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
The banks should not be asking about citizenship. Period.
They should only be asking for ID required under Access to Basic Banking Services–no more, no less. The enabling act should not have prevailed over Canada’s banking, privacy and human rights laws.
The government should have ensured the IGA did not apply to Canadian citizens and legal permanent residents living in Canada. That is what the amendment drafted by Anne Frank, sent to the NDP and Liberals by Schubert and me and presented at Finance Committee by the NDP, Liberals and Green Party was all about.
The Cons voted to override all Canadian laws for a foreign bully. They refused to support the amendment. They laughed and joked as they passed the law to strip us of our rights.
Unfortunately, it does not matter what the government should have done. They didn’t do it. That is why our Canadian lawsuit is so important and why it is critical that we support it and get it funded.
At issue here is demonstration of due diligence and not mere compliance. Kinda like the bar checking ID’s and they do way more than is required by law because (a) they hate everybody who is under the legal drinking age and (b) they can use their compliance programme as demonstration of a good-faith effort to comply, to mitigate the penalties when there is an inevitable violation. In both the FATCA compliance and drinking age compliance scenarios, the best solution would be to repeal the blatantly unjust laws.
@Norman Diamond:
The hilarious part is the fury that Burger King gets to move to Canada…
FYI Burger King collects state meals taxes in the state where the cash register is located, regardless of where the corporation is chartered.
EU banks in 2016 will no longer have the option to turn away ‘US persons’ who hold an EU passport and resident in the EU. The so-called Right to a Basic Bank Account directive comes into effect September 2016.
http://www.bankingtech.com/286432/right-to-a-bank-account-poses-challenge-for-eu-banks/
Yes EU banks can still at this moment ask for the FATCA non-sense, but they won’t be able to say NO.
Let’s get an EU legal challenge going soon and tell the USG to FATCA OFF.
@Don
Unfortunately that only applies to “basic payment accounts”. If I’ve understood correctly, money market, certificate of deposit, investment accounts etc. wouldn’t fall under that rule.
“To allow a nonjudicial officer, unarmed with judicial process, to demand the books and papers of an individual is an open invitation to abuse of that power. It is no answer that the individual may refuse to produce the material demanded. Many persons have yielded solely because of the air of authority with which the demand is made, a demand that cannot be enforced without subsequent judicial aid. Many invasions of private rights thus occur without the restraining hand of the judiciary ever intervening.”
Read more: http://www.americanthinker.com/articles/2015/06/sotomayors_4th_amendment_time_bomb.html#ixzz3eAuGuDyq
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I believe the appropriate homelander response is “go denounce yourself then, and don’t let the door hit you on the way out.”
@notamused – That’s right. However, at least you’ll have access to an account for receiving your salary, and pay bills. Long term financial planning is still a problem unless you suddenly become a gold bug or buy bricks and mortar for buy and let and receive your rent in cash.
The time is right to launch an EU website, start tying together to ‘US person’ community in the EU, and get a legal challenge going. Also different EU countries must be researched for legal aid. If a legal challenge is launched because the IGA breaks a part EU article, it’s possible legal aid may pay for the challenge. However it would be best to start collecting money so we can get an Arvay EU equal to follow this up to the EU Court of Justice.
I’d love to wake up to the headline that all EU IGAs have been declared in breach. Also I think a legal challenge against an EU FFI would also be necessary because, for example, UK banks have changed their T&Cs allowing them to send account information direct to the US or any other government. It’s no good bringing down the IGAs without stopping the banks sending data direct to the IRS.
The banks are going to have to forced to change their T&Cs exempting resident EU citizens from this kind of data transfer on the grounds it discriminates against EU citizens deemed as ‘US persons.’
@Blaze. I am in 100% agreement with you. I neglected to mention a qualifier in my comments above: “if the lawsuit is unsuccessful and the IGA is allowed to stand”. That was in my head but didn’t make it to my typed comments. Of course the banks shouldn’t be allowed to ask the citizenship question at all.
Just as no bank employee is qualified to make a determination of US taxable status, they would also be unqualified to judge whether or not a person is a legal resident of Canada. Leave the legalities of residency to the appropriate government department.
Presenting valid ID showing a current Canadian address (plus a SIN card) should be all that is required.
To atone for this sin of omission I will make another donation to ADCS. I am quite concerned that the thermometer is lagging this last month or so.
@Maz57: I can think of no better atonement!
@Blaze, “The banks should not be asking about citizenship. Period.”
On that point I slightly disagree.
I think it is reasonable to ask “Citizenship:___________”
You then insert your citizenship. An argument could be made that determining stated citizenship is reasonable and proportionate.
But it is not reasonable to put a person through hoop after hoop…… Canada deems me a national because of changes in her laws, I do not recognize the “gift” of Canadian Citizenship by our Government. Having said that should I be under any obligation to disclose my so called Canadian Citizenship when I open an EU bank account?
It is also not reasonable to ask place of birth to open a bank account, that serves no purpose.
So I believe that it MAY be reasonable to ask the simply question as to what is your Citizenship, which you give and thats that…..
If the IGAs did not come out with the “indica hunt” I would dare say that IBS would likely not exist.
The people that drafted the IGA did so in the spirit of the Nuremberg Laws so obviously that is in an innate characteristic in mankind.
Hmmm, I am now wondering if as a means of protest we should in fact state every possible citizenship that we may have some claim to???
Then just wait for the FI to ask for passports…..LOL LOL
@Maz 57, “Just as no bank employee is qualified to make a determination of US taxable status, they would also be unqualified to judge whether or not a person is a legal resident of Canada. Leave the legalities of residency to the appropriate government department.
Presenting valid ID showing a current Canadian address (plus a SIN card) should be all that is required.”
Yes, very true….
And I also believe that it is up to a Canadian Court to determine if a Canadian Citizen who happens to have clinging US nationality is a US Citizen under Canadian Law.
I seriously suspect that a Judge who strictly followed Canadian Law would determine that our two plaintiffs are Canadian Citizens…full stop…..and that any bestowed status by a foreign power was meaningless in tn Canada.
Its impossible for a Canadian Citizen to be “An American in Canada” as stated by an MP.
Another example of how FATCA will affect personal security, with British, German, Irish, and Belgian tourists killed today on a Tunisian beach totaling at least 27 persons, what’s stopping FATCA data being stolen and start having door step murders of ‘US persons’ and perhaps simultaneous across the world at the same time?
The US Congress has uniquely subjected US persons to ready made lists at the world’s FFIs. That’s how much respect US expats hold by US politicians.
@notamused
One more benefit is, so many banks won’t rent a safe deposit box unless you have a deposit account. Now, even if all you can get is a savings account at a credit union, you can then open safe deposit boxes at a number of its branches and store cash, gold and silver in those. If a burglar breaks into one, you still have the others.
@George:
Most U.S.A. persons who open accounts at Canadian banking institutions would mess up, too. Like, if I put down, “United States of America” only, I would be messing up.
The Citizenship Clause in the U.S. Constitution says, “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. (emphasis added.) I happen to be a dual citizen: U.S.A. and New Hampshire, wherein I reside.
@George: I disagree. Under Canadian banking and other laws, banks could not ask for citizenship. That was a long-standing law.
FATCA changed that with the IGA and the enabling act. It should not have happened.
But, as I said to Maz, at this point, it does not matter what should or shouldn’t have happened. It did happen. Now our fight is on to the courts. Hopefully, they will see how wrong this is.
We saw this coming. Rand Paul blocking treaties that would help find tax cheats.
http://www.addictinginfo.org/2013/01/20/rand-paul-blocking-treaties-that-would-help-find-tax-cheats/
Apologies if this was already posted. At least it is not in the mainstream media–but that is probably coming.
@notamused I would accept a basic “payments account”. Getting a basic “payments account” has gotten more difficult since the end of 2013. Impossible.
For those that have accounts… They are very valuable at this point
I expect the banks to get smart and offer “payments accounts” that can never exceed $40K… Far less than the $50K reporting requirement in most FATCA IGAs.
@DON & @notamused
Here is the gem:
“Under the new rules, it is still possible for banks to refuse a customer – but the bank is obliged to explain the reason, free of charge, and it may be subject to a challenge if the customer feels they have not been treated fairly.”
Right now most of the banks that refused me would not put the refusal in writing. All of them look at my place of birth, wince, and state “Sorry. You know where the door is. Please leave. Now. Filthy US citizen” (sarcasm, but basically accurate)
With written proof of being denied banking servers it strengthens all of our arguments. Right now our plight is deemed “anecdotal”…
‘The Citizenship Clause in the U.S. Constitution says, “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.’
Yeah, that means that under US law I used to be a citizen of the United States and Tokyo. Pardon me while I think the Japanese government is the one who gets to decide if I’m a citizen of Tokyo.
Actually I think it says “every person” rather than “all persons” because plurals make difficulties.
Historically the US consitution was the constitution of the US not of person[s]/people/etc. US courts used to hold that the US was bound by the US constitution regardless of any nationality or gender or colour of person that the US sought to victimize. But then courts changed their minds, giving the US government power to abuse persons who weren’t part of the people. Then the courts changed their minds again, then changed again, then changed again.
For a while, the 5th Amendment protected every person, regardless of the person’s residence or nationality, because every person was a person. But the 4th Amendment didn’t protect a non-resident alien, because such a person wasn’t part of “the people”.
Of course now the 4th, 5th, and 8th Amendments are as dead as everything else so it doesn’t matter any more.
Idiot me for posting before looing it up. It does indeed say “all persons”. I wonder what happens when they don’t all live in the same state. Courts rule that they don’t resolve grammar, except for when they do.
That Addictinginfo article seems to leave out how ordinary middle class expats have been thrown in front of the FATCA bus especially when they hold citizenships of other countries.
It also fails to mention:
$2350 Renunciation Fee
The rich are heading for the exit doors so they won’t pay in future regardless of FATCA
FATCA costs billion, causes hassles while raising very little tax revenue
The journalist probably is just out of university if not nappies.
This journalist should write about how on 1 July 2014 he/she lost their right to cash out of America, move abroad and not be tracked by the US Government through FFIs. If they’re reading this blog, please get the laptop out and start writing.
Anonymous: the bank that threw me out in fact did agree to explain that their policy now was “no US persons”. In writing.
@Blaze you said: Under Canadian banking and other laws, banks could not ask for citizenship. That was a long-standing law. FATCA changed that with the IGA and the enabling act.
Thank you for clarifying that. It’s not surprising that the law prohibited banks from checking citizenship, but the current system of flagging various “US indicia” and making a decision that errs on the side against the client is far, far worse. For example, they’ll err on the side of deeming any US birthplace as proof of being a “US person”, even if the person has lawfully renounced citizenship (with or without the CLN card). How do you renounce being a “US person” anyway, since the term encompasses so many more things than just being a US citizen? It’s a bit like the Germans under Hitler who had to try to defend their ancestral family tree from any taint of Jewishness. Of course, some people are easily cleared since they have no indicia. But this is not the case for people who many others who who relinquished a green card some time ago or who are mentally incapacitated or who were born in the States but haven’t lived there since early childhood. They’re in a terrible position: I shouldn’t be considered American, but I can’t get out of being considered American under FATCA.
Before the IGA was passed to accommodate FATCA, our government should at the very least have put in place some exemptions or framework to make the process viable for the Canadian people. Instead, the bank workers are told to hunt for a large number variables of “US indicia” and to use them as they see fit despite the violation of the Charter of Rights, incl. #8 – the right to be secure against unreasonable search and seizure and #15 – the right to the equal protection and benefit of the law without discrimination based on race, national or ethnic origin . . .