Issues

Main issues

“FATCA is the hammer, and FBAR is the anvil.”

Republicans Overseas HK seeks to facilitate greater involvement for overseas Americans in United States politics, as well as work on issues that disproportionately impact overseas Americans.

There are several issues that impact overseas Americans much more strongly than they do homeland Americans. These include citizenship-based taxation, FATCA, and FBAR.

FATCA and FBAR have resulted in the closing of hundreds (possibly thousands) of overseas Americans’ bank accounts worldwide. More than 40,000 bank accounts were at risk in Europe, alone. FATCA is the hammer of regulations, but FBAR is the anvil.

Read further to understand why these regulations hurt overseas Americans.

FBAR

What is FBAR? FBAR is the Reporting of Foreign Bank Accounts. FBAR is an anti-money laundering regulation dating back to 1970. It was originally devised for the US Department of the Treasury under 31 U.S. Code 5311, in the context of ‘criminal, tax or regulatory investigations or proceedings, or in the conduct of intelligence or counterintelligence activities, including analysis, to protect against international terrorism.’ FBAR mandates US persons to declare any account outside the US with the FBAR form (TD F 90-22.1). FBAR assumes that any entity failing to report a foreign account is hiding profits from a criminal activity, and it therefore levies unsustainable civil...

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FATCA

What is FATCA? FATCA is the Foreign Account Tax Compliance Act. FATCA was intended to prevent domestic Americans from illegally hiding their taxable wealth in foreign banks, but it has instead created significant hardships for law abiding overseas Americans. FATCA requires foreign financial institutions (‘FFIs’) such as banks or investment companies to share overseas Americans’ financial data with the IRS. FFIs either sign up with the IRS to send the information directly or share the information with the host countries’ central tax authorities, who then pass it on to the IRS. There is no wealth threshold for the collection of...

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Tax Reform

Republicans Overseas has worked hard to bring the issue of citizenship-based taxation and tax fairness to the attention of Republican legislators. We were able to find a wonderful champion in Congressman George Holding, who introduced the Tax Fairness For Americans Abroad Act of 2018. This bill would have treated overseas Americans like non-resident foreigners and eliminated all foreign income from taxation during the period of overseas residency. However, when the Democrats won back the House in 2018, forward movement on the tax fairness bill died. Republicans Overseas will find a new champion to carry this bill forward. You can read...

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