Since 2010, FATCA — that is, the U.S. Foreign Account Tax Compliance Act — has been deemed a nemesis rather than a savior by legions of Americans living overseas.
Although federal legislators undoubtedly anticipated a bit of blowback against a law they have always contended was written solely to catch American tax evaders residing abroad, they were unquestionably far from prepared for the widespread venom and condemnation hurled by “average” expats at the legislation.
Legions of those people have chafed under what they view as repressive and flatly mean-spirited consequences flowing from harsh dictates outlined in FATCA.
Here’s just one example: Many overseas banks that had for years willingly served U.S. residents living abroad suddenly turned away that demographic — and, additionally, closed the accounts of existing customers — in the wake of FATCA’s passage, fearing legal reprisals from U.S. authorities and/or their own governments.
And then there is this: Legions of expatriates say they have lived in an environment of fear and intimidation under FATCA, given their perceived threat of criminal prosecution for not fully and timely filing relevant tax documents via FATCA and FBAR forms.
Mass discontent with FATCA has given rise to lobbying groups that forcefully seek repeal of the legislation and are not hesitant to take their fight to court.
One such organization is Republicans Overseas, which comprises members of the expat community as well as some Republican officials, including, prominently, Kentucky Senator Rand Paul.
That group, which recently lost a judicial battle against FATCA in a lower federal court, vows to make a quick appeal to the U.S. Supreme Court.
In commenting on the lower tribunal’s adverse ruling (which was an appellate outcome affirming a first-instance district court decision), a spokesperson for Republicans Overseas cited surprise that the court was “unwilling to recognize the very real harm that FATCA is imposing on overseas Americans.”
The advocacy group now vows to make an ardent effort to convince the nation’s highest tribunal of that alleged harm. We will keep readers duly informed of any material developments that occur in the matter.