Our letter to U.S. Sec. Mnuchin demanding FATCA’s repeal
Together with Jim Jatras, my co-leader in the Campaign to Repeal FATCA, we have written an open letter to the U.S. Treasury Secretary to demand the Trump administration scrap the fatally-flawed Foreign Account Tax Compliance Act.
As reported by influential U.S. media outlet Newsmax, we wrote this bold letter to the Honorable Steve Mnuchin, as nothing has yet been done to abolish the so-called “worst law most Americans have never heard of” after a year in office.
Indeed, this is even after election campaign promises that if they win, the Republicans would “call for repeal” of FATCA.
The Foreign Account Tax Compliance Act, brought in 2010 by a Democrat-controlled Congress and signed into law by Barack Obama, has been causing mayhem within the global financial system. Introduced as a means to target “fat cat” tax evaders stashing monies offshore, FATCA is instead an indiscriminate information dragnet requiring all non-U.S. financial institutions (banks, credit unions, insurance companies, investment and pension funds) in every country in the world to report data on all specified U.S. accounts to the IRS.
Failure to comply results in hefty, economy-destroying penalties.
The five-page letter, dated November 14, states: “We are writing to you on the supposition that in a democratic country, elections should have consequences. When a political party stands before the electorate on declared principles and makes specific promises, those principles and promises should be reflected in how that party governs under its mandate from the voters.”
This refers to the 2016 Republican Platform that read: “The Foreign Account Tax Compliance Act (FATCA) and the Foreign Bank and Asset Reporting Requirements result in government’s warrantless seizure of personal financial information without reasonable suspicion or probable cause. Americans overseas should enjoy the same rights as Americans residing in the United States, whose private financial information is not subject to disclosure to the government except as to interest earned. The requirement for all banks around the world to provide detailed information to the IRS about American account holders outside the United States has resulted in banks refusing service to them. Thus, 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 U.S. citizens overseas.”
Within the letter, myself and Mr Jatras state: “This Republican pledge to repeal FATCA rests on the deepest and most cherished American principles, not least a decent respect for the privacy of citizens who are not engaged in lawbreaking and are not even suspected of doing so. Even the IRS’s own Taxpayer Advocate Service has criticized FATCA’s ‘enforcement-oriented regime with respect to international taxpayers’ with its ‘operative assumption [that] appears to be that all such taxpayers should be suspected of fraudulent activity, unless proven otherwise’.
“We are confident that legislative progress is being made and that FATCA will be repealed in the near future. We are writing to you now because of our disappointment that no positive action has yet been taken by the other part of the apparatus of government, in the Executive Branch. This includes the Department of the Treasury.”
This onerous, sovereignty-violating law turns law-abiding, middle-class Americans living overseas, of whom there are approximately eight million, into financial pariahs.
Indeed, as I was quoted at the launch of our Washington DC-based lobbying group, the Campaign to Repeal FATCA, back in February: “FATCA is an extraterritorial diktat that burdens other countries’ financial institutions and their clients, which violates other countries’ sovereignty, and which is detrimental to their consumers and taxpayers.”
Firm action must be taken to make sure that the choice American voters made in 2016 becomes a reality in regard to FATCA.