Last week, Congress published H.Rept. 624 on the Financial Services and General Government Appropriations Bill (H.R. 5485). One paragraph in the report shows a slight concern for our issues. CTRL+F for “Foreign Account Tax Compliance Act”, or see p. 26 of the PDF:
Foreign Account Tax Compliance Act.—No later than 180 days after enactment of this Act, the Department of the Treasury shall submit a report to the Committees of Appropriations of the House and Senate on its decision (TD 9610 (78 FR 5874)) and TD 9657 (79 FR 12811)) to require withholding on non-cash value insurance premiums, including payments by foreign insurance brokers. No later than 180 days after enactment of this Act, the Committee directs the Government Accountability Office to determine the impacts of FATCA on United States citizens living abroad and make recommendations on FATCA implementation.
The Appropriations Committee could have done much more than this, such as prohibiting any of the appropriated funds from being used to implement FATCA. (Indeed, they did prohibit the funds from being used for far higher-profile Homeland causes célèbres, such as determination of tax-exempt status of non-profit organisations.) On the other hand, at least it’s a bit of progress from House Republicans’ earlier inattention to the issues of U.S. persons in other countries, such as last year when they voted nearly-unanimously to blow a giant hole in their own budget and repeal the estate tax while leaving the estate-tax-backstop § 2801 in place — which would have given Homelanders who leave $15 million or $15 billion to their kids a lower tax rate than emigrants who leave $15,000 to their kids.
If the executive branch’s past attitude towards deadlines is any guide, it will take far longer than 180 days for this report to get written. In June 2014, for example, the Senate Appropriations Committee directed DHS to report within 90 days on their efforts to implement the Reed Amendment. DHS’ report, discussed here at Brock, was finally published 350 days after the passage of the relevant bill.
And of course, when the report finally does come out, it will consist entirely of boilerplate lies about how FATCA doesn’t have any negative impacts on United States citizens living abroad (and even if it does it’s your own fault not the government’s fault, and even if it is the government’s fault it’s justified because of “tax evasion”, and even if the alleged individual international tax gap is utterly miniscule compared to the domestic tax gap the United States must do something and FATCA is something therefore it’s a Good Thing).
This is not a development that should cause any Brock readers to change their good plans. If you were planning to go get a CLN, keep that appointment at the consulate — it’s absurdly hard to get another one. If you were planning to continue your ordinary law-abiding life outside of the United States without obtaining a CLN, keep on keeping on. But if you think you’re U.S. tax compliant and have nothing to worry about, well, you’re lying to yourself — and even after this useless report comes out, you’ll still be lying to yourself.