The founder and CEO of one of the world’s largest independent financial advisory organizations is hailing the involvement of one of America’s most prominent superlawyers in the campaign to repeal the highly controversial Foreign Account Tax Compliance Act (FATCA) as “the tipping point.”
The comments from Nigel Green of deVere Group, which has 80,000 clients and $10bn under advice, are in response to attorney Jim Bopp Jr’s decision to mount a legal challenge to the new law – due for implementation on July 1.
A legal challenge to FATCA
The high profile, no-nonsense lawyer is preparing a legal challenge to FATCA, which its opponents insist has a host of serious unintended adverse consequences.
Mr Green says: “The decision taken by Mr Bopp, who has previously successfully challenged other questionable finance laws in the Supreme Court, to take on the fatally-flawed FATCA could, I suspect, be the tipping point in the campaign to ultimately have it repealed.
“He is on a legal mission to definitively prove that FATCA, which has far-reaching negative consequences for the 7.6 million U.S. citizens abroad, the 13 million green-card holders and American businesses that operate globally, is unconstitutional on at least three counts.
“I believe that common sense and justice is on his side on this issue of national and international importance. I am confident that his legal opinion will prove to be sound and robust.”
American firms operating outside are being routinely turned away from non-U.S. banks
He continues: “Due to the onerous and expensive demands of FATCA, U.S. citizens who live abroad and American firms who operate outside the U.S. are being routinely turned away from non-U.S. banks and other financial institutions. This toxic tax act is having the effect of giving them a leprosy-like status.
“So devastating are the consequences of FATCA, that to avoid the fallout the number of Americans giving up their passports has skyrocketed in recent times, according to official federal figures. Similarly, in a deVere Group survey in November 2013, two thirds of polled American expats said they are tempted to renounce their U.S. citizenship in response to FATCA.”
The deVere Group chief executive concludes: “All Americans should be concerned about FATCA – not only because of its impact on those who live and do business overseas, but also because it will reduce foreign investment in the U.S. thereby threatening American jobs, fuel the likelihood of tax hikes, increase consumer costs for dealings with banks and other financial institutions and potentially damage important international trade relations.
“Bearing this in mind, Jim Bopp’s fight against this law, a law which could ultimately be ruled as unconstitutional, must be championed.”
FATCA, part of the 2010 HIRE Act, requires every single financial institution in the world to report all their American clients’ financial activities directly to the US Internal Revenue Service (IRS), or be issued with a 30 per cent withholding tax.