On behalf of Silver Tax Group posted in Offshore Accounts on Wednesday, April 25, 2018.
The U.S. Supreme Court will not be haring the latest challenge concerning the Foreign Account Tax Compliance Act (FATCA). A number of U.S. citizens living abroad brought the lawsuit. It also had support from Senator Rand Paul who felt that FATCA was unconstitutional.
Plaintiffs in such cases have had little success in challenging the law. Yet the law continues to place a burden upon those living across the sea when it comes to reporting requirements.
Why is FATCA so unpopular?
Some lawmakers have opposed FATCA since it became law in 2010. Still, legislative efforts to repeal it have been unsuccessful. This includes an attempt to challenge FATCA from use in the country of Israel.
The attorneys representing the plaintiffs who hoped to see FATCA overturned pointed out the great expense the legislation is having upon citizens living abroad and on foreign banking institutions.
The claimed intent of FATCA was to locate undeclared accounts of U.S. citizens living in foreign nations. There were allegations that many residents were using foreign accounts to hide income and avoid tax liabilities.
However, FATCA placed additional burdens on those living abroad in that many nations would not allow them to set up accounts in their countries. Many such banks refused to do business with U.S. citizens due to “a significant noncompliance penalty” and because of “staggering compliance costs.
What happens next?
We’ve spoken in the past about the stringent requirements FATCA places upon taxpayers. With the passing of this law came a number of complex reporting procedures. The failure to comply with such reporting procedures ultimately could lead to the seizure of assets, bank levies, wage garnishments, and even prison time.
As tax attorneys keep informed regarding rule changes and interpretations of FATCA regulations, they become an invaluable resource for Michigan taxpayers with offshore assets and accounts.