Will FATCA be repealed?

Posted on 19 February, 2017 by Orlando Gotay Since I have been closely following the unfolding—and somewhat constantly shifting tax policy of the Trump administration and the 115th Congress, I get asked often what will happen, if anything, to FATCA, the Foreign Account Tax Compliance Act. Recall FATCA has turned virtually every foreign country and bank into an agent of the IRS, reporting back to the US Treasury on the holdings of US “persons”. Along with a bunch of additional requirements, like the odious Foreign Bank Account Report, it presents a truly formidable fiscal challenge even for the ‘normal’ expat. Most countries folded and signed agreements with the US where they agree to share financial information of US persons, under clear threat of punishing withholding taxes of US sourced payments to people in those countries. Even Vatican City signed up. Some countries have taken their time, and there has been more or less some push-back. The interesting thing is that there was a promise in the Republican party platform to repeal FATCA. I have been a delegate to National Conventions, so I can tell you the language in these much fought over platforms has often ended up in the dustbin. But the Trump administration is anything but normal. Could they try to repeal FATCA? The first hurdle is that FATCA may not be as high as we could wish on the administration’s tax priorities. Well ahead is Obamacare repeal (remember it has plenty of tax components) plus the Trump “big … Continue reading

Foreign Real Estate Is the New Swiss Bank Account

Foreign Real Estate Is the New Swiss Bank Account By Nick Giambruno Financial privacy is essentially dead. I think it’s only prudent to assume that sooner or later all the details of your financial life will come to rest in a government computer—if they haven’t done so already—and to plan accordingly. We live in a world where pretty much every penny you earn, save, and spend is stored in a permanent record somewhere and can be retrieved for scrutiny one day if needed. It’s not a comfortable or happy thing. But no matter how unpleasant it is, I believe it’s a reality we have to face. Knowing that you are financially naked and exposed to an insolvent government hungry for revenue might make you feel like you just ate rat poison for lunch. That said, don’t be tempted to try to illegally hide your income and skirt reporting requirements. It’s a fool’s errand. The draconian penalties make a cost/benefit analysis easy… don’t even think about it. An Inescapable Global Dragnet FATCA is at the vanguard of the global trend for the automatic reciprocal exchange of financial information between governments. In case you don’t know, FATCA, the Foreign Account Tax Compliance Act, is the wildly unpopular law that forces every financial institution in the world to report information about their American clients to the US government, which imposes huge costs on those financial institutions. In effect, FATCA causes every foreign bank to become unpaid agents of the IRS. The US is … Continue reading