We live in FATCAesque times. FATCA is many things.
FATCA is the end of financial and human privacy.
FATCA is the means by which the U.S., by using it’s Trojan Horse soldiers (U.S. citizens abroad) intends to confiscate a portion of the GDP of other countries.
FATCA is, for lawyers and accountants the “gift that just keeps on giving”.
FATCA is responsible for the creation of new industries.
In short, FATCA is “a small step for man, but a large step for mankind”!
For, this the world owes Senator Carl Levin and President Barack Obama a great debt.
The United States and Eritrea are the only two countries in the world that impose taxation on their citizens who live abroad. That said, Eritrea imposes a tax of only 2% on its citizens abroad. The U.S. through PFIC and other forms of “so called taxation” use this “so called taxation” to confiscate assets. Therefore, it is unfair and insulting to Eritrea to compare it to the United States.
Which brings me to the final point about FATCA which is:
FATCA is the mechanism that is designed to enforce citizenship-based taxation – the vehicle that is used to confiscate the GDP of “sovereign nations”.
For this reason, the taxation of U.S. citizens abroad is “on the radar” to an extent that it never has been before. U.S. citizens are dangerous, toxic and a potential “legal liability” for all kinds of professionals. This is particularly true in the legal and accounting industries (where it is getting increasingly difficult to find accountants to take U.S. clients).
Lawyers needs to be concerned. There are many areas of law where a lawyer must ask:
Are there extra and unforeseen consequences to the fact of having a U.S. client? The answer is of course, U.S. citizens are exceptional. But, there is one area where lawyers need to be very very concerned. This is the area of family law.
The marriage or divorce of a U.S. citizen creates special problems. If neither party to a marriage is a U.S. citizen, one can simply book the wedding. But, if one party to a marriage is a U.S. citizen and the other is not, we will call it an “FBAR Marriage”. Before getting into an “FBAR Marriage” you need to call a lawyer. The United States of America is exceptional. U.S. citizens are therefore exceptional. Therefore, your “FBAR Marriage” will have exceptional issues. In fact the “FBAR Marriage” is so exceptional that it has a heightened likelihood of ending in an “FBAR Divorce”.
Definition of an “FBAR Marriage” – A marriage where one spouse is a U.S. citizen and the other is not.
Definition of an “FBAR Divorce” – The end of the “FBAR Marriage”.
My point is a simple one:
Non-U.S. lawyers practicing in the area of matrimonial law really need to understand the principles of “American Exceptionalism” and how they apply to the “FBAR Marriage”.
As grows the awareness of U.S. citizenship-based taxation, so grows the potential liability for failure to understand the most fundamental
taxation principle of U.S. citizenship.
My advice to those practicing matrimonial law:
Don’t take U.S. person clients. It will keep your insurance costs lower.
Those brave souls interested in this topic can get started with:
To be forewarned is to be forearmed!