Protests are rising against the US Foreign Account Tax Compliance Act (FATCA) as a coalition of 23 groups is lobbying Congress to repeal the law.
FATCA was approved by former President Barack Obama in 2010 as a tool for uncovering Americans avoiding tax by hiding cash and investments overseas.
Since then, more than $10 billion in lost tax has been recovered from more than 100,000 taxpayers by the Internal Revenue Service (IRS).
Republicans pledged to scrap FATCA if Donald Trump took power, but so far, the election promise has not been raised by the President’s staff or in Congress.
- Fails to target the wealthy avoiding tax by moving money and assets offshore
- Traps millions of US expats with reporting requirements and tax penalties
- Leads foreign financial firms to shun doing business with Americans
- Costs the IRS more to recover money than other tax laws
- Encourages other countries to target American firms with ‘tax grabs’
“FATCA violates our most-cherished principles of due process, presumption of innocence, personal privacy, and national sovereignty. It does not accomplish its stated objectives but does inflict untold collateral harm at great cost,” says the letter.
“Penalising the innocent through measures aimed at targeting the guilty was “unacceptable and un-American”.
Members of the coalition include the American Commitment, Taxpayers Protection Alliance, Competitive Enterprise Institute, Institute for Policy Innovation, Citizen Outreach, the Campaign to Repeal FATCA and the Small Business and Entrepreneurship Council.
Nigel Green, CEO of one of the world’s leading financial advice forms for expats, the and co-leader of the Campaign to Repeal FATCA, said: “FATCA has been ruining the lives of Americans abroad and pulling money out of the global financial system for no benefit. It’s exactly the kind of counterproductive and burdensome regulatory scheme Donald Trump has pledged to get rid of.
“I am thrilled to see US taxpayer advocate groups weighing in with congress to repeal the Obama-era FATCA. It’s time for citizens in other countries to show the same kind of backbone and help get this costly mistake off the statute books.”