FATCA is Part of Obama’s Executive Overreach


As charged by House Speaker John Boehner, President Barack Obama has demonstrated an unprecedented circumvention of Congressional authority “through executive action, changing and creating his own laws, and excusing himself from enforcing statutes he is sworn to uphold — at times even boasting about his willingness to do it, as if daring the American people to stop him.”

Now it’s time to add another instance where the Administration not only has far exceeded its constitutional and statutory authority but has misrepresented its actions and sought to thwart Congressional inquiry into them. At risk is not only constitutional and legal principle but a potential partial default by the federal government, with, literally, incalculable impact on the American and global economy.

Last year, Florida Congressman Bill Posey, a respected member of the House Financial Services Committee, wrote to Treasury Secretary Jack Lew regarding the Department’s legal authority for entering into “intergovernmental agreements” (IGAs) with foreign governments to enforce the “Foreign Account Tax Compliance Act” (FATCA).

Enacted in 2010 by an all-Democratic Congress with almost no legislative review and no cost/benefit analysis, FATCA was slipped into an unrelated jobs bill as a minor budgetary pay-for provision. It went into effect on July 1 of this year. FATCA supposedly is aimed at “fat cat” American tax cheats with money stashed abroad but includes not a single provision targeting actual tax evasion. Instead, FATCA creates an indiscriminate NSA-style information dragnet requiring – under threat of sanctions – all non-U.S. financial institutions (banks, credit unions, insurance companies, investment and pension funds, etc.) in every country in the world to report data on all specified U.S. accounts to the IRS. No proof or even suspicion of wrongdoing is required.

FATCA has been dubbed “the worst law most Americans have never heard of.” See here for more.

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