The Republican National Committee plans to hold a vote Friday on a resolution calling for the repeal of the Foreign Account Tax Compliance Act.
FATCA, which was included as part of the HIRE Act of 2010 in an effort to curb offshore tax evasion, has provoked controversy both in the U.S. and abroad. It requires foreign financial institutions to report on the holdings of U.S. citizens to the Internal Revenue Service or else face stiff penalties. Last year, Senator Rand Paul, R-Ken., introduced a bill to repeal some of the key provisions of FATCA that he said would undermine the privacy of U.S. citizens (see Rand Paul Introduces Bill to Repeal Parts of FATCA). In the House, another Republican lawmaker, Rep. Bill Posey, R-Fla., called for a moratorium on FATCA enforcement in a letter to Treasury Secretary Jack Lew (see Congressman Calls for FATCA Moratorium).
The RNC is holding its winter meetings in Washington, D.C., this week and is expected to vote to pass the resolution, according to Reuters, using FATCA as an issue during the midterm election campaign.
However, FATCA also has its defenders, including the advocacy group Global Financial Integrity.
“It is mind-boggling that a major political party would even consider endorsing a resolution to facilitate tax evasion,” said GFI legal counsel and director of government affairs Heather Lowe in a statement. “Tax haven secrecy is estimated to cost U.S. taxpayers $150 billion per year. Naturally, we urge all members of the Republican National Committee to reject this resolution. Tax evasion and illegality do not belong in the official platform of any political party.”