Monday, July 20, 2015

Paul sues IRS over foreign account regulations

Rand Paul Sues IRS Over Foreign Account Taxes, Disclosures - Bloomberg Business - David Voreacos & Richard Rubin:

July 14, 2015 - "Republican presidential candidate Rand Paul sued the Treasury Department and Internal Revenue Service over rules on how Americans abroad are taxed and what foreign banks must disclose about U.S. customers.

"The Foreign Account Tax Compliance Act is supposed to make it harder to hide assets overseas, yet its regulations are unconstitutional and violate privacy rights of U.S. citizens, Paul said in the complaint.... The tax act, or Fatca, 'imposes enormous economic costs on individuals and financial institutions,' according to the suit by the U.S. senator from Kentucky and six others. It makes millions of Americans living abroad report accounts above $50,000 with their annual tax returns. Fatca also requires foreign banks to report any account held by a U.S. taxpayers....

"President Barack Obama signed the law in 2010, and the Treasury Department reached cross-border agreements that are easier for governments and banks to use than the strict rules in the law itself.

"Those accords, which didn’t get congressional approval, are unconstitutional because they exceed the president’s authority, Paul claims. He asked a judge to strike down the Canadian, Czech, Israeli and Swiss agreements....

"The lawsuit also targets the Treasury requirement that U.S. residents abroad disclose accounts through a Report of Foreign Bank and Financial Accounts, or FBAR. Americans who willfully violate the law are subject to penalties of 50 percent of the high balance of the account -- a levy that can run into the millions of dollars....

"The case is Crawford v. U.S. Department of Treasury, 15-cv-00250, U.S. District Court, Southern District of Ohio (Dayton)."

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