UPDATE: The initial story by Ralph Z. Hallow, chief political writer at The Washington Times, has been revised and greatly expanded at the same previous link:
http://www.washingtontimes.com/news/2015/jun/24/sen-rand-paul-sue-irs-us-treasury/
This is stop-the-presses news: Rand Paul has joined forces with Jim Bopp, Solomon Yue and Republicans Overseas and will be one of seven plaintiffs in the upcoming lawsuit against the IRS and the US Treasury Department. The suit will be filed by a new composite organization called Republicans Overseas Action.
Some crucial highlights:
Sen. Rand Paul to sue IRS, U.S. Treasury
Rand Paul is poised to become the first major presidential candidate in memory to sue the government he seeks to lead as president.
The Kentucky senator will take legal action against the U.S. Treasury and the Internal Revenue Service for what he says is the denial of his constitutional right to vote on more than 100 tax-information treaties that the Obama administration unilaterally negotiated with foreign governments, The Washington Times has learned.
In what the suit says is a violation of Article II, Section 2 of the Constitution, President Obama has not consulted the U.S. Senate about the treaties nor given the Senate an opportunity to approve or disapprove of the treaties. The administration calls them “intergovernmental agreements.” They require foreign banks to gather and share private financial information about millions of Americans living and working outside the U.S. — information they would not have to disclose to the U.S. government if they lived and worked in the U.S.
The treaties or agreements are the enforcement mechanisms of the Obama administration’s Foreign Account Tax Compliance Act (FATCA), enacted by a Democratic-controlled Congress in 2010.
The act is despised by many of the estimated 8.7 million Americans living overseas, a record number of whom have — with great anger and reluctance, according to those who have spoken to the foreign and U.S. press — renounced their U.S. citizenship rather than attempt to comply with FATCA.
Mr. Paul, a Republican who announced his presidential bid in early April, will join six other plaintiffs in the suit that a new organization called “Republicans Overseas Action” expects to file in a southern Ohio federal district court the week of June 29. The court’s Republican makeup is considered at least open to the constitutional arguments that the plaintiffs lay out.
The other plaintiffs in the suit Mr. Paul has joined say they have been denied banking and financial services in the foreign countries where they live and work. The foreign banks don’t want to be burdened with the expense and paperwork to comply with FATCA and therefore simply refuse to accept Americans as clients.
The Republican National Committee and the recently formed Republican Overseas Action aim to get as many of those Americans living or working outside their country to register in one or another of the swing states that decide the presidency in close elections. Republicans Overseas Action is paying for the lawsuit Mr. Paul has joined as plaintiff.
The driving force behind the suit is a longtime conservative activist on the Republican National Committee, Solomon Yue of Oregon.
“The best way to defend 8.7 million overseas Americans’ right to privacy and constitutional protections is to cripple the IRS, FATCA and enforcement tools through legal action on constitutional grounds all the way to the U.S. Supreme Court,” said Mr. Yue, founder and vice chairman of Republicans Overseas Action Inc
For reference, here was our initial coverage today:
A very significant announcement from Rand Paul today, as reported by The Washington Times:
Sen. Rand Paul to sue IRS, U.S. Treasury
Kentucky Sen. Rand Paul will sue the U.S. Treasury and the Internal Revenue Service for denying his constitutional right to vote on treaties that the Obama administration unilaterally negotiated with dozens of foreign governments, The Washington Times has learned.
The treaties, which the administration calls “intergovernmental agreements,” require foreign banks to gather and share private financial information about millions of Americans living and working outside the U.S. – information they would not have to disclose to the U.S. government if they lived and worked in the U.S.
Photo credit: Associated Press
@pukekonz
“TPP and TTIP probably have some fine print stating any country signed on to the agreement that has any “US Person” on their soil deemed non-compliant with the IRS, is to be extradited to the USA for processing.”
“Non-compliant with the IRS” when they were already declaring their incomes and paying their taxes as citizens/residents in those countries but unwilling to file their zero-declaration for the same income? What about my cousins who left the US when they were infants and lived their entire lives in Europe? (They do not even speak a word of English!) How exactly are they “to be extradited to the USA for processing”, to a country they have never known? Little wonder why the entire world passionately loathes the U S of A.
I didn’t really want to talk much about that old fossil either, and my comment was only meant to be in passing…
I can’t find any other articles that mention this alleged lawsuit. Maybe the article’s author, Ralph Z. Hallow, got his wires crossed and mixed up Rand Paul’s efforts to repeal FATCA with the Bopp lawsuit? He sure likes to cover Paul a lot though:
http://www.washingtontimes.com/staff/ralph-z-hallow/
Legislation AND Lawsuit.
A one ,two punch!
http://freedomandprosperity.org/2013/blog/us-relying-on-the-ignorance-to-propel-fatca-fiscal-imperialism/
From the article:
“Foreign Governments Are Being Conned
The foreign governments think they are signing treaties, which Treasury happily lets them believe. Moreover, they don’t understand the US political system well enough to understand that Treasury cannot make law – only enforce it. Unlike a parliamentary system, the US government is based on a system of checks and balances that separates power between different branches, the FATCA law does not grant any authority to sign such agreements and promise reciprocation.”
“Treasury Acting Without Authority”
“Continuing their pattern of acting first and asking for authority later, if at all, the administration is reportedly prepared to ask Congress for authority to compel US banks to provide reciprocal reporting for IGA partners. Forcing US banks to comply with FATCA-like reporting requirements, a prospect not authorized in FATCA itself, significantly raises the domestic costs of a law already unable to be justified on cost-benefit grounds. But offering up domestic institutions on a silver platter serves the administration’s purpose, which is to trick as many countries into enforcing FATCA as possible so that Treasury doesn’t have to.”
Rand Paul is an outstanding Senator. Too bad more are not just like him.
He has had the legislation on the books since 2013 and since the midterms, has brought it back. ( March of 2015)
Punch One
And now he is litigating!!
Punch Two
Gotta love it.
So much for that theory. Hallow wrote this article about the Bopp lawsuit back in May of 2014, which garnered some Brocker comments (even mine):
http://www.washingtontimes.com/news/2014/may/5/superlawyer-jim-bopp-takes-on-mccain-backed-tax-ac/?page=all#pagebreak
I guess he’s really doing it. FABULOUS!
@Bubblebustin
Its got to the point… all I see & hear is talk… I won’t believe it until its actually filed… I understand the Overseas Republican are working on their lawsuit… when do they intend to file… after the election? Talk is talk… now do the walk… The only lawsuit I see going on that is solid is the one in Canada…. people did the talk…. now they are doing the walk…
People need to help by donating what they can… we need to stop the gov’ts in their tracks… its time for the people to take back the reins from the gov’t… they are elected to represent the good of the people & our country…. they are doing neither… they are acting like they can do what they want with no protesting…. sliding crap in under the dead of nite or just using bullying tactics to enforce their will…. as I said before… time to clean house… we can not go on like… we can’t trust the gov’t at all…. I will not support the Cons nor Libs… after that… its slim pickings…. vote carefully… time to use the boot to heave the traitors out the door
I am very pleased to hear that Senator Rand Paul will be filing this suit – and would request Jim Bopp to file his suit as well. A double shot would make a point and a headline. The RO and RNC need to walk the walk.
I believe Rand Paul is not “all talk” on the subject of a lawsuit. Last year he filed a suit against NSA wiretapping which was halted by the Justice Department, on the grounds that it was too close to another pending lawsuit (which was disputable). Nevertheless, it demonstrates that he does put his money where his mouth is. Maybe lessons learned from the NSA suit will be applied to the FATCA IGA lawsuit and, at the very least, bring this issue far wider coverage, and at best, lead to the courts finding the IGAs unconstitutional.
http://dailycaller.com/2014/09/22/justice-department-halts-rand-pauls-nsa-lawsuit/
Like others have said on IBS, it seems that our only hopes regarding FATCA and RBT are in the courts. May I suggest that we all send messages of support to Senator Paul through his website, just to let him know we noticed and back him 1000 percent. I’m doing that right now!
http://www.paul.senate.gov/connect/email-rand
FATCA is a problem but it’s not THE problem — just one of them. I can’t really imagine any expat will sleep better should FATCA be set aside as long as CBT hangs over their heads.
An aside: I met with a financial planner at the National Bank (Canada) yesterday. First one I’ve met who had some knowledge of FATCA (and he quite resented it). He said at first he wondered why the U.S. would want/need data about holdings. His guess is it’s phase one of a planned cash grab in the form of an estate tax.
Also, it would be great if Paul can be encouraged to file this suit soon. He has an MD, he should view this the way a doctor treats a particularly pernicious infection. With two doses of external medicine–the ADCS hearing in August, and some sort of court hearing in Liechtenstein by September–and a shot of internal medicine from inside the belly of the beast, which his lawsuit would be, perhaps some real headway can be made toward killing this malignant disease.
@RLee
To be frank, killing FATCA would only save me the cost of filing 8938’s. It’s the principle of the thing, as I’m sure every ex-USC who supports these efforts will attest to.
Great analogies, Barbara. Love it!
Excellent! I’m looking forward to hearing more U.S. politicians standing up for what is right!
@RLee, and others who imagine that the US is planning a wealth tax (I suppose this is what you meant by “estate tax”, not the already existing estate tax on inheritance): this is extremely unlikely because it would require a constitutional amendment. The US constitution prohibits the federal government from imposing “direct taxes” without apportionment among states according to their population. Such apportionment of taxes would be impractical, and in any case I don’t think it could be imposed on American abroad since they are not counted in the population of the states.
The 16th amendment exists for this very reason, as the Supreme Court had ruled that taxation of investment income was a “direct tax” on the asset. The amendment removes the apportionment requirement from taxation of income, but not of wealth.
The reason why FBAR and FATCA ask for account balances instead of income, and why the FBAR (but not FATCA) penalties are imposed on balances, is due to the incorrect but widespread assumption that unreported money in a foreign bank account is hidden income on which tax was not paid.
The article has been updated to name Jim Bopp and Solomon Yue as involved in the case, with RO paying for it. That’s great news, but… Does this mean Bopp will drop his intention to challenge CBT in court?
I agree that FATCA is a cancer that must be excised, but I was hoping that Bopp would soon open another front by taking on CBT.
Now I’m worried.
“The act is despised by many of the estimated 8.7 million Americans living overseas, a record number of whom have — with great anger and reluctance, according to those who have spoken to the foreign and U.S. press — renounced their U.S. citizenship rather than attempt to comply with FATCA.”
The IRS reported to Congress in 2011 that a record number of Americans living overseas renounced their US citizenship because the US penalizes honest people who DO attempt to comply with the law. But that was before FATCA, so maybe we’re outnumbered now, maybe the article is right.
@Shadowraider
Constitutional? 16th amendment? Since when has that stopped them? They`ll bend the laws any way they can to avoid bankruptcy.
There certainly was a major update in the content of this article compared with what was there earlier, and clarification of who is doing what, and when:
“Mr. Paul, a Republican who announced his presidential bid in early April, will join six other plaintiffs in the suit that a new organization called “Republicans Overseas Action” [with lawyer Jim Bopp] expects to file in a southern Ohio federal district court the week of June 29. The court’s Republican makeup is considered at least open to the constitutional arguments that the plaintiffs lay out.
The other plaintiffs base their claim of legal standing to sue the Treasury and the IRS on FATCA’s requirement that they surrender personal information in violation of the Fourth Amendment’s ban on unreasonable search and seizure and on the Eighth Amendment ban on cruel and unusual punishments — in this case, unusually large financial penalties for late filings, however innocent, or for noncooperation.”
@Barbara,
Bopp never said he was going to take on CBT. He said that if he were given $50,000, he’d be willing to look into whether a case could be made. As far as I know, nobody has come up with the $50,000 consultation fee.
Isn’t that basis a hopeless case? Several circuit courts have already overthrown the 4th, 5th, and 8th amendments along with two Supreme Court rulings (US v. Sullivan and Garner v. US), and the Supreme Court denied cert on all of them.
@RLee
“FATCA is a problem but it’s not THE problem — just one of them. I can’t really imagine any expat will sleep better should FATCA be set aside as long as CBT hangs over their heads.”
For me, as a former “US person”, FATCA still is very much THE problem. Despite having non-US citizenship, a CLN and having been fully tax compliant (including FBARs) until renouncing, I’m still being harassed by banks to prove that I’m not a “US person” and am unable to open an account at many banks, simply because I have a US place of birth.
Does Isaac Brock Society have the courage to “officially” endorse Rand?
@Isaac Brock Society is amorphous with authors as the inside circle. All the authors as partners argree? Probably more appropriate at this point to endorse the direction and lawsuit rather than the man – should wait until after the lawsuit officially launched.
@Canoe
“unusually large financial penalties for late filings”
Yes- I have heard that it is now 20% PER MONTH. So if you are short 100$, that is 20$ per month-add a year and you will be paying 12 times 20$. That is as bad as the 300% percent fine they just changed to 100%. What a total farce this all is. You get screwed no matter which way you turn.
What fabulous news! Thank you for posting this, Deckard, and for making my day! Finally, something is about to happen!
Perhaps when the fracas over FATCA hits the airwaves and the front pages big time (Rand Paul’s involvement will do a *lot* to make this happen) discussion of the true root of the problem, CBT, will finally achieve centre stage as well.