The Little Red #FATCA Book – Review, Identify & Report on U.S. Persons How #FATCA affects the non-US World

reposted from the citizenshipsolutions blog

As many of you know, the long-awaited #FATCA hearing will take place three weeks from today. This is exciting and followed by the news that Congressman Mark Meadows will reintroduce his repeal FATCA legislation. Closely matching is the effort of Nigel Green & Jim Jatras. The recent letter, endorsed by major think tanks, etc is here . We still await the hoped-for tax reform. The fate of those who have not yet chosen whether to become compliant and/or renounce hangs in the balance. Regardless of the outcome(s), our direction will become much clearer in the next little while.

There are so many aspects to #FATCA and how it affects the lives of expats, I suspect it is impossible to be aware of them all. One of the best things we can do, as “ambassadors” is to make sure we are thoroughly conversant with all aspects of it as we discuss it with our family and friends, on online articles and blogs.

j fatca forumJohn Richardson has long been writing about this and has re-organized his “Little Red FATCA Book.” It is likely the most complete account anywhere. I will be reposting it on all the appropriate websites, blogs and Facebook Groups/Pages. Please, share this as widely as possible. Convincing Homelanders, as impossible as it seems, will go farther than perhaps anything else, in garnering support from Congress to rectify this horrid situation. Please, don’t give up, go out and comment everywhere and make sure you know your facts!
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The “Little Red FATCA Book” is a collection of posts that I created over an 18 month period. I have decided to collect the individual posts and organize them in one place. I have grouped the individual posts into three broad chapters which I will call Chapter A, Chapter B and Chapter C. This is a “work in progress”. Some of the posts are incomplete.

FATCA which is essentially the enforcement mechanism of U.S. “Place of Birth Taxation” is a controversial topic. Feel free to post your thoughts and comments.

John Richardson

MORE AT citizenshipsolutions blog

When law becomes a substitute for morality

When law becomes a substitute for morality

reblogged from the renounceuscitizenship wordpress blog

Today I’ve decided that I would like to go back and reblog some of the best expat posts from the last five years. For lack of a better title, I am going to call it the “A Blast From the Past Series.” This week I am going to focus on the disconnect between law and morality.

Every now and then I realize that people are still coming into awareness and that they do not realize a lot of what has gone on; how long some of us have been involved in this and most importantly, why some of us are so vehemently resistant and unyielding when it comes to evaluating the U.S. government, the tax compliance industry and so on. I guess some of us are afraid that this long period of lassitude may give a false sense of “safety.”

Without resorting to outright fearmongering, there are a number of things that may not happen (tax reform) or that will change (discontinuation of the Streamlined Program) etc. Our main reason for being involved in this from the very beginning, was to get the word out, to do our own research/take responsibility for educating ourselves and others about this hideous situation. I think it is important for people to understand how this situation has played out since the beginning……..

One of the worst aspects of everything happening today is the growing lack of morality in the world. I mean this in the “big” sense of the word; something which is on the mind of every human being as we watch America turn from being an open and welcoming society into one moving toward closed borders, over-the-top surveillance, etc. Today the Secy of Homeland Security literally said he was considering separating (illegal) parents from their (American-born) children. Unbelievably cruel and totally unnecessary. And the reinstatement of the “travel ban” which has been tweaked a bit but cannot possibly be seen for anything except what is clearly is – a move to keep Muslims out of America.

What does this have to do with us? Everything. Because when you see your government behaving like this, you are forced to evaluate two things:

1) Can YOU trust them?
2) Is there any reason to reject them/protect yourself given the unusual situation expats find themselves in?

In addition to being scared out of my mind and full of doubt whether to renounce or not (late 2011), what I could not ignore was my observation of how the U.S. was behaving outside the law. Clear, undeniable abuse of the law. Invading Pakistani airspace (I don’t care what the reason, that is not supposed to be done); the horrid abuse of prisoners at Abu Ghraib ; the assassination of Americans without due process and worst of all, holding men at Guantanamo Bay for as long as 12 years without charge, torture, etc. I did not find it difficult to believe the U.S. would think nothing of destroying our retirement by forcing me to sell my home to pay FBAR fines. It was a no-brainer.

Everyone has to come around to this decision on their own terms. All the more reason however, to take a long hard look at what has gone on over the last five years (which should influence whatever decision you choose to make).

Some of the people mentioned in this post you may not be aware of:

renounceuscitizenship – in addition to his/her own blog, one of most influential authors at the Isaac Brock Society from the beginning. Has an uncanny ability to predict long in advance, how things are going to move and a piercing, unbending analytical approach to assessing the source of our issues. Originator of the Renounce & Rejoice meme.

Steven J. Mopsick – aka “30 year IRS Vet” – a former IRS attorney who took part in a lot of the early conversations at Brock. The relationship was friendly at first and eventually disintegrated due to the natural friction between someone from a compliance point-of-view and those who did not intend to buckle under. A nice gentleman of whom was said “You can take the man out of the IRS but you cannot take the IRS out of the man.”

JustMe a much-beloved expat who suffered two-plus long years having entered the 2009 OVDP program, trying to make things right. He coined many of our expat idioms: “LCUs (Life Credit Units – how much of your life lost trying to deal with this); FATCAnatics (you can guess); CC&W (Complain, Comply & Warn-his explanation of what he was doing!),DATCA, GATCA, and so on. After he requested the help of the Taxpayer Advocate, he spent quite a long time devoting himself to our cause and taught a lot of us how to do Twitter, learn html, you name it. He finally needed to put it aside (I am sure his wife was happy about this!) and is much missed……..

Former Secretary of the Treasury Timothy F. Geitner aka “Turbo Tax Timmy” – who hadn’t paid social security or self-employment taxes on income received from the International Monetary Fund from 2001 to 2004; the IRS audited Geithner for tax years 2003 and 2004, which resulted in him paying back taxes and interest–but no penalties–totaling $16,732. Geithner voluntarily amended his 2001 and 2002 returns only after Obama expressed interest in nominating him to the Treasury post. The total bill this time: $25,970. He also failed to get proper verification for three individuals who worked for his family. As a prior Treasury employee who prior to Secy position, had run the NY Federal Reserve, one has to wonder how he could fail to understand social security or SE tax. This was infuriating to expats suffering through the OVDP/OVDI penalties. As well, former Congressman Charlie Rangel (D-NY), a sponsor of FATCA, headed the powerful House Ways and Means Committee that writes the nation’s tax laws, was censured by the House of Representatives in December for ethics violations.A chief violation included his failure to pay 17 years’ worth of taxes on rental income from the Dominican Republic property. GRRRRRRR! (still burns……..)
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tombstones

The following tweet appeared as a post at the Isaac Brock Society and generated a collection of comments.

To provide some context:
Steven J. Mopsick wrote a post which was a report of his experience at a recent FATCA conference. He was impressed by how the attendees were exploiting the business opportunity (inadvertently referring to them as “steakholders”) that FATCA has created for the compliance industry. Interestingly, Mr. Mopsick specifically makes the point that:

The focus of the conference was strictly on FATCA from the standpoint of complying financial institutions. Most of the participants did not even know about and individual’s duty to file FBAR’s, Foreign Asset Statements (form 8938) and there was very little talk about privacy concerns, fears about the dangers of an emerging international banking data base system, or how Canadian politicians were doing in shaking their lap dog image as pawns of the US government.

In other words: the focus was on the law of FATCA with no consideration of the morality, unintended consequences or effect on society as a whole. (Most law students would kill to have a prof like this!) To put it another way, the important consideration is the law itself. The fact of the law itself is the only issue. The values that underlie the law are irrelevant.
“Just Me” in his usual “wit and wisdom” commented that:

This is the Truism I take away from Steven: “The people around the world who stand to profit from FATCA are not thinking much about government intrusions into the private lives of the world citizens.”

“Them’s the FATCAs FACTs”, as they say.

Although, they may think it is a ‘business and growth opportunity’ others see it as a pending financial disaster for the World’s economy. Who is right? I think the latter, but we shall see. I could be wrong.

FATCA and US fiscal imperialism threaten to sink global economy

In all due respect to 30 year IRS vet, I think he may have his perspectives twisted (which comes from his background?) when he thinks that profiting off the backs of the government regulatory tit is “free enterprise/free market system at work.” Rather, it represents the worst of unprincipled and amoral aspects of human nature at work. These actions are not based upon free enterprise/free markets, but on artificial markets based upon dubious legal assertions.

Free markets do not require or accept extortion as their engine of enterprise.

I can think of other examples of so called free enterprise ~70 years ago, where other“hard-working, serious, responsible business men and women who were on their way up in their companies” were probably attending conferences on how to ramp up manufacturing and supply of cattle cars for another freight train in another era that he would not be so willing to celebrate. He would not like that comparison, and maybe it is a bit hyperbolic, but the same human nature principle is at work.

More recently, there was an army of war profiteering “hard-working, serious, responsible business men and women” contractors, attending conferences in Vegas to learn how suckling off the “free enterprise” of ‘War Contracting Gone Wild’ could benefit their companies. They didn’t want to get left out of the ‘business and growth opportunity’that an amoral and unnecessary war provided. What if the government threw a contractor party to support its misguided war effort at that time, and no one came? I blame the compliant and willing contractors co-enablers as much as the government initiators for the sad legacy we left in Iraq.

Maybe in fairness to Steven, what he is saying, is yes, human nature is responding to an artificial market that would NOT exist, except for US hubris, financial imperialism and extra-territoriality. I don’t think I would be citing the FATCA Compliance Industrial Complex’s (FCIC) “hard-working, serious, responsible business men and women” as an example of ‘supply and demand’ in action that Adam Smith would identity or praise.

Although I certainly agree that “Free markets do not require or accept extortion as their engine of enterprise”, the Mopsick post raises an even larger issue. Mr. Mopsick has and continues to make an enormous contribution to the discussion of FATCA, FBAR and U.S. tax compliance in general. Some of the best thinking on these topics may be found in the “Mopsick Trilogy” – a series of posts that he wrote about the compliance problems facing US citizens abroad. His posts are a unique blend of raising questions and answering questions. In this case, his post has raised an important issue.

The issue is that, in the America of today, laws have become a substitute for morality. A society where laws have become a substitute for morality, is a society that is past the point of “no return”. This is where “Form Nation” – AKA The United States of America – finds itself today.

“Form Nation” – A country structured by laws and not by men

In the beginning we had the ten commandments which were expressions of the fundamental principles of justice. The ten commandments reflected principles which were for the common good. Gradually legislatures began to create laws. In the early stages of society, these laws were specific applications of fundamental principles of justice and for the most part these laws continued to be for the common good.

What is in the common good is not necessarily what is good for specific individuals. Those specific individuals who control the political process have strong incentives to act in their interest at the expense of the public interest.

Once legislatures saw how easy it was to create laws, they began to create laws which were NOT for the common good but were to benefit specific individuals at the expense of the common good. That’s how the Internal Revenue Code and regs grew to 17,000 pages. It’s simply incredible. Mr. Romney pays low tax on his “carried interests” and U.S. citizens abroad pay confiscatory taxes on their mutual funds “PFICs”. Not only is this unfair, but it’s a wonderful example of how laws are passed to benefit the individual at the expense of the common good.

But, it gets far worse. Who exactly are the legislatures? Democracy in the “Form Nation” of today is controlled by two private clubs. You will recognize them as the Democratic and Republican parties. Not only are they private clubs, but they have the intellectual dishonesty to rely on public funding for their existence. Their job is to campaign and to stay in power. Why? Because they will profit from being power. Those of you who have seen the Movie Chicago will remember Mama Morton singing “reciprocity“.

If you have the money you can get the ear of a Congressman. If you don’t you can’t. If you are the mutual fund industry you can lobby to get the PFIC laws passed. If you are the Romney’s of the world (and I still believe Romney would have been a better president) you can lobby to get your “carried interest” laws passed. As Fareed Zakaria has noted, the system is corrupt at it’s core. A large part of the problem is the way the political system works in the United States. There is nobody who represents the voters. The elected representatives (and they are not really elections because of a lack of choice on the ballot) are in business for themselves. Their business is in passing laws that benefit themselves or their clients. This is the only reason that the IRC and regs grew to 17,000 pages. To put it simply: elected representatives are in the business of making laws.

It’s laws, laws and more laws!

The United States of today is burdened by so many laws that:

– everybody is in violation of some law (show me the man and I will show you the crime);

– the complexity of the laws means that people cannot even understand what they are required to do (the FBAR rules are a weird combination of the enabling statute, the regs and the form itself);

there are fewer and fewer laws where “mens rea” (the intent to commit the crime) is necessary for a conviction;

– people are forced to pay lawyers for an opinion on what they may be required to do (lawyers have become the modern day “priests”);

– the sheer volume of laws means that enforcement is largely discretionary (will the IRS enforce FBAR penalties or not?);

– the focus on laws leads to a presumption of criminality (the fact that US citizens abroad are subject to so many laws means they must be guilty of something);

– the moral foundation (if any) of the law becomes irrelevant. The original purpose of the law becomes irrelevant. All that matters is the mechanical application of the law. Nobody ever imagined that PFIC rules, Foreign Trust rules or the FBAR rules would be used to unleash a “reign of terror” on US citizens abroad. On the “Homelander Front”, do you really believe that Martha Stewart deserved incarceration? Of course, the good old USA has the highest rate of incarceration in the world.

Laws have become a replacement for morality. Laws are the only standard for morality.

If you are not in violation of the law, you are not immoral.

If you are in violation of the law you are immoral.

(If the U.S. is really concerned about the “crime rate” then maybe it should reduce the number of laws.)

Conclusion: The US does not have laws that are fair.

“Form Nation” – A country governed by those who decide when to apply the laws and in relation to whom! (A government of tyrants)

In the context of the laws, the laws are not applied equally

President Obama commented that Mr. Geithner should not be punished for a mistake commonly made. It was okay for Timothy Geithner, a man with the money to get accurate tax advice, to file inaccurate tax returns. It is NOT okay for US citizens abroad to fail to file or to file inaccurate tax returns.

Conclusion: The US does NOT have fair application of the law.

1. The United States of today is country where laws are passed by members of private clubs, which have no incentive to benefit the common good and every incentive to benefit themselves at the expense of the common good.

2. The laws are so numerous that every person in the United States is in violation of something.

3. The laws that passed carry no presumption of morality and simply have no moral force.

4. The laws (regardless of content) are enforced in an unpredictable and unfair way.

The result is that people live in terror of the government.

As Jefferson said:

When people fear the government there is tyranny. When government fears the people there is liberty.

So, what’s all this got to do with #FATCA and the Mopsick post?

FATCA is the “gift that keeps on giving” (well to the compliance industry that is). As Mr. Mopsick confirms, the concern of the industry in on the fact of the law. What does it say? What does it require? As Mr. Mopsick reports:

Many readers of this blog will be disappointed to hear this report. The people around the world who stand to profit from FATCA are not thinking much about government intrusions into the private lives of the world citizens. That is the furthest thing from their minds. These folks were all good students, in effect, knowing full-well that there was a new body of rules and regulations on the table which they needed to learn and master.

The implication is that the “good students”, those “hard-working, serious, responsible business men and women who were on their way up in their companies”, the “best and the brightest” (are they really that bright?) should be concerned with embracing the new morality, getting in tune with the “new world” caring about the implications of their conduct. That’s exactly what happens when law becomes a substitute for morality. Just Me compares this mentality to another time in history when he notes that:

I can think of other examples of so called free enterprise ~70 years ago, where other“hard-working, serious, responsible business men and women who were on their way up in their companies” were probably attending conferences on how to ramp up manufacturing and supply of cattle cars for another freight train in another era that he would not be so willing to celebrate. He would not like that comparison, and maybe it is a bit hyperbolic, but the same human nature principle is at work.

Interesting analogy. What is the purpose of FATCA? What are the moral underpinnings of FATCA? Has anybody ever asked the question? Clearly nobody in the world of the FATCA compliance industry. They would be afraid of the answer!

But, that’s what happens when law becomes a substitute for morality. Many of you are concerned about what reason to give for renouncing your U.S. citizenship.

Why not just say:

I do not wish to be a citizen of a country where law has become a substitute for fairness and morality!
 

TOMORROW : Burning Barns Down is not Wrong Because it is Illegal – It is Illegal Because it is Wrong

The Wisdom of Countries that Welcome Diversity

Recently I received a paper from an expat in Australia-it is a submission to the Ways and Means Committee. I am very impressed with it and shortly thereafter came across this article at the NYT.

Both Canada and Australia choose to take a positive approach and encourage the immigration of those who have studied in their countries; the citizenship process is fast-tracked. The U.S. on the other hand, has an extremely difficult regime which makes the path to citizenship much more difficult. As with other policies we are aware of, the U.S. once again, shoots itself in the foot with it’s exclusionist attitude. Add to that, President Trump’s Executive Order effective today, will likely prevent some who are already studying in the U.S., the ability to return and continue with their studies. The following groups of people find themselves barred from entry into the United States:

  • suspended entry of all refugees to the United States for 120 days
  • barred Syrian refugees indefinitely
  • blocked entry into the United States for 90 days for citizens of seven predominantly Muslim countries: Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen
  • barred green card holders from those countries from re-entering the United States

It is fairly well-known in the expatriate community that USCIS has no information for new immigrants warning them of what is involved in citizenship-based taxation and the ramifications of it should they desire to return to their home countries one day, without renouncing their U.S. citizenship. The more likely “hit” they will take, are the FBAR and FATCA provisions with the emphasis on reporting foreign accounts and assets. This is particularly obscene in that many of these students will have accounts in their home countries solely for sending money back to help their families. So perhaps the students who will NOT come to/remain in the U.S. are, for the moment, more blessed than they can possibly appreciate, by not entering/remaining in the U.S.

Those who are “more in the know” or have connections that alert them, are lucky to have access to Canadian and Australian schools and citizenship. These students as well as the countries they choose, represent a reasonable and mature approach that matches the direction of the rest of the world – globalization. Given I have the permission of the author, I am reproducing this paper in its entirety.

International students studying in America and the ramifications

of the Foreign Accounts Tax Compliance Act (FATCA) on the higher education sector
Comments to the U.S. House Committee on Ways and Means
Don Maisch PhD

January 15, 2017

Dear Committee Members

I am writing to the Committee from Australia about one particular issue involving an unintended consequence of the Act, which apparently has not been considered in any cost/benefit analysis to date. My concern is that there exists the possibility of a significant adverse effect on the major income stream for the American higher education/university sector, in relation to attracting international students to continue their education in American educational institutions.

Overview

As of the Fall of 2015, total international student enrolment in both public and private educational institutions in the U.S. was 1,043,839 with the highest numbers from China and India, Saudi Arabia and South Korea, followed by Canada, Japan Taiwan and Vietnam. Previous years show an increasing number of students from these countries (and others) attending American educational institutions.1

According to a 2015 report by the U.S. Department of Commerce, the increasing numbers of international students attending U.S. educational institutions has had a significant impact on the American economy, adding more than $30.5 billion to the economy. The report found that 72 percent of all international students are funded from sources outside of the U.S., coming from personal and family sources as well as assistance from their home country governments or universities. 2
Besides being an important funding source for higher education institutions, many students, after graduation would like to gain employment in America, a fact not lost on the previous Obama Administration which wanted science/tech international students to be able to put their skills to use in America, not overseas. Obama stated at the time: “In a global marketplace we need all the talent we can attract…We don’t want the next Intel or the next Google to be created in China or India. We want those companies and jobs to take root here”.3 How the incoming Trump Administration views this remains to be seen. In an article written in Forbes (June 2015) by Evangeline Chan, an immigration attorney, she points out that restrictions on the number of H-1B visas available for graduate foreign students with a bachelor’s degree or higher is forcing this pool of skilled people to have to leave the U.S. As of 2015 only 85,000 H-1B visas were available while there were 233,000 applications.

According to Chan, “Our communities have become more global but our immigration system has not kept up”4.
These are highly skilled US higher educated potential migrants who are willing to live and work in America, most likely eventually getting a green card or citizenship. What is an unknown however, is how many of these potential migrants would like to leave open the possibility of, sometime in the future, being able to return to their home countries to live and work. After all, they would be highly sought after by U.S. corporations, with branches in these countries, who recognise the advantages of hiring people with extensive local knowledge.

International students in Australia

Despite Australia’s relatively small population of around 24 million, it is the third most popular destination for international students (approximately 300,000 in 2014). By 2015 this was a $15 billion industry and is Australia’s third largest ‘export’ following iron ore and coal. Skilled students are encouraged to stay in Australia after graduation and are considered as an important source of migration, which can address skill shortages and contribute to Australia’s long-term economic prosperity.5 As of February 2016 the international education sector in Australia had risen to a $20 billion export industry with data showing that international students were making a significant contribution to the economy.6 This is further confirmed by a 2015 extensive analysis on the value of international education to Australia by Deloitte Access Economics. They found that it was the professional, scientific and technical services which benefited the most from the international education sector. Deloitte estimated that Australia’s current stock of international students would contribute 130,000 skilled migrants to the Australian workforce after graduation. Other benefits included:

• Economic benefits stemming from increased entrepreneurship, knowledge exchange and international collaboration;
• Economic benefits derived from trade and investment links and soft diplomacy both in Australia and in source countries; and
• Social benefits flowing from improved cultural literacy, stronger cultural linkages and enhanced cultural capital in both Australia and in source countries.7

One of the issues raised by the Deloitte report was the volatility in international enrolments due to an increasing number of countries now competing for international students.8 It is important to point out here that the income generated from foreign students has become an essential part of maintaining the financial viability of the higher education sector in both the U.S. and Australia.

The FATCA risk factor for the U.S. higher education sector

In this increasingly globalized world, where a number of countries are competing for a bigger slice of the ‘international student’ cake, and in which Australia is competing with the U.S. for Asian students, FATCA will inevitably affect both countries but in opposite ways.

As the Committee is well aware of the controversy surrounding the provisions of the Foreign Accounts Tax Compliance Act I need not go into it here, other than briefly examining how it can ensnare unwary former international students into becoming a “US person for tax purposes” if they later decide to return to their home country.

• Most foreign students in the U.S. have an F-1 student visa. After graduation, he or she can remain in the U.S. for a period of 12 months for training, internships or employment related to their field of study. This is called Optional Practice Training (OPT).
• If the former student has obtained a degree in a STEM (Science, Technology, Engineering or Mathematics) field, then they would be permitted to remain for an additional period of 17 months.
• Then the former student has 60 days to depart from the U.S. If they then depart back to their home country they would not be subject to the FATCA provisions and would not be considered a “U.S. person for tax purposes.
• However, if they instead, qualify and apply for a H-1B temporary work visa (limited availability, as explained earlier) in preparation for a “green card” which then allows them to live and work in the U.S., or they later take up U.S. citizenship, they will have a significant tax problem if in the future they decide to leave the US to live and work elsewhere.
• This possibility is not being explained to prospective foreign students who apply to study in America.

Under FATCA, “U.S. persons” for tax purposes includes dual nationality citizens, Green Card holders (regardless of country of residence) and U.S. residents, or Deemed Residents, regardless of citizenship. In addition, a U.S. person is anyone born or naturalised in the U.S., foreign born people with a parent whom is a U.S. citizen, anyone who visits the U.S for an extended amount of time (180 days). Note that a Green card holder is still considered a U.S. person if they fail to surrender it when leaving the U.S. This is still the case if an un-surrendered Green Card has expired. For tax purposes it never expires unless surrendered.

A Possible Scenario under the FATCA Intergovernmental Agreement (IGA):

After graduation from a U.S. university an Indian born (or Chinese, or Canadian, etc.) student gains a H-1B visa and gains employment in a American tech company. He goes on to get a Green Card and soon after, full U.S. citizenship. Some years later, as an American citizen (U.S. person), he decides to return to his nation of birth to take up employment with an Indian company working in his field of expertise. However, he soon finds that as a “U.S. person” the company will not hire him in any position of authority for to do so could expose the company’s finances to investigation by the American IRS. He then finds that he cannot open a bank account because the bank is refusing to take on “U.S. Persons” as clients because of the onerous requirements placed on reporting financial details to the IRS. He marries an Indian woman who is not pleased to learn that, as a spouse of a “U.S. person” the IRS wants to see all her financial details as well. They then have a child, and much to their horror, they find that their child (and any subsequent children) is considered to be a “U.S. person” by the American IRS because the child has a parent who is a US citizen.9 He decides to renounce his US citizenship to be free of this quagmire but finds that it is very difficult process costing many thousands of dollars to do so. He then is given a tax demand from the IRS for “Exit Taxes” based on the value of all his assets – in American dollars10. He finally frees himself of the quagmire after several years of worry and at significant expense. He then is informed that, even though he has renounced U.S. citizenship the IRS still considers his child a US citizen who will have to start filing complicated U.S. tax returns when turning 18 if the young adult wants to continue to live outside the U.S. As with what the father found, his child will find that living outside of America as an adult U.S. citizen is a significant liability. The only solution to this for the young adult is to either move to the U.S. and live out his life there, or go through the complicated process of renouncing after the age of 18, as his father had done. Trying to solve all this for his family reminded the father of that lyric from The Eagles song, “Hotel California”, which he remembered from his university days: You can check out any time you like / But you can never leave…

The all–important question for the American international student education sector is this:

If prospective foreign students were given the full facts on the possible future impacts of the FATCA IGA, if they stay in the US after finishing their education to take up employment, would they consider it worth the risk of being ensnared by FATCA, when much safer alternatives exist, such as studying and working in Australia? If so, what is bad for America may turn out to be very good for Australia.

In my opinion FATCA constitutes a significant financial risk to the American foreign student higher education sector and this should be taken into account in your deliberations over FATCA and the wisdom of maintaining citizenship-based taxation.

Thank you for your consideration.

Sincerely,

Don Maisch PhD
____________________________________________________________

1 Project Atlas, http://www.iie.org/Services/Project-Atlas/United-States/International-Students-In-US#.WHW9RZL4mUc
2 Institute of International Education, http://www.iie.org/Research-and-Publications/Open-Doors/Data/Economic-Impact-of-International-Students
3 Fox News, Obama Administration Lets More Foreign Students Stay in U.S. for Jobs, Raising Competion Concerns, http://www.foxnews.com/politics/2011/05/17/dhs-allows-foreign-students-extended-stay.html
4 Chan E, Our Immigration Policies Are Telling Foreign Students To ‘Get Out’ After They Graduate, Forbes / Opinion, http://www.forbes.com/sites/realspin/2015/06/08/graduating-congratulations-now-get-out/#4305b47312d0
5 Group of Eight Australia, International students in higher education and their role in the Australian economy. https://go8.edu.au/publication/international-students-higher-education-and-their-role-australian-economy
6 Dodd T., Education revenue soars to become Australia’s $20 billion export,
http://www.afr.com/news/policy/education/education-revenue-soars-to-become-australias-20-billion-export-20160203-gmke3k
7 Australian Government document prepared by Deloitte Access Economics, The value of international education to Australia, https://internationaleducation.gov.au/research/research-papers/Documents/ValueInternationalEd.pdf
8 ibid.
9 U.S. Citizenship and Immigration Services, Citizenship Through Parents, https://www.uscis.gov/us-citizenship/citizenship-through-parents
10 Exit tax and further taxation of citizens who renounce,
http://web.archive.org/web/20121023090722/http://renunciationguide.com/Exit-Tax-on-Renunciants.html#MarkToMarketTax