The Issac Brock Society offers an insider’s take on the Foreign Account Tax Compliance Act (“FATCA”), written by a former IRS attorney with extensive knowledge and expertise about how the IRS works, and how tax legislation is enacted.
Interestingly, the author makes clear that the IRS does not make tax policy, emphasizing that: “Tax policy is determined by the Treasury Department and the White House who then fight it out with Congress who accepts what the Treasury Department wants, rejects it, or compromises on it.” Still, the IRS is engaged in part of the legislative process, more or less.
One of the best take-aways from the post is:
“No one in the US government was thinking of Canadian citizens who had little or no connection to the United States when FATCA was enacted.”
I’d add that its likely no policymakers were thinking of middle class Americans abroad at all, whether in Canada, Mexico, Iraq or Thailand. But with several million U.S. citizens working, serving and living abroad, shouldn’t someone in the U.S. government look out for our interests? It’s time to turn up the lobbying pressure.