America’s policy of recovering undisclosed taxes has been slammed as “skewed” by the boss of one of the world’s largest independent financial advisory organizations.
deVere Group founder and chief executive, Nigel Green, is speaking out after reports reveal that a major retail corporation owns more than $76 billion of assets in overseas tax havens.
FATCA: Overseas Americans required to report directly to the IRS
Mr Green affirms: “Since July 1 last year, when the highly controversial Foreign Account Tax Compliance Act – better known as FATCA – came into effect, millions of ordinary American citizens who happen to live and/or work overseas have been required to report their private financial information directly to the IRS.
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“The idea behind FATCA is, purportedly, to catch tax evaders.
“Unsurprisingly, the vast majority of the 7.6 million Americans abroad, don’t owe any tax and are not suspected of any wrongdoing. However, the financial information must still be reported in a lengthy, burdensome and costly process nonetheless – just on the off chance some hidden offshore assets are found along the way.
“Tax evasion is a serious global problem and all attempts must be sought to stamp it out. Yet FATCA’s extremely expensive ‘dragnet’ approach is highly ineffective and not the answer.”
He continues: “It seems nonsensical and skewed that middle-income, law abiding Americans who happen to live and/or work outside U.S. borders have to jump through hoops to prove that they are not in fact tax cheats, where major corporations – which, like individuals, are also mostly not accused of owing tax or suspected of any wrongdoing – are not under the same scrutiny. Where is the logic?”
Nigel Green has been a high-profile critic of FATCA since it was first mooted and has recently won an award for his campaign to have it repealed.
He says it is “fatally flawed”, explaining: “FATCA gives us a masterclass in the law of unintended consequences.
FATCA’s burdensome regulations
“Americans overseas are now routinely rejected from foreign financial institutions, such as banks in their country of residence, because FATCA’s costly and burdensome regulations mean they are now typically deemed more trouble than they are worth. They have become financial pariahs.
“In addition, U.S. firms which operate in international markets as well as in the U.S. are now often branded with a leprosy-like status. Of course, this can only be detrimental to America’s global competitiveness, and could, as such, seriously and negatively affect American jobs and the long-term growth of the economy.”
He adds: “Questions should be asked about the imperialist characteristics of FATCA. Governments and foreign financial institutions have been coerced into complying with its expensive, onerous, privacy-infringing, sovereignty-violating regulations by the U.S. – or face heavy penalties and the prospect of being effectively frozen out of U.S. markets.”
Last month, Mr Green called on U.S. presidential candidates to “come clean” on where they stand on the issue of FATCA.
“FATCA adversely affects millions of hardworking, middle class Americans around the world, plus U.S. companies that operate internationally – and, therefore, it impacts U.S. jobs and the American economy.
“Presidential candidates who support this tax act now need to justify to America why they support it; whilst those who want it repealed now need to articulate to voters why they believe it is fundamentally flawed and why they will move to repeal it.
“It is an issue that must play a major part in the national conversation ahead of the election.”
About deVere Group
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $10bn under advisement.