[May 18 2017 update: I now include in this LINK the recommendations of Elise Bean, a long-time FATCA supporter and witness at the FATCA hearing.]
On April 26 2017 there was a Hearing at the U.S. House Subcommittee on Government Operations dealing with the harm caused by the U.S. FATCA law imposed on the world.
At the conclusion of the hearing, Chairman Meadows asked the Witnesses for “three recommendations on how to improve the legal framework set up by the Foreign Account Tax Compliance Act” (FATCA).
My personal-only interpretation of this request is that the Chair is saying something like: “If FATCA has to be replaced with something else, can you recommend three compromise laws/approaches that would achieve the “good” aims of FATCA but minimize the harm, and which would receive bipartisan support?”
— I enclose as a link the May 15, 2017 submitted personal recommendations of Jim Bopp, a witness and attorney for the U.S. FATCA/IGA/FBAR lawsuit currently pending in United States Court of Appeals for the Sixth Circuit (I am one of the plaintiffs).
From the Bopp text:
“This letter provides three recommendations on how to improve the legal framework set up by the Foreign Account Tax Compliance Act (“FATCA”).
First, we recommend that any taxation of overseas Americans comply with established United States constitutional principles and international legal norms.
Second, we recommend that the current laws be repealed in their entirety [Bopp goes on to include specifically FATCA, IGAs, FBAR, and citizenship-based taxation] and certain proposals rejected.
Third, we recommend that Congress enact a 1099 requirement on foreign banks, established by treaty, as long as this complies with established United States constitutional principles and international legal norms…”
—- Appended to the end of the Bopp recommendations are my personal thoughts as a separate submission: I support, as does Mr. Bopp, the repeal in entirety of FATCA, FBAR, IGAs, and citizenship-based taxation (the latter to be replaced with territorial/residence-based taxation), do not support any “watered-down” FATCA-replacement legislation whatsoever — which I believe will continue the harm, and offer suggestions on changing U.S. citizenship laws in the very limited context of FATCA harm. In hindsight, I now feel that I should have gone further in my recommendations for citizenship law changes.
—- When I receive the recommendations of strong FATCA supporter Elise Bean, a hearing witness, I will post.
— Ongoing developments: Republicans Overseas has initiated an intensive lobbying campaign with Congress to kill citizenship-based taxation and replace with territorial taxation. There can be no promise of success, but these people are trying. I am not aware of similar efforts on the Democrat side.
@Nononymous: “… in my view, once you claim [any citizenship right] you’re no longer a pure accidental….you don’t have as high a moral high ground as others.”
Very American, this view of taxation as a purchase of rights.
Looking at it on that basis, America is in the moral doghouse, because for many decades America never claimed payment (taxation) for allowing right of entry to non-US-resident USCs. The stated (and enforced) deal was that you had right of entry provided you entered on a US passport. Nobody ever said a dickie bird, back then, about CBT as a quid pro quo for right of entry.
Then they changed the rules. And made the rule change retrospective, so that those of us who had during the intervening years obediently renewed a US passport because it was the only way we could visit our relatives, found that by fulfilling our end of the “keep passport get entry” bargain, we were now “deemed” to have accepted lifelong double taxation, and moreover we were “deemed” to be “in need of amnesty”, as BBCWatcher put it, for not having been paying the taxes we didn’t know about, and were never asked for, for the past 40 or 50 years.
I don’t think there are any shades or graduations in the moral high ground in the FATCA phenomenon. They’re in the wrong, morally and legally.
But then, I don’t think the moral high ground ever does have much to do with taxation. It generally boils down to realpolitik, when you look at the nitty-gritty.
@Zla’od:
“I just read Bean’s recommendations. She’s not completely useless. For example, she does call for the renunciation fee to be lowered (I fail to detect any snideness on her part there)…”
On that one she’s being snide towards the State Department, which is fine with me. I agree it’s a useful recommendation though, and one that would solve the problem at a stroke for many – provided this simple form was accepted by banks and border guards as proof of non-USness.
New @IRSMedic Video:
Why everyone should be frightened by FATCA.
Because it tosses aside the entire Constitution, puts sensitive information at risk, and creates a penalty minefield for U.S. based businesses.
Key point I did not mention above:
The U.S. Government is breaking the Constitution with FATCA. The separation of powers is integral to the Constitution. The Executive has disregarded the treaty power delegated to the Senate. So now is it that the Executive may make any treaties they want?
https://twitter.com/IRSMedic/status/865633976194547716
https://www.youtube.com/watch?v=VhxtpFBZ2tE&feature=youtu.be
Another point made: Bean did not ask for FATCA SCE.
The US could solve all the problems associated with the law requiring US citizens to enter the US with a US passport by actually enforcing it.
Whose side are you on?
Indeed.
The US did enforce their bloody “no passport no entry” law on me, in 1975 when I was trying to take my children to see their grandma. Not then aware that it was against US law for a US citizen to enter the US other than on a US passport; and also not then aware that the US regarded my children as US citizens, I planned to take them in on my spouse’s (UK) passport, as one was allowed to do under UK law, back in the day. No way. Get them a US passport or they won’t be allowed in. Which is the only reason they got registered at the US Embassy as USCs – because, uniquely among the children in their nursery school, they were discriminated against by the USG from the moment they were born by being categorized as not eligible to enter the US as citizens of the country of their birth.
Bastards.
(Not my children. The USG)
@iota: in 1975 when I was trying to take my children to see their grandma. Not then aware that it was against US law for a US citizen to enter the US other than on a US passport
Unfortunately this is too late to help you now, but up until 1994, for both entry and exit the law only required U.S. citizens carry a “valid passport” and not a “valid United States passport”. Up until 2006 the regulations still did not require a “valid United States passport”. The State Department simply ignored what the law actually said.
http://isaacbrocksociety.ca/2015/09/05/ted-kennedy-alan-simpsons-lies-about-the-1994-ban-on-u-s-citizens-using-non-u-s-passports-to-leave-the-u-s/
My best guess is that the State Department belatedly noticed what the law actually said (and then quickly got some pliable Congresscritters to amend it) in 1994 because they were afraid of legal challenges either from Philip Agee or from parents who fell behind on child support payments
http://isaacbrocksociety.ca/2016/07/02/was-ex-cia-agent-philip-agee-the-target-of-the-1994-technical-amendment-barring-u-s-citizens-from-leaving-the-u-s-on-non-u-s-passports/
My sincere thanks to everyone for your thoughtful responses to Nononymous’ comment. I don’t claim to be Mother Theresa but I have considerable faith in the moral ground on which I stand.
Thanks Eric. Interesting.
Though I probably would not have contested it even if I had known they were acting outside the law because (a) from age 12 I well knew US officials didn’t act within the law if it didn’t suit them, and (b) of course, I didn’t realize at the time that US citizenship was going to turn out to be so toxic, 40 years down the line. It just seemed like a nuisance back then – find a passport photographer, frantic dash up to Liverpool consulate, register births, buy passports, in time for our flights.
So it goes. Fortunately they don’t hold it against me. 🙂 They roll their eyes and look at each other if I so much as mention the IRS LOL.
And even more fortunately, thank goodness, grandchildren not affected, not even in the twisted mind of the USG.
‘The US did enforce their bloody “no passport no entry” law on me, in 1975’
I don’t think the US had pre-clearance in the UK in 1975. What did they do, deny entry after you or your children landed in the US?
Besides which, I crossed the border several times with a birth certificate and voter’s registration, though that was just within North America where it was allowed in those days.
‘and also not then aware that the US regarded my children as US citizens’
You should have said you didn’t live long enough in the US to infect your children.
If ever there was a case of shoulda, woulda, coulda it’s mine but I’m not going to beat myself up over what is now quite far in the past. It’s easy to look back at what we did to come within snatching distance of the tentacles of the IRS squid and forget that we were just going about our daily lives and didn’t suspect that the world was heading into Orwell’s worst nightmare. I’ve said it quite a few times here at Brock that prior to being able to find answers (be they ever so varied) on the internet we really didn’t even know there were questions we should have been asking. So CLNs, I-407s, FBARs were out there but not everyone knew about them. Roughly 7 out of 8 potential US tax filers still don’t file so it’s obvious to me that the IRS has had an absolutely pathetic informational program for many, many decades when it comes to overseas “US persons for tax purposes”. Birth certificates, citizenship certificates, greencards and visas should all have had attachments outlining the tax basics for anyone exiting the country because the USA has a tax system which defies international norms, logic and intuition. It failed to forewarn so those leaving and living outside the homeland could be forearmed. (IMHO.)
NeglIgence bordering on entrapment, Embee…
@DoD @iota
I’m on the side of repealing laws that aren’t enforced, rather that allowing them to remain just to catch people one day.
@ Bubblebustin
Yes it almost looks like it was by design but we mustn’t say that because someone will throw the conspiracy epithet at us.
@Bubblebustin. In the last IRSMedic video they said that nothing is done with FBAR forms, and asked why have them.
We have FBAR forms so that people can be penalized for not knowing about them. Same as tax returns that have $0.00 owing, but more profitable because of the penalties.
@JC @ND
I heard somewhere that there are container loads of FBARs sitting in parking lots. I guess the IRS might just dust one or two off as evidence one day if it helped nail someone.
Someone apparently looks at the FBARs, or used to, when they were paper. About 7 or 8 years ago I had my FBAR returned to me in the post because some peon in that department noticed I’d forgotten to write in the reporting year at the top of the form. I wrote in the year, sent it back, and never heard from them again.
Luckily this was before the penalty madness. Nowadays I suppose I would have been fined 50 percent of my accounts’ value for willfully submitting an inaccurate FBAR. Why willful? My past forms had the year written in, so I was clearly aware of that requirement, and therefore wouldn’t be able to claim ignorance.
@Embee – ” If ever there was a case of shoulda, woulda, coulda it’s mine but I’m not going to beat myself up over what is now quite far in the past. ”
Indeedy. Speaking for myself, all this legal American stuff was a million miles away from my daily life, with no internet to make it so intrusive as it is nowadays. I feel I was lucky to be young and able to venture, just at the time when international venturing became a practical possibility for a young person in my circumstances.
Escape from America!! Happy days!!
🙂
@ Barbara
I think they might be looking for blank spaces on the FBAR. They once sent my husband a 4 page letter because his DOB was inadvertently left out on an FBAR that year. Strange they couldn’t figure out his DOB was the same as on all the previous years’ FBARs. You’d wonder why it even mattered to them but it’s possible they are OCD about blank spaces. Now that it’s e-filed it would be the computer looking for those blanks.
@Bubblebustin – “I’m on the side of repealing laws that aren’t enforced, rather that allowing them to remain just to catch people one day.”
But Eric has shown that it never was the law until 1994 (coincidentally, just about the time internet access was spreading). Yet it was enforced on me, and enforced on my children, and no doubt enforced on many others, simply because bureaucrats and petty officials either thought it was the law, or thought it ought to be the law, and the people they were enforcing it on didn’t know, and couldn’t know, that it wasn’t. In the mid-1990s, that began to change.
Eventually, law caught up with practice.
The internet has changed the world in ways we don’t even recognise or remember.
@iota
Did you know that Canada recently passed a similar law for air travel, but is strictly enforcing it? Fortunately for those born in Canada, the repercussions of obtaining a Canadian passport aren’t potentially life-altering (or at least not that I know of). Exceptions are those “dual” citizens traveling on a US passport.
Canada’s reasons for now requiring a Canadian passport are here:
http://www.cic.gc.ca/english/visit/dual-canadian-citizens.asp
@Embee:
“Birth certificates, citizenship certificates, greencards and visas should all have had attachments outlining the tax basics for anyone exiting the country because the USA has a tax system which defies international norms, logic and intuition. It failed to forewarn so those leaving and living outside the homeland could be forearmed.”
A warning was inserted in the passport pages sometime in the mid-80s. Not that it did me any good, as I never noticed it until I went back and looked through old passports after learning of CBT/FATCA.
@Bubblebustin:
“Did you know that Canada recently passed a similar law for air travel, but is strictly enforcing it?”
No. I don’t see why that’s relevant. I still don’t understand why you think the US law/non-law ought to have been better enforced. It would have been better for me and my children if it had not been enforced. My sister in America is sick. I want to visit her – last visit, as we are both well aware. But for practical reasons I need my daughter to travel with me, and we can’t do that because a former USC travelling together with a daughter-aged woman of the same surname sticks a USC label on my daughter’s forehead.
Bastards.