Sen. Paul Introduces Bill to Repeal Anti-Privacy Provisions in FATCA
WASHINGTON, D.C. - Yesterday, Sen. Rand Paul introduced a bill to repeal anti-privacy provisions of the Foreign Account Tax Compliance Act (FATCA) and put an end to a defective bill that does not accomplish its objective of ending tax evasion. FATCA infringes upon basic constitutional rights, for under FATCA, private data of anyone considered a "U.S. Person" would have details of their financial assets provided to the IRS without a warrant requirement, suspicious activity report (SAR), or any allegation of wrongdoing at all. Stated in its simplest form, FATCA would require every non-American financial institution (such as banks, credit unions, pension funds, stock and investment firms, etc.) to register directly with the IRS and agree to provide specified financial data on the accounts of any "U.S. Person." Perhaps even more troubling, the implementation of FATCA has allowed the Treasury Department to make independent decisions with respect to the sovereignty of foreign nations and the privacy of United States citizens. In order to implement this law, Treasury has initiated intergovernmental agreements (IGAs), citing the intent to engage in reciprocal information sharing with other nations. In other words, the Treasury Department, without the consent and authority of Congress, will force U.S. financial institutions to provide the bank account information of private customers to foreign nations.
"FATCA is a textbook example of a bad law that doesn't achieve its stated purpose but does manage to unleash a host of unanticipated destructive consequences," Sen. Paul said. "FATCA's harmful impacts cover the spectrum. It is a violation of Americans' constitutional protections, oversteps the limits of Executive power, disregards the mutual respect of sovereignty among nations and drains money from the federal treasury under the guise of replenishing it, and discourages overseas investment in the United States."
"Tax evasion is a problem that should be addressed, but not in such an egregious way. FATCA violates important privacy protections, disregards the sovereign laws of other nations and will cost the U.S. economy hundreds of billions of dollars in compliance costs," he continued. "FATCA should be repealed, and Congress should consider less onerous means of enforcing tax laws."