Pressure on US President Donald Trump to repeal the controversial Foreign Account Tax Compliance Act (FATCA) are growing.
FATCA demands foreign banks and financial institutions should file reports on US taxpayers with cash and investments overseas every year with the Internal Revenue Service (IRS).
The rule applies to US residents with accounts offshore totalling more than $50,000 and expats holding more than $200,000.
But leading expat financial adviser Nigel Green argues FATCA has had a negative impact on his firm and the finances of US expats.
“Tackling tax evasion is a noble and worthwhile objective,” Green said. “FATCA’s dragnet approach is highly ineffective at achieving this as well as being prohibitively costly.”
Impact on expats
“Many US citizens cannot even now hold a bank account in their country of residence as foreign banks routinely feel Americans are too much trouble thanks to FATCA’s onerous and costly rules by which they would need to abide to take them on as clients.
“This makes normal life extremely challenging, to say the least. By using its super power status, the US has over the last few years been coercing foreign financial institutions around the world into accepting FATCA, or facing stiff financial penalties and extraterritorial sanctions.”
Jim Jatras, a Trump supporter and advocate of repealing FATCA is also Tweeting and blogging in support of Green. Jatras is a former Senate policy adviser and diplomat who runs a law firm in Washington DC.
“President Trump can roll back/terminate the IGAs and FATCA effectively falls. He should do so,” Jatras Tweeted.
Trump silence on FATCA
Nigel Green, is founder and CEO of deVere Group, the world’s largest IFA for expats with more than 80,000 clients in 100 countries. The company also caretakes over $10 billion in savings and investments for these clients.
Although Trump has not divulged his views on FATCA, the Republicans pledged to repeal the law and for US taxes to be based on residency in the States rather than place of birth.
The IRS has revealed that more than $10 billion in ‘lost tax’ has been clawed back from more than 100,000 US taxpayers with cash and investments overseas.
Green is also concerned new laws cancelling passports if US taxpayers owe more than $50,000 to the IRS will lead to more problems for the estimated 8 million US expats overseas.