The Foreign Account Tax Compliance Act (FATCA) was enacted as a revenue increasing measure, but is yet another in a series of laws that place additional burdens on US citizens residing abroad, otherwise known as expatriates or “expats”. These new laws include FBAR and the HIRE act.
FATCA and FBAR (Foreign Bank and Financial Accounts) require foreign businesses to identify any Americans among their customers and turn over information about their accounts to the IRS. Any American who does not file an account at thresholds beginning at $50,000 will be fined.
The problem for US citizens working abroad is that non US banks do not want to expose themselves to IRS audit and liability and therefore are refusing American clients.
Additionally non US employers may discriminate against hiring US citizens if the positions involve financial responsibility of financial records, assets or bank accounts, since control of these activities would also expose foreign companies to IRS scrutiny.
Effectively, these laws act as capital control laws preventing expatriation of funds outside the USA. Furthermore, these laws act to impede freedom of work for US citizens residing abroad.
The affected group of Americans living overseas has had little political support among US lawmakers, due to their small number and that their government representatives are spread out across the 50 US states thereby further diluting their voting power, according to American attorney Joe Leeds.
Related Posts:
http://www.thailawforum.com/blog/thailand-residents-seek-refuge-at-government-savings-bank
http://www.thailawforum.com/blog/no-tax-no-passport
{ 0 comments… add one now }