February 3

New Zealand Ambassador Alerted to Repeal FATCA Movement, Others to Follow

Republicans Launch ‘Abolish FATCA’ Petition Site

In a follow-up from the adoption by the Republican National Committee (RNC) of a  resolution to repeal FATCA (the “Foreign Account Tax Compliance Act”) proposed by Republicans Overseas (RO), a new “Abolish FATCA” link ( http://abolishfatca.com/live/) has now been posted inviting U.S. Citizens, Green Card-holders, and former U.S. Citizens to petition Congress to get rid of what RepealFATCA.com calls “the worst law most Americans have never heard of.”

In addition, Solomon Yue, Jr., Republican National Committeeman for Oregon and chief sponsor of the RNC resolution, has written to New Zealand’s Ambassador to the United States, Mike Moore, to inform him of the Abolish FATCA petition and of the resolution.  In his February 2 message to Ambassador Moore, Mr. Yue wrote:

My co-sponsors and I believe this law violates not only 7.6 million overseas American citizens’ right to privacy, but also the rights of your citizens residing in the U.S.  FATCA’s intergovernmental agreements feature reciprocity of exchange of individuals’ financial information. It is designed to be a "big data” collection scheme on our citizens as well as yours.

We are committed to defend the basic human rights of our overseas citizens, including their right to privacy, to make a living, to have banking services, and to protect their private property against the 30% “withholding” of US-source payments without due process.  [ . . . ]

This resolution will also be forwarded to other foreign Embassies in Washington D.C.

[The full text of Mr. Yue’s message follows below]

As noted on the Canada-based Isaac Brock Society site, New Zealand seems to be unique in its rush to accommodate the U.S. Treasury Department’s demands for FATCA compliance, with Parliament acting to pass legislation to mandate obedience to this costly and invasive extraterritorial regime even before an “intergovernmental agreement” (IGA) is signed!  The parliamentary committee has solicited comments on the bill (see http://www.parliament.nz/en-nz/pb/sc/make-submission/50SCFE_SCF_00DBHOH_BILL12926_1/taxation-annual-rates-employee-allowances-and-remedial ), for which the opportunity closes on February 4 (U.S. time).  RepealFATCA.com has submitted comments to the committee, available here and below.  RepealFATCA.com  urges readers to add their comments as soon as possible, as well as signing the Abolish FATCA petition.

While FATCA proponents and the compliance industry – which stands to make incredible amounts of money on this dysfunctional monstrosity – have been downplaying the significance of the RNC resolution, it’s becoming clearer that momentum is starting to shift in favor of FATCA critics.  Notable is the increasing number of balanced, critical examinations of FATCA’s travails from observers such as Nigel Green, Eileen O’Connor, Richard Rahn, Robert Wood, Jessica Meek, Meredith Swain, Alex Newman, Jeff Thomas, Karin Zeitvogel, and others, as opposed to the usual rote references to FATCA as “anti-tax dodging law” – which it isn’t.  

The breezy claim from the compliance industry that “it is clear that FATCA is not going away” is sounding less and less convincing . . .  

James George Jatras
Editor, RepealFATCA.com

Below, please note:

  1. Text of Solomon Yue’s message to Ambassador Moore
  2. Text of the Abolish FATCA petition
  3. Text of the RNC resolution to repeal FATCA
  4. Text of the RepealFATCA.com submission to the New Zealand parliamentary committee

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Notice: The foregoing may be posted, republished, or quoted with attribution.
Contact RepealFATCA.com and find out how you can help get rid of “the worst law most Americans have never heard of!   
Email: RepealFATCA@gmail.com or jim@globalstrategicpr.com 
Twitter: @RepealFATCA
Phone:  +1.202.375.1007
www.RepealFATCA.com

1.  Text of Solomon Yue’s message to Ambassador Moore

To: His Excellency
Mike Moore
The Ambassador of New Zealand to the United States of America
New Zealand Embassy
37 Observatory Circle, NW
Washington, D.C. 20008
United States of America

Dear Ambassador Moore, 

As the Chief Sponsor of the Republican National Committee (RNC) Resolution to Repeal the Foreign Account Tax Compliance Act (FATCA), I am forwarding a copy of this newly-adopted resolution to inform your government regarding my party's policy position and resolve regarding this matter.

The resolution’s passage has laid a foundation for us to launch next week a worldwide online petition drive to repeal FATCA. This link (http://abolishfatca.com/live/) is for your preview. It would be our pleasure to forward petitions signed by U.S. Green Card-holding New Zealand citizens to your office.   

My co-sponsors and I believe this law violates not only 7.6 million overseas American citizens' right to privacy, but also the rights of your citizens residing in the U.S. FATCA's intergovernmental agreements feature reciprocity of exchange of individuals' financial information. It is designed to be a "big data” collection scheme on our citizens as well as yours. 

We are committed to defend the basic human rights of our overseas citizens, including their right to privacy, to make a living, to have banking services, and to protect their private property against the 30% "withholding" of US-source payments without due process. 

Attached please find a copy of the RNC Resolution to repeal FATCA,

If you have any questions about this resolution, I could be reached at RepublicansOverseas@abolishFATCA.com and would be happy to share more details on our worldwide repeal FATCA efforts. 

Yours Sincerely,

 Solomon Yue, Jr.

Republican National Committeeman for Oregon

 P.S.: This letter will be posted on Republicans Overseas Facebook at https://www.facebook.com/republicansoverseas

P.S.S.: In my personal capacity, I serve as Vice Chairman and CEO of Republicans Overseas, Inc.

P.S.S.S.: This resolution will also be forwarded to other foreign Embassies in Washington D.C.

2.  Text of the Abolish FATCA petition

PETITION TO CONGRESS OF THE UNITED STATES TO ABOLISH THE FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA)


Honorable Senators and Representatives of the United States Congress,

I am writing in support of abolishing the Foreign Account Tax Compliance Act (FATCA).  FATCA has negatively impacted 7.6 million U.S. citizens living abroad.

First, it violates U.S. Citizens’ right to privacy by requiring foreign banks to disclose U.S. citizens’ account names, taxpayer identification numbers, addresses, and their account balances, deposits, and withdrawals to the IRS.

Second, foreign banks are denying and/or revoking financial services to U.S. Citizens as a result of the increased costs and burdens of FATCA. The impact extends to any American-owned business operating or wishing to establish itself overseas. Foreign financial institutions trying to avoid these new requirements have two alternatives: to drop American clients or not invest in the U.S. Consequently, Americans’ ability to run businesses and export U.S. goods and services is being negatively impacted.

Finally, the IRS requires U.S. payers to withhold 30% of funds paid through non-compliant foreign financial institutions as a punitive enforcement against U.S. Citizens, without due process, if foreign banks fail to meet FATCA’s reporting requirement. As a result, a record number of Americans are deciding to give up their citizenship in order to protect their livelihood. By the end of the third quarter of 2013, according to the Wall Street Journal, there had already been 2,369 expatriations; that is 33% more than all of 2011. This over 500-page regulation is forcing Americans to choose between their patriotic love of America and providing for their families.

The IRS Taxpayer Advocate Service (TAS) 2013 Annual Report to Congress admits that FATCA’s most serious problems are its reporting requirements and violating taxpayer rights. TAS Report #23 on page 43 is titled The Foreign Account Tax Compliance Act Has the Potential to be Burdensome, Overly Broad, and Detrimental to Taxpayer Rights.

I agree. I believe that FATCA is morally reprehensible and detrimental to overseas Americans’ basic human rights. America, as a shining city upon the hill, must not impose this horrible choice between citizenship and livelihood on its own citizens. Thank you. 

Sincerely,

3.  Text of the RNC resolution to repeal FATCA

RESOLUTION TO REPEAL THE FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA)

WHEREAS, In March of 2010, the United States Congress passed the Foreign Account Tax Compliance Act (FATCA) proposed as an effort to catch tax evaders; however, this Act has ensnared every one of the 7.6 million United States Citizens, and all Green Card holders living overseas in its overzealous provisions;

WHEREAS, FATCA was never debated in Congress, but was discretely added to the HIRE Act (Hiring Incentives to Restore Employment Act) of 2010; and, it was never subjected to a cost/benefit analysis by Congress; it requires substantial Internal Revenue Service (IRS) legal, software development and administrative costs; adds one more layer of excessive bureaucracy; imposes significant compliance costs on U.S. financial institutions; and yet it was scored by the Joint Committee on Taxation to bring in only $800 million a year in additional revenue;

WHEREAS, The United States is effectively the only country in the world that taxes foreign income of its citizens who are living abroad and who already pay taxes where they reside, creating enormous reporting burdens for American taxpayers living overseas, and putting them at great risk for penalties for even the slightest innocent mistake;

WHEREAS, FATCA requires foreign financial institutions to enter into an agreement with the IRS to identify their U.S. account holders and to disclose the account holders' names, taxpayer identifications, addresses, and the accounts' balances, receipts, and withdrawals (sometimes in violation of foreign privacy laws), opening up wide doors to identity theft and other crimes against Americans residing overseas;

WHEREAS, FATCA’s primary mechanism for enforcing compliance of foreign financial institutions is a punitive withholding levy on U.S. assets, which creates a strong incentive for foreign financial institutions to divest (or not invest) in U.S. assets, resulting in capital flight; hurting the United States economy;

WHEREAS, FATCA has resulted in Americans who are living and working overseas finding themselves, and their companies, shut out from access to banks, insurance, loans, and investment opportunities, as many foreign financial services providers have concluded that doing business with Americans is simply too much trouble; thus, opportunities are lost and America’s competitiveness overseas is diminished;

WHEREAS, Time magazine reported a sevenfold increase in Americans renouncing U.S. citizenship between 2008 and 2011, and has attributed this at least in part to FATCA; and another surge in renunciations in 2013 to record levels has been reported in the news media, with FATCA cited as a factor in the decision of many of the renunciants; and

WHEREAS, FATCA forces Americans living abroad to make a horribly unfair choice between renouncing their citizenship and abandoning their businesses abroad because foreign financial institutions won’t handle their transactions or accounts; therefore be it

RESOLVED, The Republican National Committee hereby presents this Resolution to each Member of Congress and urges the U.S. Congress to repeal FATCA, to defend the livelihood and increase the competitiveness of Americans overseas, to remove inappropriate invasions of Americans citizens’ privacy, and to allow those U.S. citizens who renounced their citizenship due to FATCA to regain their U.S. citizenship; and

RESOLVED, The Republican National Committee urges the IRS to cease causing the negative impact on United States and its Citizens overseas, and on the global financial system, in an attempt to vindicate FATCA’s misguided approach to tax enforcement.>

*As adopted by the Republican National Committee on January 24, 2014.

4.  Text of the RepealFATCA.com submission to the New Zealand parliamentary committee

[Also at: http://isaacbrocksociety.ca/2014/01/26/a-plea-for-submission-against-fatca-iga-enabling-legislation-in-new-zealand/comment-page-1/#comment-1054556 ]

To: Parliament of New Zealand, Parliamentary Select Committee

Re: Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Bill

This is James George Jatras, Esq., in Washington, DC.  I am a former US diplomat and long-serving US Senate staffer, now in private practice.  I also am Editor of RepealFATCA.com, where further documentation is available.

I urge that legislation mandating New Zealand’s (NZ) compliance with FATCA not be approved, and that NZ not allow this imposition on your citizens and institutions, as follows:

  1. FATCA has no legal authority in NZ:  As the US Department of Justice admits, non-US financial institutions threatened by FATCA are “outside the United States’ jurisdiction.”  NZ institutions are under no legal obligation to comply with FATCA.  Thus, the 30% “withholding” of US-source payments to “recalcitrant” institutions is not a “tax” or a “penalty,” but a sanction or reprisal.  A sovereign state has a duty to defend its institutions and citizens from foreign extralegal and extraterritorial threats, not capitulate to them. [Source: http://www.repealfatca.com/index.asp?idmenu=4&idsubmenu=146&title=why-republicans-are-right-to-support-repeal-of-fatca ]
  1. The FATCA IGA’s main purpose is abrogate NZ privacy protections:  The FY2014 Budget Submission to Congress noted: “In many cases, foreign law would prevent foreign financial institutions from complying [...] Such legal impediments can be addressed through intergovernmental agreements under which the foreign government agrees to provide the information required by FATCA to the IRS.”  Here “foreign law” and “legal impediments” primarily mean privacy protections of your citizens and residents. [Source: see above]

 

  1. The IGA is not a “treaty” under US law and can be changed by the US at will:  NZ would lock in its compliance with US demands through domestic legislation approved by Parliament; on the US side, no Congressional action would be taken to bind the US.   The US unilaterally can cancel the IGA at any time with one year’s notice, for no reason whatsoever, and leave NZ and your institutions facing direct compliance with IRS regulations – the threat impelling you to consider the IGA in the first place.  Thus, NZ would be forced to accept any future changes dictated by the US.  [Source: http://www.repealfatca.com/index.asp?idmenu=4&idsubmenu=112&title=why-republicans-are-right-to-support-repeal-of-fatca ]

 

  1. NZ would not receive “reciprocal” exchange of information:   Under the supposedly “reciprocal” IGA, the Treasury Department promises (a) to report bank interest income on US accounts of NZ residents and (b) to seek legislation for FATCA-equivalent reporting at some unspecified future date.  Even the limited bank interest reporting under current US regulations is questionable under Congressional and court challenge.  FATCA-equivalent reporting would require new legislation, which Congress will not approve.  [Source: http://www.repealfatca.com/index.asp?idmenu=4&idsubmenu=130&title=why-republicans-are-right-to-support-repeal-of-fatca ]

 

  1. FATCA exposes NZ institutions to US intelligence agencies:  FATCA data provided to the IRS would not be considered confidential under US law and would be reportable to US agencies such as NSA.  Assurances in the IGA that information provided via IRD would be subject to tax treaty protections against non-tax enforcement use or transfer are not credible. [Source: http://www.repealfatca.com/index.asp?idmenu=4&idsubmenu=135&title=why-republicans-are-right-to-support-repeal-of-fatca ]

 

  1. FATCA may be repealed in any case:  A bill to repeal FATCA has been introduced in the Senate (S. 887).  The Republican Party, which recently approved a resolution advocating FATCA repeal, will continue to control the House and is expected to capture the Senate this year.  Why would NZ rush submit to an expensive, invasive, and anti-sovereign foreign demand that may be rescinded?