Rand introduces bill to repeal parts of tax evasion law, citing privacy concerns

[jct74]

Senator Paul offers bill to weaken U.S. anti-tax evasion law

By Patrick Temple-West
WASHINGTON | Wed May 8, 2013 12:00am EDT

May 7 (Reuters) - U.S. Senator Rand Paul introduced a bill late on Tuesday that would repeal parts of a 2010 law designed to fight offshore tax evasion by Americans with assets hidden in foreign banks.

The Foreign Account Tax Compliance Act (FATCA) is being implemented worldwide through a series of agreements between the U.S. government and other governments and foreign banks.

Paul, a Kentucky Republican with libertarian views, has been a critic of FATCA, saying it invades individuals' privacy. His bill has little chance of winning approval in the Democratic-controlled Senate.

Starting next year under FATCA, foreign banks, investment funds and other financial institutions will have to tell the U.S. Internal Revenue Service about Americans with accounts that are worth more than $50,000. Firms failing to comply could effectively be frozen out of U.S. capital markets.

In a letter to other senators, Paul said his bill would repeal only provisions that undermine U.S. privacy protections.

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read more:
http://www.reuters.com/article/2013/05/08/usa-tax-fatca-idUSL2N0DP00X20130508

 

[jct74]

more on this:
http://isaacbrocksociety.ca/2013/05/07/senator-rand-paul-introduces-bill-to-repeal-fatca/

Rand's letter:
http://www.repealfatca.com/downloads/Dear_Colleague_FATCA_Repeal.pdf

 

[jct74]

Rand Paul introduces bill to roll back parts of tax evasion law

By Bernie Becker - 05/08/13 01:52 PM ET

Sen. Rand Paul (R-Ky.) introduced legislation this week to roll back key portions of a law that seeks to crack down on offshore tax cheats, his office said Wednesday.

Paul said in a statement that the law, the Foreign Account Tax Compliance Act (FATCA), would fall far short of its goals on tax evasion, all while opening up “a host of unanticipated destructive consequences.”

Those consequences, Paul said, include invading the privacy of U.S. citizens, heaping compliance costs on businesses in the U.S. and discouraging foreign investment in this country.

"FATCA's harmful impacts cover the spectrum,” Paul said. “It is a violation of Americans' constitutional protections, oversteps the limits of Executive power, disregards the mutual respect of sovereignty among nations and drains money from the federal treasury under the guise of replenishing it, and discourages overseas investment in the United States."

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read more:
http://thehill.com/blogs/on-the-mon...es-bill-to-roll-back-parts-of-tax-evasion-law

 

[jct74]

press release:

Sen. Paul Introduces Bill to Repeal Anti-Privacy Provisions in FATCA

May 8, 2013

WASHINGTON, D.C. - Yesterday, Sen. Rand Paul introduced a bill to repeal anti-privacy provisions of the Foreign Account Tax Compliance Act (FATCA) and put an end to a defective bill that does not accomplish its objective of ending tax evasion. FATCA infringes upon basic constitutional rights, for under FATCA, private data of anyone considered a "U.S. Person" would have details of their financial assets provided to the IRS without a warrant requirement, suspicious activity report (SAR), or any allegation of wrongdoing at all. Stated in its simplest form, FATCA would require every non-American financial institution (such as banks, credit unions, pension funds, stock and investment firms, etc.) to register directly with the IRS and agree to provide specified financial data on the accounts of any "U.S. Person." Perhaps even more troubling, the implementation of FATCA has allowed the Treasury Department to make independent decisions with respect to the sovereignty of foreign nations and the privacy of United States citizens. In order to implement this law, Treasury has initiated intergovernmental agreements (IGAs), citing the intent to engage in reciprocal information sharing with other nations. In other words, the Treasury Department, without the consent and authority of Congress, will force U.S. financial institutions to provide the bank account information of private customers to foreign nations.

"FATCA is a textbook example of a bad law that doesn't achieve its stated purpose but does manage to unleash a host of unanticipated destructive consequences," Sen. Paul said. "FATCA's harmful impacts cover the spectrum. It is a violation of Americans' constitutional protections, oversteps the limits of Executive power, disregards the mutual respect of sovereignty among nations and drains money from the federal treasury under the guise of replenishing it, and discourages overseas investment in the United States."

"Tax evasion is a problem that should be addressed, but not in such an egregious way. FATCA violates important privacy protections, disregards the sovereign laws of other nations and will cost the U.S. economy hundreds of billions of dollars in compliance costs," he continued. "FATCA should be repealed, and Congress should consider less onerous means of enforcing tax laws."​

http://www.paul.senate.gov/?p=press_release&id=793

 

[jct74]

The Credit Union National Association, which represents nearly 90 percent of America’s 7,000 state and federally chartered credit unions and their 96 million members, has endorsed Rand's bill.

http://www.repealfatca.com/index.asp?idmenu=4&title=News&idsubmenu=125
http://www.repealfatca.com/downloads/0508_-_FATCA_Repeal_-_Paul.pdf

May 8, 2013
The Honorable Rand Paul
208 Russell Senate Office Building
Washington, D.C. 20001

Dear Senator Paul,

On behalf of the Credit Union National Association (CUNA), I am writing to express support for S. 887, which would repeal the Foreign Account Tax Compliance Act (FATCA) so that regulatory relief will be provided to U.S. credit unions and other financial institutions. CUNA is the largest credit union advocacy association in the United States, representing nearly 90 percent of America’s 7,000 state and federally chartered credit unions and their 96 million members.

We share your concern that FATCA, if left in place, will impose billions of dollars of compliance costs on U.S. credit unions and banks annually. We are also concerned that FATCA and FATCA-related intergovernmental agreements with foreign nations undermine the constitutional privacy rights of U.S. credit union members and bank customers.

The FATCA statute passed by Congress in 2010 made no references to U.S. credit unions and banks yet U.S. financial institutions will be required to bear a large proportion of FATCA’s compliance burdens. U.S. credit unions and banks will be required to comply both with the ‘withholding agent’ provisions of the Internal Revenue Service’s FATCA regulations and the IRS’s FATCA-related non-resident alien Form 1099-INT reporting rules promulgated by Rev. Proc. 2012-24 in April 2012. In addition, the Administration has requested in its FY 2014 Budget authority to impose additional non-resident alien reporting requirements on U.S. credit unions and banks to help facilitate FATCA intergovernmental agreement negotiations.

CUNA is also concerned that the European Union is considering adopting a ‘European FATCA’ which would regulate U.S. credit unions and banks in the same manner that the United States’ FATCA purports to regulate credit unions and banks in the European Union. Unless Congress repeals FATCA, we think that it is only a matter of time before the extraterritorial diktats of a European FATCA and other FATCA-inspired foreign laws become additional compliance burdens on U.S. financial institutions.

On behalf of America’s credit unions and their 96 million members, we appreciate your leadership on this issue, and look forward to working with you on this matter.

Best regards,

Bill Cheney
President & CEO

 

[supermario21]

This could win over middle class folks all over the country. I know many teachers and other similar professionals are in credit unions, etc. It's also an issue you rarely hear about so kudos to Rand for taking it on.

 

[rodo1776]

Great News!

This could win over middle class folks all over the country. I know many teachers and other similar professionals are in credit unions, etc. It's also an issue you rarely hear about so kudos to Rand for taking it on.

As an expat this is great news. This Facta legislation not only costs US credit unions and banks but also all banks around the world who will also have to implement reporting systems.

It also contributes to banks world wide refusing to open accounts for Americans.

I'm sure Rand can not repeal it or portions of it but to have the guts to see the problem and also approach it as a Liberty issue.

Way to go Rand!!