Judge Blocks Israeli FATCA Data Transfer As ‘Unfair’

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FATCA does not work and its time more regulators and officials followed the lead of an Israeli judge who has ordered that work drafting data for the US Internal Revenue Service should halt.

Judge Hanan Meltzer has stopped the Israeli tax authority and financial institutions from handing information about the finances of around 300,000 US taxpayers living in the country to the IRS in direct contravention of FATCA.

The law instructs foreign tax authorities and financial firms to file annual returns detailing the balances of accounts worth more than $50,000 for US resident taxpayers. They also have to give reports on expats with accounts of more than $200,000.

Meltzer ruled FATCA was unfair to US taxpayers and ordered a full hearing before September 15 of a suit brought by the pressure group Republicans Overseas Israel demanding that the law is overturned.

Wake-up call

Nigel Green, chief executive of deVere Group, a financial services firm with more than 80,000 international clients, has long campaigned for the repeal of FATCA and supports the action in Israel.

“Justice Meltzer’s action should be championed,” said Green. “His wise caution should serve as a wake-up call for other countries to rethink enforcing this toxic, flawed, damaging legislation that is being imposed on sovereign states around the world by the US”

He also fired a warning to other financial centres that are adopting FATCA without considering the unintended consequences of the law.

“Countries and foreign financial institutions have been coerced into complying with FATCA’s sovereignty-violating, expensive, burdensome and privacy-infringing regulations by the US or threatened with heavy penalties. In effect, these countries and financial institutions are now working as de facto agents of America’s tax authority,” said Green.

Untargeted approach

“It is claimed by its proponents that this law is designed to catch tax evaders who illegally shelter money offshore, but FATCA cannot possibly tackle this extremely important global issue effectively due to its dragnet, untargeted approach.”

Green also argues that the high cost of compliance with FATCA is making Americans and US businesses not worth working with.

“American businesses working in international markets are now often branded with a leprosy-like status. Clearly, this can only be detrimental to their global competitiveness and could, in turn, hit American jobs and the long-term growth of the US economy,” he said.

View the Youtube video below of Nigel Green explaining his thoughts on the controversial FATCA

1 thought on “Judge Blocks Israeli FATCA Data Transfer As ‘Unfair’”

  1. A key point missing. While the FATCA reporting threshold is $US50,000, many banks are asking 100% of new account applicants if they are US persons. So it is not just the folk with a lot in a bank account who are impacted.

    Additionally, there is no penalty for banks reporting below the threshold. As the potential US penalties are so great banks may simply report all US persons to help eliminate the risk that they do not report an account they should. Some banks can’t keep track of account balances over the year – such as high account balance – or they have other limitations to their systems that don’t allow them to determine with exactness the requirements of FATCA reporting. So, when in doubt they are likely the report more accounts than under the FATCA IGA’s.

    Here is a key point to it all in regards to threats by the US government: most African countries do not have a FATCA IGA and indeed many of the relatively poor countries do not have one. So, in 2017, will the US economically bankrupt these countries?

    FATCA and FBAR are unconstitutional on 8 counts, so says (with lawsuit backed by Republicans overseas) FATCALegalAction.

    The Canadian FATCA IGA violates the Canadian Charter of Rights that prohibits discrimination based on national origin, so says (& backed by lawsuit) the Alliance for The Defence of Canadian Sovereignty.

    The US practice of Citizenship Based Taxation subjected on US persons resident in other countries is unconstitutional, so say (& soon backed by legal opinion) The Alliance for the Defeat of Citizenship Based Taxation.


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