November 2, 2013

FATCA: The Scarlet Letter Abroad

By Ryan Rommann
I am a U.S. citizen living and working abroad. I have always been an upstanding, taxpaying American. I served in the Peace Corps and donate my time to community service. Never have I attempted to pay less than my fair share of taxes nor tried to hide in offshore tax havens. Yet I, and the 7.2 million Americans currently overseas, am being blacklisted by a little-known tax policy. The Foreign Account Tax Compliance Act (FATCA) bill proposed by Senators Max Baucus (D-Mont) and Charles Rangel (D-NY) in 2009 to catch tax evaders has inadvertently ensnared everyone else. Under FATCA, Foreign Financial Institutions (FFIs) have until 2014 to disclose the full account information of their American and green card holding clients. If these foreign banks, brokerages, and insurance companies fail to meet Washington's expectations, they face the steep penalty of 30% automatic withholding on U.S.-sourced income. They are pushed into a corner of divulging client information, exiting the U.S....(Read Full Article)