Constitutional Challenge to FATCA

Earlier this month, Jeff Lerner wrote about the Foreign Account Tax Compliance Act, a pesky law that requires foreign financial institutions to report to the IRS on bank accounts (not just income, but transaction records) held by Americans in their countries.  Reporting requirements have evidently forced many overseas financial institutions to drop American bank accounts due to compliance costs.   The Wall Street Journal reported yesterday that a constitutional challenge to FATCA that will make its way to the courts.  Two Americans, one living in the Czech Republic and the other in Israel, are challenging FATCA on the grounds that it violates the Fourth Amendment (privacy rights) and the Eighth Amendment (excessive fines).  The lawsuit will not be filed until May, but I will update readers on its progress.



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