MPs in the Netherlands have called for a resolution to the problem of so-called 'Accidental Americans' who face having their bank accounts closed because of their status as American taxpayers.
The Dutch MPs are championing the cause of people who find themselves categorised as American but in many cases have never lived in the US and do not have a US tax number. At the same time, many banks across Europe are threatening to close accounts of Accidental Americans to avoid US penalties.
Under FATCA, the US Foreign Account Tax Compliance Act, banks outside America are compelled to report the income of all US citizens, accidental or otherwise.
This entails the risk of being designated as significantly non-compliant by the US authorities, with potentially high penalties as a result."
There are around 46,000 such Accidental Americans living in the Netherlands, with Dutch nationality, many of whom have either never spent time in America or are not even aware they are classified as American nationals.
The FATCA legislation requires all US citizens to supply the US tax authorities with detailed information of their bank accounts and assets held abroad and requires non-US banks to report such information directly to the IRS.
Wopke Hoekstra, the Dutch finance minister, said he wants to "take control" of the issues affecting Accidental Americans in the Netherlands.
Hoekstra told the lower house of Parliament last week: "The banks involved said that they are terminating accounts of Dutch nationals, including US nationals, who have not yet taken action to obtain a tax identification number or certificate of loss of nationality."
"The banks gave as a reason for terminating accounts the expiration of the US deferral scheme as of 1 January 2020, with the result that banks would have to report in cases where a tax identification number or certificate of loss of nationality is missing."
He added: "This entails the risk of being designated as significantly non-compliant by the US authorities, with potentially high penalties as a result."
Earlier this year a group of Accidental Americans in France launched legal action arguing FATCA was being used as an excuse to discriminate against Americans.
Antoine Vey, the lawyer presenting the legal action, said in July: "You can't exclude someone because of their nationality. It's clearly discriminatory. I feel like the prosecutor's office has not understood the significance of an issue that affects nearly 10,000 people in France."