[TEXT OF THE FATCA COMMENT LETTER SUBMITTED BY AMERICAN CITIZENS ABROAD] CC:PA:LPD:PR (REG-121647-10) Room 5205, Internal Revenue

Service PO Box 7604, Ben Franklin Station Washington, D.C. 20044 April 4, 2012 Dear Sirs, American Citizens Abroad (ACA) appreciates the opportunity to comment on the Treasury proposed regulations issued February 8, 2012 relating to FATCA legislation. While these specific regulations are essentially addressed to the foreign financial institutions (FFIs) and non-financial foreign entities (NFFEs), they directly impact on Americans and green card holders residing overseas (henceforth collectively referred to as Americans abroad). Many Americans working abroad are already experiencing difficulty in opening and maintaining bank accounts, pension plans and life insurance contracts with FFIs as FFIs aim to reduce the administrative burden and perceived legal risk associated with U.S. person clientele under FATCA legislation. To put this issue in context, ACA will first present what it considers to be the ultimate solution for resolving this problem and will then make specific comments on the Treasury Departments proposed regulations for foreign financial institutions under FATCA. ACA advocates alternative taxation to resolve the FATCA issue for Americans abroad FATCA is the straw that has broken the back of Americans and green card holders residing overseas (henceforth referred to as Americans abroad). FATCA has turned Americans abroad into pariahs in the international financial world. Americans abroad must have access to foreign bank accounts, pension funds and insurance companies to survive. The dilemma in which these Americans find themselves today would not exist if they were not subject to citizenship-based taxation. Consequently, ACA is urging Congress to adopt residence-based taxation and to tax Americans abroad with a withholding tax on U.S. source income, just as the U.S. currently taxes foreigners on U.S. source income. ACA believes that this solution is revenue neutral for the United States. ACA aims to have appropriate legislation introduced in order to have it scored by the Joint Committee on Taxation. Adopting residence-based taxation would align U.S. tax policy with that of the rest of the world. Under residence-based taxation, foreign financial institutions would no longer need to report to the IRS for purposes of FATCA on the accounts of 6 million Americans overseas and many more millions of green card holders residing abroad; they would focus only on U.S. residents. The IRS would benefit from automatic tax collection from Americans abroad on U.S. source income through withholding tax and would be relieved of administering the excessively complicated tax filings from Americans abroad.

The IRS would have resources freed up to focus its attention on tax evaders residing in the United States. Americans residing abroad are not de facto tax evaders, because they are already paying taxes on their worldwide incomes to the nations where they reside. With residence-based taxation, Americans abroad would no longer be forced into a position to have to choose between their families and their U.S. nationality, between career opportunities and their U.S. nationality. U.S. tax policy would be aligned with that of the rest of the world. ACA appreciates that the Treasury Department recognizes the unique situation of Americans abroad Before entering into this discussion on the proposed regulations, ACA would like to thank the Department of the Treasury and the IRS for having established in the Instructions for Form 8938, issued December 15, 2011, higher thresholds for the reporting requirement of Form 8938 for Americans abroad. Through this approach, the Department of the Treasury has specifically recognized the situation of Americans working and living abroad to be distinct from that of Americans resident in the United States. Although Form 8938 comes under Section 6038D and is not a topic included in the proposed Treasury regulations of February 8, 2012, which focus on FFIs and NFFEs and relate to Sections 1471 and 1472 of the Code, it is a key element of FATCA legislation affecting Americans working overseas. ACA perspective on the modifications in due diligence requirements in the proposed regulations The IRS proposed regulations of February 8, 2012 build upon prior FATCA notices issued by the IRS and provide substantial additional guidance regarding due diligence, withholding and reporting obligations and additional carve-outs from -- and exceptions to -- FATCAs applicability, as well as a new timeline for implementation. The delay in the implementation reflects the utter complexity of instituting FATCA and aims to provide FFIs more time to prepare the administrative and software structures required for compliance. The Treasury Department has taken several steps to facilitate compliance and reduce the administrative burden for FFIs, in particular with regard to due diligence requirements. Thresholds have been introduced to significantly reduce the administrative burden related to smaller accounts and to increase focus on large accounts. n1 Most significant, preexisting individual accounts with a balance or value not exceeding $ 50,000 are exempt from documentation and cash value insurance or annuity contracts with a balance or value of $ 250,000 or less are also exempt from documentation. Accounts with a balance or value exceeding $ 50,000 but that do not exceed $ 1 million are subject only to review of electronically searchable data for indicia of U.S. status. For new individual accounts (opened after the effective date of an FFIs agreement), review of the information provided at the time the account is opened is required, and if U.S. indicia are identified, additional documentation must be obtained or the FFI must treat the account as held by a recalcitrant account holder.
2

Furthermore, the proposed regulations have expanded the categories of deemed-compliant FFIs to include i) registered deemed-compliant local banks, non-reporting members of a participating FFIs affiliated group, qualified collective investment vehicles, restricted investment funds whose interests are sold through certain distributors and FFIs that comply with the requirements of an agreement between the U.S. and a foreign government that, in each case, register with the IRS, meet various requirements for their deemed-compliant status and renew their certification every three years; and ii) certified (but non-registering) deemed-compliant local banks, retirement funds, non-profit organizations, certain owner-documented FFIs and FFIs with only low-value accounts that meet various criteria and that certify their qualification as deemed-compliant FFIs by providing certain documentation to a withholding agent. n2 These measures represent important efforts on the part of the Treasury Department to make FATCA more workable and more acceptable to the FFIs. Nevertheless, collateral damage is already present. Due to FATCA, foreign bank accounts are being closed In anticipation of the approaching dates when FATCA will apply, many FFIs have informed American clients that they are closing their accounts. These account closings relate to investment accounts, but also to retail accounts. It is not just bank accounts of Americans resident in the United States, but also Americans working and residing overseas in the country where the FFI operates that are being closed. Americans working abroad are also losing access to foreign pension plans and foreign life insurance contracts. Prepaid credit card companies are refusing Americans. Americans married to foreigners are being taken off of what was formerly a joint bank account, putting the American spouse into a very precarious financial position. American students studying abroad cannot open a bank account to pay tuition and living expenses and receive funds from the United States. Americans moving abroad for professional reasons face the same problem. U.S. companies aiming to establish presence abroad to sell U.S. products find it difficult to access FFIs. Furthermore, foreigners who move to the United States for professional reasons face forced closing of accounts in their country of origin, including demands to immediately liquidate their mortgages. FATCA leads to a severe decrease in the mobility of individuals towards the United States and of Americans towards the rest of the world. The reaction of the FFIs is normal self-defense on their part. It is comparable to the reaction of U.S. domiciled banks which, following the passage of the Patriot Act, refuse to accept as clients Americans resident overseas because they have a foreign address. The reaction to FATCA is all the more radical because FATCA carries the threat of a confiscatory 30% withholding on the sale value of U.S. securities for the entire institution. In the Annex to this letter are testimonies received by ACA from Americans overseas on their experiences of foreign and U.S. bank accounts being closed. It is a major problem for the community of Americans residing abroad. Americans residing overseas are being forced to renounce their U.S. citizenship
3

Increasing numbers of Americans who are long-term residents overseas and have a second nationality are being forced to renounce their U.S. nationality because of FATCA. ACA has listened to multiple testimonies from citizens who have concluded that renouncing U.S. citizenship is the only practical solution not only to live a normal life overseas but even to survive, although it is done with a heavy heart and regret. American women and men married to foreigners have to choose between their families and their U.S. citizenship as their foreign spouses refuse to have their joint bank accounts reported to the IRS and Treasury Department. Americans engaged professionally overseas have to choose between the development of their careers and their U.S. nationality as the restriction to banking facilities makes it very difficult to run a business and the reporting requirement on 10% U.S. ownership in a foreign venture scares away foreign partners. Americans, who have lived most if not all of their lives overseas, find they have to choose between losing their life savings to the IRS or losing their U.S. nationality. This includes U.S. citizens born abroad to a U.S. parent, who have ever held a U.S. passport, do not have Social Security numbers, who have never lived or even visited the United States. Americans find the complexity of filing tax forms with the IRS overwhelming and out of reach. It is impossible to insure that tax returns are totally compliant without competent professional tax specialists. In many foreign countries such services are not available. When they are available, they are very expensive, easily $ 2,000 or more, creating a heavy, unfair burden on all budgets, particularly since generally no U.S. income taxes are due. FATCA brings great fear and anger to the American community overseas because of the negative experience of those who entered the IRS voluntary disclosure programs and were unjustly penalized for not having filed the FBAR, even though thy owed little or no U.S. tax. Americans abroad see FATCA reporting penalties cumulating with very harsh FBAR penalties.
4

 Americans overseas view Form 8938 and FBAR as discriminatory forms and the reporting requirement as an unjustified invasion of privacy. It is incomprehensible to Americans abroad why two separate reports on foreign financial assets, both carrying heavy penalties for non-reporting, have to be filed with the Treasury Department, particularly since the United States only taxes income, not assets. These reports are perceived as raising a serious risk of identity theft and sufficient reason to renounce U.S. nationality. ACA recommends that at a minimum the Treasury Department suggest to Congress to modify the law so as to combine Form 8938 and FBAR into one report, to apply the higher reporting thresholds of Form 8938 and to require the report to be sent to the Department of the Treasury in Detroit. ACA also believes that Congress should significantly reduce the penalties for non-filing, penalties which are excessive in comparison with the fault. Similarly ACA strongly recommends that the IRS take a lenient position in determining such penalties for Americans abroad as is possible within the scope of IRS authority. The double reporting has raised concern in Congress as Senators Baucus and Grassley requested a GAO study on the topic. n3 U.S. citizenship for many has become a liability. The number of Americans renouncing their U.S. citizenship has increased radically in the last three years and will continue to do so unless U.S. policy changes. This trend is most disturbing as the United States is inflicting upon itself a serious brain drain, as those renouncing are well-educated, speak foreign languages, have experience living in various parts of the world, share and project American values and represent an extremely valuable national asset. The nation is losing not only talent but also excellent diplomats who work for the country for free. ACA recommendation to alleviate FFI reporting requirements Through the proposed regulations, the Treasury Department has demonstrated openness to facilitate compliance among FFIs by proposing more flexible guidelines with regard to due diligence and deemed-compliant FFIs. Since the Treasury Department has recognized the distinction between Americans working overseas and U.S. residents through the different levels of reporting thresholds on Form 8938, ACA would like to suggest that the Treasury Department make a similar distinction in its final regulations by stating that FFIs need not report to the IRS on accounts of U.S. persons who are bona fide overseas residents. This would certainly encourage FFIs to maintain Americans overseas as clients.
5

If this general exemption appears to the IRS to defeat the purpose of FATCA, then the exception could be limited to those Americans overseas whose maximum balance in the account during the year is below a specific threshold, for example $ 1,000,000, which is the same threshold required for electronically searchable data for indicia of U.S. status under the proposed regulations. Already under the current proposed regulations, no identification is required for bank accounts under $ 50,000 and for cash value life insurance policies under $ 250,000. Hence, bona fide U.S. persons residing overseas with bank accounts between $ 50,000 and $ 1,000,000 and with cash value life insurance policies between $ 250,000 and $ 1,000,000 would be identified by the FFI, but the FFI would not be required to report to the IRS the account balances and total movements of those accounts, nor would the FFI be threatened with IRS 30% withholding penalties on their own portfolios because of these accounts. This exclusion may require the U.S. person who is a bona fide overseas resident to provide the FFI every year a certificate from the fiscal authorities of the country of residence testifying that the person is tax compliant where he/she resides. Such a measure would cover the great majority of Americans working and residing overseas. Instead of reporting on millions of Americans and green card holders overseas, the numbers would probably drop to just a couple hundred thousand. Consequently, the FFIs should perceive a significantly lower administrative burden and less threat of penalty from the IRS. They should hopefully be more willing to accept as clients Americans residing overseas. For the purpose of FATCA in preventing tax evasion, this measure would allow the FFIs and the IRS to concentrate on large accounts overseas, which are more susceptible to tax evasion. Such a measure would allow significant rationalization of IRS efforts and reduction in cost of administering FATCA. In this context, it should be signaled that according to the Taxpayer Advocate Service, 91% of Americans overseas who file Form 1116 with their 1040 owe no U.S. taxes. n4 Consequently, massive FATCA reporting on those individuals is not going to increase tax revenue significantly. Even If FATCA increases tax filing compliance reporting among Americans abroad, it will not significantly increase tax revenues for the United States. A 1998 report of the Treasury Department Office of Policy cited specific studies of involving close to 200 individuals overseas, who had not been filing and were identified by the IRS; only one or two owed any U.S. tax. The report concluded: Treasury believes the samples do indicate that with respect to U.S. taxpayers working overseas, a taxpayers failure to file a U.S. tax return does not necessarily indicate that the taxpayer is not paying the taxes he or she owes to the United States. Therefore an initiative aimed merely at increasing overseas filing compliance may not necessarily raise sufficient revenue to justify the cost of such an initiative. n5 The report also concluded that the IRS should focus its overseas compliance resources on compliance measurement and enforcement projects that are likely to yield sufficient tangible results to warrant the resource expenditure. n6 The Treasury report also discussed that there should be no taxing of individuals who genuinely do not know they are American and who have never taken out a U.S. passport. Similarly those whose U.S. citizenship was stripped and then restored should not be subject to taxation during that period. n7

Alleviating the reporting burden on FFIs with regard to Americans working and living abroad is essential for Americans overseas to be able to access services of FFIs. The same is true for small and medium-sized U.S. companies to be able to set up structures abroad which will facilitate U.S. exports The FATCA Partner framework announced with the proposed regulations Upon release of the proposed FATCA regulations, the U.S. Treasury also announced that it had established a framework under which the United States, France, Germany, Italy, Spain and the United Kingdom will develop an alternative approach to FATCA through automatic exchanges of information which would resolve the issues related to the privacy laws of the countries and the passthru requirements of FATCA for bank transfers within the partner countries. As noted by Alston + Bird LLP, This intergovernmental approach is intended to help financial institutions deal with costs (estimated to be $ 100 million for each multinational bank), administrative burdens and legal impediments (e.g., data protection, reporting restrictions) in applying the FATCA provisions. n8 The U.S. government announced that it is approaching more countries regarding the government partner arrangement to share information. Evidently, the Treasury Department hopes that the partner arrangement will become a model that is generally accepted. If this movement to government partnerships develops, ACA believes that its recommendations stated above remain valid. The FFIs should not be required to report to their governments the accounts of Americans resident in the country up to a specified threshold, or not at all. This would substantially reduce costs and administrative weight on the FFIs, the partner governments and the IRS. These partnership agreements are conditioned on reciprocity, which is a key element missing in the FATCA legislation. Reciprocity puts the partner agreements on an entirely different level and fundamentally changes the application of FATCA. Will the U.S. Department of Treasury be able to furnish reciprocity? Reciprocity implies that U.S. financial institutions must be able to determine the country of residence of each of its clients, to create separate lists of clients by country and to report this information to the IRS. This creates a significant administrative burden on U.S. banks because of the highly fractured nature of the U.S. banking system with thousands of small local banks. In addition, all U.S. based mutual funds and ETFs (exchange-traded funds) would presumably have to report to the IRS on the residence of all foreign owners. Insurance companies as well. Will all U.S. based companies have to go through their ownership files to segregate out and report on any foreign resident who owns 10% or more of the company? How will the United States react when Brazil and Mexico request a reciprocity agreement comparable to that of the five European countries? Up to now the United States has refused to provide any information to Mexico on deposits in U.S. banks owned by Mexicans. It is widely recognized that U.S. banks hold large amounts of Latin American money, due to the non-reporting, non-taxation status of bank deposits owned by foreigners. There is major resistance in Congress to allow the IRS to require U.S. financial institutions to report on the accounts owned by foreigners. Can the United States carry out its part of the reciprocity agreements?

Information exchange arrangements are being discussed in several places -- through FATCA, the OECD and the European Union. For all countries other than the United States, the tax evasion issue deals only with residents who have not reported all worldwide income on assets held in overseas accounts. Because of citizenship-based taxation, however, for the United States, the exchange relates not only to U.S. residents but also to Americans residing abroad. For this reason, ACA believes that the only long-term viable solution is for the United States to adopt residence-based taxation comparable to that of other nations. FATCA will negatively impact the United States ACA reaffirms its position that FATCA should be repealed as it works against the interests of the United States. Foreign investment in the United States will shrivel when FATCA becomes operative. Just the threat of a 30% withholding on sale of U.S. assets is enough to scare away investors. Foreign portfolio managers are already recommending to their foreign clients to avoid U.S. securities. FATCA will bring little additional tax revenue to the United States, but will cost the nation dearly by isolating it from international capital movements. FATCA has already created immense ill-will throughout the world and risks to create systemic weakness in international financial markets due to the passthru requirement, which many banking professionals consider to be unworkable. FATCA will destroy the community of Americans working overseas if access to foreign financial institutions is totally shut off. ACA recognizes that repealing legislation is an issue for Congress, not the Department of the Treasury. However, IRS staff was actively involved in drafting FATCA legislation and the Department of the Treasury is in a position to significantly influence the direction of future legislation. Request that the Treasury Department and the IRS maintain a dialogue with Americans abroad The dilemma in which Americans abroad find themselves today would not exist if they were not subject to citizenship-based taxation. Consequently, as announced in the beginning of this letter, ACA is actively encouraging Congress, within the framework of fundamental tax reform, to adopt residence-based taxation for the U.S. citizens and green card holders and to tax them instead with a withholding tax on U.S. source income, just as the U.S. currently taxes foreigners on U.S. source income under double taxation treaties. ACA believes that this solution would substantially broaden the tax base and would be tax neutral for the United States, perhaps even bring in additional revenue for the United States. American Citizens Abroad would sincerely appreciate maintaining a dialogue with the Department of the Treasury and the IRS on this issue. ACA would appreciate any assistance that the IRS could provide in documenting current revenue flows from citizenship-based taxation vs. projected revenue flows under residence-based taxation with a U.S. withholding tax on U.S. source income, according to existing double taxation treaties. ACA believes that adopting residence-based taxation would be win-win solution for everyone, starting with the IRS. FATCA reporting or any other platform for international information exchange would deal only with U.S. residents and would greatly simplify the administration for the IRS. The IRS would benefit from automatic tax collection from Americans abroad on U.S. source income through with8

holding tax and would be relieved of the heavy administrative burden of excessively complicated tax filings from Americans abroad, an inefficient tax collection system which for the most part yields little tax revenue for the United States. ACA thanks you for your attention given to these lines. ACA remains available at all times to respond to any questions which you may have. Sincerely yours, Marylouise Serrato Executive Director Jackie Bugnion Director Anne Hornung-Soukup Director CC: The Honorable Timothy F. Geithner, Secretary of the Department of the Treasury The Honorable Douglas Shulman, Commissioner of the IRS The Honorable Nina Olson, Taxpayer Advocate The Honorable Max Baucus, Chair, Senate Finance Committee The Honorable Orrin G. Hatch, Ranking Member, Senate Finance Committee The Honorable Dave Camp, Chair, House Ways and Means Committee The Honorable Sander M. Levin, Ranking Member, House Ways and Means Committee

***** ANNEX Testimonials covering banking access problems related to FATCA and the PATRIOT ACT. Up through March, 2012 Compiled by American Citizens Abroad (ACA) Contact: info.aca@gmail.com Edited for content FATCA ONLY TESTIMONIES FATCA: Denied Account at Interactive Investor (UK) because of FATCA (Personal Experience message) Message: I am an American DPhil student at the University of Oxford. On 17 January 2012, I contacted Interactive Investor, a UK-based discount brokerage, to inquire about opening a fund account. The customer service representative stated that it shouldnt be a problem, but that shed check with her manager as she wasnt accustomed to enrolling new American clients. Upon her return, I was told, in no uncertain terms, that I was ineligible for any account with Interactive Investor because of FATCA. She stated that she did not know what FATCA was, but that they would not take me as a client because of it. I felt helpless. I am a simple student, wanting to responsibly put aside money for my future. I never thought that Id be impacted by legislation that I was completely unaware of, ostensibly designed to prevent multi-million dollar international money laundering schemes. In shock, and desperate for information, I discovered that I am below the FBAR (Form TD F 90-22.1) and well below the FATCA (Form 8938) reporting thresholds. Please help students, and other Americans abroad of limited means. Repealing the legislation, or at least amending it so that Foreign Financial Institutions (FFI) dont need to report on people below the individual reporting threshold could remedy the situation. Maybe then a student could invest money for the future. Ryan M Harrison Department of Physics & Wolfson College DPhil Biomedical Sciences (Biological Physics) Clarendon Laboratory, Parks Road Oxford OX1 3PU United Kingdom FATCA: Denied Banking Services in Germany (Personal Experience message) Message: Please send this letter to every single person and entity that you know. I am enraged and my story below explains why. As the descendant of Jews who fled Eastern Europe to escape the Nazis, I was mortified when I was told that I could not open the account I needed at a bank in Germany. I flinched at first; however, a customer service representative confirmed this by telling me, Madam, we value you as a potential client. However, a new law (FATCA) passed in the US prevents us from opening any new accounts for American citizens. Since you are a US passport holder, we cannot open the account for
10

you. When I asked if other nationalities could open the account he told me, Everyone other than US nationals can have such an account. I have been banned from this bank by FATCA, passed quietly under the Hire Act in 2010. And all of this is because of Carl Levin (of all people), who seems to have learned a thing or two from the Gestapo, to hunt down every American and descendants of Americans on the planet and chase them to no end. I am banned from holding an account in Germany (of all places), and its due to my own government and two men deeply involved in this who should know better (Levin and Shulman). This is discrimination against one particular type of US citizen (the expatriate) is sinful and morally repugnant. One could even argue that its racist. Now American citizens are banned from engaging the world in any way outside of our borders? Are we refugees now? America has to keep its citizens inside its borders like North Korea? I never guessed that anything this insane would ever happen in my lifetime. Everyone on the planet can get the banking services they need to live, but Americans are banned globally? My family ran to the US to get away from dictatorial governments who were suspicious of their own people and would never let them leave. I feel like I have come full circle. Another thing to think about is this: What will the IRS do about American military people stationed all over the world? Will they arrest them or take away their homes in the US if they dont file FBARs and the more complex forms that even tax preparers cant understand? What if someone working with an NGO needs an account in Lebanon, Syria, or Egypt to aid victims of torture? In my opinion the US Congress has become incompetent, backward, provincial, ignorant, arrogant, vindictive and imperialist. FATCA: Problems with life insurance and pension plans (Personal Experience message) Message: Hi: I was informed that you are collecting information on problems US expats may be having with financial services and portfolios outside of the U.S.A. Heres my story: I am a U.S. citizen and live and work in Germany and have been doing so since the early 1980s. I own two successful businesses. I recently applied for a fund-based life insurance policy at PrismaLife (a Liechtenstein-based company). I was denied insurance, because I was a U.S. citizen. Despite lots of letters and e-mails, my application was rejected on the basis of my citizenship. Not wanting to be discouraged I tried a different insurance company, Stuttgarter Lebensversicherung AG. Once again I was denied insurance coverage, because of my nationality. FATCA: Rejected by three banks today (Personal Experience message) Message: Hello, I am an American student (from Silver Spring, MD) working on my Masters Degree at the University of Luxembourg. I have been living in Europe (Germany, specifically) for about one year, and even though it was not easy to jump through the legal hoops and paperwork required for residence permits, I was proud to be American living overseas. Today, shortly after starting my studies in Luxembourg, I attempted to open a bank account to facilitate life in Luxembourg; many services require that one has a Luxembourgish bank account (cell phone, renting a place to live, even normal purchases
11

are made through transferring money between banks through the internet). I was rejected from three different banks, on the grounds that I am American, and there are new laws in effect that require them to do more work and spend more money. I have done a bit of research, and I have learned about the FATCA. This act is causing banks throughout Europe to refuse to work with Americans, simply because the US Government wants to catch a few tax evaders from overseas. I am a student. I have no income. I cant receive a FAFSA, because the USA doesnt recognize my university. I cant receive a student loan in Europe because I am American. I cant receive a student loan in the USA because I cant get a FAFSA. Now the FATCA is preventing me from even having even the most basic services overseas. How am I supposed to feel supported by my Government? FATCA: Forced to Give Up Share in Family Held Business Overseas (Personal Experience message) Message: I am an American living overseas with a Canadian husband. Recently our accountant told us that she would no longer be able to do our taxes unless I formally removed my part ownership of my husbands small business. I had worked for years to support and build this little business and am very proud of it. But our accountant said the new legislation that was coming down could put our business at risk because the filing requirements are so unclear and so difficult to predict. Even though we fully intended to play by the rules, the future rule-book was not clear. We went to a notary and transferred my small honorary share of the business to my husband. Those of us who live overseas are being deprived of any ability to plan our futures. Like many other households my largest investment for retirement is the growing value of my home. But now, because of the dramatic decline in the dollar, even if I sold my house at a loss, I would still be faced with inflated capital gains purely due to the exchange rate. There is no level playing field for us out here. It is like America has said to us, you deserve this because you chose to live abroad. I have not known much envy in my life, but now I look at almost anyone with any other nationality with great jealously. They seem so free while I feel shackled and fearful. I hate feeling like that. If I were only French, or German or Japanese I could have kept my tiny business holding. I wouldnt have to worry that my savings are in potential danger even when I am trying to do everything right in terms of my taxes. I would be able to make plans for my retirement without worrying that a collapse in the dollar against the currency where I live would ruin me. A person of any other nationality has a huge advantage. Under this situation we seem to have limited choices. 1. Continue living abroad but in deep uncertainty and unable to plan for the future. 2. Go back to the United States -- because it is just too difficult to survive financially or run a business abroad 3. Go underground and stop declaring anything 4. Give up your passport. I am a proud American who loves our country. But Ive made a life for myself abroad which I also love. Why is our country forcing us to face such unfair choices? FATCA: Brokerage account rejection as an American (Personal Experience message) Message: This week I was informed by Deutsche Bank in Poland, where I have had a corporate and personal banking relationship for over 12 years, that they are unable to open for me a personal brokerage account due to my American nationality. This account was going to hold securities of approximately $ 1.2m USD -- so NOT something that any bank would typically EVER pass on. This is a result of a corporate and global decision by Deutsche Bank to NOT accept Americans as customers due to the 1 January 2013 FATCA requirements. They view FATCA as so onerous that they will not even
12

take Americans abroad on as customers, whereas certainly there will be other banks that will do so -- but at a much higher cost to Americans Abroad. FATCA: Discrimination Against Contractors (Personal Experience message) Message: Sir/Maam, I am United States citizen and permanent resident, a 6-year Air Force veteran, and a holder of a high-level government clearance. I work for L-3 Stratis on contract with the US Army in Iraq on a US compound and hold a Common Access Card (CAC). ShareBuilder, my investment bank, recently notified me that I am no longer authorized to place trades on the account Ive held with them for the past 5 years that Ive been overseas. My understanding is that this is because of new government rules and regulations designed to prevent terrorism, and that if I were still in the military or working directly for the DoD that I would not effected. I contacted two other banks and was told the same thing, such that the situation now is that I do not have access to investment services -- as if living conditions were not poor enough over here! This is absolutely outrageous. Considering my service record and patriotism, questioning my integrity because law makers lack the competence to appropriately tune their laws is a sure sign of the creep of Federal Tyranny. You can be sure that if this unconscionable situation continues the USA will continue to lose citizens to permanent expatriation FATCA: Shut out of Europe (Personal Experience message) Message: I recently moved to Europe for personal and business reasons. The move certainly wasnt for tax avoidance as I am an American citizen. Wherever in the world one lives, the use of a local bank account to pay local bills, receive local salary and conduct your local business affairs is essential. When I set out to open a bank account I was educated by local bankers in the country where I live on the FATCA legislation passed in 2010. To my surprise, the biggest obstacle to obtaining a local bank account was not my ability to meet the minimum deposit requirements, but the color of my passport. After being declined by a handful of banks due to my American nationality, I obtained a list of all 38 banks from the local banking association and proceeded to systematically meet with each one of them. Many of them informed me that while they have existing American clients, they are not taking any new ones. Others regaled me with tales of how they had literally fired their American clients after the passage of FATCA. After a month walking up and down the streets, I was declined by over 30 of the 38 local banks for one single reason -- I am American. The gross arrogance of FATCA is an insult to all foreign countries and is reason alone to repeal the legislation. To apply American financial regulation, specifically tax compliance, on every financial institution on earth, no matter how big or small, for having a single American client that may not even live in America, is fanciful and absurd. The ramifications of FATCA on American companies to conduct business overseas are already being felt and will severely discriminate against and handicap American business as the implementation date nears. The portion of the 10 trillion dollars in foreign capital that is invested in the American stock markets that will be removed to avoid FATCA penalties and compliance will be enough to effect yet another stock market crash in US equities.

13

Repeal FATCA immediately and update our civil war era tax system to the global standard of a territorial based system for American citizens and companies. At present it takes me about a month to do all my US tax compliance for my businesses and my personal income. This is cruel and unusual. The only country on earth that can claim a similarly backwards tax policy is tiny African Eritrea. Elite company indeed for the country whose business is supposed to be business! FATCA: Banks Refusing Accounts (Personal Experience message) Message: Recently, Ive been rejected for bank accounts due to these new laws. I discovered that there are things that the rest of the world can do that I cannot do, just for the simple fact of where I was born and from where I have a passport. Why should an American have to report taxes twice in two different countries when one of the countries has nothing to do with the Americans day-to-day life? And the taxes are no simple process. The existing system takes hours to complete all of the necessary forms. America SHOULD have a residency-based system like all of the other counties in the world, and focus on people who are evading taxes from within America. The American extraterritorial taxation system limits mobility and expatriation which I believe is against some of the most basic human rights. As soon as I get Brazilian citizenship, Im giving up American citizenship with haste. Lastly, when I was a boy, there was a strong pride to having American citizenship: a politician in a foreign country and someone who serves in a foreign military would have had their citizenship stripped. Today, all that is gone. Basically, you can do just about anything and keep American citizenship, but to get rid of it, you have to pay an outrageous $ 450 fee to renounce American citizenship. The $ 450 fee (and the difficulty in renouncing citizenship) did nothing but devalue American citizenship, especially when you consider the only regimes that had a similar practice were Nazi Germany and the Soviet Union. FATCA: Turned down by my Bank after 30 years. (Personal Experience message) Message: I was notified, by my Bank of over 30 years, in Brussels, that as a result of the FATCA Act I could no longer; 1) Keep my portfolio account with them, I could only sell or leave the Bank. I could no longer buy or perform any transaction. Access to a fictitious account is also denied and,2) A Belgian Pension scheme, where I have been working for the same American subsidiary, for the past 25 years, & pay taxes is now being denied. I believe that I have been treated unfairly. I do not expect to retire in the US, & therefore my ability to invest for my retirement is thwarted by FATCA. FATCA: Filing requirements for Foreign Bank Accounts (Personal Experience message) Message: I am a parish priest in the Church of England. I am also a school governor and serve on the board of a small local charity. As part of my duties it would normally be expected for me to be a signature on a number of bank accounts to do with these activities. I, obviously, have no personal financial interest in these accounts, and they are all audited and subject to the scrutiny of the UK Charity Commission. However, because of the administrative burden (and the potentially rather punitive response if I were to make an error) I have had to decline to be a signature on the accounts for the school and the charity,
14

and have recently had myself taken off the list of signatures for our church accounts. All of these decisions place additional burdens on others, and inhibit my ability to do my job properly. When I explain why I have made the decision I have in regard to these accounts, it usually raises incredulity and astonishment. The idea that the vicar has to go line by line through the church bank accounts every year to find the highest balance so he can report it to the American tax authorities does not do the public image of the US in my parish much good FATCA: (Personal Experience message) Message: I have lived and worked in Graz, Austria, and have banked at the same bank for more than 40 years. In the course of time I accumulated savings that I invested in financial products (bonds, a fund, life insurance) offered by that bank. A bond issue matured on July 1, and on July 4 and as usual, I chose to roll it over and buy new bonds. Then, to my surprise and shock I was informed by my bank officer that as an American citizen, I can no longer buy securities that are not registered for trading in the United States. My bank is a major bank in Austria but its securities are not traded in the United States. I will be allowed to hold what I already own, but when my next bonds mature in 2 years, my only option will be a straight savings account, which offers very little interest. FATCA apparently requires total transparency from banks regarding accounts of American persons holding them cannot be brought into compliance with Austrian banking regulations and it will only be understandable that banks will then refuse their services to Americans. The people that FATCA wants to target -- the big fish -- will find ways out, as they usually do; it is the normal, everyday Americans who chose to live abroad and retain their American citizenship who will suffer from this bureaucratic monster that will consume huge amounts of taxpayers money to administer and fail to deliver substantial returns while causing Americans abroad severe inconvenience in their everyday life. FATCA: (Personal Experience message) Message: Last week my bank in Holland advised me that I would not be permitted to have a security account once FATCA kicks in. In other words I will not be able to invest in any stocks, bonds etc. from the U.S. or any other country. An e-mail was sent to me confirming the above. This is the result of a ludicrous policy designed by shortsighted people who sadly do not realize that they are placing the U.S. in an awkward position when it comes to dealing with the rest of the world. FATCA: Unwanted customer (Personal Experience message) Message: I live in Germany and have my financial life here. I have invested here and built up a financial existence here. Last month I received a letter from one of the companies where I have been investing in a fund for many years. This letter stated that since I was an American citizen I was no longer wanted as a customer of this company, because they had no intention of setting up all the paperwork needed to comply with FATCA. They set a deadline by which I am to divest myself of their fund.

15

This deeply disturbs me, and frightens me. What other companies will decide I am an unwanted customer? What about my health insurance company? My life insurance company? Banks I have accounts with? Other investments I have made? What about the company I work for? Will they be able to keep me as an employee -- as I might be a pariah to their insurance or pension or other financial service companies? I beg all those concerned to reconsider and to investigate the utterly devastating effect FATCA will have on Americans who choose to live outside of the States, but proudly remain Americans. Is it the aim of my country to destroy my ability to choose where I live, to destroy me financially because I am and remain a citizen? Am I to be punished for not living on American ground? Assumed guilty of some financial wrongdoing because I am not living and working on the soil of my homeland? FATCA: Persecution of Lawful Citizens (Personal Experience message) Message: The current tax climate for law-abiding US citizens with foreign bank accounts is nothing short of prosecution. In 2008 my mother resided in the US (naturalized US citizen of 40 years, born/raised in Switzerland) and was forced to close her Swiss brokerage account with UBS (UBS accounts are hardly unusual for Swiss). Being a dual citizen and living in Switzerland, I had to go to outrageous lengths to find a new bank for her mutual funds (most of which were European, not transferable to UBS in the U.S.). She was terminally ill with Leukemia, so the impact was extraordinarily high. Last year I was also visited by the current tax climate. I was forced to close a brokerage account here in Switzerland, although it contained no U.S. stocks and even though I have a U.S. brokerage account. I am not alone in this dilemma, as I know from personal contacts. I find myself asking, to paraphrase Kennedy, not what I can do for my country, but asking what my country can do for me. As a 7-year Navy veteran I am appalled by this treatment. FATCA: Foreign bank account closings (Personal Experience message) Message: I served as president of The FAWCO Foundation 2008-2010. This is a US registered non-profit philanthropic organization that receives donations and makes grants throughout the world. The Foundation had both a Swiss bank account and a US bank account to accommodate multi-currency transactions nearly since its beginning in 1967. In May 2009, we received notification from Credit Suisse that they were terminating our account on June 15, 2009. The reason they gave was that they had a new policy for accounts that were domiciled outside Switzerland and specifically U.S. business accounts. The US government had begun to impose strict limitations on banks that managed offshore business accounts and the fines and punishments to banks whose account holders did not declare assets would be severe. The Foundation was told that all of these accounts must now be $ 1 million. The FAWCO Foundation moved its funds to a US bank. This has resulted in higher processing and currency exchange costs. The FAWCO Foundation receives the majority of its donations from American citizens
16

who live abroad and the lack of a foreign account delays receiving and processing those donations. It has also become cumbersome for us to award our grants. FATCA: Forced closure of Bank Accounts (Personal Experience message) Message: My wife and I and our 3 children are American citizens. We have lived and worked in Switzerland since November 2001. We are C-permit holders and have purchased a house in Switzerland. Ive paid U.S. and Swiss taxes during this time, and disclosed all foreign bank accounts annually in accordance with applicable laws. In August 2010, I was assigned to an affiliate in NY for an open term. Im now a Swiss expat working in the U.S., but paid in Swiss francs, contributing to the Swiss pension, paying a Swiss mortgage and will continue to pay Swiss and US taxes. However, Im in the process of having my Swiss bank accounts with UBS forced closed, except for the mortgage. Ive been unable to open an account with any other Swiss bank. I have nowhere locally to deposit my Swiss paycheck or arrange for payment of my Swiss expenses, most importantly my mortgage payments. In addition, UBS stated that they would not continue to finance my mortgage if we are still living in the U.S. when it lapses, thus possibly resulting in the forced sale of our house. We would certainly incur a significant loss on the house due to the forced and premature sale, not to mention we would incur significant and unnecessary costs to secure housing when we return to Switzerland after the ex-pat assignment is over. In the meantime, we will incur unnecessary costs every month related to the payment of Swiss expenses from our U.S. account (as we have Swiss francs converted to dollars and deposited in the U.S. account, then converted back to Swiss francs and transferred for payment in Switzerland). FATCA: Banking issues (Personal Experience message) Message: This morning, August 10th 2010, I met my appointed representative at my Belgian bank of over 25 years, where I was informed that as of the date of their notification, 14 June 2010: 1) my portfolio of investments held at their bank was blocked. About 25% of these are with US bell weather corporations. He advised me that as of that date, I could no longer trade, but could only hold, sell or transfer my portfolio. I was banned from trading in either US stocks or all others. 2) A perfectly legal pension plan developed by Belgium to complement the legal pension is equally blocked until my 60th birthday, at which time I can only sell my accumulated savings, this at the legal tax rate of 16.50%. Yearly contributions, currently of maximum 830[EURO], are deductible, in Belgium, where I file. By not contributing yearly, I will lose about 5,000[EURO] in savings, depending, of course, on the stock market evolution, mostly Belgian.
17

This, of course, puts me at a clear disadvantage compared with peers, and implies a loss of a well-functioning program established to supplement the legal Belgian pension program. 3) I am also forbidden to subscribe, at their bank, in a life insurance policy, as a result of my citizenship. One of the reason advanced by the bank, is that such reporting would represent a cost of about 1,000USD/month per account, and that, of course, my portfolio does not justify this cost and that, in addition, we, the US citizens, are not worth it as a group in terms of clientele. FATCA Subject: Denial of Retirement Insurance by Allianz today (Personal Experience message) Message: I am an American citizen living abroad and teaching at the International School of Dusseldorf in Germany. I am an elementary school teacher. I have lived and worked in Germany on and off since 2000. Today I visited my insurance agents office in Solingen, Germany to take out a retirement/pension insurance with Allianz, the largest insurance company in Germany. I was denied the policy because I am an American citizen. My agent very clearly said that he could sell the policy that I wanted to any other nationality, except me-because I was American! Part of the money taken from my salary would be invested in stocks. My insurance agent explained that the U.S. Securities and Exchange Commission no longer allowed American citizens residing abroad to invest in stock-based pensions overseas. I pay 50% of my salary to the German government in taxes. I have an opportunity to invest in a retirement plan (in the country where I am living and working) that offers me a tiny bit of relief from high German income taxes and offers me a little peace of mind during my retirement years and today I was denied because of American laws. FATCA: Rejected by Banks (Personal Experience message) Message: I am writing to provide my testimonial regarding my personal banking difficulties faced as an overseas American. As a resident of Saudi Arabia, I have twice been rejected as a customer, purely on the basis of my US citizenship. In both instances, I was told that increased administrative and compliance burdens imposed by US authorities have led the banks in question to refuse to open securities accounts for American citizens. FATCA: Problems with banking access (Personal Experience message) Message: I have lived in Switzerland for 47 years ever since my marriage to a Swiss. With the appearance of FATCA, I have felt the serious whiplash of U.S. legislation impacting negatively on my freedom to bank and invest.

18

I had a retail account and an investment account with UBS in Switzerland and another investment account with a private Swiss bank. In the spring of 2009, I was informed by both institutions that since I was American, the investment bank accounts would have to be closed out before the end of 2009 or liquidated; both banks were following closely the reinforced QI regulations and Congressional discussions about FATCA. Both institutions offered services through their SEC registered subsidiaries set up specifically for investment accounts for Americans, but they require high investment thresholds and carry high fees. I consolidated my investments into one of the subsidiaries. If I hadnt been able to meet the threshold, I dont know where I could have banked. I had already had a bad experience with ETrade in the United States where I had maintained a securities account for several years but was refused in 2004 to open up a parallel interest bearing account because of my foreign address and Etrades new policy under the Patriot Act not to open accounts of Americans with a foreign address. This made me nervous as I had heard stories of U.S. securities accounts owned by Americans residing overseas being blocked and forcibly closed by other U.S. banks because of the Patriot Act. It was then that I repatriated all my investments back to Switzerland and closed the ETrade account. Hence, because of U.S. regulations, I have been forced to assume a high cost banking relationship and to take business away from the United States. This entire process has not only been expensive but also extremely disturbing because I realize that U.S. government regulations are making Americans overseas outcasts in the United States and abroad, putting them between the devil and the deep blue sea. Then, in May 2010, I received an email from my U.S. tax preparer asking if I had any investments in any foreign passive investment companies (i.e. foreign mutual funds or hedge funds). If I had any, my tax preparer insisted that I sell those positions before the year-end. The reason for this restriction on investment categories is the passage of FATCA in March 2010. The reporting requirements to the IRS of any investment in foreign passive investment companies are so complex that professional tax preparers dont want to deal with them. Hence, U.S. legislation is effectively prohibiting American citizens from investing in foreign mutual funds, which is a hidden form of protectionism for U.S. based mutual funds and a specific discrimination against American citizens who reside overseas and should be able to invest in the country where they reside. FATCA legislation should be repealed, or at a minimum should not apply to U.S. citizens who are bona fide overseas residents so that foreign banks can maintain banking relationships with Americans overseas and Americans can invest freely in the country where the reside. FATCA: Banking access problems (Personal Experience message) Message: I am an American citizen who has lived in Geneva Switzerland since 1973, with the exception of four years in the mid-1990s (1993-1997) when my employer, the International Labor Office, transferred me to New York. I retired at the end of 2002 and still live in Geneva. I return to the U.S. as our two children and now two grandchildren live in the U.S. I am a proud American who believes that I served my country by being part of the U.S. secretariat quota of one of the largest and the oldest of the United Nations specialized agencies. I retain many friends in the U.S., am part of a vibrant American community in Geneva but we are fully integrated here in Switzerland. This is an advantage, which many long-term American residents offer to the U.S. because we are accepted and liked for who we are in our
19

resident countries and operate with a credibility that serves both our home country and our country of residence. This should be viewed as a huge asset for the U.S. and it pains us that increasingly this does not appear to be the case. Just since the beginning of the year, I have been informed by one of Switzerlands two largest banking institutions that due to the fact that I am an American, I had to divest myself of all my investment holdings in their financial institution. Another bank agreed to accept my investments; then, just this month, on the day that I went to sign the papers, I was informed that the authority to do this had been withdrawn. Meanwhile back in the U.S., a large insurance company with whom I have been dealing since the early 1960s appears to be resisting changes in the composition of an IRA portfolio that I established with them upon retirement at the end of 2002. This is in view of the fact that I am living overseas. I feel that I now am being squeezed between my country of citizenship and my country of residence and they are forcing me to choose my mattress as the only site where I can place my savings. I am an American who loves my country. I always have filed my U.S. income tax return as well as the FBAR, which now seems to be so much in the news. I do not understand why my government is treating me this way. Again, I support and feel that I represent my country, living abroad. FATCA: Denial of Banking Services (Personal Experience message) Message: I am a US citizen because my father and mother were born in the USA. When I was born in Japan, in 1952 I gained that citizenship as a birthright. I have never qualified under any circumstances to be a citizen of any another country. I have been proud to be American throughout my 58 years of life and have been a good ambassador. Now I am not so proud to be a USA citizen -- I am scared, and I am stuck. I would like to renounce my citizenship but I have no alternative. Is there such a thing as an American economic refugee recognized by any other country? I have complied with the US tax laws by filing and paying my taxes each and every year. I complain about the fact that foreigners can invest in the US while paying no tax to the US government on their foreign income and I complain that the US is one of a very few countries that chase their citizens wherever they may be living in the world to file their taxes on any income they may have. But I comply. Obviously, having lived in Asia most of my life, I have set up local systems for banking and investment that best suits my needs. Because banking and investment are now global in nature most of these institutions come in touch with the USA -- its currency and or its financial and investment markets. All of the institutions I presently work with are now discriminating against me because I am a citizen of the USA. All of these banks and institutions are cutting me off from participation in any but the most simple of basic bank account. Why? Because they do not want to take the time and instill the systems and carry the cost of reporting the income of each of their US citizen clients to the US government. It is a special extra procedure -who can blame them? I cant -- I want financial and investment services like the citizens of the countries to which I travel and where I reside. I resent discrimination.
20

FATCA: Banking Problems caused by US citizenship (Personal Experience message) Message: I have had numerous problems with banking both in Switzerland and the UK. I have been denied access to investment accounts based on my US citizenship. I can only have a checking and savings account. I have been unable to set up college investment accounts for my son in Switzerland because he has US citizenship even though he is also a Dutch citizen. This is compounded by the fact that my residence abroad has limited my ability to invest for my sons future in the US (many 529s and UTMA accounts cannot be opened for non-US residents). I was finally able to open up a bank account to put my salary in through UBS. Though my accounts have to be linked to my husband at all times (I have lost my financial autonomy due to my citizenship). I have been unable to gain legal advice in Switzerland regarding US Wills and Guardianships because UBS lawyers are not permitted to speak to Americans about legal, tax or banking matters in specific terms. US lawyers are not trained in Swiss law and have been unable to advise me on tax implications of Wills, Trusts, etc. while residing abroad. My family is penalized for being partially American and living outside of the US both in tax terms, but also in our ability to accumulate wealth and in our pursuit of life, liberty, and happiness which is an entitlement of all American people. I plan to live abroad for a the long term and my annual tax return preparation fees for just US taxes is upwards of $ 10k for simple returns -- I am by no means a millionaire and am law abiding and file my taxes annually on time! We should not be penalized for choosing to experience the world, developing skill sets and languages that eventually could be useful to the development of skilled labor in the US. FATCA: Refused bank services (Personal Experience message) Message: I lived in Switzerland for 8 years (until 2004) and have continued to bank with Credit Suisse who until now had financed my home in Geneva (currently rented) I have been resident in California since 2004 and recently received notice that Credit Suisse would close my accounts and no longer finance my home because I am a U.S. citizen. I have contacted numerous banks and all refuse to do business with me because of my residency and nationality. I am currently in the precarious position of not being able to collect rent and pay my bills in Switzerland, let alone refinance my home simply because I am American. I have impeccable credit, have continued to work for well-known public company for 15 years, yet to no avail. FATCA: Fatca Legislation closed my bank account (Personal Experience message) Message: I am an American citizen but have been resident in Europe since 1976 when I moved here to join my Scottish husband. The company who has been holding my modest UK share portfolio wrote to me in September 2010 saying they were closing my account. They were removing all US persons from their client base due to the increased reporting and audit costs placed on them by the Fatca legislation. The portfolio represented part of my planning for my retirement. I will now need to divest at a time not of my choosing. I feel like a pariah and a second-class citizen. FATCA: Fear of losing bank account (Personal Experience message)
21

Message: Honestly, I live in fear. In the US, I use my parents address for my bank account, credit cards etc. However, theyre moving soon from their home of many years and I have no idea how to prove I live at their new address. In Switzerland, shamefully Ive avoided all discussion of my US citizenship, as I know they will close or not let me open accounts if they find out. I wait in fear for the IRS or the US Treasury to inform them of this and I have no idea what I will do then. I have a wife and a 6 month of child to think about. I already have to spend a fortune in time and money to keep myself in compliance with federal returns and account reporting requirements. Its clear to me that politicians couldnt care less about us -- beating up on Americans living abroad is hardly a threat to their electoral careers and were easy marks for them. Ironically, they make it so only rich Americans can afford to live abroad. FATCA: basic bank account closed (Personal Experience message) Message: Here is my story and the unintended consequences of the well-intentioned but shortsighted efforts of our laws. I am a resident of California where I work 9 months out of the year as a professor. For 3 months every year I travel to Switzerland to conduct research and to attract top European students to come to the US to study for doctoral degrees. The arrangement is rather common in todays globally connected world and quite advantageous to the US economy due to the advancements in science and engineering that come to us via these collaborations and connections. To be able to live in Switzerland on a daily level, to be able to be paid, to be able to pay my bills, to be able to buy groceries, etc. I must have a local bank account (basic savings/checking). This year after many years my Swiss bank abruptly closed my account on 1 month notice due to my US citizenship. It mattered not to them that I report all my Swiss salary and my Swiss interest income on my US tax returns. In looking for a new bank in Switzerland so that I can conduct my daily life for the months that I am there, I found banks that would open an account, but only if I deposited one million or more dollars. A far cry from the couple of thousand I need to keep in my Swiss account. Eventually, I found one bank willing to open an account but they warned me that if the current legislation passed in a form where it applied to simple savings/checking accounts then they would have to close my account too. Millionaires would still have access to a bank account ordinary people would not. I understand the need to tighten enforcement to catch tax evaders but the current efforts are creating unintended consequences for simple people like myself who are just try to live part-time overseas. The law needs to be amended to avoid penalizing the daily requirements of US citizens living overseas. If foreign governments were to impose similar laws vis-a-vis their citizens living in the US, we would surely object on the grounds of a foreign government interfering with our internal affairs. FATCA: Foreign Investment Account Closed (Personal Experience message) Message: ING, one of the largest banks here, just closed my investment account (held jointly with my wife who is Dutch). They sent me a letter saying: Our records show that you are an American citizen. Because of various strict new American rules regarding securities accounts held by American shareholders, we are closing such accounts including yours.
22

FATCA:: banking account for US citizens abroad refused (Personal Experience message) Message: I was recently deployed on an international assignment in Switzerland to help promote my US Companys business in Europe. I was extremely surprised and outraged by the fact that not one bank (including foreign branches of US banks!) would allow me to open a simple savings account to pay my rent and bills. All of the banks cited my US citizenship and the difficulties they experience with the US government. It is really disappointing to feel like a second-class citizen when abroad. If we want to maintain a competitive advantage globally, it is my sincere belief that we must eliminate the banking and double taxation of US citizens abroad, as their presence is crucial to growing the export capacity of US businesses. This inequality does not exist in any other industrialized first world nation and it will eventually erode our influence as Americans simply stay home. FATCA: Investment possibility closed (Personal Experience message) Message: I only heard of FATCA a few months ago and have already begun to feel its effects. Last week I inquired about investing proceeds from a German term life insurance policy in European funds and was turned down by a financial advisory firm because of my American citizenship. I was told that not only the paperwork was time-consuming but also that the company and the banks administering the funds could be made liable -- for what, they didnt say. I might just as well stuff the money in a mattress. TESTIMONIALS CONCERNING BOTH FATCA AND THE PATRIOT ACT FATCA/PATRIOT ACT: Subject: Unable to open a brokerage account (Personal Experience message) Message: Due to an estate settlement, I needed to open a brokerage account in order to permit the transfer of stocks and other securities to my name. Merrill Lynch said it could not open an account for me in the U.S. because I currently live in Thailand and have a Thai address. When I checked with the local representative office of Merrill Lynch Bank, its officer said that in order to open an account with its Singapore office, I would probably have to open an off-shore account in the British Virgin Islands. Today, November 25, I learned that this option will also not work because of the banks concerns about U.S. regulations covering off shore accounts. When I checked with Vanguard and USAA, where I have had mutual fund accounts since the late 1980s, their representatives said that I could not open a brokerage account. Moreover, although they could accept funds in established mutual funds (I make purchases from my U.S. bank account monthly), I could not open new mutual fund accounts. This means that if my financial needs change, I will not have flexibility in directing my investments. The estate in question is in the U.S. I do not want to move my money out of the U.S. FATCA/PATRIOT ACT: I cannot open an account in which to place funds left to my sons by their grandfather (Personal Experience message) Message: This year I celebrated both my 70th birthday and my 50th year in Europe. When my father died, in 1999, he left a considerable sum to each of my sons, but in the form of a living trust (in favor of my stepmother while she lived). She died more than three and one half years ago, and it has taken that
23

long for distributions to begin to take place. I sent the first Trustees cheques to two UTMA accounts that had been set up for my sons; they were duly cashed and the money was deposited. The two accounts appeared to be functioning correctly. A few months ago, I attempted to invest some of those funds in U.S. shares. I was told that these accounts were blocked, because we were not US residents. I could do nothing, I was informed. Naturally I complained bitterly to my account executive in the brokerages London office. For several months now they say that they have been trying to do something about this, but meanwhile nearly $ 300,000 has been blocked over all this time. These are UTMA accounts until age 21; One of the boys (both of whom are US citizens but also foreign nationals), is still 17, so the Patriot Act appears to contravene the UTMA law, because our broker informed us that because we are not U.S. residents a minor cannot have a bank or brokerage account in the USA. At this point the obliquely named FATCA Act comes into play. US citizens (or should we say SUBJECTS now?) cannot, as I read it, have overseas bank accounts either. I am not sure how we are supposed to pay the rent, car insurance etc. without a bank account here where we live? Today, and for the last months, several hundred thousand dollars of uncashed cheques, signed by the Trustee, languish in a safe, because there is nowhere on earth where I can deposit the funds, in the form of trustees cheques prepared for UTMA accounts which can no longer exist. I am in a terrible quandary. I dont mind giving up my US citizenship, but only under the most extreme circumstances. My sons however should not be forced into this, as they should have the opportunity to live and work wherever they want. FATCA/PATRIOT ACT: Denial of financial accounts due U.S. citizenship (Personal Experience message) Message: I have been forced to close a U.S. bank account due to being an overseas citizen and cannot open new bank or brokerage accounts in the U.S. I am also being denied the opening of new brokerage accounts in Spain. As a U.S. citizen overseas I am being marginalized by financial institutions on both sides of the Atlantic in a clearly discriminatory manner. I have already phoned the U.S. Consulate in Madrid, the U.S. Treasury and the IRS regarding this issue but only receive some empathy and I am told that nothing can be done. I also tried to contact the U.S. State Department but they dont answer the phone and never responded to the voice mail message I left inquiring about this issue. I am now emailing my congressional representatives, who I hope will be concerned about such matters affecting overseas citizens. FATCA/PATRIOT ACT: Bank Accts Closed and Refused (Personal Experience message) Message: In the early 90s American Express Bank automatically cancelled my account because I am a US citizen living abroad denied opening a bank acct. in US, NJ because I lived abroad. I now use a US address. I must sell a fund in Germany because I am a US citizen. I am unable to be on my husbands
24

accounts because I am a US citizen. I hope I die first otherwise I have a problem accessing funds. The US government does a terrible job communicating its rules and regulations particularly as it relates to foreign bank accounts. Unfortunately, we have NO representation so we are easy targets. FATCA/PATRIOT ACT: Banking Problems as an American (Personal Experience message) Message: Problems with banking that I have personally had as an American living in Hong Kong for 16 years now. Just to be clear, I was born in the US, I am a US Citizen and I have a valid social security number... 1. As an American no local retail stock brokerage firm (that is not an American firm already) will open a broker account for me. Its a blanket policy, no US Citizens. This is true for HSBC and Standard Chartered Bank among others. 2. Wells Fargo Bank in San Francisco informed me that the client service people for the stock brokerage division were not even allowed to speak to me as I had an international mailing address. This, even though I am a retail-banking client of Wells Fargo Bank in San Francisco. 3. I am forced to use my parents address on a dedicated credit card (also at that address) in order to use many of the services I would otherwise have access to if I were merely a resident of the US. Thank you. TESTIMONIALS CONCERNING SPECIFICALLY THE PATRIOT ACT PATRIOT ACT: Involuntary (FORCED) liquidation of IRRA Account (Personal Experience message) Message: I received via UPS an UNSIGNED letter dated July 27th, 2011, from Merrill Lynch, Merrill Edge/Service Elevation Team, MSC NJ2-140-02-19, P.O. Box 1501, Pennington, NJ 08534, USA, announcing: Please be advised that the account will be closed on August 26th, 2011because we are not able to hold accounts for clients that are residing overseas. Copy of letter attached to my separate E-Mail sent to ACA Since August 1st, 2011,I have been in telephone and E-Mail contact with Merrill Lynch (ML) in Pennington, NJ, USA, the custodian of my Individual Retirement Rollover Account (IRRA). Accordingly I have asked ML to assist me to ROLL OVER, within the IRS required 60 days from the date of distribution, the entire account consisting of CASH/MONEY ACCOUNTS and MUTUAL FUNDS valued at just over US$ 109000. -- as of July 29th, 2011,to a new IRS approved custodian of their choosing. This they agreed to do. However, in spite of repeated E-Mail contacts (acknowledged by ML) I have only been told that the associate responsible (unknown to me) is working on it and will advise me in a few days. Time is running out and I do not know how to protect my saved IRRA funds. This worries me, since I cannot possibly afford to pay income tax and penalties to IRS on this INVOLUNTARY, FORCED liquidation of the IRRA account. Neither can I afford to take the losses incurred by this FORCED liquidation during the present stage of the depressed stock market. The IRRA was created over 30 years ago in order to help us to cover living expenses during our old age. My wife and I were born in 1930! For the past 11 years I have received yearly the REQUIRED MINIMUM DISTRIBUTION (RMD) in the amount of around US$ 6000. -- plus/minus. The same amounts were reported on our yearly Income
25

Tax Returns and taxed by IRS accordingly. In addition, ever since the initial implementation, we have filed yearly the REPORT OF FOREIGN AND FINANCIAL ACCOUNTS with the TD F90-22.1 via REGISTERED AIRMAIL at the US Dept of the Treasury in Detroit, MI, USA. We receive US Social Security, with deductions for Medicare. All our lives we filed US Income Tax Returns on a timely basis with the professional help of Ernst & Young and over the last more than 22 year with Deloitte. We cannot understand why the BANK OF AMERICA and its wholly owned subsidiary MLPF@S, with both of which we have our private bank accounts, our brokerage and our IRRA accounts for over the last odd 57 years, is permitted to act in such a discriminatory (to say the least) manner. Please be good enough to find ways and means to protect the honest US Citizens, who are in 100% compliance with USA laws and regulations, but happen to live abroad, from such arbitrary, punishing and discriminating bank actions! PATRIOT ACT: US bank cancelled account because of French residency (Personal Experience message) Message: I am a US citizen living in Europe. I have a US passport and a US social security number; I do not have European nationality but am married to a European. My US bank, Merrill-Lynch, has sent me a letter announcing that it can no longer handle my account and that I must notify the bank in writing within 30 days concerning where I wish the money in the account to be sent. Since half the account is in investments, including mutual funds, Merrill-Lynch says it will liquidate these funds and send me a check. This, of course, means a loss as well as a huge tax burden. I have held this account for almost 20 years and have had only a French address for 7 years. Financial advisors at the bank have been investing my money in funds for several years and never warned me that the account might be closed abruptly. I use the account to pay my US taxes and my childs college education, and my US retirement benefits are sent to the account. Im currently looking for a solution. I understand that the know your customer regulations require banks to be extra-vigilant, but I believe that US citizens who have established accounts in person with bank representatives and who have held the accounts for several years, and whose identity is therefore not at all questionable, should not be forced to lose their accounts simply because they live abroad. PATRIOT ACT: (Personal Experience message) Message: As one of the many millions of US citizens who reside outside of the US, but whom still, despite having to pay local income taxes in their country of residence, still have to pay taxes in the USA, I now find that as is unfortunately usual, my obligations towards the US Government are not matched by any equality of service from the US Government. I refer to the demise of Legacy Treasury Direct facility, supposedly in the interests of efficiency, and its replacement by Treasury Direct online. Now I am told that as Legacy Treasury Direct is to close I must open an account with Treasury Direct online. But then I am told that this is impossible for US citizens living abroad without a US address. So I have no option but to progressively withdraw the approximately $ 90,000. -- that I have on deposit with you and deposit it elsewhere. One would have thought, that with the enormous US state deficit, and the need to borrow enormous sums to fund this deficit, that the last thing that the organization responsible
26

for raising funds to cover the deficit would do, would be to turn away persons willing to lend to the US Government. PATRIOT ACT: (Personal Experience message) Message: My parents and I were Operation Mercy 1956 Hungarian Refugees who found a home and life in the USA. My father opened a bank account with then Pittsburgh National Bank and we have maintained that account since 1957. We worked hard and saved prudently and kept our investments with now PNC. After father passed away in 1999, I being single, asked mother to move in with me and we lived in PA, TX and MA. The sale of the parental home proceeds, our IRA, well everything we accumulated financially during our lifetimes were always handed over to our Financial Advisor at PNC with mutual respect and trust. In 2004 we learned that we could live comfortably in Hungary as dual citizens. We learned that Hungary and the USA have an agreement that we can pay taxes to the USA and pay the local taxes and healthcare insurance to Hungary. Mom has her social security automatically deposited to the PNC checking account. We keep an account here in Hungary with about $ 2,000 as mergency cash -- which we reported to the IRS this year. We file our taxes annually through our accountant in Flower Mound, TX. In short, we are two older women of modest means, following all the laws of both Hungary and the USA as we try to maintain a calm uncomplicated life for ourselves. By a letter dated March 14, 2011, Michael S. Mortensen President and CEO of PNC Investments informed us that PNC will no longer be able to service accounts with address on record outside of US. PATRIOT ACT: Problems with banks in CT (Personal Experience message) Message: Even though a couple of years before I had assisted my son with a $ 50,000 down payment for a home, when I tried to arrange financing myself for a home in the same area of Connecticut, Plainfield (zip 06372) with Putnam Bank, I was informed that because I resided overseas I could not get financing from the bank. This caused a great deal of worry and delay, and eventually led to my not buying a home until the present. While Americans have their home addresses and often vote in the same area, banks do not accord them the rights that they are entitled to. PATRIOT ACT: Banks Refuse to Open New Accounts (Personal Experience message) Message: After a recent review of the bank charges I am paying at a US bank for ATM transaction, I contacted a number of US back that have low fees about opening an account. Every single one of them indicated that I could not open an account without a US residence. Having a US mailing address was not sufficient in the way they interpreted the Patriot Act. This makes it extremely difficult to conduct my personal affairs efficiently and economically. Its absurd that an American citizen cannot even open an account at a US bank. PATRIOT ACT: ING bank account closure due residing overseas (Personal Experience message) Message: I have had an account with ING for many years, Id have to check my records, but I suspect since 2001. My account is a joint account with my spouse, who is also a US citizen living with me in Saudi Arabia. My account balance was close to the amount that FDIC insures for a joint account ac27

cording to pre 2008 crash rules. I use a Houston, TX based mailing address, the same address I use for the IRS so I can pay my taxes as a US Citizen. The initial reason cited for the closure was the Patriot Act. This was then clarified after I wrote an e-mail to the President of ING Direct. See response below. We received the email you sent to our President, Arkadi Kuhlmann, and wanted to follow up with you. At ING DIRECT, we require our Customers to have the following in order to have an account with us: U.S. citizenship or permanent residency, A valid Social Security Number, U.S. home address, A personal checking account at a U.S. chartered bank. Be at least 18 years of age to have an individual account. Although the USA Patriot Act does not prohibit us from allowing our Customers to keep their accounts while maintaining a foreign residency, we have our own requirements in place independent of this legislation for our Customers to have an account with ING DIRECT. Your Electric Orange account will be closed on November 4, 2009, and the funds, plus an interest-earned, will be transferred to your linked external checking account and arrive 2-3 business days from that date. PATRIOT ACT: U.S. Stock Market and the Patriot Act (Personal Experience message) Message: In 2003 my sister and I, both U.S. residents in Greece, needed to change our financial advisor in the U.S. Our choice was happy to take us on but would not allow us to handle our accounts directly because of the Patriot Act. Trusts had to be set up that are operated by our brother. Again, I had been invested in another companys funds since their incipiency. Suddenly in 2003 I could no longer add to my account or shift money from one account to another because of the Patriot Act. Again, I spoke to their lawyers who could give me no help. I showed the relevant article to 2 lawyers and both said the same thing, that there was nothing in the article that would have brought on the responses I was given. This is a serious issue. What do I do when my brother, who is elderly, can no longer deal with this? I pay U.S. taxes. I declare everything I have. Why do I not get the same rights and privileges of those who happen to reside within the borders of the U.S.? PATRIOT ACT: Banking problems in the US, testimonial (Personal Experience message) Message: Extensive correspondence file, including correspondence with President of Bank. Received letter dated May 6, 2005 announcing that the investment account can no longer be serviced, effective July 2, 2005, including refusing letter of State Dept. Account is restricted; bank recommends transfer to another bank. The reason for the restriction is due to country residence, France. Situation on June 14, 2010(almost 5 years later) is the same. The account is still frozen with no visibility online. Mail is irregular. Form 1099-DIV was never received for filing on April 15, 2010 and has still not been received. PATRIOT ACT: Banking problems in USA (Personal Experience message) Message: With regard to your initiative re US bank accounts for Americans abroad, may I raise another issue. US bank accounts for non-US nationals who live outside the US but who need a US account in order to receive their Social Security payments from the US: 1) a non US person might have lived and worked in the US and then returned to his/her own country but still qualify for SS income; and 2) a non-US person might be the widow of a US national and thus be qualified to receive SS benefits. PATRIOT ACT: Problems with US banking (Personal Experience message)
28

Message: I am a born US citizen, vote in the US and pay my taxes. I had a bank account with Merrill Lynch where my pension was sent, ever since I retired in 1992. After asking for a transfer of $ 25,000.-last year to buy a car, I was delivered a registered letter terminating my account. Ever since, it has not been possible for me to open a normal account with credit card and checkbook since I do not have a residency in the US. PATRIOT ACT: (Personal Experience message) Message: At my mothers death, I inherited a trust fund, the capital of which I cannot touch for 21 years -- nor can I put the capital into the bank of my choice. Stuck, therefore, with this bank, I asked the best way to invest the income and had conversations with, first, Mr. A. Portfolio Manager, Investment Management, Senior Vice President and with Mr. B. who was to be my advisor. They both suggested I open a brokerage account where, with my approval, they would put my income from the trust into funds of their bank. Asking how to open such a brokerage account I was put in touch with Mrs. C. Trust Administrator. The first question that came back was when will you next be in the U.S.? September 2010. Next question: What is your permanent address? Paris, France. Sorry, you may not open a brokerage account! Neither Mr. A. Mr. B. nor Mrs. C. was aware of this impossibility. Digging further, I learned that as an American resident outside the U.S. I was not allowed to have the said brokerage account. I have since been able to open such an account with another bank in another state where I have a savings account -- but must use a U.S. address. -- a great nuisance for me -- but bank no.1 is therefore not allowed to make money. PATRIOT ACT: (Personal Experience message) Message: As a loyal American citizen who grew up pledging allegiance to the flag, served over 5 years in the US Army (mostly overseas during the Berlin Crisis), served honorably also in the US Foreign Service for 25 years, and pay taxes honestly and regularly as one should, I am offended by the treatment I have received from US Banks with which I have had decades of dealings. Having served at the Paris-based OECD (an international organization of which the US is a Member and founder) I stayed on for a while living in France. Some financial institutions and banks are so sticky and read the Patriot Act so narrowly that even though they know me personally and have dealt with me over decades, they will not deal with me if I have foreign address. Money swirls around the world in all directions, but many of US, honest, tax-paying citizens cannot have a normal financial or banking relationship with many such institutions. PATRIOT ACT: Subject: Cannot open U.S. business account for U.S business from outside USA (Personal Experience message) Message: Ladies and Gentlemen: Last summer I was in the U.S. to open a business (assembly of a German manufactured dog product) for sale in the U.S. and Canada. Because my U.S. current bank (USAA) does not offer business accounts, I inquired at another bank, and was told I would have to be physically present to open the account. Because of the sizable minimum deposit, and the fact that the company was just starting, I did not do so. Now, when I make large sales, and want to avoid the not
29

insignificant PayPal fees, I have to have customers send the money to my Credit Union, and then I transfer it to my bank. I am a former U.S. Army officer, and a retired Dept. of the Army civilian employee with over 30 years of total Federal Service. Sure would be great to be able to open a U.S. business account without flying to the U.S. My business provides work in an existing assembly plant to American workers. My sales are increasing, and I hope to be able to use American parts in the future. It would be great if I could get a certificate from a U.S. consulate or embassy enabling me to open a U.S. bank account. I understand the intent of the Patriot Act, but just because an American does not live in the U.S. certainly does not mean he cannot be trusted! FOOTNOTES: n1 This brief review of due diligence guidelines is taken from Alston +Bird, Summary of the Proposed FATCA Regulations, March 15, 2012. For preexisting individual accounts, the following guidelines apply: Accounts with a balance or value not exceeding $ 50,000 are exempt from documentation. Documentation exceptions and aggregation rules apply for certain accounts that are offshore obligations (other than cash value insurance or annuity contracts) with a balance or value of $ 50,000 or less and for cash value insurance or annuity contracts with a balance or value of $ 250,000 or less. Accounts that are offshore obligations with a balance or value that exceeds $ 50,000 but that do not exceed $ 1 million are subject only to review of electronically searchable data for indicia of U.S. status. Accounts with a balance exceeding $ 1 million are subject to review of electronic files (and non-electronic files to the extent that electronic files do not contain sufficient information about the account holder) for U.S. indicia, including an inquiry of the actual knowledge of any relationship manager associated with the account. For preexisting entity accounts, the following guidelines apply:
30

 Accounts with a balance or value not exceeding $ 250,000 are exempt from documentation requirements until the balance exceeds $ 1 million. For remaining entities, anti-money laundering (AML) and Know-Your-Customer (KYC) records and other existing account information can be relied upon to determine the type of entity to which the account belongs (e.g., whether the entity is an FFI, a U.S. person or a passive investment entity). Depending on the account balance and type of entity, different identification procedures of substantial U.S. owners are required. For new individual accounts (opened after the effective date of an FFIs agreement), review of the information provided at the time the account is opened is required, and if U.S. indicia are identified, additional documentation must be obtained or the FFI must treat the account as held by a recalcitrant account holder. For new entity accounts, the following guidelines apply: Accounts of another FFI (other than an owner-documented FFI for which the participating FFI has agreed to perform reporting) are exempt from documentation of substantial U.S. owners. Accounts of an entity engaged in an active nonfinancial trade or business are excepted from documentation requirements. For remaining passive investment entities, FFIs will be required to determine whether the entity has any substantial U.S. owners upon opening a new account. n2 Ibid. n3 GAO, Reporting Foreign Accounts to IRS: Extent of Duplication not Currently Known, but Requirements Can Be Clarified, February 2012. http://www.gao.gov/assets/590/588921.pdf

31

n4 In its 2011 Report to Congress, the Taxpayer Advocate Service reported that in tax year 2009, After the application of the Foreign Tax Credit, only about nine percent of these taxpayers had a U.S. tax liability. p. 155. n5 Income Tax Compliance by U.S. Citizens and U.S. Lawful Permanent Residents Residing Outside the United States and Related Issues, Department of the Treasury, Office of Tax Policy, May 1998. http://www.treasury.gov/resource-center/tax-policy/Documents/Income-Tax-Compliance-USCitizens-and-Residents-Residing-Outside-US-5-1998.pdf, p. 4. n6 Ibid., p. 45. n7 Ibid., pp. 39-40. n8 Op. cit. Alston + Bird provide the following sketch of the framework. The intergovernmental framework outlines the following objectives: The U.S. would enter into an agreement with a partner country (FATCA partner) under which each FATCA partner would implement legislation to require FFIs in its jurisdiction to apply necessary diligence in order to collect and report to the tax authority of the FATCA partner the required information, which would be automatically transferred to the United States. The U.S. government would allow certain FFIs to avoid entering into an FFI Agreement with the IRS, and would establish categories of FFIs that would not be subject to U.S. withholding on payments to them and that would be allowed to report FATCA information to the FATCA partner jurisdiction rather than to the IRS. The U.S. government would commit to automatic reciprocal collection and reporting of information to FATCA partners.

32

 FFIs established in the FATCA partner would not be required to (i) terminate the accounts of recalcitrant account holders, (ii) impose passthru payment withholding on recalcitrant account holders or (iii) impose passthru payment withholding on payments to other FFIs organized in any FATCA partner jurisdiction. Each FATCA partner would commit to the development of alternative approaches to achieving the policy objectives of passthru payment withholding that would minimize any associated administrative burden and would work with appropriate partners to adapt FATCA to a common model for automatic exchange of information, including the development of reporting and due diligence standards.

33