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
Delayed again?
According to a post 17 hours ago at: https://www.facebook.com/republicansoverseas
Do you think we will really see the filing in one week? Perhaps adding the Article 2 Section 2 argument (treaties require 2/3 Senate approval*) would take a week to ensure that the dozens of unconstitutional IGAs are correctly cited.
http://www.bloomberg.com/politics/articles/2015-06-25/rand-paul-said-to-take-on-the-irs-again
*https://www.law.cornell.edu/constitution/articleii
@Jefferson
Bopp says this has nothing to do with taxes? I don`t think I will EVER understand the law. But maybe one victory could lead to another….
@Polly
I am not a lawyer in any country …… but to my untrained mind ……
FATCA is Not about taxes …. it is about loss of privacy, discrimination, unreasonable disclosure, illegal search (without a specific warrant based on reasonable suspicion/good cause) … and maybe seizure …. of people and their assets. It is about loss of Human Rights. Of course that Class A Idiot Justice Roberts might claim that the 30% non disclosure penalty IS a tax (based on his dismal performance on the Obamacare issue where he argued that Penalties on the uninsured ARE a Tax even though the Govt argued that the penalties were not a tax. Go figure.
CBT IS about taxation but with intent to control free movement.
@Polly Here is my take on it: if Bopp says that his suit is not about taxes that doesn’t mean that CBT and FATCA/FBAR are not intertwined issues. They may violate some of the same constitutional rights and legal principles, think of a Venn diagram; some arguments between the two are completely unrelated. But the object of the present lawsuit about to be filed: it is all about FATCA. We can pursue arguments against CBT separately, using some same, some similar, some different arguments. An injunction and a finding of unconstitutionality of FATCA will block continuing enforcement of CBT, leaving us to continue the fight against CBT.
I just posted the following at the Washington Times site. http://www.washingtontimes.com/news/2015/jun/24/sen-rand-paul-sue-irs-us-treasury/?page=2
The Article now rises to a C+ in terms of accuracy. The matter is even more severe than the author describes.
One example …. the US has effectively blackmailed the entire world into signing these Inter Governmental Treaties (word specifically chosen) by threatening to steal 30% of every US Dollar transaction worldwide as these clear through the major US Banks. To try to avoid losing this 30% countries have been forced to breach their own Charters of Rights, Human Rights Decrees and their Constitutions in order to mollify the US mafia style offer. The US has made itself a Pariah. A new Chinses centric International Payments System is expected to be live in the 4 th quarter of this year. As international trade re-routes around the US, New York is going to suffer.
Second example is the omission of discussion of the MASSIVE compliance costs (initial and ongoing into infinity) being imposed on financial institutions and Governments world wide …. think Billions of Dollars of wasted money already.
@nervousinvestor
“CBT IS about taxation but with intent to control free movement.”
That is pretty much what it is, too. It was implemented back in the days of the Civil War to try and go after those that were fleeing the draft, and it has stayed on the books to this day. Only, the reasons for keeping it have changed.
@mjh Did the IRS go after Vietnam draft dodgers that fled to Canada?
@Jefferson D. Tomas
I would imagine that they likely tried to back in the day, but without FATCA, their options would’ve been limited.
The greater threat to the draft dodger back then, would’ve been facing arrest at the border if they tried to return to the US. I believe Jimmy Carter offered most of them pardons, but roughly 50,000 of them decided to remain in Canada permanently, out of the around 100,000 or so that left the country to evade the draft.
Jan, you are so right: “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).”
On the RBC Direct Investing application form there is the birthplace question but *no* question regarding whether or not one has a CLN. Nothing. So, if you write down “United States” you’re screwed. Period. You’ve just given the bank absolute proof of your “US Personhood”. I feel sick for those who don’t yet know what’s going on and who will unwittingly be handing their banks the weapon that will be used to compromise their financial lives. My blood boils!
@MuzzledNoMore
On an application like that, it would be prudent to ask a whole lot of questions, starting with the first one on my mind: What if I’m no longer a US citizen? And: Why am I not being asked that question?
@@MuzzledNoMore
If they say they can’t ask that question regarding your citizenship, then I would immediately ask them why it’s even relevant for them to ask me where I was born. If they can’t give you a straight answer to that, then I would take my business elsewhere.
@Muzzled and @MJH….
A major High Street bank on my side of the pond asks the same questions. So I called them…….
After getting passed around the call centre I made it to their FATCA Guru…..
I was advised that they would report everyone who has a US POB. I then asked about relinquishers and even CLNs. This person knew exactly where I was going.
Response? The IGA allows the handover of anyone with a US POB and they are not required by the IGA to cure any indica!!!
Yes. MJH there are so many people who are going to have life changing OMG moments too late.
@Muzzled ” I feel sick for those who don’t yet know what’s going on and who will unwittingly be handing their banks the weapon that will be used to compromise their financial lives. My blood boils!”
I have warned and keep warning others.
Millions will get burned.
Thankfully my young children already know about this and what to never say.
@Shadow Raider
@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.
As FATCA violates the 4th amendment and FBAR the 4th, 5th and 8th amendments and both violate the equal protection clause and CBT violates no taxation without representation, the 16th amendment preventing an estate tax does little to help me sleep at night.
That is the root of the problem, we are not afford the protection of the rule of law.
@ George
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.
WTF!!! Are you CRAZY!?!?!? Just what I need, some scary person who hates USCs, be it an extreme right winger here in Japan or one of the three nice fellas I met 1997 in Tachikawa telling me they were friends of Osama Bin Laden hacking into or paying for the client list of my bank.
I have already caught one employer here giving the local addresses of all American employees to someone who called saying they were from Newsweek Magizine and wanted to send free subscriptions! I have also had my veterans records compromised three time that I know of due to improper safeguarding of them by the VA. Now we have the hack of all Federal employees.
No! Name and basic contact information only is all anyone should need to provide in writing along with producing a photo ID. Allowing anything else is akin to leaving your doors unlocked when going away on a long vacation while not stopping mail and newspaper delivery.
@JapanT I get what you are saying concerning a wealth tax.
Teeny tiny problem
Have you read the scotus opinions of John roberts
I believe this court would easily find a wealth tax constitutional
If the US imposes a tax of $10,000 per person, without regard to wealth, it will be apportioned among states according to their population. Republicans will be overjoyed because — even though the rich will have to pay as much as everyone else — their wealth will get a break.
So why worry about a wealth tax? Who needs one?
@mjh
@@MuzzledNoMore
If they say they can’t ask that question regarding your citizenship, then I would immediately ask them why it’s even relevant for them to ask me where I was born. If they can’t give you a straight answer to that, then I would take my business elsewhere.
That won’t work for me. Employers in Japan dictate to the employee which bank or banks we can use to receive our pay.
@george
@JapanT I get what you are saying concerning a wealth tax.
Teeny tiny problem
Have you read the scotus opinions of John roberts
I believe this court would easily find a wealth tax constitutional
Yep, thus the statement that the 16th amendment would prevent it does not allow me to sleep easier. The rule of law is nonexistent in the U.S. . We are completely unprotected. After reading them I again began to consider becoming Japanese but as the remarks above show, a CLN is not even being asked for by FIs, only US POB. We are caught. Even naturalizing does not protect us from having our info sent to the U.S. to be left unsecured, perhaps sold to the highest bidder.
@JapanT, “WTF!!! Are you CRAZY!?!?!? Just what I need, some scary person who hates USCs,”
I get where you are coming from as we share a common bond as some do at IBS.
I remain convinced of “I think it is reasonable to ask “Citizenship:___________”
Lets start with what is NOT reasonable and can not be defended and that is asking Place of Birth of applicant. It is not reasonable to ask solely that question because it is clearly discriminatory and “lets off” persons that have two USC Parents. Further solely asking applicants POB is equally fraught with error as asking the place of birth of both applicants parents and if one is USA singling them out and not correcting the indica. Sometimes to show that a Law needs to fall is to take the law to its rightful edge.
Though I believe it is reasonable to ask Citizenship and then fill in the blank, I do believe that the proper question is Where are you permanently resident_____________.
Right now we have FI asking placeof birth AND because the IGA does NOT require them to cure the indica handing over the information.
I personally preferred the IGA language that required closure of recalcitrant accounts because it ensured wrong info would not be handed over. Protecting ones data to me was more important than protecting the ability to have a checking account at Commerzbank.
You highlight a security concern and I can say that we are singing in the chorus together. Names,date of birth, physical address and the USA indica all in one file. This goes against all forces protection advice of blending into the fabric of the local society and not sticking out.
Let me use the farthest example to make my point…….if a family that had any US indica and was living in Jordan, I would tell them straight out to lie to their FI and hide any indica. I would tell them this for their personal safety of their family.
On your own situation, you are between a rock and a hard place. Even if you naturalise you still stick out.
I do believe that the dam can be broken by attacking it from all sides. Whilst I disagree with DA and ACA they are still attacking the dam and that is weakening the dam.
I did not like Obamers proposal on accidentals but again that weakens the dam.
All we need is for a little bit of water to start trickling out, then a pebble will fall out of place, then a stone falls out of place, then a boulder rolls out of position then the river is flowing again.
Hence my personal call that the IGA should only ask citizenship or you need to ask place of birth of each parent. I suspect that asking POB went through the minds of the civil servent lawyer that drafted the IGA but they held back knowing that was the bridge too far.
@Japan T
“That won’t work for me. Employers in Japan dictate to the employee which bank or banks we can use to receive our pay.”
Yikes!
Japan T: Thank you for your excellent summation in a nutshell of the constitutional issues surrounding FBAR, direct taxes, etc. A complicated issue made very understandable. Thanks!
Regarding banks, I’m really curious about what they’ll do (or may already be doing) when mortgages come up for renewal or in other re-financing situations. Does anyone have any information about this? I’ve been searching but haven’t seen anything specific. Do they treat a renewal as a new account and thereby justify probing for US indicia where none may have existed before? Our own mortgage/LOC comes up again this fall and I’m wondering if we’re sitting on a time bomb. Or is existing debt simply not covered under the IGA’s at all? Or could it be indirectly if/when funds are transferred through existing checking or savings accounts? I’m so confused.
clarification: what I meant above by “An injunction and a finding of unconstitutionality of FATCA will block continuing enforcement of CBT, leaving us to continue the fight against CBT.”
Please read something like: this would stop the banks from forcing people to comply. As far as I know, as long as one stays in the foreign country where one is a bone fide resident and (I hope) citizen, IRS cannot collect. But next step would be to attack CBT in US and foreign courts.
@deckard I have already heard many stories, and at least one story where I was able to verify, that the bank in question held mortgage renewal over the head of the USP to become compliant, to the detriment of the non-USP spouse and minor children and that this was at great expense and especially ridiculous because the USP member of the family in question had little income and zero US tax liability because they were a stay-at-home-spouse to raise the children. They ended up changing the bank, and their mortgage at expense to them, I’m not sure what happened later, and they wouldn’t give me names of people at the bank.
THIS IS THE PROBLEM, GIVE US NAMES OF THE IDIOTS AT THE BANKS, POST THEM AS “Hall Of Shame” candidates !!!!! EVEN IF THEY ARE ACTING ACCORDING TO A “LAW” , IF IT IS AN UNCONSTITUTIONAL LAW LET THEM SUFFER THE SHAME OF BEING A COLLABO OR JOIN US !!!! Let us hear their position!