Expats Squeezed by the Demands of FATCA
The Federal government’s aggressive crackdown on overseas tax evaders and money launderers is putting a financial and emotional strain on thousands of individual U.S. expatriates. Reacting to the strict requirements of the Foreign Account Tax Compliance Act (FATCA), financial institutions and brokerage houses have closed the accounts of some expats.
A survey by Democrats Abroad, ”FATCA: Affecting Everyday Americans Every Day” ,reveals other expat issues, among them:
- Strained Personal Relationships: Spousal and partner relationships have been damaged stemming from the need to reorganize finances and reluctance to have joint accounts.
- Negative Impact on Career Path: New reporting demands have impacted an expat’s ability to start a new business and advance within their employer’s organization. Employees may also be reluctant to take overseas assignments.
- Curbed Investment/Retirement Planning: Expats have become gun-shy when looking at investment and retirement planning options for fear of violating FACTA and Foreign Bank and Financial Account Report (FBAR) rules.
Out of frustration, some expats have or are considering renouncing their U.S. citizenship.