U.S. Citizens that have hardly ever lived in the U.S. are challenging the country’s rights to track their bank accounts. These people are called “Accidental Americans,” and they were born on U.S. soil, giving them automatic citizenship, but then lived their lives abroad. Still, the U.S. demands tax returns and banking information from them ’til death do us part.
This is due to the Foreign Account Tax Compliance Act, or FATCA. It demands that the world’s banks report activities of American customers. The law was introduced by the Obama administration to prevent rich Americans from shielding wealth in Swiss banks. The unintended consequences, however, have been that people who had no wealth or lives in the U.S. are being harassed. Lawyers in Europe are suing the State Department over this on behalf of 20 such Accidental Americans saying that this violates the European Union’s data protection laws and also might violate the U.S. constitution.
These groups have sought support from U.S. politicians to help their cause by setting up a new category of permanent expats called “qualified nonresidents.” They haven’t got very far with that as neither Republicans nor Democrats seem to care very much.