Geneva (PRWEB) August 7, 2009
In July 2009, American Citizens Abroad (ACA) wrote to President Barack Obama and other US Administration officials, to bring to their attention the unjust tax and banking laws faced by American citizens living overseas. ACA points out in the letter that these laws and regulations are increasingly having unintended damaging consequences for US citizens all over the world, and when overseas citizens are harmed and harassed, the United States overall will also suffer economically and politically if this situation is not addressed.
The letter highlights the four policies that have combined to create an extremely difficult banking and tax situation for the estimated five million Americans living and working abroad. These policies, both currently in place and proposed, are leading banks all over the world to reject US citizens as clients, and are causing banks in the US to close the accounts of anyone with a non-US address.
The first policy change concerns the proposed new Qualified Intermediary (QI) regulations, scheduled to be introduced at the end of the year, which make all banks worldwide into investigators for the IRS. This has led many banks to begin closing accounts of US citizens in order to avoid the intrusion into foreign sovereignty, the administrative hassle imposed from Washington, and the perceived legal risk of non-compliance.
The second change, already in place, concerns the Know-Your-Customer regulations contained within the Patriot Act, passed after 9/11 in 2001. This regulation leads banks operating in the United States to conclude that they cannot properly identify any client with a non-US address, and therefore these banks are arbitrarily closing the accounts of anyone with an address outside of the United States.
The third change is a far-reaching new regulation from the IRS, starting in 2009. It expands the filing requirements for accounts held or controlled by US citizens outside of the US, called the FBAR regulations. These new requirements widen the definition of accounts over which US citizens are considered to have signature, and which must therefore be declared to the IRS. The new regulations also impose unduly harsh penalties for not filing or incorrect filing, even when this is done unknowingly. Rather than risk having non-US accounts declared to the United States, companies and organizations overseas are removing US citizens from signing positions.
Finally, ACA makes the point that the US system of citizenship based taxation, leading to several of these major issues for Americans living overseas, is unfair, uneconomical, and harms the interests of the United States all over the world.
In addition to the letter to President Obama, ACA sent detailed letters to Secretary of the Treasury Timothy Geithner and to Chairman Paul Volcker and members of the President's Tax Review Panel. Copies of the combined correspondence have been sent to the Commissioner of the Internal Revenue Service Douglas Shulman and Secretary of State Hillary Clinton, as well as the members of the Americans Abroad Caucus in the US House of Representatives.
American Citizens Abroad is waiting for responses to these letters, and hopes that President Obama and the US Administration will realize that these new laws and regulations are not only putting US citizens outside of the United States into an untenable situation, but also are harming the entire country, economically and politically.
American Citizens Abroad (ACA) is a voluntary advocacy organization defending the rights of US citizens living outside of the United States. It was founded in 1978 with headquarters in Geneva, Switzerland. The organization has thousands of members all over the world, and Country Contacts in over 50 countries. Interested US citizens can check ACA's website at http://www.aca.ch and join the organization to show support.
American Citizens Abroad (ACA), the Voice of Americans Overseas
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