Last week, the New Jersey legislature announced its plan to repeal estate tax by January…
22 February, 2014
The Republican Party is expected to approve a resolution calling for repeal of an Obama administration law that is designed to crack down on offshore tax dodging.
In what would be the party’s first appeal to scrap the law -the Foreign Account Tax Compliance Act (FATCA) – a panel was slated to vote at the Republican National Committee’s (RNC) winter meetings in Washington, likely approving the resolution on Friday, according to party members driving the repeal effort. The resolution is not a binding on any member of congress and will not likely result in any change in laws.
If adopted, the anti-FATCA resolution would reflect the party’s political priorities for the time being but would not change its presidential campaign platform, according to the RNC.
Approved in 2010 after a tax-avoidance scandal involving a Swiss bank, FATCA requires most foreign banks and investment funds to report to the U.S. Internal Revenue Service information about U.S. customers’ accounts worth $50,000 or more.
Criticized by banks, libertarians and some Americans living abroad as a costly and unneeded government overreach, FATCA is on the books, but its effective date has been delayed repeatedly, with enforcement now set to start on July 1.
Repeal seems unlikely, but more political heat from Republicans could further complicate and delay implementation, said financial industry lobbyists. Republicans are eager to use FATCA as a campaign and fundraising issue against Democrats ahead of the congressional mid-term elections in November. Republican Senator Rand Paul last year introduced legislation to repeal parts of FATCA, citing privacy concerns.
Defending the law, US Treasury Department spokeswoman Erin Donar said in a statement: “FATCA continues to gain momentum and international support as we work with partners around the world to fight offshore tax evasion.”
Our law firm believes that FATCA is here to stay. Dozens of information sharing agreements with numerous nations have been entered. We are advising clients to expect aggressive enforcement of US tax laws against taxpayers with undisclosed foreign accounts.
Category: Planning for Tax Minimization