U.S. Treasury and IRS expect every financial institution on the planet to become their personal spies.
The Foreign Account Tax Compliance Act (FATCA), a law intended to combat offshore tax evasion by people living in United States, is instead snaring honest Americans living in other countries. Some are as close as Canada and Mexico. Others are a world away in Australia or Africa.
Those aren't places that usually come to mind when one thinks of tax havens.
United States was built by immigrants. From around the globe, immigrants flocked to United States to build better lives for themselves, their children, and future generations. The melting pot of diverse cultures, races, and values helped build United States into one of the most powerful and prosperous nations on earth.
Homelands of those immigrants did not stalk their emigrants or American banks for private financial information. If they had, those immigrants would have been unable to survive and raise their American-born children.
Yet, that is exactly what Americans living outside U.S. face now with FATCA.
FATCA demands every foreign financial institution (FFIs) in the world report on financial assets of "US persons" to US Internal Revenue Service beginning 2015.
WHO IS AFFECTED:
Millions of Americans living around the world are caught in this nightmare.
Their reasons for living outside United States are as diverse as the individuals. They include:
Creating jobs and exports for United States through businesses abroad;
Career, employment, and entrepreneur opportunities;
Marriage to citizens of other countries and raising children born in those countries;
Making a difference working or volunteering in developing countries;
Naturalized Americans returning to their homeland;
Immersing in language and culture of another nation;
Myriad of other reasons.
These people are legal residents--and often citizens--of the other nation.
Canadians Protest Against FATCA by Brockers
Many have been citizens of other countries for years or decades. Many have every reason to believe they relinquished US citizenship when they became citizens of another country. US Consulates told them clearly and firmly their loss of US citizenship was "permanent and irrevocable" three, four, five, or six decades ago. They had no idea until recently that U.S. Supreme Court in 1986 reinstated their citizenship without their knowledge or consent.
Others hold dual citizenship with US and country of residence.
Many "accidental Americans" never lived or worked in US. They were simply born in US to parents working or studying there temporarily. For some Canadians, their mother gave birth in the closest hospital to her home--across US border. Their entire lives have been lived as citizens of their home country only.