On 15 April 2019, the National Taxpayers Union Foundation (“NTUF”), releases a policy paper analyzing the first tax filing season including the reforms and reductions implemented through the Tax Cuts and Jobs Act (“TCJA”) (Link). The paper, which has been conducted and updated for nearly two decades states, that it will address the compliance burden taxpayers face this year, the impact on complexity from the enacted tax reform law. Thanks to the TCJA, business taxes were reduced from 35 percent to a 21 percent rate. However, there were trade-offs in complexity with the addition of complicated new international provisions.
For the NTUF the Foreign Account Tax Compliance Act (“FATCA”) still is a large complexity in the Tax Code. NTUF qualifies FATCA as an instrument, enforcing reporting requirements on foreign financial institutions, which has driven many to refuse to take on Americans as clients, imposing financial difficulties on U.S. citizens living in other countries.
The policy paper quotes Texas A&M University Law Professor William Byrnes, who estimated that repeal of FATCA would reduce revenues by $150 million annually while cutting compliance costs on the economy by $200 million. Consequently, FATCA imposes more burdens on the private sector than it raises for the U.S. government.