The IRS is about to go global and turn foreign governments and financial institutions into an arm of the IRS at the expense of our constitutional privacy rights. It will all come to fruition in July thanks to a law known as FATCA. The IRS already has control over our healthcare, now it can extend its reach and power to the world.
The United States requires U.S. citizens to pay taxes on their income no matter where they live and they even have to pay taxes on foreign income. U.S. citizens living abroad have not always complied.
In 2009, Sen. Max Baucus and Rep. Charles Rangel introduced the Foreign Account Tax Compliance Act (FATCA) to Congress to deal with the problem. They tacked the Act onto an appropriations bill, which is what Congress usually does when it wants to get unpopular bills passed. The act was renamed the HIRE Act and passed in March 2010. It is scheduled to go into effect July 1, 2014.
The Act requires financial institutions to report to the IRS about their American clients.
The problem with the Act is that it turns financial institutions and foreign governments into IRS agents. It ends individual financial privacy, an inherent part of our Constitution.
It requires foreign financial institutions, like banks, to act as IRS agents by identifying their U.S. account holders and disclosing to the IRS their names, TINs, addresses, account balances, receipts, and withdrawals.
The government says the paperwork burden will not be onerous, but think about the burden of collecting this data each year for your own tax reporting, then multiply it by every citizen living abroad and then tell the bank they are responsible for collecting it and verifying it. It’s onerous.
In order to collect taxes, our government is willing to sacrifice our liberties and our Constitution.
The U.S. in turn will supply the same information to foreign governments without any statutory authority to do so.
There is a great deal of foreign support for the law because they hope to enjoy the spoils, but some governments are unhappy because they will be forced to act in opposition to their own laws.
Free Enterprise believes that it encourages foreign entities to avoid doing business with Americans.
After all is said and done, after giving up constitutional freedoms, the Joint Committee on Taxation will only collect about $870 million.
Where will they go from here – a global tax? It’s a logical eventuality. Get ready for it. Once the IRS engages the world, greed will win out.
There have been a lot of delays and if Republicans have their way, it will never go into effect. It was passed on a one-party Democratic vote.
It’s a new era of financial transparency from the most transparent government ever. The IRS has gone global. Yippee!