The Law That Makes U.S. Expats Toxic
By COLLEEN GRAFFY
Oct. 8, 2015 3:00 p.m. ET
The U.S. government has long created hardships for Americans who live abroad, and much of the problem relates to the tax code. America is the only country that taxes citizens on their global earnings, and in 2010 Washington exacerbated that by passing the Foreign Account Tax Compliance Act, or Fatca. As this law comes into force, it is doing immense harm to Americans and American interests abroad.
Aimed at preventing money laundering, the financing of terrorism and tax evasion, Fatca requires foreign financial institutions such as banks to report the identities of their American customers and any assets those Americans hold. Institutions that don’t comply are subject to a 30% withholding tax on any of their own transactions in the U.S.
This provision was enacted without regard for its effects on the 8.7 million U.S. citizens living abroad, who have essentially been declared guilty of financial crimes unless they can prove otherwise. Many institutions no longer consider their American clients worth the burden and potential penalties of the law, and are abandoning them in droves.
Being an American overseas has become a liability, and not just because it’s difficult to open or keep a bank account. Americans are now often seen as toxic. Thanks to Fatca and other tax provisions, foreigners who marry Americans abroad can see their prospects for homeownership and their pensions, insurance, privacy and investments negatively affected.
American leadership overseas, from volunteer organizations to the business world, has diminished. No one wants an American involved when their citizenship attracts a maze of rules, regulations, potential fines and criminal penalties. In one case a Swiss hospital, understandably reluctant to have its account information released to the U.S. Treasury because it has an American chief financial officer, gave the American executive a choice: Give up your job or give up your citizenship.
As a former American diplomat who now lives in Europe, I am acutely aware of the important public-diplomacy role that overseas Americans play. It’s painful to witness the anguish of patriotic Americans as they contemplate giving up their U.S. citizenship, as record numbers have been doing. In 2014, 3,417 renounced their citizenship, a 266% increase over 2012, before Fatca came fully into effect.
http://www.wsj.com/articles/the-law-that-makes-u-s-expats-toxic-1444330827
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I believe that you mean FATCA rather than FACTA. https://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-FATCA It is the one for which the magic number is higher.
https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act
FATCA is the revenue-raising portion of the 2010 jobs stimulus bill and is thus a good thing, IMO.
FBAR is the one that applies uniquely to bank accounts and applies when the aggregate total of foreign bank accounts is >USD 10,000. https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-FBAR
FBAR is no big deal, IMO. It's just a report that can be filled out on-line, printed, signed and sent to the IRS. It takes a few minutes and certainly does not require a tax accountant. I've done my own for years.
Now that I am a retiree, I have no financial assets abroad that >USD 50,000. My major financial accounts are held in the US, so the IRS already knows everything that there is to know.
When I first moved to Switzerland in 1994, I became a client of then-SBS (now UBS), which is an international bank with an international as well as local clientele. UBS was one of the notorious ones that got caught for helping US citizens (here and in the US, btw) to hide their financial assets from IRS scrutiny and got its fingers badly burned. (I never had enough financial assets to be involved in any of this skulduggery, LOL.) However, what UBS has done since then is to combine its US expat clientele for administration directly from its head office in Zurich so that it meets all of its tax treaty obligations for IRS purposes.
The problems caused by FATCA are not with the major international banks, at least not in Switzerland, but rather with the smaller cantonal banks. They don't generally have the resources to ensure that they will be in compliance with US reporting requirements and thus take the path of least resistance. So yes, the cantonal banks as a rule refuse US nationals as clients based on nationality alone. And yes, I know personally ex-US citizens who have specifically repudiated their US nationality for that reason. However, they would likely not have had the same result with one of the big internationals such as UBS or Credit Suisse, which have branches all over the country - and the world.
No one should necessarily condemn anyone out of hand for their actions, IMO. In most cases I know, the individuals were US citizens by birth who had spent the majority - if not all - of their lives living outside the US, had few, if any, ties there, and had a second nationality.
IMO, FBAR is not a prob at all - just a few minutes spent on line after verifying the highest account balance(s) during the tax year. FATCA does not apply to me at all.
Now everything is done on line. I keep forgetting that until I actually go on line to complete the blasted form. Senior moments!
Last year, I made a mistake - had a typo where I inverted some digits - and still managed to get the matter clarified, all on-line. The I-net really is an amazing contraption. 
There are some great Dem advocates here.
It sounds like you have a lot to stay for.
Have to say that my own Schwyzerdüütsch is extremely sparse. French is the main language where we are. When we travel to the German-speaking area, most people are happy to speak to us in English. Of course, that's usually in the larger cities. 