Let the Lawsuits Continue!
Another group of people, residents & citizens of other nations (yet claimed by the U.S. all the same), the Association des Américains Accidentels has formed a legal entity in order to raise funding for procuring a legal opinion and proceeding with litigation against the FATCA IGA in France and/or the European Union courts.
We began our journey in February 2014 and welcome this effort, hoping it spreads around the world. Best thing to remember:
This is not a sprint, it’s a marathon and “always concentrate on how far you’ve come, rather than how far you have left to go.”
WHO WILL BE NEXT?
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cross posted from Association of Américains Accidentels
Let's Unite to Defeat #FATCA! Assn des Américains Accidentels asking 4 donations 2 initiate litigation https://t.co/esrmqpOD8X Pls RT pic.twitter.com/zgHGjlRa9K
— Patricia Moon (@nobledreamer16) June 5, 2017
Let’s Unite to Defeat FATCA!
The “Association of Américains Accidentels” (Accidental Americans Association) is a legally formed entity under the French law of 1901.
Its aim is to defend and protect Franco-American binationals against the nefarious effects of FATCA. The consequences of this Inter Governmental Agreement (IGA) between France and the United States have been manyfold and tragic for binational citizens: French banks have refused to open accounts or have closed them, payments of inheritances have been suspended, insurance policies and mortgages have been cancelled among other bureaucratic hassles binationals have had to endure. This has resulted in feelings of great anxiety, anger as well as the feeling that French Authorities has abandoned them to their fate.
The Association has two goals: First, to seek legal opinions in French, European and International law to defeat FATCA in France or better yet in the European Union altogether and secondly to undertake the necessary judicial actions to exclude binationals from the FATCA IGA’s once and for all. Preliminary conversations with highly qualified lawyers have been promising and we think that there may be solid legal grounds to achieve this goal whether at the French or European Union level or both. But legal opinions by good lawyers are not free.
To this end we have started a fund raising drive and we need you.
In advance, many thanks for your help and Let’s Unite to Defeat FATCA!
Fabien Lehagre
Président de l’Association des Américains Accidentels (AAA)
Published on Jun 6, 2017
1ère réunion de l’Association des Américains Accidentels le 29 avril 2017 à Gourin (56).
Les Américains « accidentels » ont répondu à l’appel de Fabien Lehagre qui a lancé son collectif qui regroupe ces Franco-Américains, nés sur le sol français d’au moins un parent américain ou nés sur le sol américain d’au moins un parent français. Les États-Unis, ils n’y ont passé que quelques semaines ou quelques années d’enfance…
Et pourtant, depuis 2014, le fisc américain leur court après. Depuis que la France a signé avec les États-Unis l’accord Fatca, qui oblige les banques françaises à transmettre les informations bancaires de leur client présentant un « indice d’américanité » à l’IRS, le fisc américain.
Depuis, ces Américains Accidentels subissent une effroyable injustice…
For reference, this paper provides good summary of what is and is not a ‘US situs’ asset for US estate tax purposes. Note the presence of the US’s trademark illogical stance in several places. For example, cash in a US bank is not at risk from US estate taxes, but cash held in an US brokerage is, as is cash currency held in a US safety deposit box.
Canada and a handful of other countries have estate tax treaties with the US. The general rule with these treaties is that NRAs get the same $5.49mm or so estate tax exemption as provided to US citizens before US estate taxes kick in. So much more usable than the downright stingy $60k default provided to folk in non-estate tax treaty countries.
With that in mind, filing a US non-resident estate tax return, IRS form 706na, is somewhat of a pain in the proverbial, even from a country with a decent US estate tax treaty. I have done one, and wouldn’t particularly choose to repeat the process in future. No actual tax, but a bunch of pointless and time consuming paperwork hoops with the IRS before funds can be released from US held accounts.
Karen & USCitizenAbroad: Thank you so much for the links to the actual law. I really appreciate your footwork on this! 🙂
My parents are US citizens living in the USA. If one of them dies, leaving an estate in the USA, and I am one of the heirs, what complications would be introduced if I have expatriated? The situations described above assume an alien decedent.
@Zla’od
I don’t think there would be any estate tax implications based on the citizenship status of the heirs. The tax (if any) is paid by the estate based on the status of the decedent.
The vast majority of NRAs holding US shares never file a US estate tax return.
BUT beware having a large accounting or Trust company as executor. They may well be obliged to follow mother IRS rules. Of course that’s why they can charge big bucks. No tax owing but huge fees.
Zla’od – The only potential complication of a NRA (including an ex USC) might be if there was real property transferred. That could in theory drag you back into the US tax system which you had carefully extricated yourself from. Or could drag in a descendant who was never a USC. FWIW It is the estate that pays estate tax, not the recipient. There are specific and very ugly rules related to estates and gifts from a covered expatriate to a USC tho that probably need to be thought about from an estate planning perspective.
Thank you both (Karen and Moulard). I have no descendants, so that issue is moot. One parent owns a house. I suppose the thing to do would be to make sure she appoints someone else as the executor, and that person sells the house.
U.S. estate tax laws have, on many many occasions, caused enormous financial harm to innocent non-U.S. citizens and temporary residents. As an accountant in London, I have seen a few horrifying cases. One case comes to mind. A German student of 26 years old was on a two semester study programme at a major U.S. university and held a one-year student visa, with the right to limited work related to his field. During his stay in the U.S., his father, an extremely wealthy man, with over 3 million dollars of investments in the United States alone, suddenly died. The mother had already passed away and the boy was the sole beneficiary of the entire estate. Since the father had well over $60,000 held in the U.S. and the son was at the time of his father’s death a U.S. resident, the IRS attempted to impose U.S. estate tax on the entire inheritance, including on the vast majority, over 38 million U.S. dollars, held in Germany, Austria, Switzerland and the U.K. The case dragged on and on and the IRS tried in every which way possible to get their hands on the estate “tax due” from the entire estate, claiming that the beneficiary was a U.S. resident and had not previously declared that he was a holder of the family trust as well, trying to impose exorbitant penalties, etc. The case was partially resolved, but not without enormous and protracted wrangling and losses to the boy in the millions of dollars. Moral of the story: DO NOT INVEST IN U.S. DENOMINATED SHARES. DO NOT INVEST IN U.S. PROPERTY, IF YOU DON’T LIVE IN THE U.S. IF YOUR CHILDREN EITHER LIVE IN THE U.S. OR WANT TO STUDY THERE, TAKE PRECAUTIONS BEFORE THEY GO THERE TO REMOVE THEM FROM ANY DIRECT INHERITANCE THAT COULD POSSIBLY ARISE. TREAD WITH EXTREME CAUTION WHEN INVESTING IN THE U.S.!!!
Few countries tax systems are as ruthless, cut-throat and make the laying of traps their modus operandi. FATCA is only a part of this “modus operandi” and because this way of “taxing” and an entrenched system of entrapment has become the norm in the U.S., I wouldn’t expect to see FATCA going away anytime soon. I salute all of the attempts, but the truth of the matter is that for over seven years this FATCA story has been in the headlines and the collateral damage is well-known and well documented. Nothing has been done and sadly, I fear, nothing will be done, as FATCA is just an intrinsic part of a much larger enterprise that will not be toppled easily.
@Walter
Thanks for your input.
I wish the popular press would expose this.
I have a nephew studying for 6yrs in the US. My sister and brother in law look incredulously at me when I try to warn them, they think I am speaking nonsense.
Walter III: Thank you for sharing this with us. There is no doubt in my mind that the United States government used its power to steal from that young man whether or not they ever got the full amount they were seeking. I agree with Heidi that stuff like this should hit the papers!
@Walter & Muzzled
I think that IRS employees must work on a commission or bonus and that has led to the relentless drive for collection and the persecution of US expats. It seems to me that the IRS has become the fourth arm of government and have become a law unto themselves.
I am acutely aware of the difference in character between them and the Social Security Administration whos job it is to give out money.
Entrapment is the perfect word for how the IRS works. The initial OVDP (Overseas Voluntary Disclosure Program) is a perfect example of entrapment. Enticing innocent, law-abiding people to correct their past forgetfulness with assurances that they would just be getting their paperwork in order and fulfilling their obligations as U.S. citizens living abroad and then, just when they were “in” the program, they changed the rules and threw the book at these people, bankrupting and financially devastating many in the process. Nobody should be surprised. That is how the “system” works there.
After the Brexit negotiations, Barnier will defend the rights of EU citizens affected by Fatca … ??? … non?