WASHINGTON (7/15/14)--An amendment that transfers $1 million to the Internal Revenue Service Inspector General's office for an economic study of the newly implemented Foreign Account Tax Compliance Act (FATCA) passed the House of Representatives by a voice vote Monday evening, hours after the Credit Union National Association and the World Council of Credit Unions submitted a letter to U.S. Rep. Bill Posey (R-Fla.).
Posey's amendment to the Financial Services and General Government Appropriations Act of 2015 (H.R. 5016) would transfer the funding from the IRS enforcement division.
"We believe this study is necessary given the complexity of implementing FATCA, the complex rulemaking that has taken place, and the myriad unintended consequences of the law on U.S. financial institutions and U.S. citizens living abroad," says the letter signed by CUNA interim President/CEO Bill Hampel and World Council President/CEO Brian Branch.
FATCA created a tax information reporting and withholding system for certain payments made to financial institutions. The 2010 FATCA statute passed by Congress requires foreign financial institutions to register with the IRS and detect taxable activity by U.S. citizens in foreign countries.
The IRS FATCA regulation also requires U.S.-based financial institutions to conduct due diligence and tax withholding on international funds transfers. This requirement is not present in the FATCA statute passed by Congress.
CUNA believes that these requirements are making it difficult for U.S. citizens living overseas, including credit union members, to maintain access to financial services in America.