FATCA Destroys Lives and the US Economy
Join the growing chorus of opposition to FATCA. Tell Washington to repeal FATCA today. FATCA legislation will destroy the lives of average, honest and hard working Americans no matter where they live. Reporting on foreign bank accounts, pension plans, annuities, and property just because you hold these assets overseas is discriminatory.
Penalties for non-willful failure to report can quickly amount to $50,000 for simply filing errors or honest errors of omission. IRS classification of certain foreign financial instruments are not clear and will lead to confusion on reporting, leading many overseas Americans to make filing errors that could result in financially ruinous penalities.
If this isn't bad enough, think what will happen when foreign banks, insurance companies and financial institutions begin refusing Americans as clients and divesting of US securities. Foreign investment in the US amounts to $21 trillion and $10.5 trillion of this is invested in US securities. A KPMG survey indicates that only 36% of financial institutions will comply with FATCA leaving 64% still considering divesting out of US securities. If even a fraction of those foreign investors divest, the loss to the US would be in the trillions of dollars. This at a time when the US economy desperately needs more foreign investment, not less.
Starting in 2014 (moved from 2013), foreign financial institutions will be required by the US government under the Foreign Account Tax Compliance Act (FATCA) to report information regarding accounts of US citizens to the IRS. This law requires foreign financial institutions (FFI) such as your local bank, stock brokers, hedge funds, pension funds, insurance companies, trusts, etc. - to report directly to the IRS all their clients who are "US persons" (citizens and green card holders living in the USA or abroad). The penalties for the institutions that do not cooperate are steep.
FATCA also requires US citizens who have foreign financial assets in excess of $50,000 (thresholds are higher for those filing from overseas-- see link that follows) to report those assets on a new Form 8938 to be filed with the 1040 tax return starting fiscal year 2011. Instructions for form 8938 were published in December 2011 and the form should be filed in 2012 and succeeding years. This form is separate from the FBAR which should also be filed every year.
Get informed and act today. See our ACA FATCA report at fatcapp.pdf where you will also find a model letter for writing to your congressman. See our letter to IRS and Treasury officials. Act now as Senator Levin has recently announced an extension to the FATCA legislation that will further cripple the U.S. economy. See the following link for background information on FATCA
Sign the online petition against FATCA at signon.org
Don't forget to write to the Americans Abroad Caucus members as well -- email addresses are available here on this ACA website.
Legislators want you to believe that FATCA is about tax evasion but it isn't. It's about destroying US jobs and economic well-being. Write to your Congressman and encourage all of your American friends in the United States as well as those residing overseas to support a massive write-in campaign. ACA has prepared a model letter fatcaml.txt orfatcaml.doc and reproduced below as well (which you can cut and paste into your word processor)::
The Honorable [full name of Congressman].
United States [House of Representatives] [Senate]
Washington D.C. 20515
RE: Comments regarding FATCA
I am an American living abroad [or living in the US and doing business abroad]. I would like to make you aware of the unintended and difficult consequences of this law upon my life as a [retiree, business person, or citizen living abroad]. [State the consequences of your personal situation: some of them may include: difficulty in understanding the requirements of the law, expense in compliance, problem with being refused banking services or interference with business relationships.]
I understand that ACA American Citizens Abroad ( americansabroad.org ) is making a large effort to educate the US Congress about how this Act was slipped into the Hiring Incentives Bill of 2010 and was not properly reviewed; most in Congress were not even aware of the content of the law, let alone the implications. FATCA will significantly discourage foreign investment in the United States due to the threat of withholding 30% of their funds. FATCA will negatively impact U.S. businesses and American entrepreneurs operating in global markets; it has already turned American citizens into pariahs in the international world of finance as foreign financial institutions close off banking relationships. FATCA is not necessary and requires heavy administrative costs that exceed any potential for additional tax revenue; the IRS already has many other tools to go after tax evaders. FATCA is an unacceptable manifestation of U.S. financial imperialism that imposes U.S. law on the rest of the world; this can lead to a systematic destabilizing of international financial markets.
I completely support the current campaign of American Citizens Abroad to have this law repealed.
Please also be advised that I am one of the estimated 6,000,000 or so citizens who live abroad and continue to exercise my voting rights. I am a voter in the US elections and vote in the [__th] district.
Thank you for your kind attention.
Very truly yours,