Another comment deserving its own post
March 13, 2017 at 7:08 am
@Karen and all
Thank you for collecting and posting these stories.
I would like to offer some general observations (of which Shaun is one of many examples) and suggest some lessons which are largely based on Shaun’s story in particular.
It seems to me that the lesson(s) from Shaun’s story are simple. So, let’s summarize them:
1. Those Australians who have entered the U.S. tax system need to renounce as quickly as possible (hopefully before they are “covered expatriates”) and probably even if they are “covered expatriates”.
Anybody who doesn’t get this does not understand the U.S. tax system. (Not that anybody understands the system.)
2. Because of the prevalence of Superannuation in Australian society, those who are NOT in U.S. tax compliance should not be too quick to enter the U.S. tax system (better clarification on the tax status of one’s particular Superannuation – they are NOT all the same) – is needed.
3. Under NO circumstances should anybody in Australia engage the services of a U.S. based CPA or lawyer. The simple reality is that these “specific life forms” (1) Don’t give care about you in the least (2) don’t understand your local tax system (3) subconsciously believe that you are a “tax cheat” (because all Americans are) and (4) are required to view the world entirely through the “perverted prism” of the Internal Revenue Code (which presumes that anything that is “Not U.S” (not one of “us”) exists ONLY for the purpose of defrauding the U.S. Treasury.
Remember that when it comes to the Internal Revenue Code and Americans abroad:
– Americans abroad are deemed to actually live inside the USA; and
– the assets of Americans abroad are deemed to be foreign (even though they are really local to the individual)
4. It is painfully obvious that Shaun would have been far better off if he had NEVER entered the U.S. tax system. This is hindsight. He could never have understood where this was going. Truth is that things have changed a great deal over his 30 years in Australia. But, Shaun has provided a great lesson to Australian citizens and residents who are NOT in the system.
The lesson is this:
For Americans abroad in general, but for Australians in particular (think Super), the consequences of entering the U.S. tax system lead to far worse results than the consequences of NOT entering it. It’s pretty simple. Shaun lost the following:
– his retirement
– his health
– his happiness (you can be sure that he carries with him anger and resentment)
– he has probably become a very negative person
– if he has an Australian spouse (or still has one) it is likely that this has impacted his family in a big way
Shaun is unique. Although it doesn’t specifically say that he has filed U.S. taxes for 30 years, it is clear that he has filed U.S. taxes for many many years. Poor Shaun. He filed because filing “is the law”. Yes, it’s the law. Shaun probably thought that there was some connection between law and morality or law and “doing the right thing”.
There is no connection between law and morality. Filing U.S. taxes is “obeying the law” and obeying unjust and immoral laws. A great American writer (by the name of Thoreau) wrote a book (considered to be subversive in the land of the free) on this topic. It’s called “Civil Disobedience”. Read it sometime. (He discusses the relationships among: laws, unjust laws and compliance with unjust laws.)
Clearly Shaun (and others who have exhibited this kind of “life time” compliance while living outside the USA) are “model citizens”. Yet they have been proven to have been “model fools”. Through compliance with these laws, they have destroyed their lives.
The U.S. tax system, enforced by the tax professionals (who usually don’t know what they are doing anyway) is such that:
It’s far more punitive to be in the U.S. tax system than not be in it. There are a number of reasons for this, but we see how Shaun loses his life savings by trying to comply (doing the “right thing”).
Believe, me Shaun has lost a lot more than his money. Year ago I wrote a couple of posts based on theme that:
“It’s not what they take from you, it’s what they leave you with”.
Take particular note of the comments (including one from MarkPineTree who was Dr. Marcio Pinheiro whose anxiety over Mr. FBAR made the last few years of his life a “living hell”). See a tribute to him at:
Finally, this story is a sad, sad reminder that those who have been most hurt by the predatory and immoral practice of U.S. “place of birth taxation” are the ones who tried hardest to comply.
The Tax Compliance Industry might say:
“Resistance is futile!!!!”
Those who have tried hard to comply will say:
“Compliance is impossible”
Put it this way:
“It’s very clear that “compliance is impossible”. But, it’s not clear that “resistance is futile”. The proof is rather simple:
Seven out of eight Americans abroad recommend non-compliance and every one of them is in a better state than our friend Shaun!