To Washington and back: 2015
In all, 9 people went to Washington in March 2015 representing AARO and FAWCO: AARO President Lucy Laederich, Vice President Ellen Lebelle, former Tax Chair John Fredenberger, Asia Director Ross Feingold and Kathleen Mistry, now living in Washington, were there throughout a week that featured over 50 meetings, essentially with Congressional offices. They also met with reporters from the Wall Street Journal and The New York Times and conducted several conference calls after the week to make up for meetings cancelled due to snow!
On the positive side, they felt that that Washington is increasingly aware of the overseas community; this is partly due to extensive media coverage in recent months but they also noticed the effect of the letter-writing campaign initiated only a few weeks earlier and a Democrats Abroad-organized “doorknock” the previous week, creating a certain momentum on which our delegates were able to build.
On the negative side, it seemed clear that in this divided Congress and with crucial presidential elections looming, little will happen in the coming months; in particular, the feeling was virtually unanimous in Washington that major tax reform will have to wait until after the 2016 elections.
This year’s delegation had decided to focus almost solely on FATCA impacts and the loss of access to financial services in the US and abroad, currently the prime concerns in the overseas community.
Meetings were held with the staff of Senators Mike Lee, who is pursuing a constitutional challenge to FATCA; Rand Paul, who introduced his “repeal FATCA” bill during the week; and Roger Wicker, an immediate co-sponsor of that bill who agreed during their meeting to introduce a “repeal FATCA” amendment to the Senate budget bill later in the month. The delegates also met with all co-chairs and almost all members of the Senate Finance Committee working groups looking at FATCA and tax reform. One meeting was held with representatives of the Center for Freedom and Prosperity and the Cato Institute, who shared the group’s concerns about possible FATCA-related threats: potential identity theft and security threats related to the information being collected around the world. In a meeting with staff of the Joint Committee on Taxation as in a number of others, they were asked if the problems Americans are facing abroad can definitely be linked to FATCA or if they are possibly no more than business decisions on the part of banks.
One thing learned by the week-earlier group and confirmed in many of the AARO-FAWCO meetings was that regulatory changes are far more likely than any legislative action with respect to FATCA. For Treasury to be willing to make those changes, however, they will have to feel they have Congressional support, so finding Congressional champions continues to be crucial.
Our organizations were asked by staff of the National Taxpayer Advocate, Treasury, the Joint Committee on Taxation, and a number of legislators to collect and provide two kinds of proof of FATCA impacts:
- Testimonies from our members and the general public on how they have been personally affected but these testimonies must be accompanied by a waiver of confidentiality (the stories can be redacted and include no personal information, but they cannot legally be used by anyone in Washington without such a waiver);
- Actual documents linking the denial of a service (account closed or not opened, account type not available, service limited) to the nationality of the account holder (whether or not the word “FATCA” actually appears, although this is preferable).
In addition, we are supporting the effort on the part of the earlier “Doorknock” group, including Democrats Abroad and ACA, to find out from banks and banking associations around the world whether or not with certain documentary back-up, they would, in spite of FATCA, provide service to “US persons”.
Access to financial Services
Meetings were held with the staff of a number of members of the House Financial Services Committee and most of those of the Senate Banking Committee, in addition to a conference call with the American Bankers Association that had to be scheduled after the week in Washington.
The delegates were reminded that account closures in the United States are essentially due to “Know Your Customer” rules which actually require that a customer be present to open an account.
We will make an effort to develop a list of documentation that could satisfy banks and the Treasury Department as to the bona fides of potential (or existing) customers with foreign addresses.
Americans Abroad Caucus
The Caucus has been registered again in the new Congress, with the same co-chairs as before, Representatives Mick Mulvaney (R-SC) and Carolyn Maloney (D-NY). There were, at the beginning of the week, 24 members in the 114th Congress; following the week in Washington, at the request of one of the delegates, Congresswomen Elizabeth Esty of Connecticut joined. She is one of several Caucus members who have joined at the request of a single constituent. We cannot stress enough the potential importance of the Americans Abroad Caucus and the fact that legislators need to hear from constituents if they are to be expected to join.
The support of the Caucus could be extremely valuable in any effort to convince Treasury to make even small changes to FATCA. For that support to be credible, the Caucus needs more than 25 members and they must be from “both sides of the aisle” (note that there are currently very few Republicans). AARO members are strongly urged to contact their legislators and ask them to join.
APEC Business Travel Card
The Department of Homeland Security has now commenced implementation of these cards to American nationals but its availability is not uniform. In a meeting with Ambassador Robert Wang, US Senior Official for APEC, delegates were assured that his office is aware of the problem and is taking steps to correct it. With respect to FATCA, Ambassador Wang suggests identifying the countries where implementation is the most problematic and seeing if State Department officers might explore corrective measures with local authorites.
The bottom line?
While some delegates are frustrated that no major progress was made during the week, it must be seen as positive that “overseas Americans” are increasingly known in Washington, that the negative impacts of FATCA have – through our own efforts and in the press – become familiar, that our overseas advocacy organizations continue to work hand in hand, and that we do have friends in Washington. Our job now (that of all AARO members) is to work with them to achieve that illusory progress…