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Campaign Begins To Lobby For FATCA Repeal

by Glen Shapiro,, New York

09 February 2017

On September 17, 2019, two bills were introduced into the United States House of Representatives designed to ease tax compliance rules for American citizens living abroad.

The Overseas Americans Financial Access Act, introduced by Carolyn Maloney (D – NY), directs the Internal Revenue Service (IRS) to exclude from Foreign Account Tax Compliance Act (FATCA) reporting financial accounts held by American citizens in countries where they are bona fide residents.

According to Maloney, this proposal would eliminate the reporting burden imposed on overseas Americans by FATCA, enabling them to more easily open and maintain private bank accounts with foreign financial institutions )FFIs).

FATCA, which was enacted by the US Congress in 2010 and took effect on July 1, 2014, is intended to ensure that the IRS obtains information on financial accounts held at FFIs by US persons. Failure by an FFI to disclose information on their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.

In addition, US taxpayers holding financial assets outside the United States meeting certain monetary thresholds must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets.

Since FATCA reporting was introduced, advocacy groups representing the interests of Americans residing on foreign jurisdictions have repeatedly warned that these requirements are deterring FFIs from providing banking services to US clients, due to the heavy regulatory burden involved in doing so, and the potential penalties they may face for non-compliance with FATCA.

Meanwhile, the Commission on Americans Living Abroad Act of 2019, also introduced by Maloney, would create an executive commission comprised of a 10-member bipartisan panel to examine the concerns of US citizens living and working abroad.

Maloney explained that the Commission would analyze, report on, and make appropriate recommendations to address the effects of activities, laws, and policies of the federal government on Americans citizens living overseas.

TAGS: compliance | Foreign Account Tax Compliance Act (FATCA) | tax | tax compliance | FATCA | law | banking | financial services | legislation | withholding tax | United States | tax reform | services | Compliance | Tax

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