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Is FATCA failing due to US expat non-compliance?
| Published: | 30 Mar at 6 PM |
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Tagged: USA, Citizenship
The USA's dreaded FATCA reporting ruling may be failing due to massive numbers of American expats ignoring its filing rules.
According to recent reports, literally millions of US expats living overseas are comply ignoring the American taxman’s regulations as per the hated FATCA annual report. Introduced some 10 years ago, the Foreign Account Tax Compliance Act compels all American citizens living overseas to give the US taxman full details of their foreign investments and bank accounts with balances of more than $10,000, even if they’re working and paying tax in their countries of residence.
Some nine million USA citizens are believed to be expatriates, with the number affected by FATCA including even the so-called ‘accidental Americans’ born in the USA but who’ve never lived there or even visited as children and into adulthood. However, a new release by a New York accountancy firm has revealed only 2.2 per cent of the actual US expatriate numbers have made the required returns. In addition, the report states only one out of every four who actually declared their offshore holdings made full disclosure as demanded.
According to tax experts, many US expatriates aren’t even aware of the need to report annually to the US Treasury as well as to the tax authorities. It’s not just individuals who’re compelled to conform with FATCA regulations, it’s also any foreign financial institution with US expat clients, with over 400,000 in a total of 100 world countries forced to comply. Over the past 10 years, organisations representing US expats overseas have tried their best to get the rules relaxed without success, and increasing numbers of US expats are opting out of their American citizenship in order to avoid the hated tax.
According to recent reports, literally millions of US expats living overseas are comply ignoring the American taxman’s regulations as per the hated FATCA annual report. Introduced some 10 years ago, the Foreign Account Tax Compliance Act compels all American citizens living overseas to give the US taxman full details of their foreign investments and bank accounts with balances of more than $10,000, even if they’re working and paying tax in their countries of residence.
Some nine million USA citizens are believed to be expatriates, with the number affected by FATCA including even the so-called ‘accidental Americans’ born in the USA but who’ve never lived there or even visited as children and into adulthood. However, a new release by a New York accountancy firm has revealed only 2.2 per cent of the actual US expatriate numbers have made the required returns. In addition, the report states only one out of every four who actually declared their offshore holdings made full disclosure as demanded.
According to tax experts, many US expatriates aren’t even aware of the need to report annually to the US Treasury as well as to the tax authorities. It’s not just individuals who’re compelled to conform with FATCA regulations, it’s also any foreign financial institution with US expat clients, with over 400,000 in a total of 100 world countries forced to comply. Over the past 10 years, organisations representing US expats overseas have tried their best to get the rules relaxed without success, and increasing numbers of US expats are opting out of their American citizenship in order to avoid the hated tax.
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