Wall Street Journal editorial, Taming IRS Imperialism: A Foreign Leader Asks President Trump If He Will Keep a Promise:
In the tiny Caribbean nation of Trinidad and Tobago, Kamla Persad-Bissessar, the leader of the opposition coalition in parliament, recently did something no other world leader has done: She read the U.S. Republican Party platform.
There she discovered that the GOP had called for repeal of the Foreign Account Tax Compliance Act, or Fatca, which is best understood as a license for IRS imperialism. The Treasury Department has used the law to demand that foreign countries change their own laws so their financial institutions report information on their American account holders. Upon discovering the Republican call for Fatca’s repeal, Mrs. Persad-Bissessar wrote Donald Trump in January asking if he will keep this promise.
It’s a good question. Mrs. Persad-Bissessar, a former prime minister, wants to know because the Trinidad and Tobago parliament is now considering changing the nation’s laws to accommodate Fatca. It would make little sense to change her nation’s laws, she argues, if Fatca isn’t long for this world.
Americans have an even bigger stake in the answer. In theory this 2010 law was designed to go after fat cats hiding their wealth offshore by adding a new reporting form for taxpayers with assets overseas. In reality, the law has become another example of gross federal overreach, adding another burden on Americans overseas who are already paying taxes where they live. ...
Mrs. Persad-Bissessar’s question to Mr. Trump has roiled the pro-Fatca establishment. The American ambassador (appointed by President Obama) has said Fatca is being held up by “some people with cocoa in the sun,” insinuating that only someone with something to hide could be opposed. The Fatca chief at Deloitte & Touche has been telling Trinidad and Tobago that Fatca is here to stay and Mr. Trump can’t do anything about it.
Well, yes and no. Only Congress can repeal Fatca. But the whole Fatca edifice has been built on the intergovernmental agreements that Treasury has negotiated with more than 100 countries—agreements for which there is no statutory authority or Congressional ratification. Mr. Trump could take the teeth out of Fatca by announcing he has suspended negotiations for future agreements and won’t enforce the ones we have.
So two cheers for Mrs. Persad-Bissessar for asking her question. Let’s hope President Trump gives the answer that Americans deserve, by making clear he intends to deliver on the GOP pledge to dismantle a bad law that never should have been passed.
Previous TaxProf Blog coverage:
- WSJ Op-Ed: A Boy’s Allowance: Never Safe From The IRS (Oct. 26, 2016)
- The Economist: Border Babies v. The IRS (Mar. 5, 2016)
- The Economist: After Starting The Global War On Offshore Tax Evasion, America Is Now The World's Biggest Tax Loophole (Feb. 29, 2016)
- Morriss: BEPS, FATCA & EU Tax Harmonization: Seeing The Taxman (July 2, 2015)
- Rand Paul To Challenge The Constitutionality Of FATCA (June 26, 2015)
- Vatican Signs On To FATCA To Help U.S. Track Down Tax Evaders (June 10, 2015)
- NY Times Op-Ed: FATCA — An American Tax Nightmare (May 13, 2015)
- Kaye: Innovations in the War on Tax Evasion (Dec. 23, 2014)
- WSJ Op-Ed: Why Does Uncle Sam Hate American Expats? (Dec. 17, 2014)
- Morriss: The Future of Offshore Financial Centres: The Tax Question (Sept. 4, 2014)
- U.S. Expats Sue in Canada to Block FATCA (Aug. 13, 2014)
- WSJ Op-Ed: FATCA — American Expats' Tax Nightmare (July 10, 2014)
- Christians & Cockfield: The Implementation of FATCA in Canada (Mar. 28, 2014)
- Blank & Mason: Exporting FATCA (Mar. 25, 2014)
- Taxpayer Advocate: The IRS Is Too Tough on Americans With Foreign Accounts (Jan. 13, 2014)
- Ofshore Accounts: No Place to Hide? (Sept. 22, 2013)
- NY Times: Compliance With FATCA Is Major Headache for Foreign Banks (Sept. 17, 2013)
- Harvey: Worldwide Taxation of U. S. Citizens Living Abroad (Sept. 5, 2013)
- WSJ Op-Ed: FATCA — How to Lose Friends, Citizens and Influence (July 17, 2013)
- Christians: The Dubious Legal Pedigree of IGAs (July 9, 2013)
- Dean Delivers FATCA Lecture Today At The University of Antwerp (Apr. 30, 2013)
- Why FATCA Will Not Stand (Apr. 27, 2013)
- What's FATCA Got To Do With It? Tina Turner Renounces U.S. Citizenship (Jan. 26, 2013)
- Harvey: FATCA — A Report from the Front Lines (Aug. 7, 2012)
- WSJ Op-Ed: The FATCA Cliff (July 17, 2012)
- FATCA and the New International Tax Order (June 27, 2012)
- Morse: The Future of Global Tax Reporting (Feb. 21, 2012)
- NY Times: Law to Find Tax Evaders Denounced (Dec. 27, 2011)
- Marsan: The Global Financial System and FATCA (Oct. 14, 2011)
- FATCA Could Drive Away Investment in U.S. (May 13, 2011)