Rep. Mark Meadows and Sen. Rand Paul have sent a letter to Treasury Secretary Steven Mnuchin and OMB Director Mick Mulvaney urging President Trump take action to “mitigate the ongoing damage” caused by the Foreign Account Tax Compliance Act and quickly repeal the law.
FATCA is designed to ferret out individuals who have unreported offshore bank accounts and other assets. The controversial law requires financial institutions to share information about Americans' accounts worth more than $50,000.
Nigel Green, CEO of deVere Group and Co-Leader of the Campaign to Repeal FATCA, applauded the letter. “This is a major landmark moment,” Green said of the letter.
“FATCA has only rolled on because of legally unauthorized ‘intergovernmental agreements’” – known as IGAs – “but if the White House and Treasury overturn the previous administration’s power-grab, that alone would doom this terrible, toxic law,” Green said.
Meadows and Paul introduced FATCA repeal legislation in the previous Congress and plan to file the same bill, with expectations that repeal will be included in any tax law sent to Trump. A House hearing on the damaging impact of FATCA, especially on Americans living abroad, will take place on April 26.
The Meadows-Paul letter urges four interim steps the Trump administration can take on its own to reverse what they call “the previous administration’s inclination for abusing its Executive power”:
“Issue a Statement of Administration Policy to the effect that the Trump administration is committed to the repeal of FATCA as promised in the Republican Platform, welcomes inclusion of repeal provisions in any tax reform bill, and is reviewing administrative steps to limit FATCA’s damaging effects pending its repeal.
“Instruct the Treasury Department’s Office of International Affairs and other elements of the Department that may be involved to cease all efforts to negotiate, sign, and implement IGAs. Continued signings of new IGAs – most recently with Ukraine in February 2017 – send a false signal that the new administration is committed to this destructive law as matter of policy.
“Announce that the IGAs are under legal review of their authority and that if they are found to be legally infirm – as we believe they will be – they may be declared invalid ab initio with immediate effect or terminated upon expiry of the one-year’s notice specified.
“Under the broad authority FATCA grants the Treasury Secretary, deem all impacted foreign institutions compliant on a temporary basis pending outcome of the legal review of the IGAs. The IRS should also be instructed to suspend enforcement of provisions impacting individual taxpayers; and, on an urgent basis to help decrease the spiking increase in U.S. citizenship renunciations, suspend imposition of penalties for FATCA filing errors by individuals.”
FATCA and tax rules generally have been fingered in the growing number of Americans abroad who renounce their citizenship. In a 2015 survey, 86 percent of respondents felt the law needs to be reworked. Both parties' representatives abroad agree on that, though there are differences on how they propose to accomplish it, Bloomberg News has reported.
(Newsmax wire services contributed to this report).