Wednesday, March 18, 2015

FATCA-Elizabeth Warren you haven't a clue

If I were still American, Elizabeth Warren would be my senator. Overall she does great things, but what the damage FATCA does to law-abiding expats she doesn't have a clue.

Her response ignores that FATCA is so bad that people are giving up their nationality because of the unintended consequences. 

My letter to her didn't address the underlying issues that the US is only one of two countries to tax citizens on world-wide income, nor does it cover the money and time spent filing US taxes, a large majority of which owe nothing.

She talks about the $100 billion they hope to recover, not the higher cost of implementation (one estimate is $100 million per bank).

At school when one kid was bad, all kids were punished. FATCA is the same, which is why expat Americans who can no longer want to be American. They are being punished for doing nothing wrong and she is helping attack her fellow citizens albeit indirectly.

Thank you for contacting me to share what happened to you while trying to obtain financial services overseas and your concerns about the Foreign Account Tax Compliance Act (FATCA).

As you may know, President Barack Obama signed FATCA into law on March 18, 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act. The purpose of FATCA is to prevent overseas tax evasion by U.S. persons holding assets in offshore accounts. Under the statute, U.S. taxpayers must report their foreign assets to the Internal Revenue Service (IRS) if the total value exceeds $50,000 and certain foreign financial institutions -- such as mutual funds and banks -- must report annually on the accounts held by their U.S. clients.

I recognize that FATCA implementation has not been perfect, and it troubles me that financial institutions overseas would deny services to Americans out of concern over FATCA compliance. However, according to the U.S. Senate Permanent Subcommittee on Investigations, the U.S. Treasury may be losing more than $100 billion in tax revenues every year as a result of offshore tax havens.  I believe measures like FATCA clamp down on overseas tax evasion and help make sure that everyone pays their fair share of taxes.
Thank you again for your input and for sharing your story about what happened to you personally. I will be sure to keep your thoughts and story in mind.


Victoria FERAUGE said...

Thank you for posting Warren's letter. I share your disappointment but I'm not surprised.

It has been proposed to me that people like Warren don't really understand what they signed into law. Perhaps they didn't back in 2010 but plenty of American abroad have educated them through letters and various organizations. Last year it was rare to find someone in the hallowed halls of the American Congress who hadn't heard something about it.

So they are aware of the problems but many still think it's a capital idea. As one person put it to me: "How else are we to catch those tax evaders?" And at least we are Doing Something."

I see. Well, the collateral damage can Do Something too and you just might not care for how that works out for you.

Ellen said...

I'm not surprised either. This year, though, thanks to Jim W., we were able to speak to her banking guy and plead our case, not only about the ravages of FATCA on our accounts outside the US, but also the closings and denial of service from financial institutions in the US to citizens with foreign addresses.

James Wattengel said...

Just for the record (and not to defend her) FATCA was passed and signed into law before Elizabeth Warren became Senator.

James Wattengel said...

Just for the record (and not to defend her) FATCA was passed and signed into law before Elizabeth Warren became Senator.

Noble Dreamer said...

Another individual has posted the exact same letter from Sen Warren's office:

Joe Citizen said...

Double Taxation without representation, with excessive compliance, and with excessive compliance penalties, yet with $0 in US government services is tyranny.

Perhaps the letter should have focused on the Unconstitutional aspects of FATCA.

Any US persons living overseas must visit the message boards of The Isaac Brock Society, whose motto is Liberty and Justice for all United States Persons abroad >> because while the US is supposed to be about Liberty and Justice for all it does not care about 7+ million US persons overseas unless they live in ones Congressional Districts; inspite of the Constitution not proscribing discrimination against US persons living overseas, and not limiting its protections to only those US persons living in the US.

Tim said...

Being from Massachusetts this has always been a tough call me for as Warren's predecessor Republican Senator Scott Brown was one of the only Republicans to vote for the HIRE Act(which put FATCA into law) so in this particular circumstance it is not clear who would have been the better choice Brown or Warren. Knowing all this at the time of the 2012 election(Republican Brown voting for FATCA while all Democrats generally supporting FATCA) I chose to leave this section of my ballot blank.

Anonymous said...

Warren and others are following the hyperbole entered into the record by the retiring - and immensely ignorant and evil - Carl Levin who came up with the figure of "lost" revenue of $100 billion to "tax havens". How would they or anyone else know even an estimate? Here is what we DO know: as a result of the UBS settlement and the 4500 names they supplied to the IRS and the 40,000(!) other tax cheats who came forward under the voluntary disclosure program, the IRS recouped only $2 billion and assessed interest and penalties of another $4 billion for a total of $6 billion.

That seems like a lot of money until... We learned from the IRS' Inspector General that EACH YEAR the IRS sends out over $20 billion in fraudulent tax returns,that they also allow over $15 billion in illegal deductions, that employees within the Federal government owe over $3 billion in back taxes, that Secy of Commerce, Pritzer owed $80 million (!) in back taxes when she was nominated, and last week it was revealed by the CBO that the Federal bureaucracy in total misspends over $125 billion EACH YEAR that is unaccounted for. This does not include the $500 million in cash and equipment that the administration sent just to Yemen that is now missing!

Finally the Internatioanl Bankers Association estimates that compliance with FATCA will cost $20-30 billion alone!

Think that is bad enough? There is more: At the end of 2010, the Ways and Means Committee "scores" each new change in legislation as to how much revenue it gains or costs. FATCA was scored at bringing in only $800 million per year! Naturally the $6 billion from the OVDP is not a recurring sum; once they have paid their back taxes and penalties it isn't going to repeat, is it?

FATCA is. toning less than jihad declared against overseas Americans by this administration in their desire to weaponize global finance as punishments and extend the financial and fiscal imperialism on the rest of the world. This is their idea of "how to win friends and influence people", and as we've seen from his reaction to the 2014 elections, Pres. Obama doesn't care what "we, the people" think - if he says we are wrong, his Majesty must be right and sycophants like Warren and the other brain-dead members of the once intelligent and independent-minded members of the Democrat Party simply bleat like the sheep,they have become at anything the administration tells them to.

One of the saddest days of my life has been telling my god-son, born of a English parents in NYC that he should give up his US passport because of FATCA! Very time another American does this because of this inherently evil law, it breaks my heart. Even the American icon and national treasure, Tina Turner, didn't wake up the fools in Congress!

We cannot give up this fight, however, or we are not worthy of being called American!