Accidental Americans Financially Frustrated By FATCA

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Strict tax rules governing US taxpayers who live abroad are highlighting the plight of Accidental Americans in some countries.

Accidental Americans are people who have few ties with the USA that the Internal Revenue Service (IRS) who are caught in the country’s tax net.

In many cases, they were born in America but left as children and have made their lives in another country, where they own homes, have jobs and pay tax.

But under US tax rules, they are nationals who must declare their worldwide income to the IRS.

The problem is the US Foreign Account Tax Compliance Act (FATCA)is making their financial lives overseas a misery.

Legal challenges

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Banks are refusing to open accounts for them, they cannot raise loans or mortgages and often are denied credit cards. Some are refused investment opportunities because of their US tax status.

This is because foreign banks want to avoid the hassle and cost of complying with FATCA, which demands they should report the financial status of all their American customers to the IRS each year.

More than 100 countries have FATCA treaties with the US government and more than 300,000 global financial institutions have registered as FATCA compliant with the IRS.

In Canada, a group of Accidental Americans are challenging FATCA in court.

Meanwhile, several hundred Americans have formed a protest group in France have managed to persuade President Emanuel Macron to raise how FATCA and the US tax rules impacts their lives.

Renouncing US citizenship

“All we want is a simple way to renounce our citizenship, so we can get out of this mess,” said a spokesman for the group, Accidental Americans in France.

To renounce US citizenship means paying a fee and the settlement of any outstanding taxes, while the action cannot be reversed.

The group claims having nearly 450 members, with 15 signing up each week.

French MP Marc Le Fur has also taken up their plight of the Accidental Americans in France.

“We shouldn’t be acting as an auxiliary of the US tax authorities,” he said.

Another legal challenge is expected through the French courts later this year, claiming that FATCA reporting by the French tax authority is unconstitutional and breaches European Union data protection rules.

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2 COMMENTS

  1. I would encourage you to interview Fabien LEHAGRE, founder of the Association of Accidental Americans in France. Additionally, there are MANY articles and reports in the French and now anglo media about this Kafkaesque situation inflicted on this population by the US. The most recent will be the NBC Nightly News on Sunday, 22 April.

    I am intimately involved in the fight for the rights of Americans overseas AND Accidental Americans.

    Keith REDMOND
    American Overseas Global Advocate

  2. Other than seeing its slaves as tax cows, what was usa really about??

    Renounce; the USA was a hustling and huckstering empire signifying ontologic emptiness.

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