Due to the results from their 2014 global survey, the Democrats Abroad have raised serious concerns about the financial reporting and taxation that American expats could face in the near future. These worries are mainly due to the Foreign Account Tax Compliance Act, otherwise known as FATCA.
FATCA was initiated in 2010 with the main purpose of looking at USA citizens who were not paying their due taxes. It was discovered however that a large proportion of expat Americans were using foreign bank accounts and were not reporting the financial activity that these were connected to. It was also noted that 30% of the issues had arisen because the Foreign Financial Institutions were not happy about disclosing their details under this requirement. As well as frustrating and causing a lack of clarity to the FATCA request for information, this lack of cooperation is having a seriously negative effect on the Americans living and working abroad.
Because of the FATCA initiated investigations, these Americans are facing account closure and even more personal aggravation with their spouses. Their professional lives are also being thrown into turmoil and in the most extreme cases; some of these US citizens are considering making the break from the USA more permanent by way of renouncing their right to a US passport. This survey is based on more than 6,500 US citizens currently working overseas.
Despite the more negative results of the FATCA rulings, the overall response from US citizens overseas has been encouraging. FATCA have expressed their feelings that the normal and law abiding US citizens living abroad are not their targets and are delighted with the level of cooperation received in the main. They fully understand that the reasons for the moving overseas are usually due to work and personal reasons and applaud the way that these countrymen have responded. Tax evasion and undeclared earnings form nefarious activities are the reason this law came into place and it is hoped that most of these people will eventually be brought to justice.