FATCA letter from the US Treasury to the Dutch ambassador | first comments by Lehagre and Richardson

On 29 August, 2022 the Assistant Secretary of Tax Policy, U.S. Department of the Treasury, Ms. Lily Batchelder, has sent a letter to the Dutch ambassador on FATCA with the following content:

I am writing regarding our ongoing discussions on the Foreign Account Tax Compliance Act (FATCA), during which you have requested further guidance with respect to Dutch financial institutions that are reporting information pursuant to the Agreement between the United States of America and the Kingdom of the Netherlands to Improve International Tax Compliance and to Implement FATCA (the IGA) regarding bank accounts of account holders that have not provided U.S. taxpayer identification numbers (U.S. TINs) to the financial institution. We understand that the issue is of particular concern with respect to bank account holders that are U.S. citizens who are residents of the Netherlands and have limited ties to the United States.

We value our collaboration with the Netherlands in countering offshore tax evasion and improving international tax compliance. We believe that it is in our mutual interest for U.S. citizens resident in the Netherlands to continue to be able to access basic bank accounts in the Netherlands in order to conduct their ordinary course daily financial activities like the receipt of wages and the payment of bills. However, we wish to again emphasize that obtaining U.S. TINs from U.S. citizens holding accounts at foreign financial institutions (FFIs), including accounts located in their country of residence, is crucial to ensuring that the U.S. Internal Revenue Service (IRS) has the tools it needs to determine whether U.S. citizens are complying with their U.S. tax obligations

In order to address the concerns described above in a balanced manner, the Treasury Department and the IRS intend to develop and publish guidance that we expect will provide that FFIs that follow specified procedures will not be treated as significantly noncompliant with their reporting obligations under the IGA solely because of the failure to report U.S. TINs for certain types of accounts. The guidance is expected to require that our FATCA partner jurisdictions take certain steps to increase the likelihood that U.S. citizens residing within their border will report U.S. TINs to the relevant FFIs as a condition to relief for FFIs in the jurisdiction. This guidance is intended as a first step towards potential permanent relief for foreign financial accounts of U.S. citizens resident abroad that pose a low risk from a U.S. tax compliance perspective.

We hope that based on this information Dutch FFIs will not close accounts of U.S. citizens resident in the Netherlands who do not provide U.S. TINs prior to the issuance of the published guidance.

We appreciate the constructive dialogue that we have had on these issues and look forward to future collaboration and cooperation.

This is the letter the Dutch banking organisation NVB referred to (blog).


First reactions from FATCA-victims

Fabien Lehagre of the French Accidental Americans Association, Association des Américains Accidentels (AAA), on linkedin:

[#FATCA / #USTreasury]

✍️ Letter from Lily Batchelder, Assistant Secretary of Tax Policy for U.S. Department of the Treasury addressed to André Haspels, Ambassador at Embassy of the Kingdom of the Netherlands in the USA.

🤔 I have mixed feelings because there are positives and negatives.

👍 The good news is that the U.S. Department of the Treasury is now aware of the banking problems and seems to want to fix them : “This guidance is intended as a first step towards potential permanent relief for foreign financial accounts of U.S. citizens resident abroad that pose a low riks from a U.S. tax compliance perspective.”

👎 On the negative side, they don’t seem to understand that accidental Americans residing in Europe are first and foremost European citizens and that having a Social Security Number is far from obvious because it was only made mandatory in 1986 in USA.


John Richardson of Citizenshipsolutions wrote the article August 29 Letter From US Treasury To Dutch Government Reinforces Commitment To Impose US Citizenship Tax On Dutch Residents. He remarks amongst others:

The Dutch banks simply do NOT want to deal with US citizen clients.
This sentiment is entirely reasonable and is a natural consequence of US regulatory overreach.


Therefore, it’s clear the reluctance to have US citizen customers is not principally motivated by a concern of FATCA noncompliance. It’s because the US Government has ensured that US citizens are “toxic (taxic) carbon life forms” and it’s better to avoid them. The “toxicity” (taxicity) is caused by US citizenship taxation – specifically the US attempt to impose worldwide taxation on US citizen Dutch residents who live and pay tax in the Netherlands. In other words: the problem is caused by US citizenship taxation and not by FATCA.


US law causing problems for its citizens

The US has a different system of taxation from all other countries in the world, ‘Citizenship-Based Taxation’, read my introduction in Dutch on FATCA and several articles in English, e.g.

Over Ellen Timmer

Weblog: https://ellentimmer.com/ ||| Microblog: https://mastodon.nl/@ellent ||| Motto: goede bedoelingen rechtvaardigen geen slechte regels
Dit bericht werd geplaatst in Bankrekening krijgen en behouden, Belastingrecht, English - posts in English on this blog, Financieel recht, onder meer Wft, Wtt, Fraude, witwasbestrijding, Wwft, Grondrechten en getagged met , , , , , . Maak dit favoriet permalink.

Een reactie op FATCA letter from the US Treasury to the Dutch ambassador | first comments by Lehagre and Richardson

  1. Pingback: Part 1 - Notice 2023-11: The Carrot, The Stick And Heightened FATCA Enforcement On Overseas Americans - U.S. Citizens and Green Card Holders Residing in Canada and Abroad

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