Legions of taxpayers and estate holders in California and across the country have dreaded for years the acronym FATCA and what it stands for. The Foreign Account Tax Compliance Act enacted as federal law by Congress in 2010 has long been viewed as a near limitless power often wielded by the IRS in selective and unfair ways.
As noted in a recent national media piece on FATCA and its involvement in the courts, the legislation’s goal has been “to target the undeclared offshore accounts of Americans.” Revenue officials have consistently contended that FATCA’s reach is actually quite narrow, being focused solely on tax evaders. Special agents and law enforcers say that investigatory probes have always been aimed only at individuals and business entities that seek to avoid legal tax duties by hiding money outside the United States in offshore tax havens.
Many Americans have never seen it that way. Rather, they have consistently argued that FATCA places onerous exactions on scores of thousands of law-abiding taxpayers lacking any intent to defraud the government. They decry the legislation as overreaching and an invasion of privacy, and they note additionally that their accounts are often closed by foreign institutions afraid of IRS reprisals.
A group of American expatriates led by U.S. Sen. Rand Paul (R-KY) has long fought against FATCA and sought its demise on constitutional grounds. That coalition recently had a case potentially pending before the U.S. Supreme Court.
The nation’s highest tribunal declined just last week to hear it, letting a lower-court decision in FACTA’s favor stand. That outcome follows the failure of an earlier attempt to defeat FATCA via a congressional bill proposing to repeal it.
FATCA foes vow to press on. One principal spokesperson says that opposition remains strong and is “committed to take down FATCA tyranny.”