New York Democratic Representative Carolyn Maloney has formally re-submitted a bill that would establish an "exemption" to FATCA for U.S. citizens living and working outside of the U.S. – but this time, as an amendment to the National Defense Authorization Act.
(Editor's Note: This story has been updated. )
Some expat advocates say this unexpected effort might just give the millions of Americans overseas who have been struggling for years to keep even basic bank and investment accounts a much-needed break, even as other, more wide-reaching efforts, such as a move to a residence-based tax regime, continue to be worked on.
"This is absolutely possible," says one such long-time advocate for expatriates, who requested anonymity, but who called on other Americans abroad to join him in urging their members of Congress to support the bill.
"Don't be like Eeyore. Don't look at your shoes. Get active! Contact Congress! Ask for it!”
Joining Rep. Maloney, pictured above, in making the submission were three other members of the so-called Americans Abroad Caucus: Democrats Dina Titus of Nevada and Don Beyer of Virginia, and Republican Rep. Maria Elvira Salazar of Florida, according to a statement on the website of the American Citizens Abroad.
Reps. Maloney, Titus and Salazar are all co-chairs of the Americans Abroad Caucus, which was founded in 2007, and which a growing number of members of Congress have been joining recently.
The submission, which may be found online by clicking here, is dated July 5, although the ACA announcement is dated yesterday (July 12).
NDAA 'enacted every year'
In its statement, the ACA says that Reps. Maloney, Salazar, Titus and Beyer had "submitted HR 5799, The Overseas Americans Financial Access Act, as an amendment to the National Defense Authorization Act." The NDAA is a major piece of U.S. government legislation that is enacted every year in order to fund the U.S. military. Not surprisingly, it is often used as a vehicle through which legislation that potentially affects the U.S. military and/or its employees is introduced.
Miilitary and other U.S. government employees who live abroad would of course, be among those affected by FATCA (Foreign Account Tax Compliance Act), and thus would be seen likely to benefit from the exemption being proposed by Rep. Maloney and her House colleagues. As for the number of Americans abroad who are U.S. government employees, including those in the military, one recent estimate places it as around 1.3 million citizens in total, based on the number of tax returns received from such expat government employees.
The ACA statement notes that introducing the 'Same Country Exception' for FATCA reporting would "alleviate issues of foreign banking lockout experienced by some U.S. citizens living and working overseas," a group that would include military personnel. (The terms "Same Country Exception" and "Same Country Exemption" are being used interchangeably by different organizations but refer to the same concept, the AXFNJ has been told.)
The ACA ends its statement by expressing its gratitude to representatives Maloney, Salazar, Titus and Beyer for "their efforts, and on their continued support of the community of U.S. citizens living and working overseas."
It notes that a decision as to whether the Maloney amendment might be included in the NDAA was likely to be made within a matter of days.
The submission itself, meanwhile, consists of four pages of fairly technical copy beneath the heading "Amendment To Rules Committee Print 117-54 Offered By Mrs. Carolyn B. Maloney of New York."
This is followed by references to such things as "modification of certain Internal Revenue Service reporting requirements with respect to certain individuals who live abroad" and "individuals with foreign financial assets".
Neither the term Foreign Account Tax Compliance Act nor its acronym, FATCA, actually appears here.
History of HR 5799
The idea of a "same country exemption" to FATCA is almost as old as FATCA itself (which, though signed into law in 2010, didn't come into force around the world until 2014). FATCA was aimed at discouraging American taxpayers from hiding wealth and income in overseas banks and financial institutions by mandating stiff penalties for any foreign financial institutions found not to be reporting, annually, the bank account details – including asset amounts – held by any of their clients who happened to be U.S. citizens or Green Card holders.
On the ACA's website, for example, an article about the "SCE" says that ACA first proposed that the U.S. Treasury "amend the FATCA regulations to exempt Americans residing in a foreign country from the rules in FATCA requiring banks and other foreign financial institutions to report on US account holders’ accounts" back in 2015.
Rep. Maloney, meanwhile, in 2019 re-introduced what she then referred to as the Overseas Americans Financial Access Act (HR 4362), which, like HR 5799, was described as having been designed to direct the IRS to exclude from the need to report, under FATCA, "[certain] financial accounts held by American citizens in countries where they are bona fide residents." In November of 2021, she re-introduced the Overseas Americans Financial Access Act, along with her Commission on Americans Living Overseas Act, which she is also in the process of re-introducing.
Some critics of the same country exception/exemption concept, including Toronto-based lawyer and expatriate advocate John Richardson, argue that its benefits would be limited, since, he says, it would only apply to "depository accounts," and that there already is a carve-out for such accounts for amounts of less than US$50,000.
Click here to sign up to receive the American Expat Financial News Journal's free weekly news bulletin, and occasional breaking news bulletins
- UK's tax authority to reach out to 'hundreds' with possible links to bank in non-CRS-compliant Puerto Rico
- Ross McGill: ‘FATCA isn’t the problem: CBT is’
- France's National Assembly approves FATCA reciprocity amendment, citing 'accidentels'
- John Richardson: 'The CRS ≠ FATCA'
- As EU Parliament's Petitions Committee 'mission' to DC ends, FATCA critics speculate on its long-term impact