As submitted by two Brock commenters. Our thanks to them …
and, once again, to Senator Rand Paul.
*********************
This story is confirmed on Senator Rand’s website.
Mar 4, 2015
WASHINGTON, D.C. – Sen. Rand Paul today reintroduced S.663, a bill to repeal certain provisions of the Foreign Account Tax Compliance Act (FATCA) and put an end to a defective bill that does not accomplish its objective of ending tax evasion.
…
“FATCA is in complete violation of every Americans’ constitutional right to privacy and adds burdensome regulations that negatively impact our economy. It is a defective law which disregards the mutual respect of sovereignty among nations and drains money from the federal treasury, on top of discouraging overseas investment in the United States. My bill will reverse the negative aspects FATCA has on the economy, prevent the government from bulk collecting U.S. Citizen’s financial data, and preserve the constitutional rights for all Americans,” Sen. Paul said.
******************
UPDATE: March 5, 2015
AARO team met Wednesday with Senator Wicker (R-MS) who will co-sponsor Senator Paul’s “Repeal #FATCA” bill.
Ok, that does it. He’s got my vote for president…if I’m still a US citizen in 2016. From the parts of the bill he just introduced that I can understand, it doesn’t eliminate FATCA entirely, but cuts off most of the rotten meat. I wonder what the timeframe is for such a bill, and when it comes up for vote? Is there time to write to my so-called home state senators? It would seem to me that we US persons abroad should at the very least start a letter-writing campaign to get this passed.
I am impressed by the sentence in the quote from Senator Paul, beginning with “It is a defective law which disregards the mutual respect of sovereignty among nations …”
As far as I know, Senator Paul is the only American politician to have made this point in public. A point that one would have hoped other US politicians (not to mention a whole slew of non-US politicians including our own pathetic Canadian “Harper Government”) bloody well should have made and should be making, forcefully, in resisting FATCA.
I don’t agree with what I’ve heard to be many of Senator Paul’s other political views, but I agree with this one. And am disgusted that AFAIK he’s the only politician who has been quoted in any country as saying this. It is pathetic, and rather scary, that no one else in government or politics on the planet seems to get this rather vital point (unless I’ve missed someone, if so someone please set me straight here).
I’m amazed that some of the politicians in the US who don’t think Obama is “exceptionalist” enough in his attitudes about America, are overlooking the fact that Senator Paul indirectly seems to be acknowledging that the US is not “exceptional” in having sovereignty over its soil and citizens nor is it “exceptional” in having some weird “right” not to have mutual respect for other nations’ sovereignty. Is Paul the only US politician who has his head screwed on correctly on this point? (Obama sure doesn’t seem to get it, nor does Kerry, nor does Clinton, nor for that matter do many Republicans seem to be picking up on this particular point.) Or the only politician in any country?
McCain wasn’t a maverick, he’s a RINO. Rand Paul’s the real maverick in the Republican Party.
You’ve got that right, bubblebustin. What a toss-up of a race to the bottom — McCain / Palin or what the US has today.
I would be interested to read the details of his latest bill. I would like to see how much rotten meat he is proposing to get rid of.
I am also curious to know what is going on with the FATCA Legal Action lawsuit.
I read what was on his website. Perhaps I am wrong but his Bill does not look like it does anything for expats.
The text of this bill is in this post’s link, “on Senator Rand’s website”.
Calgary411,
I read it. Doesn’t look like it does very much to me. But then again, I’m just a regular guy who can’t read legalize very well, particularly when most of it is only, “delete section so and so” or add “so and so” bla bla bla.
Its just gobbledygook to me. Is there anyone here who can understand what Rand Paul’s bill is actually supposed to accomplish?
It is not easy to figure out what is going on.
However, sections of the Internal Revenue Code of 1986 are continually mentioned. This is way before FATCA. He is going after a lot of the reporting and penalties for not reporting, methinks.
Juicy hints:
SEC. 3. REPEAL OF PENALTIES FOR UNDERPAYMENTS ATTRIBUTABLE TO UNDISCLOSED FOREIGN FINANCIAL ASSETS.
SEC. 4. REPEAL OF REPORTING OF ACTIVITIES WITH RESPECT TO PASSIVE FOREIGN INVESTMENT COMPANIES.
SEC. 5. REPEAL OF REPORTING REQUIREMENT FOR UNITED STATES OWNERS OF FOREIGN TRUSTS.
SEC. 6. REPEAL OF MINIMUM PENALTY WITH RESPECT TO FAILURE TO REPORT ON CERTAIN FOREIGN TRUSTS.
(1) by striking ‘the greater of $10,000 or’, and
(2) by striking the last sentence and inserting the following: ‘In no event shall the penalty under this subsection with respect to any failure exceed the gross reportable amount.’.
Summary – this appears majorly significant and appears a direct assault on FBAR penalties plus lots more. If PFIC reporting is repealed then does this mean if you live overseas then no issues with mutual funds in your country of residence? Does it mean that your overseas trust is then unmolested?
I see no reference to United States Persons tax resident overseas. It appears to be directed at Homelanders and of course if you don’t live there you could benefit.
I heard of the philosophy of Solomon Yue in regards to attacking FATCA. He talked about knocking out the legs of FATCA. Do we imagine a table or chair with legs? Or person? One of the “legs” was legislative another was through the courts. So no matter the legislation the court action should continue and I look forward to http://www.fatcalegalaction.com filing their case – should be Q1 2015 which leaves less than 4 weeks.
I would also like to know the status of the proposed US suit by James Bopp, and I would suggest that IBS and ACA solidly get behind Rand Paul to support the bill. We need a concentrated push on all fronts.
Rand Paul’s bill does repeal what people call “FATCA”, entirely. He is being overly technical, and confusing the public unnecessarily, by saying that it only repeals the “anti-privacy provisions” of FATCA. The parts that the bill doesn’t repeal are minor and not controversial. I’ll explain below.
The actual FATCA law (subtitle A of section 5 of the HIRE act) has 13 sections:
*501. Requirement on foreign financial institutions to report accounts of US persons, and the associated withholding tax on their US transactions if they don’t comply. This is what people are usually referring to when they mention “FATCA”.
502. For the issuer of a bond to deduct the interest paid from US taxation, there is a requirement that the bond be registered in the US (this requirement doesn’t apply to individuals). However, there is an exception for foreign bonds, which are not subject to this requirement. Before FATCA, there was a further exception to this exception, which authorized the Treasury to include certain foreign bonds in the registration requirement anyway. FATCA removed this further exception.
*511. Requirement on US persons to report their foreign financial accounts (IRS form 8938).
*512. Penalties for not reporting these accounts.
*513. Increase in the statute of limitations from 3 to 6 years for not reporting these accounts.
*521. US persons have to report income from PFICs (foreign mutual funds) according to a special tax regime (IRS form 8621). FATCA added that shareholders of PFICs have report them annually, simply for owning them, regardless of whether there was any income from them.
522. The Treasury may require a person to file returns electronically, instead of on paper, but only if that person has to file at least 250 returns in a year. FATCA added that the Treasury may still require financial institutions to file returns electronically, for the purpose of withholding tax on US income and for FATCA, even if they have to file less than 250 returns in a year.
531. Expansion of definition of US beneficiary of a foreign trust.
532. Presumption that a foreign trust has a US beneficiary if a US person transfers property to it, unless proven otherwise.
533. Specifies that the uncompensated use of property belonging to a foreign trust is considered a distribution from the trust.
*534. US persons have to report transfers to and from foreign trusts (IRS form 3520). FATCA added that owners of foreign trusts have to report them annually, simply for owning them, regardless of whether there was any transfer.
*535. Creates a minimum penalty of $10,000 for not reporting foreign trusts.
541. Specifies that certain dividends paid to non-US persons are treated as dividends from US sources.
*Rand Paul’s bill simply repeals sections 501, 511, 512, 513, 521, 534 and 535, by reversing the exact changes that they did to the tax code (and conforming amendments to fix numbering and references). That’s it.
To understand the bill text, here are some explanations:
Chapter 4 is “FATCA”.
Section 6038D is IRS form 8938.
Section 6662 is penalties.
Section 1298 is IRS form 8621 (PFICs).
Section 6048 is IRS form 3520.
Section 6677 is penalties.
Shadow Raider, thanks for the excellent clarification. This makes it more imperative that we write to various senators to urge support for Paul’s bill.
My question is–and I may have missed it being explained in some other thread–who slipped FATCA into the HIRE act in the first place? Was it the White House or a particular senator? I’d like to figure out how much the White House will fight tooth and nail to defeat Sen. Paul’s bill. If it was Treasury who stuck it in, then that was Geithner, the worst Treasury Secretary in history in oh so many ways, who is blessedly no longer there, so I wonder which vested interests are likely to try to block this bill’s passage.
Finally, I note that IBS has “links to government representatives”, all in Canada. I’d love to find a contact list geared to anti-FATCA and anti-CBT lobbying, including all US congress members, Treasury Dept. and IRS officials.
@ Barbara
Sen. Max Baucus (D) and Rep. Charles Rangel (D) slipped FATCA into the 2009 HIRE Act.
Good news. Hopefully not too late. It already is March 2015.
https://www.abolishfatca.com/live/
This petition was created by RO to show support to Sen Paul, to gain additional cosponsors, and to help get the bill through committee.
@Shadow Raider. There is more in there besides FATCA removal. Note the watering down of FBAR penalites. No longer would there be a minimum $10,000 fine per unreported account and it sounds like the minimum fine would go to $0 if no tax owed.
Who is going to say sorry to the financial institutions of the world for spending $200 billion?
@JC
In Canada… the costs of all this will be paid by all in Canada… we get slapped in Canada then we will be robbed by the US at gun point…. I just find it ironic… Canada gov’t tosses us under the bus… US rolls that bus harder on top of us… then we got to dig into our pockets for more money to sue the Canadian gov’t who will be using our money to defend themselves… Why don’t we slip in a law… any gov’t officials that are traitors should lose their pension for a job they didn’t do properly
@Schubert1975 says
Oh yes, other politicians get it all right.
Over here in France we have deputy Frederic Lefebvre who managed to pass a law forbidding banks to close bank accounts for people residing in France or french citizens living in the States (that have had their accounts in France closed to because of FATCA!!!).
Here’s his blog : http://www.frederic-lefebvre.org/tag/fatca/
I just e’mailed him this article.
@Barbara
To find senators get on twitter and do a search for “senators” You’ll find lots of twitter senator accounts to tweet at. I’m starting now and we all should.
Here’s the link of results, hope it works : https://twitter.com/search?q=senators&src=tyah&mode=users
The problem with the text of the bill is, it is heavily dependent on references to other documents.
I’m afraid to hope but there it is. Let’s not drop the ball here folds. Cracks are forming but whatever the U.S. does to correct this Harper and his cronies must be told by the courts that I and you all are not “second class citizens”!!!! We must keep funding the court challenge.
@Shadow Raider
Thank you for the clarification! On the surface it didn’t look like Rand Paul’s bill was doing much. However, the reality is that it is gutting FATCA like a fish.
Kudos to Rand Paul!
He is living up to his father’s good name.
PS. FATCA was Carl Levin’s brainchild. To my knowledge, Obama has helped Levin with several pieces of anti-offshore legislation. I would have to research specifically which ones but I do remember seeing Obamas’ name being side by side with Levin’s.
In short, we have to expect for Obama to dig his heels in to protect FATCA.
I have not studied this closely, but it appears that when the Senator speaks of “Americans’ constitutional right to privacy”, he includes the right to hide money offshore. Unfortunately, this muddies the water. It will confirm the sponsors of FATCA in their opinion that opponents support tax evasion. In the poisonous atmosphere of American politics it seems impossible for politicians of the two different parties to agree on anything.
Keith Redmond says on Facebook:
Don’t hold your breath. Rand Paul is part of the lunatic fringe of the hopelessly dysfunctional, gun loving, anti tax , Obama hating ( primarily because he had a black father) Republican party