It's no secret that U.S. expats are very frustrated and angry over FATCA's, the Foreign Account Tax Compliance Act, impact on their life abroad. It was created to prevent tax evasion. FATCA requires employees to file yet another form to the IRS stating specified foreign financial assets. Expat tax filing is already complicated, and the resulting banking problems have wreaked havoc on their lives. They have had enough, and they are taking the IRS to court.

In addition to individual filing requirements, banks are required to report on the accounts of their American clients. If they do not comply, the IRS will withhold 30% of the expats' payments. This can be crippling for the banks, and many are simply choosing not to work with U.S. expats. The Wall Street Journal states that 16% of expats have lost their bank accounts, mortgages, and other financial services in their host country and 22.5% are unable to open savings or retirement accounts. Many employees have lost promotions or start-up opportunities because foreign companies want to avoid the higher compliance costs of working with the Americans and opening up their books to the IRS.

The expatriates who filed the lawsuit against the IRS claim that FATCA invades their privacy and unfairly discriminates against those living overseas. They also state that the regulations set forth in FATCA impose a "guilty-until-proven-innocent" approach to Americans living abroad. Senator Rand Paul has stated that FATCA's reach has gone too far and ignored Congress. He is leading the charge to repeal the act. The U.S. government has thus far stated that the plaintiffs have no standing in this case because they have not suffered sufficient injury or damage.

FATCA Explained: The New Tax Law for U.S. Citizens Abroad

Case Study Questions

1 Do you agree with the expats' case against the IRS? Why or why not?

2 Would these issues cause you to reconsider working in a foreign country?

3 As a global HR manager, what could you do to prepare employee who is going to work in a foreign country for this problem?

NEED EXPLAIN AND CONCLUSION AT THE END OF ANS