Katharine: re FATCA: ACA solicits expats to contact their US Representative

Editor:  this is a letter sent out by ACA, and below it is the text of the Maloney/Mulvaney letter

Contact and Educate your Representative on
“Same Country Exemption” for FATCA Reporting

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Congresswoman Carolyn Maloney (D-NY) and Congressman Mick Mulvaney (R-SC) are circulating a letter asking their colleagues in the Congress to support the recommendation of “Same Country Exemption” for FATCA reporting. This letter will be sent to the Secretary of the Treasury and the Commissioner of the IRS who can authorize regulatory changes such as Same Country Exemption without passing new legislation. ACA supports Same Country Exemption as a way to alleviate the unintended negative consequences of FATCA while continuing to advocate for Residence-based taxation. If adopted, the regulation could come into effect quickly and resolve some of the banking lock-out issues that Americans overseas are currently facing.

Please encourage your Congressman/woman to sign onto the Maloney/Mulvaney letter and support the FATCA regulatory change for “Same Country Exemption.” (see letter here - copy of the letter).

You can contact your Representative in Congress using the following: http://www.congressmerge.com/onlinedb/index.htm or https://democracy.io/#/. You can also contact your Representative directly using the contact form on their website. You will be required to insert a US address so you should use your last known address with zip code in the United States (your official voting address).

The deadline for contacting your Representative is this Friday, July 31, 2015.

Contact and educate your Representative NOW.

Thank you,  ACA

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July 31, 2015

The Honorable Jacob Lew

Secretary of the Treasury

U.S. Department of the Treasury

1500 Pennsylvania Avenue

Washington, DC

The Honorable John Koskinen

Commissioner

International Revenue Service

1111 Constitution Avenue, NW

Washington, DC

Dear Secretary Lew and Commissioner Koskinen,

On behalf of the roughly eight million American citizens who live abroad, we write to express our

concerns regarding several tax reporting requirements imposed on U.S. citizens living abroad that

have created the unintended consequence of limiting overseas Americans’ access to legitimate

banking services. We respectfully request that the Treasury Department adopt a recent Taxpayer

Advocate Service recommendation that Foreign Account Tax Compliance Act (FATCA) reporting

exclude financial accounts maintained by a financial institution in the country of which the U.S.

person is a bona fide resident.

When FATCA was passed in 2010, the intent was to combat and prevent overseas tax havens.

Unfortunately, in its implementation, FATCA has had detrimental consequences on law-abiding

Americans living outside the U.S.

As you know, FATCA requires Foreign Financial Institutions (FFIs) to report accounts of U.S.

citizens directly to the United States or to the government of the country where the bank is located

for further transmission to the U.S. through Intergovernmental Agreements (IGAs), or be subject to

a 30% withholding on their U.S. investments. In many cases, these accounts are no different than

savings or checking accounts in local bank branches across the U.S. People rely on their

convenience and depend on these accounting services to simplify basic financial responsibilities

such as paying living expenses, saving for higher education or planning for retirement.

Some Foreign Financial Institutions have simply closed accounts or refused to open new ones for

U.S. citizens in order to minimize their exposure to FATCA reporting requirements, withholding

fees and potential penalties. This practice leaves law-abiding American citizens without access to

everyday financial tools such as mortgages, bank accounts, insurance policies and pension funds --

all of which are critical services regardless of place of residence.

The IRS Taxpayer Advocate Service (TAS) has recognized this issue and has expressed concerns

about the redundancy of FATCA reporting requirements. In order to address this, the TAS issued a

recommendation on April 13, 2015 that FATCA reporting exclude financial accounts maintained by

a financial institution in the country in which the U.S. citizen is a bona fide resident. We support

this recommendation and urge its implementation.

While we recognize that Treasury is tasked with the difficult job of making sure American money

around the world remains compliant with the U.S. tax code, the current FATCA reporting procedures subject ordinary Americans to the same scrutiny as criminal tax evaders and money

launderers. Revision of these reporting policies is necessary to ensure that Americans remain

competitive in international business and continue to contribute to economies here in the U.S. and

around the world. Adopting the TAS’s recommendation is an efficient way to avert a banking

lockout while maintaining the integrity and intention of FATCA.

Thank you again for your attention to this request.

Sincerely,

Carolyn B. Maloney            Mick Mulvaney

Member of Congress           Member of Congress