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Thursday, January 23, 2014

Wow! Republicans to pass resolution calling for repeal of FATCA

The Republican party is expected to pass a resolution on Friday calling for the repeal of the Foreign Account Tax Compliance Act (FATCA) (Hat Tip: Memeorandum).

If adopted, the anti-FATCA resolution would reflect the party's political priorities for the time being but would not change its presidential campaign platform, according to the RNC.

Approved in 2010 after a tax-avoidance scandal involving a Swiss bank, FATCA requires most foreign banks and investment funds to report to the U.S. Internal Revenue Service information about U.S. customers' accounts worth $50,000 or more.

Criticized by banks, libertarians and some Americans living abroad as a costly and unneeded government overreach, FATCA is on the books, but its effective date has been delayed repeatedly, with enforcement now set to start on July 1.

Repeal seems unlikely, but more political heat from Republicans could further complicate and delay implementation, said financial industry lobbyists.

Moreover, Republicans are eager to use FATCA as a campaign and fundraising issue against Democrats ahead of the congressional mid-term elections in November, RNC members said.
"I see FATCA just like Obamacare," said Solomon Yue, an RNC official from Oregon who is leading the party's FATCA repeal effort. "It will attract American overseas donors."
The act, which as noted is intended to prevent Americans from hiding money in foreign bank accounts, is the bane of the existence of many Americans residing abroad. Here in Israel, for instance, if you are a US citizen, unless you live here full time, you cannot open a bank account, and if you had one, you were probably forced to close it. Moreover, if you're a dual citizen living here and open a bank account, you must now give your US social security number. 

Yes, this issue resonates with Americans overseas - at least with the ones who haven't already given up their US citizenship to avoid issues like this one.

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