Foreign banks are refusing to accept US citizens due to FATCA requirements
Rand Paul, the Senator of Kentucky and the US Presidential candidate is looking to prosecute the IRS (Internal Revenue Service) regarding a court testimony that its Foreign Bank Account Reporting (FBAR) regime and the Foreign Account Tax Compliance Act (FATCA) are unconstitutional.
FATCA states that foreign banks must report all accounts held by US persons back to the IRS in order for accountholders to be taxed accordingly. The six US defendants in the lawsuit known as the “Republicans Overseas Action” claim to have been refused normal banking services in their countries of residence as a result of the US governments' use of FATCA, and their campaign to combat tax evasion, has made it extremely difficult for American clients obtain foreign bank accounts.
According to Jack Townsend, a tax law specialist in the US, the case may start a forum where US citizens living abroad complain about the lack of access to banking services, to enquire as to whether they are subjectively or systemically affecting large numbers of overseas citizens. An estimated 8.6 million US citizens are living abroad, and the number who abandon their citizenship as a result of the harsh tax filings obligations is increasing on a yearly basis.
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