IRS Taxpayer Advocate Urges Lighter FATCA Burden

July 15 — The IRS national taxpayer advocate told lawmakers she will keep up the pressure to lighten the compliance and implementation burdens of the Foreign Account Tax Compliance Act.

In part of a mid-year report to Congress on the office’s 2016 objectives, Taxpayer Advocate Nina E. Olson said July 15 she would encourage mechanisms that ease the unintended negative consequences of FATCA—particularly for U.S. taxpayers living overseas.

FATCA requires foreign financial institutions to report U.S.-owned accounts to the Internal Revenue Service or face, in some cases, a 30 percent withholding tax on their U.S.-source income. Confronted with that specter, many overseas banks have simply closed accounts owned by Americans.