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Today’s Top Headlines




Democrats Abroad Warn On FATCA Effect For American Expats

by Mike Godfrey, Tax-News.com, Washington

18 September 2014

Democrats Abroad (DA), the overseas arm of the Democratic Party, has issued the results of its 2014 global survey, which demonstrates the growing concerns about taxation and financial reporting facing Americans living outside the United States, and in particular the consequences of the Foreign Account Tax Compliance Act (FATCA).

FATCA was enacted in 2010 to target non-compliance by US taxpayers using foreign accounts. It requires US financial institutions (FIs) to withhold 30 percent of certain payments made to foreign FIs that do not agree to identify and report information on US account holders.

DA confirmed that it has been working to alleviate the unintended consequences of FATCA. While noting that the Act "was enacted to stop Americans living in the US from hiding money from the taxman in overseas accounts, it has meant that one in six citizens who responded to the survey have had their financial accounts closed because their foreign FIs did not want to incur the cost of annual reporting on American customers' accounts to the US Internal Revenue Service."

In addition, the survey results are said to "show the intense impact FATCA is having on overseas Americans. Their financial accounts are being closed, their relationships with their non-American spouses are under strain (21 percent reporting that they either no longer have joint accounts or are thinking of moving to separate accounts), some Americans are being denied promotion or partnership in business because of FATCA reporting requirements, and some are planning or contemplating renouncing their US citizenship."

The latest survey was carried out in June and July 2014 to examine experiences related to FATCA. There were 6,552 responses from Americans hailing from all 50 states and the District of Columbia, who are now living outside the US in locations across six continents.

Carmelan Polce (Democrats Abroad in Singapore), Chair of DA's FATCA Task Force, said: "We are so pleased with the enormous response to our survey from Americans living abroad. The remarks they have provided suggest Americans, no matter where they live, support policies that fight tax evasion. They want this policy to work and have participated in the study in order to express the problems they face."

In its meetings in Washington, DA stressed that it has always insisted that "most Americans living abroad are ordinary citizens living middle class lives after moving abroad for employment, a relationship or retirement, and are not the intended target of the FATCA legislation."

"We believe that the unintended consequences of FATCA raised by this survey – an unfair burden for Americans abroad – can be relieved without undermining the enforcement power of the law," added Kathryn Solon (Democrats Abroad in Germany), DA's International Chair.

TAGS: individuals | expatriates | compliance | Citizenship | Foreign Account Tax Compliance Act (FATCA) | tax | tax compliance | FATCA | law | banking | enforcement | legislation | United States | Compliance | Expats | Tax

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I'd voted for Mr. Obama in 2008 and again in 2012. It was a big mistake and I now live with deep regret. Being married to a non-American for 25 years, I've been his dependent since. I was happy giving up my career to raise a family with his support. Because of FATCA, the bank put a great deal of pressure on us to report details of our joint accounts to the IRS. My husband was furious and asserted that all the money in our joint accounts was his own earnings, and he had already paid taxes. He wrote to the banks and spoke to them, but his words fell on deaf ears. The banks kept sending us notices and he became increasingly resentful. Then he removed my name from all the accounts. Feeling distraught, I went to a different bank trying to open an account in my own name. I was refused by the bank because I was carrying an American passport. The second bank I approached was quite rude, saying they would never do any business with Americans. I now have no bank account, no credit card or debit card and I want a separation from my husband. He has insulted me and I am deeply hurt. A member of my family in the US wrote to a D Congressman asking for his advice. The Congressman replied that he himself had voted for FATCA and gave a lengthy and ignorant explanation. Recently, all members of my family assured me that they would certainly voted for the Republicans in the future. I myself will NEVER vote for the Democrats again. My life is shattered.

jasmine on Wednesday, November 5, 2014

Carmelan Polce made a bogus statement that misrepresents everything that Americans were saying: They want this policy to work, he says. Americans overseas want FATCA repealed. I am a Democrat. I am pro gay marriage, pro abortion, I fight discrimination wherever I see it. And I am a single female in her thirties. FATCA is such a terrifying Nazi-style Third Reich law, that I have completely stopped supporting the Democrats. In my opinion, they are evil. I believe now that they duped me for years, trying to convince me that they were for civil rights when in actuality they are scary fascist lunatics. I will never in my lifetime vote of a Democrat again - ever. Even if a Republican runs for office, any office, who I totally disagree with, I will vote for him or her. I now see the light. Democrats equal a totalitarian police state that bullies its citizens. Republicans, although I disagree with 80% of what they say, I am not afraid of. They don't frighten me or terrorize me. The Democratic party does.

kim on Sunday, September 21, 2014

If you are concerned about this, write to your members of congress. I've posted the letter I wrote at http://fanaticbarf.blogspot.com

Hopefully if more peope do this it will at least get on the radar screens of our politicians.

Bill on Sunday, September 21, 2014

Democrats and Republicans are guilty of treating American expats with suspicion. we are all guilty of money laundering, drug smuggling, tax cheating until we prove ourselves innocent. I never had a problem with the IRS while I lived in the US. Since moving to Canada 12 years ago, it has been nothing but trouble. The US needs to start treating us like citizens instead of "US Persons for Tax Purposes" and stop asking us to report our non-US spouses. We need to report their details as well. They are considered "non resident aliens" and need to have an "ITIN" (individual tax payer identification number"). Besides FATCA I need to send a surveillance document to the US Treasury's "Financial Crimes Enforcement Network". Instead of treating Americans abroad as goodwill ambassadors or assets to the US economy, we are treated as opportunities to milk as for taxes and penalties for the slightest "non-willful" mistakes. The process and forms we need to file are painful, confusing, time consuming, madenning, and the rules change every year. My fellow expats and I in Canada used to talk about plans for Thanksgiviing or 4th of July. Now all we talk about is our situation with the IRS, how many forms did you fill this time, did you get penalized lately, are you thinking about renouncing? Something is wrong. Both parties are complicit and clueless.

Anonymous on Friday, September 19, 2014

Hillary Clinton needs to say something about killing Fatca to win any votes. This is the worst law ever. This law weaken America one US person at a time, everyday.

CM on Friday, September 19, 2014