As a solution to the problems caused by FATCA, American Citizens Abroad (ACA) proposes that FATCA be tweaked by imposing on “US citizens” abroad a “Same Country Exemption with mandatory IRS compliance” (SCEWMIC). SCEWMIC is likely to make the unjust FATCA law even more harmful.
Go to the links below for info and also read: “Why ACA supports Same Country Exemption (SCE) rather than repeal of FATCA, and why SCE will work to correct banking lockout by Foreign Financial Institutions.”
If you don’t like SCEWMIC then tell ACA exactly what you think in an email.
E-mail Mr. Charles Bruce, ACA Legal Counsel, at info@americansabroad.org
You can ALSO comment at ACA’s FB site: https://www.facebook.com/americancitizensabroad
[OF COURSE, you can argue that an email to Mr. Bruce, or to ACA, will not change their minds on SCE, but are you really so certain that when an organization claiming to represent “YOU” makes a bad proposal that will cause you harm — the best way to proceed is to remain silent and not confront that organization? Those who feel that all U.S. laws are irrelevant should not read further.]
So… here’s what you would have to do to make the SCEWMIC election:
“…An individual would complete the election on a 1-page, front and back, IRS form providing the individual’s name, address, Taxpayer Identification Number [Everyone has one?], and country of residence, and listing the “Same Country” accounts (name and address of bank and name, number and type of account, i.e., depository, custodian, etc.). The individual would certify that this information is correct. Also, the individual would state that he or she is a resident of X foreign country and the bank(s) are licensed and regulated under the laws of X country of residence (the same country where the individual is a resident). One copy of the election would be given to the bank; a second would be attached to the individual’s federal income tax return; a third would be retained by the taxpayer [NOTE TRANSITION IN PARAGRAPH FROM “INDIVIDUAL” TO “TAXPAYER”]. Instructions would be included on the form. Taxpayers would be warned that filing the election does not excuse them from having to report any income on the account on their tax return or from having to file an FBAR, provided in both instances they meet the applicable thresholds…”
Mr. Bruce explains to Bob Stack at Treasury why the ACA proposal is a really good deal for the IRS:
“In addition to benefiting American citizens abroad and foreign banks, the “Same Country” exemption will benefit the IRS. Americans abroad, in order to get the benefit of greater access to banking services, will need to come forward and file their US tax return, with the “Same Country” election attached. This will help address the nagging problem of noncompliance.”
Read Mr. Bruce’s letter to Treasury and ACA’s SCEWMIC HERE and HERE.
— and take a few minutes to email your thoughts to Mr. Bruce…
Here are two responses just received from ACA regarding SCE concerns:
“Thank you for contacting ACA.
Same Country Exemption is not a replacement for Residence-based taxation.
ACA continues to advocate for Residence-based taxation (RBT). And, in fact, ACA is the only organization that has developed a proposal for RBT. None of the other overseas advocacy organizations, either non-profit nor party affiliated, have developed a fully written and considered proposal.
ACA’s RBT proposal has been cited in a variety of the tax writing committee reports; Joint Committee of Taxation, Senate Finance and Ways & Means.
See our complete proposal and work here: https://www.americansabroad.org/taxation/
ACA conducted a FATCA survey with the University of Nevada at Reno. The results of that survey indicate that Americans overseas believe that SCE would alleviate the problems of banking lock-out. See: http://acaglobalfoundation.org/PressAndMedia/3748196
As ACA has explained before, Repeal of FATCA would require Congressional vote. ACA does not believe that the Congress, in its efforts to combat tax evasion legislatively, will achieve the majority vote to repeal FATCA. SCE would help alleviate the bank lock-out problem and is achievable as it does not require Congressional vote but simply a regulatory change. This knowledge is a result of our long standing work directly speaking with Congressional offices and committees involved in tax evasion legislation.
As noted in our Mission statement, “ACA works to find practical solutions to resolve issues impacting overseas US Citizens and communicates results to constituents stateside and abroad,” (https://www.americansabroad.org/about/ ). ACA’s proposal for SCE was not developed solely with Europe or Americans living in Europe in mind. ACA does not believe that working toward repeal of FATCA is a practical way forward in getting Americans overseas immediate relief from FATCA. Please see our statement on this here: https://www.americansabroad.org/…/why-aca-supports-sce….
ACA as well has spoken with Foreign Financial Institutions (FFIs) on the viability of SCE to alleviate the bank lock-out problem and reported on our findings here: https://www.americansabroad.org/…/Treasury_Ltr_Same…
ACA regrets that you do not appreciate our work on behalf of Americans living and working overseas, however ACA will continue to support it’s efforts with RBT and SCE.“
The above ACA email was just posted on American Expatriates.
AND:
“Thank you for contacting ACA.
For a full explanation as to why ACA believes that Same Country Exemption is workable and why ACA believes that a repeal of FATCA is not achievable please see: https://www.americansabroad.org/…/why-aca-supports-sce…
ACA”
The above ACA email was posted on: https://www.facebook.com/groups/citizenshiptaxation/
Here is the writer’s response to ACA (posted at the above website):
“Thank you, for your email reply. I have read the documentation you provided. My net takeaway, from your piece, “Why ACA supports Same Country Exemption (SCE) rather than repeal of FATCA, and why SCE will work to correct banking lockout by Foreign Financial Institutions,” is simply that rather than attempting to help American expatriates, by taking the more difficult road, the ACA would rather take the easy way out that does not rock the boat or risk displeasing the US political elites. So, I’m left wondering why the ACA calls itself “American Citizens Abroad.”
With whom, in what countries, and how many American expatriates has the ACA spoken, to come up with its SCE position? Why should American expatriates have to file anything with their banks or the IRS relating to what, for us, are our local bank accounts, when homeland Americans do not have to do this (even those hiding their assets in Delaware Corporations)? Why should we have any confidence that our being “locked out” of FFI services would improve? My reading, of your document, which may be incorrect, tells me that the ACA proposal might make the whole situation, with FFIs even more convoluted, and perhaps expose us to even more discrimination. I would think that you should include, in your paper, something from a significant number of FFIs (not just a few), from varying geographies, indicating that they endorse your views and will treat us more fairly. Did I miss this?
At the end-of-the-day, we expatriates simply want to be treated, in our relationships, with our local banks (which may also include, for good reason, banks in neighboring countries, just like US banks, in neighboring States) no better, nor no worse, nor no different than the relationships that our fellow homeland American citizens have with their banks in and across the US. That seems, to me, to be a pretty reasonable request for support, from an organization like the ACA. Isn’t the real problem that FATCA is an unjust attempt to circumvent the 4th Amendment to the US Constitution? I recall when I opened my accounts, nearly two decades ago (well before FATCA), having to sign a form authorizing my bank to give the IRS full access, to my accounts, upon production of “probable cause.” FATCA shifts the burden of “probable cause,” from the US government to the FFIs and finally to the expatriate Americans. This is an unfair and non-equal treatment of US citizens, under the US Constitution.
Your paper claims that, “ACA works to find solutions to problems facing the overseas community that can be easily implemented.” Sometimes, the less easy and more difficult road is the right road. I know quite a few American expatriates, who would rather take the risk of working for something right, than settle for something wrong, or just easy. That’s why I would rather the ACA work tirelessly for the best solution, as opposed to coming up with something that appears to me to be an easy convoluted way of maintaining the status quo. Having fought and lost is better than not having fought at all. What would have happened to the Colonists, had they just looked for an easily implemented solution to what were actually far smaller issues, back in 1776?
Respectfully,”
Perhaps rather than call it SCEWMIC it should have be PJSCREWME (Please just screw me)
Some thoughts on this:
1. The reference to the Charles Bruce statement:
Well, “noncompliance” is a problem for the IRS. I don’t read this to mean that Mr. Bruce – his tax lawyer background notwithstanding – specifically thinks it is a problem.
2. ACA has been very very clear right from the beginning. They claim to represent ONLY those who (1) are U.S. citizens abroad (2) believe they are U.S. citizens abroad and (3) want to be U.S. citizens abroad.
3. Although ACA has done very good research and has through that research helped to shape the debate, they are NOT a group that will aggressively demonstrate the injustices of FATCA, CBT, etc.
4. My impression is that ACA is NOT opposed to CBT or FATCA on philosophical or moral grounds. They are opposed to these things ONLY to the extent that they inconvenience those people in Paragraph 2 above.
5. Why single out ACA? Democrats Abroad are also proponents of SCE. They should be on the receiving end of letters as well.
6. Representative Carolyn Maloney should also be targeted. I understand that she is actually proposing a Bill that would SCE law.
7. Understand that ALL proponents of SCE are in reality supporters of FATCA and CBT. What they want is an exemption from the reporting requirements for themselves, but have these requirements imposed on the rest of the world in general and their countries of residence in particular. (And they wonder why the rest of the world hates Americans – go figure.)
8. Understand that ONLY U.S. tax complaint Americans would get the exemption. This is another way of attempting to enforce CBT.
9. The arrogance of attempting to impose this new requirement on foreign banks. If I were running a foreign bank I would refuse to deal with any U.S. citizen, anybody related to a U.S. citizen, anybody who does business with a U.S. citizen, anybody who speaks with an American accent, anybody with a Green Card, anybody who travels to America. Who needs them? They are nothing but trouble. And that – in this election year is – “Change You Can Believe In”. Yes, go vote for Hillary!!!!
FATCA and citizen based taxation are un-American. Stop it!
@Linda
I guess that’s why Americans are making themselves “un-American” in record numbers.
ACA should rename themselves “American Taxpayers Abroad” in support of SCE.
I considered it, though it broke my heart. But if you own a home where you live, you won’t be able to pay the capitol gains tax and/or the fee to renounce is massive.
Not interested in Same Exemption – it’s just pandering to the US Government.
Also the US continues to ‘export’ more US law. The JASTA law is another form of citizenship based offenses. For example, if a Iranian citizen attacks the US Embassy in Rome killing US citizens, the US families left behind could now in theory sue the Iranian Government in a US Federal Court claiming damages because an Iranian citizen committed the offence. The US families would be going after Iranian Government assets in the US such as US Government bonds. The scenarios are endless.
So forget about Italian law, the only thing that matters is the Iranian Government is on the hook for all its citizens who commit crimes against US citizens worldwide. Wow….
So the US is now enforcing citizenship based crimes against US citizens anywhere. Of course this will lead to reciprocal treatment of US assets and citizens abroad in theory.
The thought process behind JASTA draws some comparison to FATCA. One of the main sponsors of JASTA was our old FATCA buddy Sen Chuck Schumer of course.
On another note will companies and foreign governments now have to factor in the risk of losing their US assets to JASTA lawsuits in future? Doesn’t give a lot of incentive to use the US dollar?
This was actually discussed at length on Facebook over a year ago, after a delegation from ACA, AARO, and I think DA and RO heard the proposal from the Assistant Sec’y of the Treasury that made it to them.
What I found perverse about the whole thing was, it had the US citizen wanting SCE submitting his 1040 to the Foreign Financial Institution for review, not the 8938 or what have you. The 1040 has no confirmation on it that the account with that bank was properly reported. Further, most foreign bank employees at the teller level don’t want to get involved in adjudicating a customer’s foreign tax return. There are exceptions — banks run by control freaks, who, when given this information have tried to denounce their US customers to the IRS! And unjustly, as it turns out. The foreign banks don’t have the knowledge to do this correctly.
So the net conclusion would be, SCE as proposed by this Assistant Secretary person would be a clear step in the wrong direction, and add no value. In fact, it would subtract value. I can well imagine banks that have gone through the agony of cobbling together a FATCA implementation saying “Yes, we’ll take US customers if they agree to be reportable under FATCA, but we will not participate in the SCE nonsense.” Perhaps that was indeed the answer the Assistant Secretary was trying to elicit in tabling such a breath-of-dog concept. His challenge, in fact, to the AARO, ACA, RO and DA was for them to go and do the legwork to find if any foreign bank would find his proposal to be value-adding or even acceptable. I’d be very surprised if they did.
What happened to the ACA is typical of what happens with someone gets a voice that the government feel it can’t ignore. They get blackmailed into symbolically continuing to represent ‘the revolution’ (as the government see it), while shifting the substance of their proposals to maintain the status quo. Key people resigned from the ACA once that happened. I stopped paying them money when they started spouting nonsense.
The other thing that happens to someone who develops a voice is, the government pay them complements and appeal to their vanity, saying they stand out above the crowd, what have you, and then invite them to be on ‘secret committees’ they can tell no-one about, whose agendas get hijacked into ineffectiveness once the game of secrecy has been bought into.
I’m afraid the latter is happening with the supposed Congressional hearing on the proposed law to repeal FATCA — all the signs are there. Same with the ADCT lawsuit — the transparency is just not there. Now that they got the lawyer his fee, I haven’t even heard news.
Social networks represent a really good opportunity to put the ‘representative’ back in the currently oxymoronic term ‘representative democracy.’ Sure, there are problems with trolls, etc. that would need to be solved, but the results of backroom deals and compromises from hell are hardly better. Yet Congress continue to throw this ancient bureaucracy in our faces. And there are shee- people out there who want to believe in the system so badly they roll over and accept this.
I understand first hand how that works having paid the IRS capital gain tax on the sale of our Vancouver home during the 2011 OVDI inquisition. Been there done that and paid the price with a significant part of our retirement savings. You’d better believe that had we known about being US taxpayers prior to selling, we would have found some legal way to not pay it.
Donald Trump thinks he’s “smart” to not pay US tax. As a non-resident US citizen, I think of it as only “fair” to not to have to pay US tax. What would the Donald do?
@ Linda
You have to pay capital gains tax on the sale of you home as an American abroad but only after a $250,000 gain, the exclusion is double that if you are married to an American.
If you expatriate and have over $2,000,000 in assets you will only pay an exit tax on unrealized gains over $680,000.
Look at the expatriation guide and do your sums, you may only have to find the fee to renounce.
http://www.renunciationguide.com/expatriation-and-tax-details-of-current-law/exit-tax-on-renunciants/
I can’t find the link but the Republicans and Democrats both issued statements on FATCA. Guess who fudged the question and was in favour of it…guess who wasn’t and got my vote? According to the statement, Donald will repeal FATCA.
@Heidi Thanks for the link. I’ve already been through this with an accountant. Sadly, having owned my home for a long time, I’d have to pay as I’d be just over the limit. 🙁
@Heidi
You write:
Actually you can get the $500,000 if you have an “Alien Spouse” who elects to file jointly with the poor American citizen spouse.
What is generally important is that U.S. citizen homeowners move frequently enough so that they won’t have to pay capitals gain tax. They should never unpack. Never assimilate into their neighborhoods. Probably the should make it a point to move every 3 to 5 years. Also, at the point of the home sale, it’s good to have a spouse to get a larger capital gains exemption. So don’t be divorced at the time of sale. Alien spouses are usually preferable because of the broader tax planning opportunities associated with being able to move money outside the U.S. tax system.
@CEB
Not sure why you perceive “secrecy”. Aren’t all Congressional hearings open to the public? What exactly is upsetting you? I don’t know enough about it to comment one way or the other. But, what is it that you think should be disclosed to you that is not being disclosed?
As far as the lawsuit goes, isn’t that a very simple solution? Just launch your own lawsuit.
Finally, there is no analogy between a Congressional hearing and a lawsuit. The Government might be organizing the hearing, but I don’t think (unless I am missing something) that the Government is organizing a lawsuit.
@ US citizen.
Yes, agree. Looks like she is committed to staying put or hoping for a change to RBT.
She could however gift assets to bring her below $2,000,000 if poss.
I know it ‘breaks hearts’ (not mine) to give up citizenship. But you are who you believe yourself to be, from your upbringing, from your heritage and no piece of paper will take that from her.
Where to Garry J and Jill S stand?
ACA is being called out because their “proposal” for Same Country Exception has the additional element of submitting one’s US tax returns to one’s local bank. The Democrats Abroad proposal does not. Do not get me wrong, I OPPOSE Same Country Exception proposals and ONLY support repeal but I wanted to make this particulate clarification.
The truth is that that the only way this will stop is if Americans abroad step up to the plate and make it clear that they will not tolerate this BS.
Some people make things happen.
Some people watch things happen.
Some people ask “what happened”?
Given the way the Democratic Party and the Obama administration have destroyed the lives of Americans abroad coupled with the upcoming election, it’s really time for people to ask:
What kind of person am I?
I reject their damn “solution”. I want a revolution instead.
@Keith Redmond
So ACA thinks that Americans abroad should file U.S. tax returns and prove it to the local bank.
We all know that those U.S. citizens abroad who file U.S. taxes have entered a fiscal prison that makes a normal life impossible. Well, this means that they believe that Americans abroad should NOT be able to live a normal kind of life. Kind of defeats the whole purpose of their organization, doesn’t it?
From the time I had my OMG moment to the time I renounced was 6 months and just in that short period of time, it felt like a lifetime of persecution so I can only imagine how it has been for those subjected to this persecution from the U.S government for years. USG is also stealing from other countries economies and extorting banks world wide to perpetrate this theft.
The only solution is an end to FATCA and an end to CBT. Adopting the same country exclusion only takes us further away from that goal and tightens the tentacles of Fatca on the world.
Has anyone at the ACA asked the banks if they want even more administration and training in overseeing US persons tax returns!
It will mean even more reason to close US person accounts.
This is ridiculous, enough is enough!!
@UK Rose
You write:
One of the key points is this:
Those who support SCE necessarily support FATCA and CBT.
Although it pains me to say this, I have reached the conclusion that DA, AARO, and ACA support U.S. law whatever that law may be. In this case they support FATCA and CBT. Some of them may “wish” these laws did not exist. But, they do support them because the U.S. Government supports them.
Most Americans abroad are in FULL SUPPORT of FATCA and CBT. They just with it didn’t apply to them.
The true impediment to change is NOT the U.S. Government. The true impediment to change are a combination of:
– the organizations described above
– the Americans abroad who do NOT support the existing efforts (lawsuits, etc) for change
– the Americans abroad who believe that SCE is somehow a solution to this problem
Truth is: Most of these people might wish for change. But they will do NOTHING to effect change. That’s what the citizens of the “”Land Of The Free Have Evolved Into”.
Ronald Reagan used to say:
“Freedom is never more one generation away from extinction”.
The Americans of today are proof positive of this principle.
https://youtu.be/SDouNtnR_IA
EmBee says
September 29, 2016 at 2:36 pm
I reject their damn “solution”. I want a revolution instead.
I am with EmBee
The Donald and his ilk dont pay taxes- but somebody has to- it is just somebody ELSE. I strongly doubt that Trump will repeal FATCA. Not when he sees the debt and has to get money to fill the treasury`s coffers. And he contradicts himself constantly. Isn’t one of his favourite sentences “I never said that.” ?