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
@MuzzledNoMore
“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.”
Exactly. Very soon we will be reminded of that old saw that any publicity is good publicity. I have long fantasized about seeing some actual debates on these issues in the mainstream media. I can hardly wait for other presidential candidates from both parties to lay-out their positions on FATCA, CBT and all the rest. I want Fareed Zakaria to wake-up and do a segment on it. I want Frontline to devote two back-to-back episodes to it. I want Fox News to stir the pot in the only way they know how and finally bring Jon Stewart and John Oliver to the FATCA table (both of them will initially get it wrong, but it will be great TV when they eventually come around to the right side of history). Finally, I want Obama, or at least his press secretary, to publicly defend FATCA and let the fireworks begin. Bring it all on!!!
One problem I think some of the media has bring FATCA to the fore is that a number of the journalists are in the compliance industry’s pocket.
I’m a bank and need a positive story about my organisation, guess who the bank’s PR person rings.
It’s apparent to me that not all financial journalists are impartial.
The best bet is to find journalists unconnected with the compliance industry.
http://www.valuewalk.com2015/06/fatca-repeal/
No shock surprises here. Nigel Green’s poll indicates 48% of Americans abroad would vote for a FATCA repeal presidential candidate in 2016. One the 23% of ‘don’t know’ is added in, it would probably be closer to 70%. The remaining people who voted NO are either not educated or Democrats Abroad. It make absolutely no sense for anyone to vote NO.
It’s extremely rare for an issue to be so united by Americans abroad. Perhaps the last issue was in the 1960s with Vietnam. However, I suspect there would have been some Americans abroad that would have supported the war because of the anti-communism rhetoric of the past.
No matter which way you look at FATCA 70% is a very very strong number.
Speaking of CLN’s @notamused,
Ireland releases FATCA FAQ’s for US citizens, mentions how some who relinquished before a certain time may not have CLNs:
“Circumstances in which an account holder would not hold a Certificate of Loss of Nationality
In some circumstances a Certificate of Loss of Nationality of the US would not be available to an individual. For example the issuing of Loss of Nationality Certificates did not become common practice until the late 1950’s, therefore the non holding of a certificate prior to this time would be considered a reasonable explanation as to why would you not hold a valid Certificate and you could be considered a non US person without producing the Certificate in these circumstances.”
http://www.fsitaxposts.com/2015/06/25/fatca-faqs-for-u-s-citizens-released-by-ireland/
Canada needs to update its FAQ’s to reflect the same. Same with the Canadian Bankers Association.
Paul a plaintiff in the Bopp lawsuit? That’s a curve I didn’t see coming. I wonder if DA is going to shoot themselves and every other USP in the foot by mentioning “Citizens United”. This is where they make the pitch for Same Country Exception.
@Bubblebustin
“…the issuing of Loss of Nationality Certificates did not become common practice until the late 1950’s…”
Proving once again just how much misinformation is out there.
Yes, Deckard, but at least Ireland’s allowing for the existence of undocumented relinquishers. Canada should do same. I think it’s time for another letter to Ms Drew-Lytle of the CBA. All the better if they erroneously extend this as a reasonable explanation back to the fifties…makes the whole process flawed.
@Bubblebustin
As long as we’re in this mess then I completely agree about the need for undocumented relinquishers to be fairly and consistently treated by Canadian financial institutions according to the language in the existing IGA. No one should be forced to apply for or produce a CLN if having one was not a contemporaneous requirement when the relinquishing act occurred. That is why I no longer have any intention of trying to get one: I didn’t need to have one back then, and having one now would be no guarantee of better treatment from my bank anyway, and all I would be doing is opening a can of worms with the US government that could only end badly. I have not been a US citizen since my 25th birthday in 1984 but I have no intention of spending the rest of my life trying to prove it. As Animal would say…
Re: Ireland FATCA FAQs:
Don’t know where they got that 1950s date from. As far as I’m concerned, CLNs were not *commonly* issued until somewhere around 2010.
Long after the 1950s, those of us who inquired with US consulates regarding the effect of naturalising were told we’d lose our US citizenship, but were never told about CLNs.
FWIW, Canada Immigration was telling us basically the same thing – that Canada Immigration notified the US govt of the naturlisation and it caused loss of US citizenship. No mention of CLNs.
I never even heard of a CLN— from anyone, government employee on the job, regular person in social conversation, or in any reading I’ve ever done, etc. – until four years ago, more than 30 years after my relinquishment.
It seems that of all the commenters at Brock over the 3-1/2 years we’ve been in existence, many of whom relinquished over previous decades, only 2 or 3 got a CLN prior to 2011. Not exactly what I’d call “commonly issued.” Pretty close to no one even seems to have known CLNs existed prior til then.
I think Ireland’s got the right idea, just that they’re way off with that date.
Should Canada update its FAQs/requirements along these lines, which would be good, I’d like to see them go with a date that reflects the reality of when CLN issuance became common practice.
@ Deckard,
Re:
I agree with you, except I believe the CLN is still not required for the relinquishing act to result in citizenship loss – that is that the voluntary, intentional relinquishing act terminates the citizenship even today, and that the CLN is not required to terminate the citizenship but its role is to provide an easily-understood, unambiguous proof that the termination occurred.
So, even with a current day relinquishment, I’d think that self-documenting the relinquishment should work, though I can see that it could be a hassle.
But back to the era when the US govt itself wasn’t even telling people, who asked about the ramifications of naturalisation, of the existence of this document, I feel it’s really ridiculous and unfair to expect a person should have one. Though I personally like having a CLN because, if necessary, anybody can read and understand it quickly, so I don’t have to explain things.
@Bubblebustin – Today I spoke to an Irish Senator’s staffer in Dublin and explained the situation and look out for my emails. Let’s see if there’s a response, silence or some canned response from the Fine Gael party leadership endorsing the wonders of FATCA to crack down on those evil tax evaders.
Until a few years ago not only was a CLN unheard of, no one would have ever imagined it would be useful to have a document proving you WEREN’T something. That’s how ridiculous this whole business has become. I lost my US citizenship when I became a Canadian because it was my intent to lose it. Exactly when the loss of citizenship occurred is simply not relevant.
I don’t have a CLN and I will never apply for one because I don’t want anything to do with those US bastards, ever again. I’ll change banks ten times before that happens. Besides, even having a CLN won’t prove you that don’t owe US tax or don’t have a US filing obligation, so what’s the point?
As far as the Canadian banks are concerned, the Canadian government should instruct all the banks that they may only ask one simple question: Are you a US citizen? If the answer is no, that is the end of it, full stop. No where were you born, are you a US taxable person, etc, etc. There is no possible way a Canadian bank employee can sort through a person’s facts and make a determination re: US taxable status. If a few slip through the FATCA net, so be it and who cares? Its not the bank’s problem and its not the Canadian government’s problem. The US government can go pound sand.
The USG worries about people fighting for ISIS, it should be concerned about people fighting FATCA.
“Rand Paul to sue US Treasury and IRS over IGA’s” that sustain double taxation. So, can I sue the IMF for offering their officials tax-free positions (i.e. no taxation at all)?
http://www.forbes.com/sites/robertwood/2012/05/30/imfs-christine-lagarde-i-dont-pay-taxes-but-you-should/
One really couldn’t make this stuff up.
@Don
It would be interesting to hear where the Irish government got their info, because it sure is bad. I hope you get a response.
“As far as the Canadian banks are concerned, the Canadian government should instruct all the banks that they may only ask one simple question: Are you a US citizen? If the answer is no, that is the end of it, full stop.”
I beg to differ. The relevant question IN CANADA should be simply: “Are you a Canadian citizen?” The nationality or birthplace shouldn’t matter. Canadian citizens using their local banks should not have to worry about being defined as “US persons” or sharing a joint account with one. That would’ve saved a lot expense and hassles for all involved. My understanding is that the NDPs on the Finance Committee pushed for Canadian citizens to be excluded, but to no avail. The Cons. tried to make a big deal out of the decision that the CRA would not actually collect the $ allegedly owed to the IRS, despite divulging our bank records with them, but this just gives permission for the IRS to slap on onerous penalties when they try to collect taxes from “US persons” themselves.
maz57 said>”There is no possible way a Canadian bank employee can sort through a person’s facts and make a determination re: US taxable status.”
So true, and that is what is causing my blood to boil. And they are steering people in the wrong direction to save their asses. I’m so glad I found this forum and found good advise from people who know what they are talking about.
‘The relevant question IN CANADA should be simply: “Are you a Canadian citizen?” ‘
Resulting in this possibility: “Oh, the Canadian government gave you permission to work / study / reside permanently / whatever, but you’re not a citizen so you can’t deposit your salary here.”
A relevant question might be “Are you legally allowed to reside in Canada?”
But that could be troublesome too. Canadian financial institutions didn’t mind letting me keep interest bearing accounts, and they deducted Canadian non-resident tax which was 10% for a resident of Japan. But what about Canadian citizens who are allowed to reside in Canada but actually reside in the US? Should they be allowed to keep their accounts? Suppose they still have expenses in Canada?
—
‘The Cons. tried to make a big deal out of the decision that the CRA would not actually collect the $ allegedly owed to the IRS, despite divulging our bank records with them, but this just gives permission for the IRS to slap on onerous penalties when they try to collect taxes from “US persons” themselves.’
If it actually were taxes (and not double taxation) it would not be too unreasonable to collect as stated in a treaty. The reason for not collecting is that it’s a penalty not a tax, and the IRS slaps onerous penalties even on US persons who fully pay or overpay their US taxes.
Forgive me if this was posted before. It is from Rand Paul’s website.
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.
Text for bill, S.663, can be found below.
“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.
http://www.paul.senate.gov/news/press/sen-rand-paul-introduces-bill-to-repeal-anti-privacy-provisions-in-fatca
@Snub,
Whoa, and he’s taking a swipe at PFIC and foreign trust reporting, too!
How embarrassing is it for a nation to create a law so flawed that it harms itself? As Rand Paul also said in a clip- how embarrassing is a tax code which makes businesses flea the country and in addition, keep their profits abroad? How dumb and dumber are these things? And when will they be big enough to admit to making these mistakes? I hear a lot about “losing face”- that America cannot bear to lose face. Isn’t it more excruciating to try to excuse the inexcusable and continue down path of self-destruction?
“How embarrassing is it for a nation to create a law so flawed that it harms itself? As Rand Paul also said in a clip- how embarrassing is a tax code which makes businesses flea the country and in addition, keep their profits abroad?”
Canada has done those in the past. The exceptionalism of the US isn’t that it’s stupid, the exceptionalism is the enormous extent it goes to in penalizing honest people.
Regarding the usefulness of a CLN. It surely differs from country to country whether it’s essential to have it to prove ones non “US person” status. Perhaps it may be possible to do without it in Canada, at least for the time being. In Germany, some banks ask for it, some don’t. However, if a bank does ask for it and you can’t provide it, your account will be closed and they will do the FATCA reporting on your account. No ifs, ands or buts. It’s as simple as that.
Just a note of caution: the courts have been woefully inadequate at protecting the powers of Congress, even in really high profile issues involving the war powers. The court could justify not looking at the case by saying that Rand Paul didn’t have enough personally at stake in the issue, the standing problem, or it could argue that this was primarily a political problem, which is also a ground for not considering a case. The D.C. federal district court has tended to make those arguments, which may be why a court in Ohio has been selected.
It is great to see these issues being raised.
Articles are gradually proliferating. And the comments sections full of the usual Homelander “Duh, if you don’t like paying yer fair share, then renounce.”
The Brock Brigade is needed here:
http://www.cleveland.com/rnc-2016/index.ssf/2015/06/rand_paul_to_sue_us_government.html
http://m.bbc.com/news/world-europe-33284937
Terrorist attack in France on US owned company including a beheading. Yeah your FATCA data is safe from us (ISIS). Really Barack?