.
Congress passed FATCA to bring an end to illegal tax avoidance by Americans in the US who use overseas financial accounts to secret untaxed earnings out of the country.
But Congress did not fully anticipate the impact the regulations would have on overseas Americans and we, therefore, are now burdened with a tax reporting obligation that treats us like suspected tax cheats and money launderers.
Fortunately for overseas Americans, we can address the unintended adverse consequences of this important piece of anti-tax evasion legislation by reforming the regulations that implement it.