As reported on April 9th, Democrats Abroad Canada held its annual general meeting on March 25th in Toronto. The minutes provided a very brief mention about DA’s FBAR/FATCA task force. Today, a new communiqué was released detailing the task force’s recent and upcoming activities. We are now heading into lobbying season, it appears, with both DA and ACA poised to make their annual pilgrimages to D.C. to plead our case – particularly interesting in an election year.
Here’s the new message:
FBAR/FATCA Task Force Update
Dear Democrats Abroad member,
Democrats Abroad’s FBAR/FATCA Task Force has been working consistently to develop an effective strategy to alleviate the burdens placed by new and newly-enforced tax legislation on US citizens abroad. The specific legislation we are focusing on is FATCA and the FBAR.
The Foreign Accounts Tax Compliance Act (FATCA) requires U.S. taxpayers with specified foreign financial assets that exceed certain thresholds to report those assets to the IRS. In addition, FATCA will require foreign financial institutions to report directly to the IRS information about financial accounts held by U.S. taxpayers, or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest.
The Report of Foreign Bank and Financial Accounts (FBAR) must be submitted if you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account. FBAR legislation has been in place since the 1970’s but only recently has the IRS begun to enforce this ruling. The threshold is currently set at $10,000 and the penalties for not filing can be considerable.
We are fortunate in having well-placed contacts in strategic government positions, and have made some headway in our efforts. In point form; here is the latest update on our activities:
* We have been in regular contact with senior staff at both the IRS and the Treasury Department, who have been receptive to our concerns.
* We have developed a strong and sympathetic working relationship with members of the Senate Finance Committee responsible for the FATCA legislation.
* We have shared with our contacts at the IRS, Treasury and Senate individual stories illustrating the stress and challenges placed on ordinary overseas Americans. These stories appear to have made a significant impact.
* Our former DA International Secretary, Amanda Klekowski von Koppenfels, a scholar in the field of politics and demographics, has compiled a detailed stratification of Americans abroad, which clearly refutes any imputation of tax evasion as a general motive for living overseas. The statistical breakdown has been of great interest to the Senate Finance Committee, and may figure prominently as supporting material to our upcoming requests and submissions.
* We helped facilitate a letter from Carol Maloney, Chair of the Americans Abroad Caucus, to Treasury Secretary Geithner requesting congressional hearings. Secretary Geithner himself has acknowledged there are concerns with FATCA and we have recently learned that Treasury will host later this month a meeting of groups representing overseas Americans, including Democrats Abroad.
* We are reaching out to senators who have been major promoters of FATCA to bring to their notice that the anti-tax laundering legislation they introduced will have disastrous, unintended consequence for millions of law-abiding overseas Americans, as well as serious implications on foreign investment in the US.
* We are requesting inclusion in an IRS hearing on FATCA in Washington, DC on May 15.
* We are arranging a meeting with Taxpayer Advocate Nina Olsen Olson, whose 2011 report to Congress is highly critical of IRS handling of overseas tax filers.
* We are preparing resolutions to present to the DPCA Resolutions Committee at the May global meeting in Mexico. If passed, Democrats Abroad will then submit those resolutions to be considered for inclusion in the Democratic Party 2012 Platform.
We remind our members once again that Democrats Abroad and its FBAR/FATCA Task Force cannot and does not offer tax advice. All those facing problems or having specific questions are urged to seek professional tax and/or legal counsel.
Respectfully submitted to the DA Membership,
Your DPCA FBAR/FATCA Task Force,
Joe Green (Canada) Chair (email@example.com)
Stanley Grossman (UK), Maureen Harwood (Canada), Carmelan Polce (Australia), Maya Samara (Switzerland) and Joe Smallhoover (France)