IRS efforts to chase tax cheats are netting another group entirely. Americans, green card holders, and dual citizens living abroad, face the threat of prohibitive fines for simply failing to file with the IRS, when many are unaware they were required to do so. This aggressive cash grab can devastate the lives of law-abiding citizens who already pay high taxes in their country of residence.
The fines for not reporting are as high as 50% of any unannounced holdings, year over year. This can add up to more than 100% of assets, even if no tax is owed! Retirement funds and education funds for families who may never have even lived in the US would be wiped out. This is disproportionate and harsh punishment, and anti‐constitutional under the 8th Amendment of the Constitution.
FATCA asks foreign financial institutions to act as collectors for the IRS, sometimes breaking local privacy laws, and setting up prohibitive barriers to international investment and legitimate trade.
This is a terrible plan on so many levels. Repeal it now!