Below is a letter received by a “US Person Abroad” from US Senator Dianne Feinstein in response to a letter urging her support for Senator Rand Paul’s bill to repeal the most burdensome provisions of FATCA.
As pointed out,
“Clearly Senator Feinstein is simply towing the Democratic Party line to support FATCA and the Administration’s enforcement actions. Quite disappointing to say the least.”
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Dear _______
Thank you for contacting me to express your concerns about the impacts of the foreign tax provisions included in the “Hiring Incentives to Restore Employment (HIRE) Act” (P.L. 111-147). I appreciate the time you took to write and sincerely apologize for the delay in my response.
As you know, the HIRE Act included a number of provisions, known collectively as the “Foreign Account Tax Compliance Act (FATCA),” that were intended to combat tax evasion by Americans holding investments in offshore accounts. FATCA requires U.S. taxpayers with over $50,000 of assets in foreign accounts to report information on their tax returns that is currently included in a Foreign Bank and Financial Account Report (FBAR). FATCA also institutes a 30% withholding rate on payments to foreign financial institutions. The principal exemptions from the withholding tax apply to interest on bank deposits, portfolio interest, and capital gains.
I understand your concerns that these provisions could negatively impact global investment in the United States and encourage foreign investors to divest from U.S. securities and holdings. While I share your belief in the importance of continued global investment, I am also concerned about the serious problem of tax avoidance. The Internal Revenue Service (IRS) recently announced an agreement with the United Bank of Switzerland (UBS) to collect back taxes and penalties from thousands of UBS customers found guilty of tax evasion. The IRS estimates that the average tax collections per case to be over $200,000, with individual cases of over $20 million in back taxes and penalties. Tax evasion penalizes all honest and law-abiding citizens, and the agreement with UBS underscores the continued need to enforce tax compliance.
To date, legislation to repeal the FATCA tax provisions has not come before the Senate for a vote. However, please be assured that I have noted your strong opposition to these provisions and will be sure to keep your comments in mind should legislation come before the full Senate.
Once again, thank you for writing. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841, or visit my website at http://feinstein.senate.gov.
Best regards.
Sincerely yours,
Dianne Feinstein
United States Senator
Seems Senator Feinstein and other congresspersons will ever label all ‘US Persons Abroad’ tax evaders.
We expats simply don’t matter in their agenda. I’m convinced I made the right decision to renounce as an act of self-defense.
The US won’t win on this issue long term. Within the EU it may be worth to find the ‘easiest’ EU to sue its government who has entered into a IGA with the view to bring this to the EU Court of Human Rights. The single question still remains unanswered. Should a resident dual EU-US citizen suffer financial discrimination while foreign born EU-US citizens go undetected along with other EU dual nations?
Should all EU citizens resident within the EU have the same financial freedom rather than accept the US bullying foreign government to grass on their own citizens?
@Don, I agree. I don’t think they will win it long term either. However, in a few years when they are deciding to do the right thing or to amend FATCA it will be far too late for everyone whose life they up ended. I’ve gone from disbelief to understanding that they know zero about who expats are and don’t care that they don’t know.
Yes, we are all a bunch of tax avoiders/evaders/cheats and must be punished within the full extent of the law, and then some.
@Don, this has long been a bone of contention for me that those USPersons with no US indicia would fly under the radar. It’s not that I want their lives to be made a hell with the rest of us, I just want to point out that it makes FATCA ineffective at what it is supposed to do which is to ferret out all US persons with foreign bank accounts under a certain threshold.
Typo, Ms. Senator:
It’s UBS AG (also, by the way, a NYSE listed company) that is *formerly* known as Union Bank of Switzerland — not United Bank of Switzerland.
You have to understand that Senators such as D. Feinstein never see these letters. They get thousands of them every day. They are answered with a stock response-“Thank you for your concern blah blah…I will keep it in mind blah blah… ‘ by a clerk or intern or staffer in her office. Don’t attach too much significance. Now, ONTH if you were a major contributor of large amounts of cash…….
@admin
that’s bank accounts “over” a certain threshold.
Perhaps someone should mention to Ms Feinstein that RBT would also deal with such forms of tax evasion? And that without harming the rest of the expats!
You’re right Polly. Fewer laws make fewer lawbreakers.
Allow me to translate what was stated into common-folk language:
“I think that FATCA is great and I fully support it, regardless of the damage it causes to the little people, but you’ll probably vote for me anyways, so it doesn’t matter”
As long as the USG continues to spend money it doesn’t have like tap water (which certain parts of the USA doesn’t have much of either), they will need to range farther to hunt down any USPs for “contributions” to the money pit.
As Atticus points out, when the idiocy of this can’t be supported anymore, the damage will have been more than done to the detriment of Homeland b/c it will have driven away many (or most) of its duals. It will have the added bonus of dispelling the myth about the awesomeness of emigrating to the US too.
The longer countries can hold out against implementation, the better, but I have lower hopes for that than the fact that the holding out allows people to disentangle themselves financially from the US and to shed USP status.
bubblebustin, I share your concerns about those who can fly under the radar but only b/c it means they aren’t going to be much help to the cause. Why would someone who can “pass” as a non-USP write a letter of protest or stick their head up in anyway? It makes our numbers look smaller than they are and it makes the problem look like it only touches USCs rather than the actual target which is USPs – that expansion term the USG prefers for obvious fund-raising reasons.
Feinstein is a tool of the highest magnitude. She’s so deeply indoctrinated that she has to be written off as a possible source of help. We are not going to get any of the old guard Dems or those with their noses up the WH’s bum to admit to the real reason they are doing this.
What’s interesting is that the only real example of tax evasion they ever seem to use is UBS. As if one incident tars everyone who dares to live outside Homeland.
“I share your concerns about those who can fly under the radar but only b/c it means they aren’t going to be much help to the cause.”
@ Yoga Girl
I’m not sure if I can fly under the radar just because I was not born in the USA — time will tell. But CBT and FATCA are intolerable and I will do what I can to protest. I think I’ve already poked my head up into radar range actually. (The NSA knows better than I do about that.) I do know, thanks to FATCA, my husband and I feel totally constrained about where and how to keep our plenty taxed enough thank you very much assets. Here’s a threshold, there’s a threshold and moving anything anywhere ends up in double counting the same amount on a FBAR or 8938 or whatever. It’s confusing and aggravating and the MOB (Mordor Over the Border) is to blame for all this mind numbing nonsense and unwarranted stress.
@YogaGirl
“I share your concerns about those who can fly under the radar but only b/c it means they aren’t going to be much help to the cause.”
Their cause will be to maintain the status quo. I wish them nerves of steel and the honest belief that things will be ok for them in the end.
I can’t think of a citizenship that’s worse than the US’s, can you? Even refugees from the world’s worst governments are regarded as victims and can at least walk in the light of day. Not so for the undetected USP. The US government could not have created a better plan to annihilate its people from the face of the earth if it had tried.
@Yogagirl
Diane Feinstein also supports Obama drone warfare. To call her a “tool of the highest magnitude” is far too kind.
bubblebustin, I am Canadian therefore I am polite. Polite should not be confused with “kind”. Were I to be direct, as opposed to polite, I might say that Feinstein is a ass kissing cunt. However, THAT should go without saying as the evidence speaks so loudly for itself.
Perhaps someone should ask Ms. Feinstein why it is that citizens abroad must file and pay taxes to the US like every resident, but are not eligible for any compensation for social benefits that residents may receive.
Taxes should be a two way street.
I should receive social security regardless of where I’ve worked in the world.
If I lose my job in Canada, will I receive unemployment benefits from the US because I am a taxpayer???
If I become destitute (which I probably will when FATCA forces Canadian banks to cancel my accounts) will I receive welfare from the US???
What about food stamps?? Shouldn’t I receive the cash equivalent if I am eligible?
Maternity benefits? Shouldn’t a new mother receive benefits regardless of where she resides? She’s taxed no matter where she resides.
The democrats love two things in this world, taxes and entitlements. We can offer them the best of both worlds.