Those @Demsabroad reiterate their support of #FATCA! Tune in April 26/17 to see how!

Updates April 23, 2017!!

First, here is the link to the live feed of the FATCA hearing on April 26, 2017:

Second the Democrats have selected Carl Levin Protege, Professor Elise Bean, as their witness in support of FATCA. Professor Bean is an interesting choice given that the focus of the hearing, in its plain terms is:

REVIEWING THE UNINTENDED CONSEQUENCES OF THE FOREIGN ACCOUNT TAX COMPLIANCE ACT

It seems to me that Professor Bean might be a much better witness if the hearing were for the purpose of:

CELEBRATING THE INTENDED CONSEQUENCES OF THE FOREIGN ACCOUNT TAX COMPLIANCE ACT

To glean some insight into the perspective of Professor Bean, read the account of her March 30 meeting in Washington with PANA committee of the European Parliament. In explaining the superiority of the U.S. approach to penalties and enforcement she noted:

Bean agreed with MEPs that the US is in a more advanced position than the EU when it comes to penalties and enforcement.

“On improving enforcement, there are three things you can do in the EU,” she said. “The first is to increase your fines – your fines at the moment are a fraction of what the banks are earning. Secondly, you should require that the company or bank admits liability. This opens the door for class action lawsuits. Thirdly, make sure that the fines are not tax-deductible. Taxpayers end up paying more than big banks when the fines are tax-deductible.

“In the US, we also use monitors on compliance. We have a monitor who will monitor the institution for a period of two years to ensure that the required changes are actually made. Make the banks pay for their own monitoring.”

Bean also informed the European delegation that there will be tax justice demonstrations taking place in Washington and 60 cities across the US on April 15. The protests will demand Trump releases his tax returns but will also call for ending deferral of corporate taxes and for action on shell companies, she said.

Professor Bean is a colleague of Professor Linda Beale of Wayne State Law School. Professor – through her own writings – is NOT sympathetic to problems of taxation-based citizenship and Americans abroad. She has distinguished herself as one who fundamentally believes that everybody with an undisclosed “offshore bank account” is (to use her words) a “scofflaw“. The professor, as well as a professor of tax law, is apparently also an expert in investing and diversification of assets as evidence by the following gem:

Now, there are at least two interesting things about the Romney’s stashing $3 million in a very low yield Swiss bank account.

1) There are better things to do with money. Even if you don’t mind a low return, you could hold that money in the US–helps the US economy more than in a Swiss bank, and is easily available without the transaction costs of getting it out of your secret Swiss bank account. Why would the Romney’s have a Swiss bank account with a very low yield? The Romney spokesperson says “diversification” but that doesn’t hold water. Makes one wonder where this money came from and certainly why it ended up in a Swiss bank.

________________________________________________________________________

And now back to our originally schedule broadcast …cross-posted from the Isaac Brock Society Those @Demsabroad reiterate their support of #FATCA! Tune in April 26/17 to see how!

Q. What do Ronald Reagan and Heidi have in common?

A. They both became disillusioned with the Democratic Party

When questioned about this, Mr. Reagan noted (referring to the period in his life when he was a Democrat) that:

1. He thought many foolish things in those days; and

2. In any case, he had not really left the Democratic Party. Rather the party had left him.
Heidi writes

“Speaking of which my personal politics are being completely turned on their head, and I am in danger of turning into a former Democrat even before I turn into a former American. Because even though most of what the Republicans stand for makes me shake my head, the only ones who have caused me harm personally are the Democrats.”

This is also the road I have travelled, from a liberal minded, east coast, physician to a renounced EX American who would rather see anyone in the White house rather than the likes of the Clinton democratic mindset.

But honestly , does it matter what the social policies of the US are anymore? We don’t live there, our concerns should be just about their fiscal policies and the effects on US citizens abroad.

I am no longer an American . My concerns now are for my own country and their policies. If you are settled abroad in your other citizenship, then does it matter if you have second thoughts about being ‘their form” of an American Democrat? You can still be a Democratic socialist or whatever in your resident country. Let America go, it is an abusive partner in your life. Hoping for it to change doesn’t work

And now, an advertisement from Democrats Abroad …

Sad but true. The Democrats Abroad AKA The Stepford Wives have once again conveyed the message (reminding me of a Democrat president):

“Let every Expat know, whether he wishes us well or ill, that Democrats shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of FATCA and Taxation-based citizenship.

Yup, #YouCantMakeThisUp

For years and years the Democrats have made it clear that they fully support FATCA and taxation-based citizenship. One would think that they would keep their sentiments quiet. Yet, once again they broadcasted their hatred of Americans abroad to the world.

It reminds me a bit of a teacher I once had who reminded me that:

“Sometimes it’s better to keep your mouth shut and let people think you are ignorant than to open your mouth and remove all doubt.”

Yet, that’s what those “Stepford Wives” have done yet again. Brace yourself, after publicly condemning the Bopp/Republicans Overseas FATCA lawsuit, after failing to directly call for a move to “residence-based taxation” in it’s submission to the Senate Finance Committee, after arguing for FATCA Same Country Exemption (which would benefit only tax compliant Homelanders Abroad and support a U.S. FATCA attack on their own countries of residence), on the eve of the April 26/17 FATCA hearings in Washington, DC, they have once again confirmed their total and absolute hatred of Americans abroad and their support of FATCA.

Here it is, straight from the Donkey’s mouth :

In light of the annual IRS deadline, we’ve been receiving a lot of questions about DA’s advocacy on filing issues for overseas Americans. Why not support Rand Paul’s proposal to eliminate FATCA entirely?

From our late 2016 FATCA FAQs:

Republicans say they want to repeal FATCA. Why won’t Democrats Abroad join their campaign to repeal FATCA?

Democrats Abroad supports policy that cracks down on illegal tax avoidance. When some taxpayers break the law by hiding assessable earnings from the IRS in offshore accounts it increases the burden for the rest of us. For many decades those with access to elite financial structures and schemes have been using offshore accounts in bank/tax secrecy jurisdictions to become even richer. Nations throughout the world have determined to bring this practice to an end and Democrats Abroad believes that is a good thing. Democrats Abroad supports the policy initiative behind FATCA. We also think FATCA can be fixed to remove the unintended adverse impacts it has on law-abiding Americans abroad.

In January 2014 the Republican National Committee (RNC) passed a resolution calling for the repeal of FATCA. While the resolution made it look like repealing FATCA would be Republican Party policy, the Republican-controlled House of Representatives did not introduce a bill calling for FATCA to be repealed in all of 2014. A bill calling for the repeal of parts of FATCA was reintroduced in the Senate by Senator Rand Paul in March 2015. It has one co-sponsor and a 1% chance of being enacted.

The RNC and Republicans Overseas, the organization formed in 2013 by members of the RNC to cultivate the overseas vote for Republicans, has been very open about their strategy of exploiting the anger and upset around FATCA to raise money and build support for Republican candidates amongst Americans living abroad.

Republicans Overseas has admitted that it sees FATCA as a political tactic for activating a ground game to attract overseas voters. If FATCA had been repealed by Congress before 2016, the Republicans would lose this wedge issue in the 2016 campaign. Republicans ran in the 2014 midterm elections on a pledge to repeal FATCA as soon as they won control of the Senate. They
have had control of both houses for two years but a repeal bill to mirror Sen Paul’s bill has not as yet been introduced in the House. And why would it? The GOP can use the promise of a FATCA repeal to take into its campaigns for Congress and the White House. We understand that FATCA hearings may be planned for the months leading up to election day – an opportunity to make the case for repeal. We are putting ourselves forward for inclusion on the witness list for a House hearing on FATCA should one be scheduled for this year.

There is a global context for this question as well. By 2017 FATCA will have been in place for more than three years and be well entrenched in the compliance practices of international banks and brokerage houses. In addition, in 2017 the “global FATCA” will start to come online with the commencement of financial account reporting by at least 80 countries under the OECD Common Reporting Standards. By that time international financial account transparency and disclosure will be a given and the global crackdown on illegal tax avoidance will be very difficult for Republicans to arrest.

Is this for real? Rather than defend their FATCA Attack On Americans Abroad, they are attacking those Republicans who support FATCA repeal. Yes, yes, bring it on!!

Don’t forget that the Obama Treasury (you know the “Change You Can Believe In” – Hopey Changey Guy”) refused to to accept Same Country Exemption confirming its attack on Americans abroad.

Now, back to the April 26, 2017 FATCA hearings in Washington, DC (resulting from the FATCA repeal legislation proposed by Congressman Mark Meadows and Senator Rand Paul ). Although these were not organized by the Democrats, they apparently will have witnesses in attendance who will defend FATCA. This is good, because instead of attacking and condemning the Republicans, they will (presumably) be forced to explain why FATCA is so desirable. Rumour is that there will be a way to witness this spectacle live online!! Yes live online!!

Check back and the link to the link to the proceedings where there will be a hearing into FATCA (including the harm done to Americans abroad). This spectacle should NOT be missed. You will see that those who oppose FATCA (a broad range of people) and those who support FATCA (the Democrats) providing evidence and discussion.

But, the FATCA hearings aside …

Democrats Abroad is here to stay and here to continue one of the core missions of the Democratic Party, which is to destroy Americans abroad. And the lesson from this is:

FOREIGN BANK ACCOUNT REPORTING AND TAX COMPLIANCE HEARING NOVEMBER 5, 2009

Nov./5/09 – FATCA Hearing pg. 13- Treasury confirms that FATCA is specifically intended to include #Americansabroad https://t.co/xwswNkDF6d pic.twitter.com/7X3gqPa2dY

— Citizenship Lawyer (@ExpatriationLaw) April 15, 2017

The purpose of this post is, as put forth by Tim:

This is a copy of the transcript of the one and only hearing on FATCA in the US Congress many years ago. I once had a copy of this years ago and lost it. I feel there is important information in this that will help the ADCS legal challenge against the government of Canada.

We would like to hear what sections of the testimony (including the non-witness, written testimony) you feel may have some impact on our Charter Challenge. I have tried to make this a little more readable; i.e., the original document is 154 pages, a lot of it in very small print. I have separated where possible, individual letters. It is a lot to take in and I hope this is helpful.

NB: Member names that are bolded/italicized still sit on the Ways & Means Committee

GPO PDF file

U.S. Government Printing Office Washington
Foreign Bank Account Reporting and Tax Compliance Hearing
Before the Subcommittee on Select Revenue Measures of the Committee on Ways and Means
U.S. House of Representatives

One Hundred Eleventh Congress First Session
November 5, 2009

Committee on Ways & Means
Charles B. Rangel, New York, Chairman
Fortney Pete Stark, California
Sander M. Levin, Michigan
Jim McDermott, Washington
John Lewis, Georgia
Richard E. Neal, Massachusetts
John S. Tanner, Tennessee
Xavier Becerra, California
Lloyd Doggett, Texas
Earl Pomeroy, North Dakota
Mike Thompson, California
John B. Larson, Connecticut
Earl Blumenauer, Oregon
Ron Kind, Wisconsin
Bill Pascrell, Jr., New Jersey
Shelley Berkley, Nevada
Joseph Crowley, New York
Chris Van Hollen, Maryland
Kendrick B. Meek, Florida
Allyson Y. Schwartz, Pennsylvania
Artur Davis, Alabama
Danny K. Davis, Illinois
Bob Etheridge, North Carolina
Linda T. Sanchez,
Brian Higgins, New York
John A. Yarmuth, Kentucky
Dave Camp, Michigan
Wally Herger, California
Sam Johnson, Texas
Kevin Brady, Texas
Paul Ryan, Wisconsin
Eric Cantor, Virginia
John Linder, Georgia
Devin Nunes, California
Patrick J. Tiberi, Ohio
Ginny Brown–Waite, Florida
Geoff Davis, Kentucky
David G. Reichert, Washington
Charles W. Boustany, Jr., Louisiana
Dean Heller, Nevada
Peter J. Roskam, Illinois
Janice Mays, Chief Counsel and Staff Director
Jon Traub, Minority Staff Director

Subcommittee on Select Revenue Measures

Richard E. Neal, Massachusetts, Chairman
Mike Thompson, California
John B. Larson, Connecticut
Allyson Y. Schwartz, Pennsylvania
Earl Blumenauer, Oregon
Joseph Crowley, New York
Kendrick B. Meek, Florida
Brian Higgins, New York
John A. Yarmuth, Kentucky
Patrick J. Tiberi, Ohio, Ranking Member
John Linder, Georgia
Dean Heller, Nevada
Peter J. Roskam, Illinois
Geoff Davis, Kentucky

The subcommittee met, pursuant to notice, at 10:05 a.m., in Room B–318, Rayburn House Office Building, the Honorable Richard E. Neal [chairman of the subcommittee] presiding.

FOCUS OF THE HEARING:
The hearing will focus on non-compliance by U.S. taxpayers with foreign bank accounts,
rules regarding foreign trusts with U.S. beneficiaries, and certain U.S. dividend
equivalent payments to foreign persons to avoid U.S. taxes. The hearing will
also focus on recently introduced legislation, HR 3933, the Foreign Account Tax
Compliance Act of 2009.

BACKGROUND:
According to the most recent tax year data available (2003), more than $293 billion
in U.S. source income was sent to individuals and businesses residing abroad.
The United States imposes withholding taxes when U.S. source investment earnings
are paid to a foreign person. Those withholding taxes were largely designed to collect
tax on income earned in the United States even though the income is earned
by a foreign person not subject to the jurisdiction of our laws. Those withholding
taxes also play a role in preventing non-compliance by U.S. persons holding investment
assets in accounts overseas.
The Internal Revenue Service (IRS) has established the Qualified Intermediary
(QI) program that authorizes foreign financial institutions to collect withholding
taxes on behalf of the U.S. government. The program was implemented to improve
compliance for tax withholding and reporting on U.S. source income that flows offshore
through foreign financial institutions. The recent UBS case revealed problems
with the QI program that permitted tax evasion by U.S. persons. Further, even with
jurisdictions in which the United States has a tax treaty, effective information exchange
used by tax enforcement agencies may sometimes be undermined by local
laws providing for banking secrecy that conflict with U.S. law.
In March of this year, this Subcommittee held a hearing on bank secrecy and tax
evasion at which the Commissioner of the Internal Revenue Service testified (Ways
and Means Committee Hearing Print, Serial 111-12, Hearing on Banking Secrecy
Practices and Wealthy American Taxpayers). In May, the President released a fiscal
2010 budget proposal including a number of new requirements on taxpayers with
foreign bank accounts and foreign financial institutions holding those accounts. Last
week, Representative Charles B. Rangel filed HR 3933, the Foreign Account Tax
Compliance Act of 2009 containing, among other proposals, many of the proposals
from the Administration’s budget, including a mandatory 30 percent withholding on
payments to foreign financial institutions unless they disclose information to the
IRS on accounts owned by U.S. individuals or close the accounts, and a requirement
on individuals and entities to report offshore accounts with values of $50,000 or
more on their tax returns (see Joint Committee on Taxation Technical Explanation,
JCX-42-09).
Continue reading “FOREIGN BANK ACCOUNT REPORTING AND TAX COMPLIANCE HEARING NOVEMBER 5, 2009”

Form 8621 and Form 5471 are required even if the tax return is NOT!

cross-posted from the citizenshipsolutions blog

IRS

The Internal Revenue Code of the United States requires two things:

1. The calculation of taxes; and

2. The reporting of information.

The Internal Revenue Code of the United States is based on three basic principles:

1. A dislike of all things “foreign”. (If you see the word “foreign” a penalty is sure to follow.)

2. A hatred of all forms of non-U.S. “tax deferral”

3. An attempt to stop the “leakage” of “U.S. taxable assets” from the U.S. tax base. (Examples include the U.S. tax treatment of the “alien spouse”and the U.S. S. 877A “Exit Tax” that may be payable when one makes the decision to renounce U.S. citizenship).

“Forms” AKA “information returns” are for the purpose of forcing disclosure of information relevant to “foreignness”, “deferral” and “leakage”.

The above tweet references an earlier post describing many of the “forms” required to be filed by Americans abroad. The post also describes the significant penalties which can be potentially imposed for failure to file the forms.

For Americans abroad the information reporting requirements are extensive, burdensome and penalty laden. Normally (but not in all cases) the “forms” are filed as part of the tax return (1040 or 1040NR).

NEVER FORGET MR. FBAR – THE NEW SYMBOL OF U.S. CITIZENSHIP – AND THE POTENTIAL FBAR PENALTIES FOR FAILURE TO FILE THE FBAR! THOSE WHO HAVE FAILED TO FILE MR. FBAR SHOULD BE CAUTIOUS ABOUT HOW THEY “FIX THE FBAR PROBLEM“.

(Interestingly, Mr. FBAR has been used as a model for Russia which now has (for lack of a better term) the Russian FBAR.)

Many people do NOT understand that they may be required to file “information returns”, even though they may NOT meet the income thresholds to file a tax return!

Forms that may be required whether a “tax return” is required or not

Form 8621 – This form must be filed if an American living abroad owns more than the U.S. dollar equivalent of $25,000 of non-U.S. mutual funds. In order to discourage American citizens from investing their money in non-U.S. mutual funds, Congress imposes severe penalties for purchasing non-U.S. mutual funds. This includes the situation of a U.S. citizen living in Canada, who buys Canadian funds for retirement planning. Yes, sometimes “truth is stranger than fiction”. From a U.S. perspective, Canadian mutual funds are “Passive Foreign Investment Companies” or PFICs.

Information about Form 8621 is here. I strongly suggest that you read the PFIC regulations which make it clear that IRS Form 8621 is required, whether you have to file a tax return or not!

(d)Time and manner for filing. A United States person required under section 1298(f) and these regulations to file Form 8621 (or successor form) with respect to a PFIC must attach the form to its Federal income tax return (or information return, if applicable) for the taxable year to which the filing obligation relates on or before the due date (including extensions) for the filing of the return, or must separately file the form in accordance with the instructions for the form when the United States person is not required to file a Federal income tax return (or information return, if applicable) for the taxable year. In the case of any failure to report information that is required to be reported pursuant to section 1298(f) and these regulations, the time for assessment of tax will be extended pursuant to section 6501(c)(8).

The requirement to file Form 8621 irrespective of whether one is required to file a tax return is reinforced in the instructions for Form 8621 which remind Americans abroad that:

When and Where To File

Attach Form 8621 to the shareholder’s tax return (or, if applicable, partnership or exempt organization return) and file both by the due date, including extensions, of the return at the Internal Revenue Service Center where the tax return is required to be filed.

If you are not required to file an income tax return or other return for the tax year, file Form 8621 directly with the Internal Revenue Service Center, Ogden, UT 84201-0201.

Who could have known …

There are financial advisors who suggest that Americans abroad should NEVER own mutual funds that are local to them! In the Donald Trump era, one should “Buy American!” and NEVER “Commit personal finance abroad!”*

Form 5471 This form is required in many circumstances where a “U.S. Person” has an interest in a “foreign” (non-U.S.) corporation. The Specific reporting requirements are found in Internal Revenue Code Sections 6038 and 6046. (Pay special attention to the 6038 regulations.) In general, the reporting requirements are for the purpose of identifying “U.S. Persons” who:

– own at least 10 percent of a “non-U.S.” “controlled corporation”; which

– is earning certain kinds (including passive) of income; that

– is not subject to direct taxation by the U.S. Government.

The goal is to attribute the income of the “non-U.S. corporation” directly to the individual U.S. shareholder. This is referred to as the “Subpart F Income Regime” which begins with Internal Revenue Code Section 951.

The reporting requirements exist irrespective of whether one is otherwise required to file a U.S. tax return. (One might be required to file an income tax return (1040 or 1040NR) for the sole purpose of filing Form 5471.)

Are you the owner of a “foreign” corporation? Watch out for the attribution rules (you are deemed to own the shares) and for the possibility of “indirect ownership” (you own something that owns the corporation) …

Just a “heads up”. Watch out for the “attribution rules” in Internal Revenue Code S. 318. You may own more shares of that “foreign corporation” than you think you own!

A form required ONLY if you are otherwise required to file a tax return – Form 8938

Form 8938 is a key component of the FATCA legislation. It is mandated by Internal Revenue Code section 6038D. You are NOT required to file Form 8398 unless you are otherwise required to file a tax return. As of the date of the writing of this post (warning!! warning!! warning!!) the IRS explains that:

If you do not have to file an income tax return for the tax year, you do not need to file Form 8938, even if the value of your specified foreign assets is more than the appropriate reporting threshold.

Reporting early – When a Form may have to be filed before the tax return is due – Form 3520A

Form 3520A is the information return required for a “foreign trust”. Forms 3520 and 3520A appear to be required whether a tax return is otherwise required. Interestingly, Form 3520A is required by March 15 of each year (before the due date of the tax return!).

Form 3520 is a key component of the collection of International Information returns.

Who could have known?

How to avoid the forms …

It’s easy. Americans abroad can avoid the necessity of filing these forms (and potential penalties for failure to file these forms) by simply avoiding all the activities that the forms are required to reveal. Simply avoid committing any “form” (no pun intended) of “personal finance abroad”.

Perhaps that is the true purpose of the “forms”.

When in Rome, live as a homelander! To learn how, simply click here.

John Richardson

Shu Yi Oei: The Offshore Tax Enforcement Dragnet via Allison Christians

reblogged from Allison Christians’ Tax, Society & Culture with permission

Shu Yi Oei (Tulane) has posted an important new paper on U.S. offshore tax enforcement, of interest. Here is the abstract:

Taxpayers who hide assets abroad to evade taxes present a serious enforcement challenge for the United States. In response, the U.S. has developed a family of initiatives that punish and rehabilitate non-compliant taxpayers, raise revenues, and require widespread reporting of offshore financial information. Yet, while these initiatives help catch willful tax cheats, they have also adversely affected immigrants, Americans living abroad, and “accidental Americans.”
This Article critiques the United States’ offshore tax enforcement initiatives, arguing that the U.S. has prioritized two problematic policy commitments in designing enforcement at the expense of competing considerations: First, the U.S. has attempted to equalize enforcement against taxpayers with solely domestic holdings and those with harder-to-detect offshore holdings by imposing harsher reporting requirements and penalties on the latter. But in doing so, it has failed to appropriately distinguish among differently situated taxpayers with offshore holdings. Second, the U.S. has focused on revenue and enforcement, ignoring the significant compliance costs and social harms that its initiatives create.
The confluence of these two policy commitments risks creating high costs for the wrong taxpayers. While offshore tax enforcement may have been designed to catch high¬-net-worth tax cheats, it may instead impose disproportionate burdens on those immigrants and expatriates who have less ability to complain, comply, or “substitute out” of the law’s grasp. This Article argues that the U.S. should redesign its enforcement approach to minimize these risks and suggests reforms to this end.

The paper provides a thorough review of the panoply of offshore enforcement programs and mechanisms and documents the harms of their dragnet approach, especially on the most vulnerable and least likely targets. A significant contribution to the literature.

 

Citizenship, identity, mourning loss of identity and moving on …

The following post appeared on the RenounceUScitizenship blog.

The above tweet references an article published on August 25, 2013 at the New York Times. The article is popular and as of now has generated almost 600 comments. It’s a very interesting article because it dispels the myth that all Green Card holders want U.S. citizenship. The article highlights the fact that there are many Green Card holders who choose NOT to become U.S. citizens either because:

– they are indifferent to U.S. citizenship and don’t have a compelling reason to get it;

– they specifically do NOT want U.S. citizenship.

The article focused largely on the connection between citizenship and identity. Interestingly there is no mention of the FBAR fundraiser or other injustices to which immigrants have been subjected. It is full of interesting and instructive comments.

Continue reading “Citizenship, identity, mourning loss of identity and moving on …”

Collective psychotherapy – U.S. citizens outside U.S. – Not what they take from you, it’s what they leave you with

cross-posted from renounceuscitizenship blog

Going back to a general thread from a few weeks ago – on law and morality – this post speaks more to the effects of the law when it is not rooted in morality. On one level, an apologist might claim that “doing one’s duty” and “paying one’s share” is moral and is necessary to maintain funding and order in a society. However, when such a law is applied to those who live outside that society, as we all know from experience, unexpected conflicts, resulting punitive actions and penalties tend to denigrate the quality of life. We are not talking about “quality of life” amounting to physical comforts or financial wealth. By “quality of life, what is referred to is mental stability, emotional trustworthiness and the ability to move through difficulties with a sense of direction and confidence. When these parameters are stifled by confusion/lack of clarity of what is expected, and ridicule and negativity is directed toward those affected, the result is a not an issue of lack of compliance but rather, wrongly imposed requirements that simply make people anxious, immobilized by fear, depression and a general inability to adjust to the situation. How this can be justified when those same people ARE compliant in the society where they live, strikes many as simply being immoral.

*****

The Wisdom of Moe Levine Moe Levine (not that I ever met him) was considered to be one of America’s greatest trial lawyers. Although he died in 1974, his wisdom lives on his book (appropriate called) “Moe Levine on Trial Advocacy“. He (legend has it) was a master at delivering the closing statement in his jury trials. When arguing for a severely injured plaintiff he (according to the commentators of his time) would tell the jury (referring to a badly injured client):

“It’s not what you take from them it’s what you leave them with.”

In other words, the inability to live a normal life was worse than the injury itself. Leaving aside the financial costs, Obama/IRS tyranny has had a very serious effect on the lives of many U.S. expats. Few of them will ever forget the day they learned about these problems. One (of many) example is the story of Ambassador Jacobson’s 70 Year old grandmas” in Saskatchewan.

A recent post offered people the chance to describe how recent events have impacted on the lives of U.S. citizens outside the U.S. Check out the comments – there were plenty of them. Yesterday a post appeared on at the Isaac Brock Society called “Your Citizenship Personality“. The comments included a number of descriptions of how the recent Obama/IRS/Levin assault on U.S. citizens living abroad has damaged their lives. I encourage you to read all the comments, but I wanted to share the following two (the second of which is my own) in a separate post:

fullTurtle

March 9, 2012 at 5:15 pm

I’ve been a lurker on this site for over a month. I’ve never “blogged” before today. I am not a writer, nor as eloquent as most you and am woefully ignorant of all this tax and legal stuff. In these 30+ days, I have read every single thread on this site and have visited every link offered. I have read the entire “OVDI Drudgery for Minnows”, all of the personal stories, and have even printed out pages & pages of suggestions and opinions (thank you so much, JustMe!). But I can’t take it anymore… this being silent and feeling so estranged and “criminalized”. The only place I feel connected anymore is while I’m reading postings from all of you. After reading zucchero81′s comments on this thread (“…this whole FATCA issue has been more like going through the 5 stages of grief…”) I feel compelled to peek out of my seemingly safe lurker shadows. You have it right, usxcanada… I am one of those lurkers wondering if/how to transition past pure denial. I have yet to make a real decision (which would require real action) on what the heck to do. My gut reaction is to run fast, run far, hide deep. But the more I read, the more that is sounding impossible to accomplish. I have chosen “fullTurtle” as my alias because doing a “full ostrich” would leave far too much exposed at the surface. Since becoming aware just 6 weeks ago (and purely by accident) of my requirement for filing US taxes… then FATCA and all the rest, my whole life has turned upside down. I can think of little else. I’ve attended a free seminar on the subject of cross-border taxation given by a high-end legal accounting firm in town (can you say ca-CHING?) and have spent the vast majority of my waking hours researching the subject. All I seem to have done is become almost catatonic with dread. I swing wildly between the extremes of near homicidal rage and suicidal depression. Okay, I’m more in the homicidal phase today. To get back to the topic of this thread, I want to renounce my citizenship so bad I can taste it. And thanks renounceuscitizenship; I agree 100% with pretty much everything you’ve posted, and I visit your site regularly too. It would be so worth the $450 USD just to fling my passport & birth certificate down at the US Consolate and tell them exactly where to shove it. When the day comes that I can renounce (my Canadian citizenship application was mailed Feb.6th so it will be 18 mo’s to 2 years), I will write that cheque on a shirt, duly certified by the bank of course, and explain it to them thusly: “Seeing as the US Gov’t is taking the shirt off my back, I thought you might like to keep the shirt.” In ending this tirade, I am so grateful to ALL of you regular posters who have unknowingly kept me from jumping from a tall building (so far). And especially you, Petros, for creating this web site. You have no idea the number of people you are helping give voice. I hope someday to add my story to those of you who have survived this holocaust. Okay whew, if I can do this… the rest of you lurkers out there can do it too!

renounceuscitizenship

March 10, 2012 at 9:36 am

@Fullturtle A warm welcome to the Isaac Brock Society. It’s a great place – with a lot of great people. It’s interesting how the comments often move the intent of a post in a different direction. What struck me about these comments is that one can feel the excruciating pain, the agony, the fear, the uncertainty, the despair, the anger, the rage, the sense of betrayal, and in some cases the unbelievably intense hatred of the U.S. government. I do believe that many people on this board have never experienced the range and intensity of emotions they are feeling today. As noted by Pacifica777: “This horrible gamut of emotions and mood swings seems to be universal, and statistically, I would guess that few of us have ever had to deal with such extreme feelings before, so it’s so unfamiliar that it’s scary. I have never felt such intensity of emotions and such a bizarre range of them, nothing close to it, ever. This US mess just takes over one’s life, feeling like caught in a complex trap, that it will never end. Though it’s not over yet, I have found as time went on, while I still feel an amazing range of emotions, they don’t seem to be so intense and overpowering. For a couple of months, it overtook all of my life — with such an overpowering complex confusing situation, it was hard to focus on anything else. Eight months on, it is still, unfortunately, a big part of my life, but slowly I’ve found more and more of my normal life, and my normal personality, returning. It’s still a big problem but not overwhelming everything else.” Blaze reiterates: “I’m hoping you are just joking in your comment about wanting to jump from a tall building, but I fear you may be serious. Another person has expressed similar disturbing thoughts. Many of us have had sleepless nights, health challenges, strained marriages and personal relationships, expensive accountants and lawyers who are draining retirement savings, difficulties at work, worry about Canadian born children, etc.” JustMe (in his infinite wisdom) has said that it is important to not hate. It will only destroy the person doing the hating. You need to be focused, methodical, purposeful and committed to achieving whatever course of action you decide is best for you. You said that you felt “criminalized”. I understand. If you are not careful, and if you allow yourself to feel “criminalized” long enough, you may actually believe that you have done something wrong. You have done NOTHING wrong (and chances are that you have done a lot right). You are on the receiving end of a vicious assault by an unprincipled vicious debt-ridden thug – The United States of America. I want to add one more thought to this moment of “collective psychotherapy”. There is good news and bad news. First, the good news. You do NOT live in the U.S. You live in Canada. You are in a situation that any sane person would dream to be in. Sure, Canada has its problems. But, lurking beneath all the problems is a basic assumption of fairness, justice and decency. I repeat you live in Canada. In addition to the good things I just mentioned, you have the benefit of the tax treaty. Canada will not collect FBAR penalties. Furthermore, (I don’t have stats on this), but I suspect that a large number of U.S. citizens here are also Canadian citizens (giving them political power). Second, the bad news. As horrible as this situation is (and it is a nightmare for most), you must go on with your life. At least in my case (and I suspect most of you) that life is a life shared with non-U.S. citizens. This is a very important point. The Obama/IRS/Levin assault cannot be understood by anybody unless they are a U.S. citizen living outside the U.S. To be specific, they cannot understand your rage and anger. They cannot understand your feeling of injustice. They cannot understand the intensity of your emotions. They cannot understand your sense of betrayal. They cannot possibly understand these things because they are not experiencing it (and probably will never experience anything like it). So, don’t expect the understanding from them that you really need. My point: You need to be very careful to not allow any of this to damage the valuable relationships in your life – friends, marriage, work, extended family, etc. We are in a situation where we are in a sense forced to protect ourselves from a repressive government. This is has gone on throughout history. Never did I believe, that government would be, (according to Margaret Thatcher) the United States –that “Great Citadel of Freedom and Justice”. But, that’s what is happening. I once met a man who had escaped from another repressive government. He wanted his children to be well educated – commenting that, the only thing that a government couldn’t take from you was your knowledge/education. It’s not the only thing they can’t take. They can’t take your attitude, or your capacity to tell right from wrong. Unless of course you let them (and we wouldn’t let than happen, now would we)! Take the weekend off from your worry. You deserve it. Renounce and rejoice!

So what am I trying to say? 1. There is no way the IRS can understand the effect of their conduct on honest, hard working people, who just happen to live outside the United States. They cannot understand it and never will. 2. Your job is to get through this and have the life you deserve.

More #Americansabroad will pay capital gains tax on sale of principal residence in Canada

 
cross-posted from citizenshipsolutions

More #Americansabroad will pay capital gains tax on sale of principal residence in Canada

The price of Toronto real estate continues its upward trajectory.

This morning I met with yet another (who could have known) Canadian resident who wishes to renounce U.S. citizenship. This person is completely compliant with his U.S. tax obligations. He is renouncing for a very common reason.

The reason for renouncing U.S. citizenship is to:

Protect the tax free capital gain, which results from the sale of his Canadian principal residence in Canada.
Continue reading “More #Americansabroad will pay capital gains tax on sale of principal residence in Canada”

This is Fantastic! Don’t Think We Have Ever Had Support Like this!

Came across this today: Ways & Means committee members letter

I do not have permission to reproduce in full but here are a few excerpts:

Dear Speaker Ryan, Majority Leader McConnell, Rep. Brady, and Sen. Hatch:
As free-market and taxpayer protection organizations representing millions of Americans,
we urge that repeal of the Foreign Account Tax Compliance Act (FATCA)—a plank in the
2016 Republican Party Platform—be included in any tax reform package sent to the
White House.

Since FATCA’s introduction, Americans living overseas have lost access to their banking
and investment accounts as foreign financial institutions drop clients rightly perceived as
toxic. This has not only impacted the welfare of the estimated nine million Americans
who live and work abroad but hampers small businesses owned and operated by
Americans attempting to compete internationally

FATCA repeal bills will soon be introduced in the House and Senate. We urge the
leadership and committees of jurisdiction to include this vital correction of misguided
enactment of the past administration by including it in any forthcoming tax bill

There is a list of 24 individuals/organizations. I ask any Tweeps to RT like mad to show our appreciation for what they are doing. PERFECT timing for the Rally tomorrow! Perhaps someone could put together an email list for those who do not Tweet.

@RepealFatca
@nigeljgreen
@GroverNorquist
@CFandP
@AmerComm
@RSI
@MarketInstitute
@ismurray
@Andrew_Langer
@limittaxesorg
@C4Liberty
@Lisabnelson
@Protectaxpayers
@NTU
@GLandrith
@60PlusAssoc
@SovereignInvest
@LimitGovt
@FreedomWorks
@tgiovanetti
@KarenKerrigan

I could not find an address I could confirm for either these individuals or orgs:

Jeffrey Mazzella President Center for Individual Freedom
Chuck Muth President Citizen Outreach
Pamela Villarreal National Center for Policy Analysis

Andrew F. Quinlan President Center for Freedom and Prosperity
Grover Norquist President Americans for Tax Reform
Phil Kerpen President American Commitment @AmerComm
Iain Murray Vice President Competitive Enterprise Institute
Andrew Moylan Executive Director R Street Institute
Charles Sauer President The Market Institute
Jeffrey Mazzella President Center for Individual Freedom
Nigel Green and Jim Jatras Co-Leaders Campaign to Repeal FATCA
Pete Sepp President National Taxpayers Union
David Williams President Taxpayers Protection Alliance
George Landrith President and CEO Frontiers of Freedom
Jim Martin Chairman 60 Plus Association
Wayne T. Brough Chief Economist and VP for Research FreedomWorks
Bob Bauman Chairman Sovereign Society Freedom Alliance
Andrew Langer President Institute for Liberty
Lew Uhler President The National Tax Limitation Committee
Chuck Muth President Citizen Outreach
Norman Singleton President Campaign for Liberty
Lisa B. Nelson CEO Jeffersonian Project
Tom Giovanetti President Institute for Policy Innovation
Rick Manning President Americans for Limited Government
Pamela Villarreal Senior Fellow National Center for Policy Analysis
Karen Kerrigan President and CEO Small Business and Entrepreneurship Council

The U.S. Cannot Force a Person Born Outside of the United States to Accept U.S. Citizenship

 

It is odd that we are STILL hearing arguments that refuse to accept a person born outside the United States, having a statuatory (NOT a CONSTITUTIONAL) claim to U.S. citizenship may decide not to accept it. As USCitizenAbroad so clearly states below:

Seriously, do you really believe that the U.S. can deem anybody in the world to be a U.S. citizen?

What if the U.S. decided to pass laws that said:

  • All cars in Japan with a US-made part are the property of the United States …..or
  • Any family with a naturalized US citizen are now citizens of the United States …..or
  • Anyone with a family member who speaks English now is a citizen of the United States …..or
  • If there are 300 sunny days in Canada, Canada now belongs to the United States

 
The reason “the US can force a person to be a citizen” sounds less silly (perhaps) than the 4 statements above is only because your mind is used to the idea that that is possible. And only because other people claim it is so.

The apologists would have you believe that in any argument, if you want to “play in the US’ playgrounds (“markets”) you have to do what the U.S. requires of you.

WEll, they might be able to force SOME of the people a lot of the time but they cannot force ALL of the people all of the time.

So they have managed to stuff FATCA down the throats of every nation on earth via the IGAs. This occurs because of U.S. law plus the U.S.tendency to bully because no nation wants to commit financial suicide.

They cannot force every person born outside of the United States to be a U.S. person, nor to be taxed as one. A person born outside the U.S. does not have a constitutional right to U.S. citizenship. U.S. law is limited to jurisdication. Don’t forget:

  • The United States was completely unable to make FATCA work (jurisdictional/statutory fact)
  • without the IGAs (US bullying of other nations)

 
U.S. Law applies to the U.S.
Be Clear.
Do not believe that U.S. law transcends the laws of your own country.
 
In the end, that person can CHOOSE – to comply or not to comply. Since that is the practical end result of what this argument is about, what is so hard to accept about it?

And if the “but then they won’t be able to go to the US” argument is raised, then that depends upon what that individual chooses. What’s so great about going to the US? “Warm climate and beaches”? Other countries have warm weather and beaches. “Cheaper prices than other places”? – well, compare what you will have to pay in order to get those “CHEAP” prices……….
 
****cross-posted from Brock ****

USCitizenAbroad says
March 15, 2017 at 7:03 am
@All

Q. Do those children born outside the United States to parents who have the statutory right (as has been redefined over the years) automatically have U.S. citizenship imposed on them regardless of the wishes of the parents (and later, the children) or do those children have the right but NOT the obligation to accept U.S. citizenship?

A. They have the right but NOT the obligation to accept/register themselves as U.S. citizens if they so choose.

This discussion has been going on since the inception of Brock and has been the subject of numerous threads.

Furthermore, the answer seems to depend on who you ask (U.S. based immigration lawyers who believe that everybody in the world wants to be a U.S. citizen) or people outside the U.S. (who recognize that the forcible imposition of U.S. citizenship on those born outside the U.S. would be an unjustifiable extension of U.S. law beyond the U.S. borders). Seriously, do you really believe that the U.S. can deem anybody in the world to be a U.S. citizen?

Some explanation follows …

1. The grant of citizenship to people born outside the U.S. is determined ONLY by statute (hence the shifting laws) and NOT by the 14th Amendment of the U.S. Constitution. This means that granting citizenship to those born outside the U.S. is in the discretion of Congress.

2. As everybody knows, under the INA there are only two ways to obtain U.S. citizenship: (A) birth or (B naturalization. Birth means that you ARE a citizen from birth and naturalization means that you BECOME a citizen after birth.

3. The INA is a statute that presumes that every life form on the planet wants to live in the USA and/or wants to be a citizen of the USA and essentially prescribes conditions under which residence or citizenship can be granted or recognized.

4. Therefore the correct way to read the statute “this person IS a citizen” is that:

these are the conditions under which we will recognize somebody is a citizen if that person wants to be recognized as a citizen.

5. The conditions acknowledged in “4” need to be proven by objective, extrinsic and reliable evidence. Even if somebody wants to be a citizen, it won’t be recognized unless those conditions are proven (which is what this post is about).

6. Therefore, unless the parent or later the child makes the claim of citizenship then the person could not be recognized as a U.S. citizen – period. Without being recognized as a U.S. citizen you are NOT a U.S. citizen. Don’t believe me? Just try to enter the U.S. based on nothing more than “I claim I am a U.S. citizen”.

7. There are numerous examples of information from consulates and the State Department (some of which is discussed in the comment thread) making this point clear. (Much of this has been discussed in other posts.)

8. There is not a single known instance of the U.S. Government forcibly imposing U.S. citizenship on somebody born outside the USA. (They are not going door to door and forcing identification of where the parents of children were born). In fact, if you are born outside the USA there is a presumption of alienage – that is a presumption that one is NOT a U.S. citizen (how many would kill for that?)

9. If the parents register the kid as a U.S. citizen, it is probably “game over” and the child IS a U.S. citizen. But even on that point, I believe that it may be possible to argue that a kid whose parent committed “citizenship crime” against his child, by registering him as a U.S. citizen might be able to defend against U.S. citizenship.

Hey, if one can’t renounce U.S citizenship until 18, then maybe one can’t accept U.S citizenship until 18.

10. I attempted to raise this discussion in an extensive post in 2015 which is here:

http://isaacbrocksociety.ca/2015/07/26/help-can-the-united-states-impose-us-citizenship-on-those-born-outside-the-us/

There are additional comments at that post.

A suggestion moving forward …

The Isaac Brock Society (whether you love it or hate it) is the most read and most influential source of information on all things U.S. (probably in the world). I believe that the Issac Brock Society should assume a leadership role by suggesting that the answer is:

Nobody born outside the U.S. is a citizen UNLESS he/she BOTH:

1. Meets the statutory conditions making he/she eligible to receive the statutory recognition of U.S. citizenship; and

2. Voluntarily (directly as an individual or vicariously via a parent) registering that U.S. citizenship.

The problem is that this is the first time in history that U.S. citizenship has been perceived to be such a horrible thing to have. Neither the State Department nor U.S. based immigration lawyers have adjusted to the idea that U.S. citizenship is now a form of cancer (unless you want to live in the United States). Even the border guards believe they are helping you by telling you that you are American. These people have not caught up with the reality that true Obama legacy has been to make U.S. citizenship the most toxic citizenship in the history of the world.

Yup, “Change you can believe in!”

it’s time to articulate the law that is consistent with the Obama legacy …

Brockers have always said that in the area of U.S. tax that lawyers make the law ….

It’s time for the Isaac Brock Society to “lay down the law” on this topic! The law is that nobody born outside the United States is automatically a U.S. citizen. If you meet certain conditions, they you can claim it if you want!

When Law Becomes a Substitute for Morality- & is Used to Punish as Well

a comment cross-posted from the Isaac Brock Society blog

@Bubblebustin

Excellent sentiment:

You know what I think is immoral? A government’s sudden enforcement of laws that it chose to conveniently ignore in the past. A lot of the problems associated with illegal immigration and Citizenship-Based Taxation could have been avoided if the US government hadn’t been negligent in enforcing its own laws. It borders on entrapment really, but “the law is the law”, and until the laws change any government can pick it up, dust it off and enforce it to its fullest degree.

Actually you are being far too kind to the U.S. government and ascribing a level of respect that it (particularly the former Obama administration) doesn’t deserve.

Take the case of applying the PFIC rules to Canadians who are/were long term holders of Canadian mutual funds. Basically, the longer the holding period the higher the confiscation just for the crime of retirement planning in Canada. (Your money should be in the Homeland.) Both the rules and the application of the rules are immoral, criminal and result in the financial rape of Canadians attempting to save for retirement.

But, it’s far worse because the IRS was not even aware of the PFIC rules until 2009 (thank the OVDP program). But, once the IRS discovered PFIC they began retroactively applying the punitive form of taxation to something that:

1. Nobody could have imagined existed

2. The IRS didn’t even know existed

3. The U.S. tax compliance industry didn’t even know existed.

Think of it. They applied rules to Americans abroad that THEY THEMSELVES DID NOT EVEN KNOW EXISTED!

But, did that stop the tax compliance industry and the IRS? Hell no.

They simply revelled in the:

“Joy Of Discovering A New Way To Rape and Pillage The Economies and Citizens Of Other Nations!”.

It’s the American way!!!!!

One takeaway from this is that you need to be very very careful about what information you give to tax preparers, etc. and what tax preparers you choose. The compliance industry is the enforcer (with pleasure) of these rules.

Americans abroad must choose between:

1. Obeying these horrible unjust “laws” which result in their financial destruction; or

2 Doing what they need to do to save themselves.

There is NO possibility of existing as “U.S. tax compliant Americans abroad” in such a brutal, immoral, dishonest and corrupt system.

All Roads Lead To Renunciation” – the only question is which road you personally will take.