Democrats Abroad work to stop FATCA blowback on US expats

From the Democrats Abroad post December 14, 2015:

FATCA requires foreign financial institutions to report the financial accounts of US citizens to the IRS annually. Foreign financial institutions which fail to meet their FATC filing obligations face a penalty of 30 percent withholding on US source income. A penalty of this nature could jeopardize the viability of all business foreign financial institutions conduct with US-based counterparts. No financial institution that does business with US counterparts can afford to ignore the risk of getting their FATCA compliance wrong when the penalty is this high. Thus we are seeing some banks across the world refusing to handle any accounts for US citizens.

Democrats Abroad has updates on three fronts:

1) Generating Senate support for the “Same Country Safe Harbor” - DA worked through the summer to generate signatures from the House of Representatives on a letter to the US Treasury and IRS urging them implement the Same Country Safe Harbor solution. They are now working on generating enough signatures from the Senate.

2) FATCA Lawsuit - after the loss in federal court on Crawford et al v United States, challenging the constitutionality of FATCA, prospects look slim to keep the case alive.

3) The Worldwide program for the exchange of financial account information starts January 1, 2016 - FATCA was the model and inspiration for the Organisation for Economic Cooperation and Development (OECD) to create a worldwide program of financial account transparency and disclosure. It is known as the Common Reporting Standards (CRS) and over 90 countries have signed up to report the financial accounts of non-national account holders to the tax authority in the account holder’s country of tax residence. CRS differs from FATCA in some important ways, most especially in relation to the severity of penalties for compliance failure.

Read the full article HERE

Posted December 18, 2015