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American expats waiting on Trump promise to repeal FATCA
| Published: | 16 Nov at 6 PM |
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Whatever US expats overseas feel about a Trump presidency, all are in unison about a rumour that the Republican is planning to get rid of the dreaded FATCA.
Of all the unrealistic and mostly unpresidential comments supposedly made during Trump’s extraordinary campaign, just one hit home for hundreds of thousands of US expats living across the world – the possible repealing of FATCA. Obama’s brainchild has caused chaos and not a little fear in the hearts of Americans overseas, as well as resulting in banks rejecting overseas accounts due to the massive penalties for even the slightest oversight.
FATCA finally became law in late 2014, with some £10 billion to date grabbed by the IRS from around 100,000 US expat taxpayers. Many thousands more have been panicked into making late returns or changing previous filings in order to avoid mandatory interest penalties and swinging fines.
Republicans Abroad have brought several court cases in Canada and Israel as well as in the USA in attempts to disrupt FATCA’s enforcement, but have lost every case. Worse still, hundreds of thousands of US expats overseas have become banking outcasts, as no bank is willing to risk its operations by misfiling.
Many of those affected have also had loans called in, mortgages cancelled and are disallowed from opening foreign bank accounts. Although no official confirmation of Trump’s standing as regards FATCA has been made, speculation is rife that a Republican president plus a majority of right-wing politicians in both the Senate and Congress, might well favour repealing the highly unpopular law.
The anti-FATCA Republican campaign is clear that the law should be repealed, claiming it allows ‘unreasonable search and seizures’, disallows US citizens overseas from living normal lives and should be replaced by direct taxation based on residency. Most importantly, the lobby group states the law breaches the right to privacy given to all US citizens under the American constitution.
Together with its complicated tax return requirements, FATCA compels all foreign financial institutions to present annual reports detailing their US-based customers’ investments and accounts worth over $50,000, as well as expat Americans’ accounts and investments worth over $200,000. Should banks’ details not match individual returns, fines and a ban on operating within the US banking system will result.
Of all the unrealistic and mostly unpresidential comments supposedly made during Trump’s extraordinary campaign, just one hit home for hundreds of thousands of US expats living across the world – the possible repealing of FATCA. Obama’s brainchild has caused chaos and not a little fear in the hearts of Americans overseas, as well as resulting in banks rejecting overseas accounts due to the massive penalties for even the slightest oversight.
FATCA finally became law in late 2014, with some £10 billion to date grabbed by the IRS from around 100,000 US expat taxpayers. Many thousands more have been panicked into making late returns or changing previous filings in order to avoid mandatory interest penalties and swinging fines.
Republicans Abroad have brought several court cases in Canada and Israel as well as in the USA in attempts to disrupt FATCA’s enforcement, but have lost every case. Worse still, hundreds of thousands of US expats overseas have become banking outcasts, as no bank is willing to risk its operations by misfiling.
Many of those affected have also had loans called in, mortgages cancelled and are disallowed from opening foreign bank accounts. Although no official confirmation of Trump’s standing as regards FATCA has been made, speculation is rife that a Republican president plus a majority of right-wing politicians in both the Senate and Congress, might well favour repealing the highly unpopular law.
The anti-FATCA Republican campaign is clear that the law should be repealed, claiming it allows ‘unreasonable search and seizures’, disallows US citizens overseas from living normal lives and should be replaced by direct taxation based on residency. Most importantly, the lobby group states the law breaches the right to privacy given to all US citizens under the American constitution.
Together with its complicated tax return requirements, FATCA compels all foreign financial institutions to present annual reports detailing their US-based customers’ investments and accounts worth over $50,000, as well as expat Americans’ accounts and investments worth over $200,000. Should banks’ details not match individual returns, fines and a ban on operating within the US banking system will result.
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