Will Obama’s New FATCA Legislation Cost You Your Bank Account?
New legislation intended to catch tax cheats, called the Foreign Account Tax Compliance Act or FATCA, is having the unintended consequence of costing expats around the world their bank accounts. Due to the high cost in becoming FATCA compliant, foreign banks must decide if compliance is more cost effective then simply cutting ties with American account holders all together. As reported by Forbes, http://www.forbes.com/sites/beltway/2011/06/20/why-obamas-fatca-law-is-a-threat-to-business-growth/, Americans around the world have begun to feel the effects of FATCA:
- From a retired teacher in Germany — “I was denied the policy because I am an American citizen. My agent very clearly said that he could sell the policy that I wanted to any other nationality, except me - because I was American!”
- From an American working in Saudi Arabia — “As a resident of Saudi Arabia, I have twice been rejected as a customer, purely on the basis of my US citizenship. In both instances, I was told that increased administrative and compliance burdens imposed by US authorities have led the banks in question to refuse to open securities accounts for American citizens.”
- From an American in Japan — “All of these banks and institutions are cutting me off from participation in any but the most simple of basic bank account. Why? Because they do not want to take the time and instill the systems and carry the cost of reporting the income of each of their US citizen clients to the US government.”
But, besides threatening expats ability to financially function, and therefore compete abroad, this legislation adds to the already overwhelming paperwork expats face, exposing them to further penalties with the IRS.
This law penalizes law-abiding expats affecting their ability to work and compete abroad. FATCA isn’t fair and needs to be repealed now!
And I have never voted Republican; but believe that stupidity is truly bi-partisan!