Last week a U.S. appeals court confirmed an earlier judgment that the plaintiffs “lack standing” in their case against FATCA. I thought this news deserved its own post.
In response, Republicans Overseas has declared its firm intentions to prosecute this matter all the way to the Supreme court.
Also, I think I’d exempt “accidental” Brits, Canadians, etc. (and just apply the reciprocity to anyone who moved to the US by their own choice).
Yuval: Just because a law has been around for a long time doesn’t mean it’s cast in concrete forever. At least two notable United States laws, based on a culture of ignorance going back centuries, were overturned during the 20th century. Women were given the vote and Americans of African descent no longer have to ride at the back of the bus. Similarly, the taxation of people based on their birthplace or on their identity will – one day – exist nowhere but the history books. Our movement here is the beginning of its end.
Great points, MNM! Thanks for the post.
@Kelly
Why would you seek punish Brits who ‘moved by their own choice’. Choice has little to do with the desire to embrace the USA, it depends on job opportunities, research, love and other criteria.
Your plan to reimburse returners would prove be even more complicated than many IRS forms and another bonus to the compliance industry.
If the Supreme Court does choose to hear the case, will they rule only on the issue of standing?
Or if they rule that the plaintiffs do have standing, will they then go on, in the same hearing, to rule on whether FATCA is unconstitutional?
Does this case have to make it to SCOTUS once, or twice?
In the hearing Bopp cited a previous case of his, “Susan B. Anthony List” v. Driehaus”, where standing was the issue that took the case to the Supreme Court. The Supreme Court ruled that the plaintiffs (this “List”, which seems to be some kind of lobbying outfit) did have standing. The verdict of the Court was “Reversed and remanded.”
“Petitioners in this case have demonstrated an injury in fact sufficient for Article III standing. We accordingly reverse the judgment of the United States Court of Appeals for the Sixth Circuit and remand the case for further proceedings consistent with this opinion, including a determination whether the remaining Article III standing requirements are met.”
https://www.supremecourt.gov/opinions/13pdf/13-193_omq2.pdf
If the FATCA case is following in the footsteps of this other case, it seems that if the Supreme Court does hear the case, they will only rule on whether the plaintiffs have standing. If they decide the plaintiffs do have standing, then it will get sent back to the lower courts for the actual case against FATCA to be heard.
How many years.
‘In the hearing Bopp cited a previous case of his, “Susan B. Anthony List” v. Driehaus”, where standing was the issue that took the case to the Supreme Court. The Supreme Court ruled that the plaintiffs (this “List”, which seems to be some kind of lobbying outfit) did have standing.’
Even that much of a result was excellent. It beat the odds by far. It gives me a microscopic amount of hope, but that’s better than zero. Thank you.
It didn’t take three to five years to get a Supreme Court ruling on the standing issue, in the “Susan B. Anthony v. Driehaus” case. The petition for a writ of certiorari was filed on 9 Aug 2013 and the court issued its judgment on 18 July 2014. A few weeks short of a year.
http://www.scotusblog.com/case-files/cases/susan-b-anthony-list-v-driehaus/
It took another eighteen months before the law was ruled unconstitutional.
https://www.washingtonpost.com/news/volokh-conspiracy/wp/2016/02/24/court-strikes-down-ohio-ban-on-knowing-or-reckless-falsehoods-about-candidates/?utm_term=.2ce7d7c817b3
plaxy: Thank you for your research on this. There is reason … and precedent … to hope!
Eleanor, thanks for this.
Nina Olson, IRS National Taxpayer Advocate, speaks up for us once again. We so appreciate her persistence. Who will now finally listen?
https://taxpayeradvocate.irs.gov/Media/Default/Documents/2018-JRC/JRC18_Volume1_AOF_04.pdf
Indirectly on our side, but still focussed on US residents.
“This act, according to the IRS, is an effort to prevent tax evasion by individuals who have financial assets and other accounts offshore. For those who have assets more than $50,000 offshore, the act requires that they report information about them on their tax return.”
It’s $200K for non-residents.
“It’s $200K for non-residents.”
Yeah, so if a non-resident can save for retirement then the US still calls them fraudulent.
Meanwhile the actual fraud artists still run free. Monica Hernandez and a few of her cohorts were caught but the ringleaders haven’t been. The way the US Department of Justice behaves, I have the impression the ringleaders are in the DOJ and they just tell drones in the IRS what to do.
If I were a gambling man I would not bet my future on the hope of a meaningful win in the FATCA lawsuit. I would risk a small bet that the standing issue will make it to SCOTUS.
If the the Supreme Court hears the case the ONLY issue it will deal with is the “standing issue”.
If the court hears the case and resolves the “standing issue” in favor of the Bopp/Republicans Overseas then the District Court will be directed to hear the case on its merits.
If the District Court hears the case on its merits, the losing side will certainly appeal.
The reality is as follows:
Success in the courts means that the case will continue for years and years. During this period of “years and years” more and more FATCA and CBT damage will be done to those affected.
This FATCA litigation is not likely to yield positive results for this generation. It should be seen as an investment in a better future for the world.
“If the the Supreme Court hears the case the ONLY issue it will deal with is the “standing issue”.
If the court hears the case and resolves the “standing issue” in favor of the Bopp/Republicans Overseas then the District Court will be directed to hear the case on its merits.”
Yes. And that’s where it may end, after a hearing and appeal at the District Court level. Even if Republicans Abroad chose at that point to try to take the case to the Supreme Court, it might just become one of the many that never get selected for consideration.
Yes and it’s important to note the any U.S. citizen living outside the USA is being “used” by the U.S. Government to accomplish this purpose. U.S. citizens who live in other countries have become “Trojan Horse Soldiers” who are used against their countries of residence. Note that it is “citizenship-based taxation” that allows the U.S. to us it’s citizens in this way.
Put it another way: The U.S. Government is using U.S. citizens as instruments of “foreign policy”.
Without FATCA repeal, other countries can protect themselves only by “ridding the country of U.S. citizens”. What you are likely to see is the following progression:
First, not allow U.S. citizens to immigrate to the country.
Second, deport those residents who are ONLY U.S. citizens.
Third, force dual citizens to renounce U.S. citizenship.
Fourth, strip those duals who will NOT renounce U.S. citizenship from their primary citizenship and then (once they are ONLY U.S. citizens) deport them.
No, this won’t happen overnight. But, it is likely to happen gradually.
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The 6th Circuit undercuts Supreme Court order to dismiss FATCA suit
https://twitter.com/IRSMedic/status/900815313721282560
What happens with the citizenship of a child born in the USA with Chinese National parents. The child moved with his parents to China at an early age.
China does not allow dual citizenship
The advice on the board as evident by court rulings too now that FATCA is never going to be repealed ever. The law has spread its tentacles all over the world now and every bank and financial institutions are threatened by it. For dual nationals with no US indicia even its imperative to stay low and renounce asap. For those with a US indicia and birth in USA unfortunately there is no escape from this law. As they say all roads lead to renounciations. I doubt that even Supreme Court will rule over anything that the Feds clamor for so much. It is quite evident from all these trials in high court and meetings in Congress. No bank or brokerage in the world wants a US citizen these days unless it is a very low category bank as compliance nightmares strangulate them and Congress will never understand that. Best advice has already been given by the founder of this forum Patricia and I commend her again for her advice and her dedication. Wish I had found this board a decade ago and left US for good. Rest assure that even Supreme Court will not be able to repeal it as so many countries and banks around the world have signed up for it. I had seen many banks over the years tell me that they are not scared of US govt but gave in and signed up for it. Might is right. To repeal it now would make the banks and institutions laugh at the US govt and I doubt ever that OECD who got US on board with them will like that. They didn’t like US not signing CRS but still they liked the law passed by ex President Obama and copied it all over the world. I have seen banks now asking for tax returns and previous residences for past five years to find out how many jurisdictions they have to report to. Trust me I live and travel to countries where this is a common phenomenon. Only in USA they can get by opening up an account in a few minutes. It takes 2-4 weeks in other countries for a local even to open up a simple account nowadays . I don’t know how it is in Canada or U.K. but the rest of the world it is getting very difficult if not impossible. This is all due to laws by US govt all over the world which have increased bank charges too for hiring more compliance officers to their teams. It is ironic that US does not have the same laws implemented on its banks inside USA. Then the homelanders would have rebeled again these laws and realise our frustrations
New laws are implemented for foreigners studying in USA or foreigners living in USA asking them to report all their FBARs just like the US citizens and permanent residents. They have to report each and everything and pay tax on interest income too. I believe all the rich foreign students if they realise these laws will impact them will ever want to come to US at all for their advanced education. US govt is after each dollar these days. It’s not just surveillance but wanting to get every dollar to fill up its coffers.
For more on this info please look at attorney Virginia’s blog. https://www.angloinfo.com/blogs/global/us-tax/foreigners-to-the-us-extreme-vetting-and-if-you-get-there-dont-forget-your-taxes/
Maybe it’s not all bad news. On the question of FBAR penalties, the Sixth District ruling seems to confirm that the IRS has to be very very careful who they hit (or try to hit).
This court has put on record its opinion that it’s not credible that the IRS would actually try to enforce FBAR penalties on these US citizens for failure to file FBARs reporting legitimate accounts held by the plaintiffs in their countries of residence.
If the IRS were to try to enforce FBAR failure-to-file penalties against an individual in circumstances similar to the plaintiffs, they’d be proving the threat credible – risking a case in which the plaintiff’s standing could not be questioned.
“This court has put on record its opinion that it’s not credible that the IRS would actually try to enforce FBAR penalties on these US citizens for failure to file FBARs”
The quotation does not show any such thing. The quotation shows the court saying that Zell did not put on record any opinion of Zell that the IRS would actually try to enforce the willfulness penalty. Next, the quotation shows the court saying that plaintiffs do not challenge the ordinary penalty at all.
Facts (would the IRS actually try to enforce the willfulness penalty, and even would the IRS actually try to enforce the ordinary penalty) are not addressed. The court might have even blocked filing of any actual facts involved in the case. Furthermore since this is a circuit court, the IRS isn’t even involved, the US Department of Justice can make up whatever they want, and it doesn’t matter if the IRS doesn’t even believe the DOJ.
@USCitizenAbroad, re;
“…..it’s important to note the any U.S. citizen living outside the USA is being “used” by the U.S. Government to accomplish this purpose. U.S. citizens who live in other countries have become “Trojan Horse Soldiers” who are used against their countries of residence. Note that it is “citizenship-based taxation” that allows the U.S. to us it’s citizens in this way.
Put it another way: The U.S. Government is using U.S. citizens as instruments of “foreign policy”……”
Your comments, and particularly “….The U.S. Government is using U.S. citizens as instruments of “foreign policy”……” really struck me as an unacknowledged angle on US extraterritorial CBT, and very valuable to make to the non-US countries which are our homes, to whom we pay taxes in full, and where we hold our legal, local savings and locally generated wages/income.
This is not only about the US asserting a so-called ‘right’ to determine its own tax system – which is the bs defensive line that the Canadian and other IGA signatory country governments are using to rationalize their craven submission to the arrogant extraterritorial demands of a foreign nation to their own local citizens, residents, personal and financial data, and assets. The nature of US extraterritorial CBT constitutes ‘foreign policy’ embodied in the individuals and families that the US is claiming merely via birthplace or parentage – without any economic connections whatsoever.
The questions posed by MEP in’t Veld demonstrate that she sees this, when she raises the questions of the US impact on EU residents and citizens – in terms of FATCA impeding EU guaranteed rights, including the right to free movement, to a certain level of data protection, etc. See ex. her latest;
23-08-2017
Reference :
P-005250/2017
Question for written answer P-005250/2017
to the Commission
Rule 130
Sophia in ‘t Veld (ALDE)
‘Subject: Multiple reporting requirements for EU citizens under FATCA and the associated IGAs’
“The Foreign Account Tax Compliance Act (FATCA) is a US law that was officially enacted to combat tax fraud committed by US tax residents through offshore accounts. The law forces non-US financial institutions to identify and report to the US Internal Revenue Service all their ‘Us person’ clients. It was implemented in Europe by means of bilateral intergovernmental agreements (IGA) concluded between the EU Member States and the US. EU citizens who are active in more than one Member State to have concluded an IGA are subjected to individual FATCA reporting requirements in each Member State on the basis of each agreement.
1. Is the Commission aware that, under FATCA and the associated IGASs, EU citizens are subjected to similar reporting requirements in each Member State in which they are active?
2. Could the Commission outline how many EU citizens could be affected by this repercussion? Does it intend to take any action to assist and protect EU citizens?
3. Does the Commission consider the practice of multiple FATCA reporting requirements in different Member States contrary to the Treaty provisions on the free movement of people? If so, how will it address this violation of EU citizens’ rights?”
http://www.europarl.europa.eu/plenary/en/parliamentary-questions.html?tabType=all&tabActif=tabLast#sidesForm
Allison Christians has also raised the issues that FATCA and US extraterritorial taxation creates that go far beyond the US and IGA collaborator’s claims that this is ‘merely’ the ‘right’ of a nation to determine its own tax system. For ex. see what she and Arthur Cockfield warned the Canadian government BEFORE they pushed through the legislation enabling the IGA (see ex. “…We examined the proposed Implementation Act and the IGA and we find that they raise a number of serious issues ranging from likely constitutional violations to violations of international law. We submit these comments in the hope that they will help lawmakers and the public understand that FATCA, while intended to catch tax evaders, is poised instead to impose serious and unjustified harms on people who live around the world as non-resident U.S. citizens and green card holders, as well as their family members and business associates. ” Christians, Allison and Cockfield, Arthur J., Submission to Finance Department on Implementation of FATCA in Canada (March 10, 2014).