Fighting FATCA “Tyranny”

Fighting FATCA “Tyranny” in U.S. Court

Born and raised in Communist China, naturalized American citizen Solomon Yue says he understands why people leave a country because of tyranny.

That’s exactly why Yue “can’t watch people abandoning (U.S.) citizenship because of FATCA tyranny.”

So, the Vice Chairman and CEO of Republicans Overseas Action spearheaded a constitutional challenge to Foreign Account Tax Compliance Act (FATCA), Intergovernmental Agreements (IGAs) and Foreign Bank Account Reports (FBARs).

Although Yue lives in Oregon, he was alarmed and troubled by soaring number of Americans living outside the United States relinquishing or renouncing American citizenship to maintain banking and financial accounts where they live, work and are often citizens.

Yue says FATCA, IGAs and FBARs strip 8.7 million Americans around the globe of their constitutional rights. “Stop making overseas Americans second class citizens by taking away their constitutional rights,” asserts Yue.

“This lawsuit’s aim is to restore those overseas Americans’ and “Green Card” holders’ full citizenship through legal action on constitutional grounds all the way to the U.S. Supreme Court,” Yue says.

“Financial Surveillance of Unprecedented Scope”

On July 14, Republican Overseas Action filed a lawsuit in U.S. District Court on behalf of seven plaintiffs from Albania, Canada, Czech Republic, Israel, Switzerland, and United States claiming eight counts of constitutional violations, including violations of Fourth, Fifth and Eighth Amendments.

The lawsuit says “FATCA was intended to address tax evasion by U.S. taxpayers who fail to report foreign assets located outside of the United States. But in practice it is a sweeping financial surveillance program of unprecedented scope that allows the Internal Revenue Service (“IRS”) to peer into the financial affairs of any U.S. citizen with a foreign bank account. At its core, FATCA is a bulk data collection program requiring foreign financial institutions to report to the IRS detailed information about the accounts of U.S. citizens living abroad, including their account balances and account transactions.”

The lawsuit also highlights some of the real challenges of FATCA for Americans living abroad. “On the most fundamental level, FATCA deprives individuals of the right to the privacy of their financial affairs. FATCA authorizes the IRS to collect information on the financial assets of U.S. citizens living abroad that it cannot collect on U.S. citizens domestically. On a practical level, FATCA is severely impinging on the ability of U.S. citizens to live and work abroad. It is affecting all facets of individuals’ lives from day-to-day finances and employment to family relations and citizenship.”

Fighting Back

“I once got trapped in an enemy minefield with no good choices — getting hit with FATCA felt a bit like that,” U.S. military veteran Major Roger Johnson told the Washington Times. So, after fighting for the U.S., Johnson is now battling the American government for his own liberties and rights.

Johnson, who has lived in the Czech Republic with his Czech wife for 21 years, is one of seven American and former Americans who have not met each other who have united as plaintiffs in the lawsuit to fight back against the intrusion of the United States government into honest, law-abiding lives outside U.S. borders.

Other plaintiffs are a lawyer in Israel, a professor of psychiatry and pharmacology in Canada, an owner of a securities brokerage firm in Albania, an information technology worker and U.S. military veteran in Switzerland, an author in Switzerland and U.S. Senator Rand Paul. All except Senator Paul have experienced serious issues relating to normal banking and financial services in the countries where they live, work, earn incomes and pay taxes. They have lived for years or decades in their respective countries and most are citizens of those countries. The two Swiss plaintiffs took the extreme step of renouncing U.S. citizenship to be able to maintain normal banking and financial lives.

“This lawsuit will not only enable Republicans Overseas to defend all overseas Americans and stateside Green Card Holders right to privacy and other constitutional protections, but also provide them immediate injunctive relief by crippling the Treasury’s ability to enforce IGAs and IRS/FCEN FATCA enforcement capability,” says James Bopp, Jr., the lawsuit’s lead lawyer.

Americans around the world are watching.


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9 comments on “Fighting FATCA “Tyranny”

  • At last the legal pushback begins in the very belly of the beast, in addition to the very significant Alliance for the Defence of Canadian Sovereignty (ADCS) legal challenge which originated in Canada (home to the second largest population of those also deemed US citizens outside the US itself).

    Polite presentations, petitions, reports, submissions and other efforts by delegations from organizations of those deemed US citizens living “abroad” – often citizens of the other countries of the globe where they actually reside, actually receive services and are ALREADY FULL LAW-ABIDING TAXPAYERS, have not achieved any redress. We have not even had any serious hearing of our grievances despite a record number of individual submissions to the recent Senate Finance Committee BUT received scant mention much less recognition of the severity of the continuing injustices perpetuated on those deemed “US persons” living outside the US.

    • Hi Badger – You’ve noted: “We have not even had any serious hearing of our grievances despite a record number of individual submissions to the recent Senate Finance Committee” Record number? It seems to me that the response from Americans overseas was pretty dismal. 347 submissions does not indicate to the world at large that overseas Americans are in a crisis situation.

      Page 80 of the SFC report states:

      “F. Overseas Americans
      According to working group submissions, there are currently 7.6 million American citizens living outside of the United States. Of the 347 submissions made to the international working group, nearly three-quarters dealt with the international taxation of individuals, mainly focusing on citizenship-based taxation, the Foreign Account Tax Compliance Act (FATCA), and the Report of Foreign Bank and Financial Accounts (FBAR)…..”

  • Great article! This needs to get into the main stream media. The latest renunciation list should be coming out any day now so the timing would be good if the article were to hit the mainstream.

  • In Thailand to get a VISA to live here based on married to a Thai you are required to have 400,000 baht on deposit in your name in a Thai bank account (about $11,800 at current exchange rates). Many do not have this amount so they borrow the money to put into their account to get the Thai VISA. MOST of these have no knowledge or concept of the FATCA rule and their need to file a FBAR form.

    Then there is the retirement VISA and that one required an 800,000 deposit into a Thai bank account in their name. I knew of a person some years ago who made a living providing these people with the loan of funds to put into their bank account.

    I have reason to believe that there are hundreds if not thousands here in one or the other of these categories. Many live on small pensions and subsistence incomes. So what is the Treasury Dept going to do with these people.

    Any fine such as listed for FBAR filing failure would devastate most of them. I keep doing everything I can to educated these people here in Thailand. But many live up country in small villages where the living expenses are quite low.

    How many of these is the US Gov. going to persecute/prosecute for nothing more than trying to eek out a living here because they can not longer afford to live in the USA.

    Something needs to be done. I am really glad to read about this law suit. Time has come.

    • Wonderful post reply Dan to Lynne Swanson’s post. It is interesting to see what is happening to those U.S. citizens in Thailand and how they are affected. Your view as a tax expert working in Thailand is very enlightening.

  • Let’s remember that there was a very good reason for FATCA, etc. however it seems that there are unintended consequences. Good to get those cleared up for the above type cases, without excusing the “true evaders.”

    And it’s now not just the US but numerous other countries looking to “capture” their citizens hiding income.

    • “there was a very good reason for FATCA … but there were unintended consequences”

      Yes, and there was -and still is- a very good reason for DDT. But DDT killed off way more than the pests it was aimed at.

      DDT and FATCA: both cause problems way worse than the problems they were aimed at, and banning both is necessary.

  • Sorry Ted, but those statements display an astounding degree of either naivete or ignorance (take your pick).

    The argument about the “unintended consequences” of FATCA is really getting old. The US congress knew all too well what the consequences would be: punishment of US expatriates on a grand scale.

    Your statement that it’s not just the USA doing this is equally wrong. Apart from Eritrea, no other country in the world has a policy of citizenship based taxation. None. ALL other countries tax their citizens based on residence.

Comments are closed.