The Isaac Brock Society consists of individuals who are concerned about the treatment by the United States government of US persons who live in Canada and abroad.
If clicking on a link brings you to the wrong page in the comment thread, click here to arrive on the current page of the thread: http://isaacbrocksociety.ca/2011/12/14/about-the-isaac-brock-society/
The United States is one of two countries in the world that taxes its people no matter where in the world they may reside. The other is Eritrea, which the USA has condemened for terrorism and for its diaspora tax. The majority of US persons who live abroad are not aware of their filing requirements. But recently, the US government has decided to crack down on those who are not in compliance.
But what is more, the US government has begun, since about 2004, to apply with great pressure a long-neglected requirement of 35-year old law called the Bank Secrecy Act. That requirement is FBAR, the foreign bank account report, which the United States government expects annually from those who have accounts outside of the United States which exceed $10,000 in aggregate. The fines for failure to file this form are extortionate, and virtually no US person who lives abroad even knew about FBAR, while most of them, over a certain age, own bank accounts with retirement savings exceeding that amount. The threats of fines and imprisonment has frightened many people who as a result have consulted expensive accountants and tax lawyers to get this mess sorted out, only to face high accounting or legal fees on top of potential fines and back taxes. In 2009 and 2011, the IRS offered voluntary disclosure programs (OVDI). Some who entered into the 2009 OVDI, because of fear of the penatlies, were shocked when the IRS assessed them fines in the tens of thousands, essentially treating them as tax evaders instead of a law abiding citizens in their countries of residence.
For many US expats, renunciation now seems like a really good idea. Why not? Many haven’t lived in the US for years and now they have few ties there except perhaps some family members. So they want to renounce their citizenship only to find that the laws regarding expatriation are confusing and that the exit tax requirements are at best complicated and invasive, and at worst, extortionate and utterly in violation of their right to expatriate.
The media coverage of this issue has been uneven. There have a been a few balanced stories, but most of the time, the media has merely publicized the purposes of the US government; this is especially true of US media sources. The Canadian media has generally done a much better job of grabbing the attention of the world about the abuses of the US government. That being said, even the Canadian media sometimes falls into the IRS trap of projecting fear in order to force compliance. Overall, we regret when the media offers only condemnation and fear without telling the story from the side of the victims or informing them of their rights and alternatives.
US persons abroad also face US border guards who are starting to put pressure on all those who have a US place of birth to travel only on a US passport, even if the person has not been a US person for decades–an arbitrary change of policy making those who relinquished citizenship into would-be loyal taxpayers to a profligate government that has to borrow 40 cents on every dollar its spends.
The Isaac Brock Society is here to fight. Sir Isaac Brock prepared Canadians for war with the United States and gave his life in repelling a US invasion in 1812. So we also want to fight for US persons who are frightened by the IRS, the border guards, the compliance condors, and the media. We are here to provide one another with resources and strategies, comfort and advice.
But not only so, we are here to warn other Canadians about the illegal incursion of the US federal government into the lives of the US expat community. Pretty soon, with the new FATCA legislation, this arrogant attitude of the United States will affect every man, woman and child on the planet who wants to open or maintain a bank account or to invest in a retirement fund. Now, according to FATCA, you will have to tell the United States whether you are a US person when you open up a bank account in, e.g., Australia or Thailand. This makes every country in the world a protectorate of the United States, for, if they comply with FATCA, they are ceding their very sovereignty to a nation which has not invaded or conquered the rest of the world, but only uses its waning hegemony over the financial sphere to coerce other nations.
So whether you are a US person living in exile, a Canadian or a citizen of any other country, we ask you to join us in this struggle for freedom and justice.
@Portland PCL
How do think Boris will be received by the U.S. government next time he tries to enter the US while refusing to pay the US tax he says the IRS says he owes them?
Thanks @Portland PLC! Anyone have experiences with quiet compliance?
@FBARhelp,
I am curious if your husband received any information when he emigrated regarding tax and information reporting? I assume not which is one of the dangers we have been trying to point out and show lack of due diligence on the part of the IRS and USCIS.
I filed my tax/info returns (Dec 2012) as a quiet disclosure and my son’s (2013) as well. Neither of us owed tax at the time. My son has never heard a word. I made a slight error on 3520 & corrected without any problems. For my final dual-status return, I owed tax due to cashing out/moving funds to Canada. So I heard from IRS that my pmt was not enough due to owing instalment payments and a penalty. That is crap bc it was not required when the $$ sat nicely in a US bank and all I had to declare was the interest earned during the whole year. I paid it anyway to be free of them.
With that much contact after a quiet disclosure and no consequences, was not a problem for me.
Worrying abour quiet disclosure is largely a matter of IRS trying t force people into their programs so they get money. They are aided by the compliance condors. The law says you have to file. It does not say you must enter their programs. Please see the Factsheet 2011-13.This is still on the IRS site and was updated last year.
http://www.irs.gov/uac/Newsroom/Information-for-U.S.-Citizens-or-Dual-Citizens-Residing-Outside-the-U.S.
I realize your husband is living in the US but the issues with FBAR is the same. I am not aware of any difference between a domestic or “foreign” voluntary disclosure.
@Tricia Moon: no, wouldn’t that have been nice if they had given us some information when he came over?
From what I can tell if you have no tax due, you will not be subject to any FBAR penalties. Apparently, if you qualify for the new streamlined program and live abroad, you also don’t have to pay any penalties, just tax due. If you live in the U.S., you still have the 5% penalty through that program.
I have read in some places that they won’t penalize you for minimal amounts of taxes due… I just have not been able to get any good answers specific to our case. Is <$100 minimal? The question is, if we go the quiet compliance route and then are audited, how big of a fine will we owe? The maximum is $10,000 for non-willful, but I can't imagine they would be that extreme.
$100 is as minimal as can be. The chances of an audit approach zero.
GOOGLE to-day honours Henrietta Muir Edwards with a doodle.
Henrietta, among many other things, took on the government of Canada with 4 other Alberta women in the ‘Persons’ case.
In April 24, 1928 the Supreme Court of Canada rendered its decision and declared that women were not persons and thus ineligible for appointment to the Senate under the B.N.A. (Canada’s constitution).
Not satisfied, the ladies appealed to the Privy council in London. On October 18, 1929, the British Privy Council ruled in favour of women, declaring that they were indeed persons and therefore
eligible to sit in the Senate of Canada. This decision also enunciated the ‘living tree’ doctrine that the interpretation of the constitution should reflect contemporary values.
Two items of interest to us. Firstly, they didn’t give up. Secondly the “Persons” case cost a total of $23,368.47 in lawyers’ fees, paid by the government of Canada; $21,000 was for the appeal to the Privy Council.
Henrietta was my great grandmother.
For more info. http://www.chrc-ccdp.ca/en/timePortals/pdf/persons.pdf
http://www.wineglass-ranch.com/henrietta-muir
@Duke: Happy 165th Birthday to Great Granny.
Henrietta certainly could never have envisioned being honoured with a Google Doodle!
Anyone know how much $23,368.47 is in 2014 $?
As Duke says, the Famous Five never gave up. Neither should we. We need to do everything we can to support our brave women Ginny and Gwen.
$318,473.04 allowing for an average inflation rate of 3.12%
@ Blaze
According to the inflation calculator $23,368 in 1929 would be $318,473 in 2014.
@ Duke of Devon
I love your great grandmother’s Google Doodle (screen captured and tucked away in my images folder). Let’s all try to capture Henrietta’s spirit and keep fighting for the rights of our own Canadian personhood and for Canada’s sovereignty. I don’t know what Henrietta’s cry for action might have been so I’ll revert to Sir Isaac Brock’s SURGITE!
@ mettleman
You’re faster on the draw than me today. You must have used the same calculator …
http://www.dollartimes.com/inflation/inflation.php?amount=23368&year=1929
yup
thank you mr. google 🙂
@EmBee: “We sought to establish the individuality of women… It was an uphill fight.”
When this is over, Ginny and Gwen can say: “We fought to preserve the rights of all Canadians…It was an uphill fight.”
We need to honour Henrietta and fight for what is right and just. We need to support Ginny and Gwen.
I remember when you first told us this, Duke of Devon. You said “the one on the right, raising the teacup” to my question: http://isaacbrocksociety.ca/2014/03/04/an-historic-day-help-canada-stand-up-to-the-american-bully-donate-now-to-the-canadian-charter-challenge-fund-2/comment-page-8/#comment-1165290
Which of these wonderful women, The Famous Five, was your great grandmother, Duke?
I love seeing their statues when walking weather is better in Calgary than it is these winter weekends.
My teacup is raised to your great grandmother Henrietta, Duke — and to all of The Famous Five. Thanks for your comment today and inspiring us even more to keep giving and encouraging other Canadians to do the same — http://www.adcs-adsc.ca/!
I am an American that donated money to your cause after it was publicized, perhaps in The Guardian, because I felt your treatment by the US government was so unjust. Consider appealing directly to Americans, and especially expats for funds. I think you should also target all “American persons” everywhere not just those of Canadian nationality. FACTA might be like the proverbial knitted sweater, pull one thread anywhere and the whole thing comes apart. You might even try Kickstarter.
I would suggest Cato.org and Reason.com as places you should do interviews. Impossible Presidential candidate Ron Paul raised an astonishing amount of money. See if you can be interviewed at his media company VoicesOfLiberty.com . You might be able to put together direct mail lists by contacting attorneys and tax experts that deal with US persons and expats.
Recently mayor of London Boris Johnson was caught up in US tax complications, so it is a world wide issue..
Good luck and apologies GF.
@ our newest george
Welcome and thank you for donating. It doesn’t happen often enough that people who aren’t directly affected take the time to more deeply understand the issue. Our Canadian MPs (the Conservatives who unfortunately hold a majority in parliament) certainly didn’t take the time and some members of the U.S. Congress not only do not take the time, they choose to be hostile to anyone who would dare suggest that FATCA is an egregious outreach of American power and that citizenship-based taxation (CBT) is just plain wrong-headed. It is those politicians on both sides of the border who need to apologize but I won’t hold my breath.
Where can I find information on exactly what the IRS can and cannot do to enforce the citizen based taxation in Canada. Example can the IRS go through Canadian courts to enforce their US laws? Can they directly confiscate money from my bank account? Exactly what can they do?
@ Chris Bambauer
Nobody can predict what will happen in the future but for now we have statements from our government officials that the CRA will not collect IRS taxes or tax penalties as long as a person was a Canadian citizen at the time of the U.S. defined “tax crime”. I would also add that this protection is only on Canadian soil — across the border everyone is fair game.
Chris B,
That’s a mighty big question or two. Have you just learned of the IGA that implements FATCA in Canada? You can start your research at this Canada Revenue Agency site, with links to the actual intergovernmental agreement signed and implemented (behind closed doors and buried in omnibus (budget) bill, C-31): http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/menu-eng.html.
After that CRA introduction, you might want to come back to this site to get further information and support regarding FATCA, FBAR and US citizenship-based taxation and how it affects US-defined *US Persons Abroad* (a departure from the residence-based taxation of the rest of the world, except the small country, Eritrea, that also taxes on CBT). A lot of the answers to the questions you have will depend on your particular situation. There are no easy, pat answers and there will be differing opinions — and a lot of generous expertise. In the end though, everyone of us must do our own inordinate amount of research to make decisions on how to best proceed for ourselves and our families, which also have to do with our level of risk. On the home page of this site — and at MapleSandbox.ca — you will find links to many sub-topics on this very complex issue.
Today, many of the readers of the Isaac Brock Society site and those of Maple Sandbox, donors from around the world have supported and now raised $300,000 toward a lawsuit against the Government of Canada. You can read background and help donate to that cause if this is something that affects you and you agree with what we are doing: http://www.adcs-adsc.ca / http://isaacbrocksociety.ca/2014/10/22/97975-more-needed-to-make-the-february-1-2015-payment-for-canadian-fatca-iga-lawsuit-il-nous-reste-97-975-a-ramasser-pour-notre-poursuite-judiciaire/.
Welcome — hope to see you back to join in our discussions.
And, Chris B., what EmBee points out is right on.
Chris. They can’t do a thing. Nothing. They cannot take money from your Canadian bank account. Even Boris Johnson’s case was grossly exaggerated. They determined he owed some money. there was talk of his being arrested at JFK. That wouldn’t happen without an arrest warrant. There wasn’t one. There is a lot of BS in the media.
@Chris @Portland,
The IRS via FATCA is forcing your bank to send your private financial and personal information to the CRA and on to the IRS.
Even if Canada will not collect FBAR penalties (or other taxes and penalties) on behalf of the IRS, CURRENTLY (this could change in future), this transfer of information is a REALLY BAD THING.
For example, ever heard of identity theft? This is a huge problem that happens only to other people until it happens to you.
And think about it – what is the point of IRS twisting arms to get all this information if it cannot actually use it somehow? Guaranteed, once they have it, they will find a way to use it in a way that won’t be to your advantage. No doubt, there will be further arm twisting.
@Portland,
You want to know what BS is in the media? The BS is the fact that the media is DOWNPLAYING the scary stuff, and not cluing in to the threat that is FATCA. FATCA is ECONOMIC WAR on a world wide scale. People don’t see it as war, but that is what it is. The fact that people don’t see it as such is what makes it such a powerful weapon. And the further it invades, the more powerful it gets, and the more damage it will ultimately inflict.
WC I was attempting to answer Chris’s question. the Us absolutely cannot confiscate money from his Canadian bank account. No need to get indignant about it.
@ WhiteKat
Right on! The USA is using FATCA, among other policies, to control individuals, financial institutions and other governments. It’s going full tilt for Full Spectrum Dominance in the worldwide economic arena as well as multiple foreign-soil military arenas.
@PortlandPLC, So was I. Don’t take it personally. 🙂