U.S. Supreme Court Refuses to Hear Challenge to FATCA
- The U.S. Supreme Court has declined to hear an appeal from
the U.S. Court of Appeals’ ruling in the Crawford case, in which the
constitutionality of FATCA was unsuccessfully argued.
- While the Republican Party has previously shown some
sympathy for efforts to repeal or scale back FATCA, under the Trump
Administration the law continues to impose significant reporting burdens on
U.S. taxpayers residing abroad.
The Court’s Ruling
On April 2, 2018, the United States Supreme Court denied the
petitioners’ request for a Writ of Certiorari to review the ruling of the U.S.
Court of Appeals for the Sixth Circuit in Crawford v. United States
Department of the Treasury, 868 F.3d 438 (6th Cir. 2017).The core issue in this
petition was whether the Sixth Circuit erred by holding that Petitioners lacked
standing in challenging the constitutionality of the Foreign Account Tax
Compliance Act (FATCA).
By declining to hear this matter, the U.S. Supreme Court
effectively validated the district court’s earlier ruling (discussed here) that
denied the plaintiffs’ claims. As is customary with respect to petitions for
certiorari, the Court did not provide reasons for its decision.
Political and Legislative Background
A push to repeal or significantly scale back the reporting
burdens imposed on U.S. taxpayers residing abroad had been included in the
Republican Party election platform in 2016 (see page 12, under “The Fourth
Amendment”). Moreover, Senator Rand Paul (R-KY), who was also part of this
unsuccessful lawsuit, tried to include FATCA repeal in tax reform legislation
last year. However, these legislative efforts also failed and the tax bill
signed into law on December 22, 2017 and known as the Tax Cuts and Jobs
Act was enacted without changes to FATCA