Why do expats have no rights as US citizens?

I am a US citizen expat. For personal as well as economic reasons I chose to leave the USA and live in a foreign country. Many honest people choose to become expats for a variety of reasons: jobs, businesses, education, love, retirement, etc. My life is becoming ever more complicated by the fact that the US government is making it very difficult for me to function outside of the USA. It is getting ever more difficult for me to open bank accounts, enter into various transactions, and make investments because of US government regulations which extend to foreign jurisdictions.

One particularly egregious example of this over extension of US government authority is FATCA; the Foreign Account Tax Compliance Act. FATCA forces foreign banks and financial institutions to not only comply with the laws and regulations of their home country, but also with US regulations regarding tracking and reporting upon US citizens doing any type of business with those banks. This is enormously costly for the foreign banks, and as a result many have decided to simply refuse to do business with US citizens, or to implement FATCA compliance in a way that makes it almost impossible for most US expats to comply.

The stated goal of FATCA is to pursue, prosecute, and discourage illegal tax evasion by US citizens. However, it is accomplishing none of that. Most US citizens who are violating US tax laws live inside the USA and use US based banks and financial institutions to evade their taxes. As such they are outside the reach of FATCA. The idea that vast numbers of US citizens and residents are using evil “offshore” banks to illegally evade taxes is simply not true. Instead, FATCA is targeting expats living abroad who are mostly people who don’t have to pay any US taxes to begin with.

I had hopes that both Obama and Trump would remedy this systemic injustice by a very simple change in policy: Excluding expats who are legal residents or citizens of the foreign jurisdiction from the onerous and detrimental effects of FATCA for banks in that jurisdiction. Either President could have changed this policy with a pen stroke. What this would mean is that foreign banks would not have to worry about FATCA compliance if you lived in that country. Only those US citizens who go and establish bank accounts in countries where they are not residents would be covered. Personally I would prefer that FATCA and these other programs are abolished, but this would actually make some sense. FATCA and FBAR have inundated the IRS with mountains of useless data that fails to identify real tax evaders. This simple change would make the data much more targeted and useful for the IRS.

So whats up with this? Why is this happening?

If we judge FATCA and these other programs based upon their actual outcomes and effects it is clear that they do not fight tax evasion and were most likely never intended to do so. What could be the “real” reason? Could it be that these programs are intended to create a “virtual iron curtain” around the USA in order to keep Americans and their money from leaving the country?

Rather than using visa restrictions, passport confiscation, high walls topped with barbed wire, and guards with dogs and machine guns to force US citizens to stay inside the USA, the US government is using foreign banks and financial institutions to force us to return to the USA with our tails tucked between our legs in defeat and financial ruin.

And what is so maddening to me is that American “conservatives” do not care. In fact I have found that many secretly, or not so secretly, celebrate the ever growing pressure applied to US expats often suggesting that we are traitors for leaving and deserve to be punished. So much for a commitment to liberty and justice.

I had hoped that other countries would rebel against these intrusive, coercive, and costly regulations imposed upon their own banking industries, but sadly they have not. They have decided to either buckle under and comply, or simply refuse to do business with US citizens.

As a US citizen living in the USA, are you better off being restricted to only living and working inside the USA?

I have an option to escape. It is not an option I want to pursue, but soon I may have no other option: abandoning my US citizenship. This is a particularly unpleasant option for me. I don’t want to give up my citizenship. If I do so it will be almost impossible for me to obtain a visa to enter the USA in the future. I may have to live my life as an exile from the USA all because I decided to pursue my personal life and business outside the USA for a time. How will this benefit my “liberty loving” fellow American patriots?

If I am right in regards to my speculation, that these policies are being implemented to keep Americans inside the USA in much the same manner as the Soviet “iron curtain” was intended to keep people from escaping from communism, then what does that mean for you patriotic Americans who choose to stay? Are you more free or less? Do you have more liberty as my freedoms and rights are being trampled upon? Is the USA becoming a better place to live? Or is it possible that these policies are small steps toward building an ever greater despotism that ultimately will turn Americans into nothing more than servile subjects of the state?

I wish you all good luck. You may eventually need it more than me.

Alexander Hay is a US lawyer now living in Tbilisi, Republic of Georgia. Some have accused him of being a curmudgeon, but what do they know???? Noisy kids!