Victims of Citizenship-Based Taxation / FATCA: even the US Senate knows | Grassley speech

It seems that even Americans are getting through that they are doing great harm to people of American nationality outside the US. In the opening statement of the meeting “Sunny Places for Shady People: Offshore Tax Evasion by the Wealthy and Corporations” Senator Chuck Grassley said (marking by me):

Whether it’s increased financial reporting or stepped-up enforcement efforts, anti-evasion measures must be balanced against taxpayer rights and the costs such measures impose on innocent taxpayers.
When it comes to catching tax cheats, I’ve found targeted approaches to be far preferable to broadly applicable ones that sweep up innocent taxpayers in far greater numbers than tax cheats.
One example of an overly broad sweep approach to offshore tax evasion is the Foreign Account Tax Compliance Act, or FAT-CA.
Enacted in 2010, FAT-CA imposed stringent requirements on foreign financial institutions to report to the U.S. Treasury on foreign assets held by their American account holders.
Democrats sold this law as the solution to wealthy tax cheats hiding assets in offshore bank accounts.
Yet, according to a 2022 Treasury Inspector General report, other than assessing $14 million in penalties, the IRS hasn’t been able to quantify any revenue raised under the law. That’s despite spending $574 million on implementation and enforcement campaigns.
At the same time, FAT-CA has imposed great costs on Americans living abroad, according to a 2019 GAO report.
Due to the law, many Americans living overseas have seen their bank accounts closed or have been unable to open an account.
For many foreign financial institutions, the business of Americans living abroad simply isn’t worth the additional burdens and cost of complying with the law. 

He ends with:

Enacting bad policies that increase tax complexity and threaten the international competitiveness of U.S. companies would only make matters worse. 

 

The video of the speech:

 

 

 

 

BACKGROUND:
US law causing problems for its citizens abroad
The US has a different system of taxation from all other countries in the world, ‘Citizenship-Based Taxation’ (CBT), read my introduction in Dutch on FATCA and my articles in Dutch and English.

Some of my recent articles in English:

The international exchange of tax information shows that governments may harm decent people in their efferts to ‘slash the scope for tax abuse’.

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About Ellen Timmer

Weblog: https://ellentimmer.com/ ||| Microblog: https://mastodon.nl/@ellent ||| Motto: goede bedoelingen rechtvaardigen geen slechte regels
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