# Any chance President Trump / GOP will repeal FATCA?



## LC3622

Although Trump has not spoken on this issue, I found a few articles online that his newly appointed chief of staff Reince Priebus has made a few negative public comments on the FATCA in the past (i.e. it is unconstitutional) and spoke about a repeal. Will Republicans repeal it? any chance? your views?


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## Bevdeforges

If, by chance, the issue of repealing FATCA comes up, I think it is a long, long way off. What I do think is likely is that Trump and Republican cohorts will starve the IRS of funding, which does make enforcement of many of the tax laws (especially overseas) much more difficult, not to say unlikely.

After all, Trump has not paid any income taxes for quite some time, and said that he doesn't "because I am smart." Perhaps it is time us expats started following the lead of our "fearless leader."
Cheers,
Bev


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## LC3622

Bevdeforges said:


> If, by chance, the issue of repealing FATCA comes up, I think it is a long, long way off. What I do think is likely is that Trump and Republican cohorts will starve the IRS of funding, which does make enforcement of many of the tax laws (especially overseas) much more difficult, not to say unlikely.
> 
> After all, Trump has not paid any income taxes for quite some time, and said that he doesn't "because I am smart." Perhaps it is time us expats started following the lead of our "fearless leader."
> Cheers,
> Bev


Why do you think it is a long way off? The Republicans have majority both in the House and the Senate. If the White House has this on its agenda (and from what I read Priebus is well aware of the issue - the question is whether this thing will get any attention now), it can be done very quickly.

I am sure they will not abandon the citizenship-based taxation and taxes on expats, but FATCA may well be repealed. 

It is embarrassing that FATCA was proposed by a democrat tax cheat Charlie Rangel from NY who has been in the House for 45 years. This is someone who had a number of tax issues in the past, including all sorts of issues with assets, income and off-shore problems while living IN THE US and serving in the CONGRESS. People like him should be in jail, not in the government. Instead, they punish people only because those people live outside the US. What a disgrace.

https://en.wikipedia.org/wiki/Charles_Rangel

As for your comments on Trump - he has not broken any law (unlike many of us - expats - who have not been in the country for ages, yet should file and in many cases pay extra tax for services/benefits we do not receive and most will never receive). He simply used the loopholes in the tax code which guys like Rep. Rangel and others created for their sponsors. What he did is legal and he played by the rules. This indeed makes him smart.


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## Bevdeforges

lucenet said:


> As for your comments on Trump - he has not broken any law (unlike many of us - expats - who have not been in the country for ages, yet should file and in many cases pay extra tax for services/benefits we do not receive and most will never receive). He simply used the loopholes in the tax code which guys like Rep. Rangel and others created for their sponsors. What he did is legal and he played by the rules. This indeed makes him smart.


Actually, without seeing his tax returns, it's impossible to know just how "creative" his accountants may have gotten with his tax situation.

But as far as FATCA is concerned, there hasn't been much dissension amongst the Republicans about the passage of FATCA, even if the legislation was initially proposed by a Democrat. They could easily have raised the issue in all the various fiscal stuff that they brought up over the last 4 or 6 years that the Republicans have controlled the House. I just think the overseas taxpayers issues simply aren't on the radar at all.
Cheers,
Bev


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## LC3622

Bevdeforges said:


> Actually, without seeing his tax returns, it's impossible to know just how "creative" his accountants may have gotten with his tax situation.
> 
> But as far as FATCA is concerned, there hasn't been much dissension amongst the Republicans about the passage of FATCA, even if the legislation was initially proposed by a Democrat. They could easily have raised the issue in all the various fiscal stuff that they brought up over the last 4 or 6 years that the Republicans have controlled the House. I just think the overseas taxpayers issues simply aren't on the radar at all.
> Cheers,
> Bev


While I definitely agree with you that the issues of the overseas Americans are totally ignored and I do not believe US will ever change to the residency based taxation, there have been some noises on the Republican end about FATCA. Senator Rand Paul was very active. In September 2016, another bill (http://src.bna.com/inD) to repeal FATCA was introduced by Republican rep Mark Meadows.


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## iota2014

lucenet said:


> Although Trump has not spoken on this issue, I found a few articles online that his newly appointed chief of staff Reince Priebus has made a few negative public comments on the FATCA in the past (i.e. it is unconstitutional) and spoke about a repeal. Will Republicans repeal it? any chance? your views?


It's the IGAs (not FATCA) which have been criticized as unconstitutional, because they were never approved by the Senate.

Personally I agree with Bev: expats' FATCA problems just aren't on the radar. Happy if events prove me wrong.


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## Bevdeforges

Actually, if they were to do anything regarding FATCA, the easiest thing might be to pass the exemption from FATCA reporting for accounts held in the taxpayer's country of residence. That would get to the heart of the "problem" (i.e. tax evasion by using offshore accounts) and if they followed through, would lighten the load on the foreign banks, who would only have to report on non-resident accounts opened by American persons.

Not that Trump is all that into cooperating with other countries, but the main thrust of this is the OECD move to try to discourage tax avoidance through the use of international accounts. Forgot to mention that this is probably yet another reason that it's unlikely even a Trump administration would move to undo FATCA altogether.
Cheers,
Bev


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## LC3622

Not very promising.


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## Bevdeforges

lucenet said:


> Not very promising.


Agreed.
Cheers,
Bev


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## celticweb

I am one of those that recently found out about the tax filing requirements and I am also an accidental American, born in the USA to UK parents and left at a young age. I got all up to date using streamlined in May 2016. Have heard nothing back from the IRS either.

i was going to renounce this year around now but decided to wait to see the outcome of the election. I am not subject to the exit tax so might as well wait to see.

However if I see no discussion on this subject in the first few months, I am going to make plans to renounce in spring or summer 2017. I waited to see because it was in their platform but a lot of things are in the platform. My accountant is not optimistic for change but than again I don't think accountants really want change. In fact they might even lobby for the opposite. Who knows how much influence these enrolled agents have, it seems they are making the rules in a lot of cases anyway.


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## Bevdeforges

Hm, can you point us to a copy of the "platform" where this is mentioned? I don't recall seeing any mention of the platform in the news over here, and frankly I suspect Trump and Co. is going to just kind of roll their own as far as "policy" is concerned, anyhow.

If you've got the money to renounce (i.e. the $2350 fee) and have no financial resources or other ties back in the US, I'd go ahead and do it now. I don't really think it's worth waiting for the queues to start growing at the Consulates.
Cheers,
Bev


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## celticweb

Hi Bev

here is a platform link (or you can google it if the link doesn't work), but like I said before so are a lot of other things in the platform and I don't think Trump has made a stand. the republican platform is not necessarily his view. However Trump is a business man and makes business sense to end Fatca and eventually CBT. I also realise there are a lot of other issues to deal with. I just want some sort of sign that they are committed to this otherwise I will renounce. I have the funds to renounce too.

https://prod-static-ngop-pbl.s3.amazonaws.com/media/documents/DRAFT_12_FINAL[1]-ben_1468872234.pdf

And it says specifically

The Foreign Account Tax Compliance Act 
(FATCA) and the Foreign Bank and Asset Reporting 
Requirements result in government’s warrantless 
seizure of personal financial information without reasonable suspicion or probable cause. Americans 
overseas should enjoy the same rights as Americans 
residing in the United States, whose private 
financial information is not subject to disclosure 
to the government except as to interest earned. 
The requirement for all banks around the world 
to provide detailed information to the IRS about 
American account holders outside the United States 
has resulted in banks refusing service to them. Thus, 
FATCA not only allows “unreasonable search and 
seizures” but also threatens the ability of overseas 
Americans to lead normal lives. We call for its repeal 
and for a change to residency-based taxation for
US citizens overseas


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## celticweb

i am also in a position to renounce now because I did the 5 years filing with the intention to renounce. Accidental Americans still need to be caught up before renouncing regardless of the exit tax. it was only because of a impending regime change that I decided to wait because then I could have all the facts to make a completely informed decision.


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## Bevdeforges

I think Trump is going to have to back down on quite a few of his campaign promises as it is. Not sure he has even read the party platform - he's not exactly considered a "good Republican" as it is.

Unless you have some overwhelming reason to try to retain your US citizenship, I wouldn't hold my breath waiting for the party to make good on this one plank in the platform. (OTOH, I can well understand if you have reasons for hesitating on surrendering your US citizenship. I can't/won't do it for a number of practical reasons.)
Cheers,
Bev


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## celticweb

I have no real reason to hang on to US citizenship except for a sister that moved to the USA. She is also a dual but married an American so settled in California. We are very close and this business has upset her because she always felt that we were lucky both being dual citizens and that we could settle near each other when we are old in either country. Not that she doesn't understand but that she thought I should wait to see if they make good on the platform. 

So I thought I might as well wait to see. But I won't be waiting for long.


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## celticweb

of course first i had to see who got elected but I was never one of those that thought that trump had no chance. In fact the opposite, I really thought he would be elected. the signs were there right from the beginning.


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## Nononymous

celticweb said:


> i am also in a position to renounce now because I did the 5 years filing with the intention to renounce. Accidental Americans still need to be caught up before renouncing regardless of the exit tax.


Actually they don't. Renunciation and tax compliance are two separate processes; the only relationship between them is that upon renouncing the State Department will send your name to the IRS, which may or may not have the resources to do anything with it.

You can renounce first then get your tax affairs in order afterwards.

You can renounce and never bother coming into compliance. If you have no US income or assets there's no real downside to this, as things now stand. Plenty of Canadians are doing this.

You can renounce then file the exit form and indicate that you're not up to date on returns and deem yourself a covered expatriate. If your net worth is below the limit there's very little downside to this, except for a higher tax rate on gifts and bequests to US citizens (so not a good strategy if your children are citizens and planning on moving to the US).

And of course you can stay off the radar, not renounce and not comply, which is currently still very easy to do, at least in Canada where the banks aren't being very diligent about FATCA.


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## celticweb

Yes I realise that they are two separate issues however if you want to leave the system cleanly then one would need to be up to date with filing, whether they got up to date before or after renouncing. 

I didn't want to be a covered expat regardless of whether the IRS will bother with me. I also don't function well when I am worried or looking over my shoulder. and I probably got bad advise right from the beginning, or rather scaremongering advise. I was so off the radar I could have just stayed there and waited it out. Except my non US citizen spouse wanted me to renounce pronto and didn't want any threat with his earnings with fbar penalties or anything else. File and renounce basically I was told. I didn't owe tax thankfully. 

None It is just my sister asking me to wait to see if there is any change with the new regime or any indication there might be change. I have a feeling that Fatca can probably easily be repealed if they wanted to. the rest is not so easy.

I could also be completely misguided with my thinking that anything will happen. My sister said she will write to her representative in the USA too.


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## jbr439

Nononymous said:


> ...
> You can renounce then file the exit form and indicate that you're not up to date on returns and deem yourself a covered expatriate. If your net worth is below the limit there's very little downside to this, except for a higher tax rate on gifts and bequests to US citizens (so not a good strategy if your children are citizens and planning on moving to the US).
> ...


The net worth test only comes into play in helping to decide if you're a covered expat or not. Once you're deemed covered (by, for example, failing the compliance test as alluded to above), net worth becomes irrelevant (as counter-intuitive as that may seem). 

What does become relevant is unrealized income, which is taxed subject to an exclusion. Unrealized income includes things like the unrealized gain on your principal residence (and the standard P.R. exclusion doesn't apply), unrealized gain on other property, present value of a defined benefit pension, unrealized capital gains on stock, unrealized gains on employee stock options, defined contribution pension gains (if not taxed already taxed by US), RRSP gains, etc, etc, etc. If your unrealized gains come in under the exclusion, then you're fine, net worth notwithstanding, otherwise you're taxed. The rationale for this would be that this is income that would be otherwise taxed eventually if you had remained a USC, so this is the last change to tax it. 

See Death and Taxes and Expatriation where Phil Hodgen mentions a hypothetical expatriate who's a covered expat by virtue of his $10 million in cash net worth; but who pays no exit tax because there's no capital gain on cash. It would be a very different story if the net worth was due to $10 million in, say, Apple stock that had an adjusted cost base of $1 million (i.e. a $9 million unrealized capital gain).

Needless to say, the older you are the more likely you are to have unrealized income (as defined by the US), and thus the less attractive being a covered expat becomes.


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## Nononymous

Right, that's what it was, you could go the covered expat route if your unrealized gains were under the exclusion, as opposed to net worth. Or something like that anyway. Probably not the best option, far safer to simply not file.


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