THE TRANSATLANTIC MAGAZINE
Sign up to The American magazine's newsletters (below) to receive more regular news, articles and updates on America in the UK.
The National Taxpayer Advocate (NTA) has released its 2020 Purple Book, in which it recommends changes to current FATCA legislation in a bid to ease the burden on overseas Taxpayers.
In their report, the NTA writes that:
"Many US taxpayers, particularly those living abroad, face increased compliance burdens and costs as a result of FATCA reporting obligations that significantly overlap with the FBAR filing requirements. The IRS has exercised its regulatory authority to eliminate duplicative reporting of assets on Form 8938 if an asset is reported or reflected on certain other timely filed international information returns (e.g. Forms 3520, 3520A, 5471, 8621, 8865, or 8891). It has also provided an exception from the reporting rules for financial accounts held in US territories for bona fide residents of such territories.
However, the IRS has repeatedly declined to adopt the recommendations of the National Taxpayer Advocate that are also supported by other stakeholders, including the Government Accountability Office, to eliminate duplicative FATCA reporting where assets have already been reported on an FBAR and to provide a same-country exception for reporting financial accounts held in the country in which a US taxpayer is a bona fide resident. These recommendations, if adopted, would reduce the compliance burdens on US taxpayers, who now must file additional complex forms themselves or pay higher tax return preparation fees. They would also reduce the compliance burdens on FFIs, some of which are declining to do business with US expatriatesbecause of the significant costs and regulatory risks associated with ongoing FATCA compliance. In addition, the unwillingness of certain FFIs to do business with US expatriates makes it difficult for US citizens to open bank accounts in certain countries.
As alluded to in the NTA's recommendations, this isn't the first time that the organization, which acts as an advocate for US Taxpayers, has recommended changes to FATCA. Similar recommendations have been included in the NTA's Purple Book for several years, often with the same wording, implying that the IRS and US Government should be aware of the concerns that the NTA and multiple overseas Americans have been raising, particularly in terms of the difficulty in accessing basic services such as bank accounts. 2019 saw a concerted focus on the issues surrounding FATCA and its affect on overseas Americans. With 2020 marking an Election Year, it'll be interesting to see if the Democrats or Republicans recognize the problem as one they can address for the many thousands of overseas Americans who will be sending their filled out ballots ahead of November.
The NTA's 2020 Purple Book can be read in full at https://taxpayeradvocate.irs.gov/Media/Default/Documents/2019-ARC/ARC19_PurpleBook.pdf
Essential Weekly Reads for Overseas Americans. Free