Meeting taking place today between EU Council prez and IRS, re EU bank accounts of 'accidentals'

According to Fabien Lehagre, founder and president of the Paris-based Association of Accidental Americans (AAA), the meeting will enable the two government entities to consider in particular a possible solution to the problem that's being proposed by the French Presidency of the Council of the European Union (PFUE). 

Full details about the PFUE proposal haven't been given, but according to Lehagre, as it's currently written it would "put an end to the closure of bank accounts of accidental Americans"while at the same time "considerably reduc[ing] the pressure exerted by certain banking establishments" currently on their U.S./European dual citizens.  

Today's meeting, Lehagre added, comes in the wake of "seven years of intense lobbying at many levels" on the part of his organization and others.

Although it's not open to the public, members of the European Commission have also been invited, Lehagre said.

Lehagre says he and others will be watching closely to see what, if anything, emerges from the high-level discussions in Brussels. Because "without a quick and permanent solution, more than 300,000 European citizens are likely to lose their bank accounts," as EU banks continue to tighten up their enforcement of FATCA, as they're obliged to do under the intergovernmental agreements the countries in which they operate have signed with the U.S., he explains.

Le Maire, in Feb: FATCA 'on the agenda'

Today's meeting comes a little more than three months after France's minister of the Economy and Finance, Bruno Le Maire, reassured Lehagre that he was on top of the matter of the bank account problems that EU citizens who also happened to be considered to be American citizens have been having in keeping their EU bank accounts, as these banks and other non-U.S. financial institutions seek to comply with a 2010 U.S. tax evasion-prevention law known as FATCA.

In order to enable the U.S. government to monitor the financial assets that U.S. citizens are holding outside of the U.S. (and thus potentially outside of the U.S. tax net), FATCA obliges all non-U.S. banks and financial institutions around the world to obtain U.S. Social Security numbers and/or Tax Identification numbers (TINs) from all of their U.S. account-holders.

However, because they have never lived in the U.S. for any length of time, if at all, nor worked there (and often didn’t even realize until recently that they were even considered to be U.S. citizens), most "accidental Americans" lack such SSNs and TINs. This makes banks reluctant to have them as clients, as the penalties they could be hit with for failing to comply with FATCA are significant.

At the same time, though, EU banks that fail to provide EU citizens with a basic bank account will be violating an EU-wide regulation (Payment Accounts Directive 2014/92/EU) that requires them to do so. 

As reported, Le Maire told Lehagre in a letter dated Feb. 14 that he had in fact "recently contacted Ms. Janet Yellen, Secretary of the American Treasury" in connection with the continuing problems FATCA was causing to French citizens, and that, as the eighth anniversary of FATCA's coming into force across Europe approaches (this November), France was continuing to "[reflect] on this problem with all of our European partners, in order to allow common responses, and to move forward."

Lehagre had received Le Maire's letter hours after a letter to Le Maire – signed by eight members of France's Senate – emerged, via social media in France (including the AAA's Facebook page, pictured left), which called on the finance minister to "finally grant French- and European-citizen 'accidental Americans' effective protection" from what they referred to as "Kafkaesque, discriminatory" predicaments that were often "financially disastrous for many [of those] concerned." 

The eight French lawmakers cited the fact that Le Maire would be better-positioned from that point until the end of June, at which point France is due to cede its current role in posession of the office of the presidency of the Council of the European Union. 

Ongoing issues with FATCA

EU FATCA-watchers note that today's meeting not only represents an important, if unofficial, acknowledgement on the part of U.S. officials that problems with the way FATCA is being implemented actually do exist, some 12 years after it was signed into law by President Obama in March, 2010, but that it is one of a number of areas  where the law is failing to do what U.S. lawmakers intended it to when they drafted it.

For example, as reported, the U.S. Treasury Inspector General for Tax Administration (TIGTA) published a major report last month which set out a number of what it said were significant shortcomings relating to FATCA, including the fact that the billions of dollars in revenue that it had been expected to generate had never appeared. 

Separately and a few days before, meanwhile, IRS commissioner Charles Rettig told a Senate Finance Committee hearing that he supported the idea of the U.S. "reciprocating" with respect to the information it currently receives from foreign governments about the overseas banking and financial accounts of U.S. taxpayers, via FATCA.

Although reciprocity had been mentioned when FATCA was first introduced, it never developed, thus sparing U.S. banks and financial institutions the cost and burden of collecting data on their non-U.S. citizen account-holders, in addition, it's said, to enabling such institutions to enable certain of their non-U.S. citizen account-holders to hide assets from their home country's tax authorities. This, in fact, was cited by the Tax Justice Network earlier this month when the U.S. moved up to the top spot in its latest "Financial Secrecy Index".