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.
TG: First, let me assure you that you are among friends here. Although discussion in recent days has focused on Eduardo Saverin, for every Saverin, there are literally thousand of average, everyday people caught up in the IRS quagmire.
Most of us are minnows, not whales. Most of us have average or low incomes. We include an aid worker in Africa, an executive, a physician, “foreign” public servants, a mother fighting for the rights of her disabled son (born and raised outside United States), a villager in India, young people at the beginning of their careers, retiree seniors, U.S. military veterans, draft dodgers, people who were told they relinquished U.S. citizenship decades ago, citizens who have renounced or wanting to renounce, citizens determined to maintain their U.S. citizenship and new immigrants to US. wanting to become citizens. And, of course, there is our fearless leader Petros.
We have members in the South Pacific, Asia, Europe, Scandinavia, Africa and North and South America. I don’t think we have yet had anyone join in from the Middle East, but we have read articles from Israel and Lebanon and residents of those countries are welcome. Despite the fact our situation is very different from Eduardo Saverin, we would welcome him here if he wanted to join us–just as we welcome someone trying to survive on Social Security outside of US.
Our backgrounds, beliefs, faiths, politics, values, lifestyles and reasons for living outside the U.S.are as diverse as we are. We are united in our conviction to fight the snare the IRS is trying to catch us in. We also are a tremendous support to each other and are constantly learning together.
So, welcome to Isaac Brock. I’m not qualified to give you any advice on your personal situation, but I will try to share what I have learned here, but I first need to ask a couple of questions. Have you been filing income tax returns with IRS during years you have been living outside of of US? As a US citizen, you are required to do that. If you have been filing returns, have you been including FBARs (Foreign Bank Account Report)? Again, this is a requirement of IRS.
Are your assets in your “foreign” bank in excess of $50,000? This is the level which has been included in FATCA draft regulations for banks to report on the holdings of their “US person” customers outside of US.
As we have said to others, the best thing you can do for yourself if to not panic (easier said than done–We’ve all been there). Gather the necessary information and go forward from here. Based on what you have described, you would be best to stay away from OVDP (Overseas Voluntary Declaration Program–which is designed for whales and criminals).
As usxcanada said, we all are in a “crazy interim” (great term!) We are helping each other to maintain sanity among the craziness of the IRS. I hope you will be part of our eclectic but solid group.
Evidently since the migration, I have been unable to logon to WordPress. Guess my active participation is over! Leb wohl guys!
*Born in Boston to Canadian parents finishing medical studies in 1951. I have a document from Citizenship and Immigration Canada stating I was registered as a citizen (retroactive to date of birth). Canadian Citizenship Certificate issued 2002 and that my application for a delayed registration of birth abroad was submitted on Dec.4/78, approved on Feb 21/79…..do I need to relinquish? Have never lived in USA. Appreciate comments and advice.
@Stickman: I have bad news for you. You may not be able to relinquish because you have not committed what is considered an expatriating act (i.e. becoming a citizen of Canada and swearing an Oath of Allegiance.
However, if you ever worked for the federal or provincial government, you may be able to submit a certified copy of the Oath of Allegiance you would have signed for consideration to relinquish.
Otherwise, you would have to renounce.
Before you rush into anything, remember, Canada Revenue Agency will not collect any tax liability for IRS for a Canadian citizen. CRA will also not collect any FBAR penalty for IRS for a citizen or resident.
Under current Canadian law, banks have no right to ask for your place of birth under FATCA and have no right to release information to IRS without your consent. They have no legal right to close your account if you refuse to give consent. So far, the government has given no indication they will change the law. Your best protection from IRS is Canadian citizenship.
To date, we have had reports of some people with a Canadian passport with a US place being told by a US border official to get a US passport. Don’t do it! If you do, you will be caught up in Calgary411’s nightmare.
To date, we have not had any reports of anyone being refused entry to US or being detained at the border for travelling with a Canadian passport with a US place of birth.
Stay calm. Keep your life simple. Don’t Wake The Sleeping Bear.
Note, this is all personal advice based on what I have learned here. It is not legal advice. Steven Mopsick is a US tax lawyer who has shared information here. He does not think IRS will go after “accidental Americans” like you.
@Stickman
The bad news is under US law you ARE a citizen. The good news no one in all likely will ever find out and if they do they are some really good tax lawyers that visit site frequently that have offered to represent anyone in your circumstances pro-bono.
You should change the title of this article. Boris Johnson is not the Lord Mayor of London, he’s the Mayor of London. The Lord Mayorship of London is a completely different office. The current Lord Mayor of London is David Wootton.
@JohnG: Thanks for catching this red herring of a mistake. I’ve made the change you suggest, to the correct post.
I’m an early joiner on this website, as well as a refugee from the ExpatForum website that shut down a whole lot of blogs by a number of us because we dared to suggest that maybe some folks might seriously want to consider renouncing or relinquishing their US citizenship rather than comply with outrageous IRS taxation and FATCA demands, especially if they’ve lived outside the US for many years and have established homes, jobs, families and lives elsewhere and either thought they’d already lost their USC or have been hanging onto it mainly out of inertia.
I’m glad we have this website, and generally I’m proud of it. It’s a forum for us to discuss and share ideas and information, and to seek some solace in our common angst. I often don’t like what some posts or some replies say, on a whole range of issues over the past months and not just some specific analogies being drawn to the US (which I don’t entirely disagree with in principle, though maybe in some specifics I do). But, to emphasize what is said in the About page and the Disclaimer which refers to it, none of us want to get into censoring opinions. Many of us left ExpatForum in disgust and outrage, specifically because of censorship by some of the moderators who IMO took their moderator jobs far too seriously and paternalistically. I don’t want to see IBS go down that road.
Everyone has their own way of dealing with internet disagreements. FWIW, mine is to scan over or learn to ignore individuals or threads that IMO have bogged down into arguments that have no relevance to or utility for the reasons I participate in this site. Same as I do with things I see in stories or blogs on the CBC News website or anywhere else. No one forces you, or me, to read or reply to anything. I’m here for a very opportunistic reason — my wife is affected by this FATCA and IRS crap, and I’m doing all I can to protect her and help her out of the quagmire, however I can.
Don’t get into flame wars because someone expresses an opinion, likely motivated out of perfectly justifiable and understandable fear or outrage at the US, which you don’t like, whether in content or in tone. Get over it, separate what’s wheat for you from what’s chaff for you, and get on with dealing with your own situation as best you can.
And if someone replies to one of your posts with nasty ad-hominem remarks, chalk that person up (in your own mind, preferably not in a public blog as that just makes it worse) with whatever your favourite negative label is, and ignore that person. Life is too short to get upset over stuff like that.
That’s my personal opinion, take it or leave it as you will. But I do hope that you, the reader, get some value from this website, and contribute something constructive and of value in return, as and when that opportunity presents itself to you.
Cheers.
Thanks, Schubert.
I’ll take it. I’m here for myself and my family and for those who don’t have a voice and know not what they will be up against.
I’m glad to see the Isaac Brock Society website disclaimer displayed. We’re all here for individual reasons and all able to make our own decisions given enough information. I value most comments and can and do disregard any that either don’t apply to me or that I think are somehow disrespectful to another person’s views. Nix censorship though — that’s why I left the Expat Forum.
I want this site to continue to be a place where others facing their OMG! moment may start their research and decide for themselves the hard decisions they will have to make. I also want it to be very supportive of those very people, which I consider the greatest asset. We are at a life-changing juncture in our lives. No one else understands what we are going through — no one!
I have been a reader of your blog for the last 6 months. I very greatfull for the information that has been distributed here. I was shock and amazed when I learned in late 2011 that I was the target of the IRS jihad against American citizens abroad. I am not sure what you would you would classify me as. Here is where I am at. I had a US passport. I did not have a SSN. I got the US passport in order to identify myself as legitimate landed immigrant in Canada. I order to file my delinquent FBAR and tax returns I applied for a SSN. No small feat. I needed school records of attendance in Canada since I was 10 years old and Canadian records of contributions to CPP for the remaining years.
Ok. I now have a SSN. I filed taxes and FBARs for the last 6 years. I forgot to sign one. The IRS sent the return back to me and I re-submitted for that year.
I then requested a appointment to renounce my citizenship. I did all that was asked of me. I think it is official.
I have a question.
As I have yet to file the 1040NR and 8854 I am still an covered expatriate. Is there a way to renounce the renouciation or am I commented to see it to the bitter end?
By the way I do not find the comment section IPad friendly.
Worldwide – Welcome to the Brock circus. We exist for your delight. If you are having second thoughts about renunciation, now that you seem to be “compliant” at long last, just cancel that appointment to renounce. End of story. Make all the appointments you care to, there is no renunciation until you show up in person, recite the turgid formulae, and sign and date the papers. Oops, forgot to mention the really important thing – and fork over that $450 head tax. If you have renounced, they probably told you that the action is “irrevocable.” Then yes, there would be no easy turning back, and you likely should do the final year of tax filing and submit (nice resonant word that is) the 8854 (and maybe a last FBAR, not clear on that detail, what say ye others?).
*@ usxcanada I found a real keyboard. Again IPads sucks for comments. I have renounced or relinquished. That is not the question. I rejoice in the fact that I made the decision to disassociate myself for the US. This decision was not base on tax purposes. You have heard it before. I don’t owe taxes to the US. I am being threatened by the IRS and tax policy. Additionally, I cannot longer associate myself with a nation that assumes collateral damage from its drones is acceptable.
My question for the paralegal of this site is:
As a person in limbo… A non-US person. But; a US person for tax purposes. What are my rights?. Can I vote? Can demand protection for terrorists?
@Worldwide, I’m not a paralegal, just a random bloke on the internet, but…
My understanding is that you’ve completed the renunciation at the consulate, but not yet tied the ribbons on any tax filings. If so, then congratulations, you ceased to be a US person for both tax and any other purpose on the day you renounced.
Your official date is the earliest of renouncing at the consulate and receiving a CLN. There’s no limbo. A “covered expat” is an ex-citizen with assets over $2MM, which you may or may not be, but this does not make you automatically a “US person for tax purposes”. That’s something different. Typically someone living and working in the US on a work visa — doesn’t sound like you.
After Jan next year you need to file 1040 for the part of 2012 up to your renunciation date, and a part-year FBAR. If you have US source income or interest you file 1040NR for the part after your renunciation date. You’ll also need to file 8854 to log you out with the IRS once and for all. This is where the US can hit you one last time with a — probably unconstitutional — exit tax, so prepare well for it.
The IRS expects you to do their internal communication for them. You’ll send 8854, 1040, and any 1040NR to Austin, and a separate copy of just 8854 to Philadelphia. The FBAR goes to Detroit.
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*I was born in the US and had Canadian citizenship by virtue of a registration of birth abroad with the Canadian consolate. I left the US when I was one year old. I have been living in Canada for over 50 years. When I was 17 in 1976 I wrote the US State Department asking for clarification of my citizenship status. They eventually wrote back saying that I would have to move to the US and reside there for 2 years prior to my 21st birthday. I made a conscious decision not to do so. Consequently, I considered that I had relinquished my claim to US citizenship in 1978. I have never lived or worked in the US during my adult life, nor have I ever applied for or held a US passport. Does anyone have any advice on whether I need to formalize my citizenship status and if so can anyone recommend legal assistance in doing so?
*BBB, your having been born in the US might cause you problems with FATCA, and it almost certainly will raise questions from US border officials by 2014 (if not sooner) if you travel there on a Canadian passport, which will show your country of birth as the US. By 2014 they will probably insist that you enter the US on a US passport, or prove that you are not a US citizen despite your birth there.
So, unless you plan to stay out of the US, you should probably get a Certificate of Loss of Nationality from the nearest US consulate to document your loss of US citizenship in 1978. It will help a great deal with that if you still have the letter that you got from the State Department in 1976. In any case, assuming you haven’t exercised any rights of US citizenship since 1978, or lived or worked there, or visited for any significant period of time, your case should be pretty straight-forward, and you should be able to fill the forms for the consulate without paying for legal advice. (Of course that’s only my personal opinion, and if you can afford to consult a lawyer, that’s probably not a bad idea.) You can find details about how to document relinquishment of US citizenship elsewhere on this site.
Good luck!
BBB, Do you still have a copy of the letter from the State Department? Some others have mentioned similar opinions, and yet I’ve never seen documentation to this effect. It would be great if you can pull that letter out of your file.
@BBB and further to Petros
If you do still have that letter from State Department, it would be fantastic if you could make a digital copy with your name and address and any other personal identifiers blacked out, convert it to Adobe Acrobat (PDF) format, and post it on this website. There are a number of “accidental” Americans who were born prior to 1976, on both sides of the border, but who have never lived in the US since early childhood (if ever) and have never exercised or claimed USC as adults. Any documentation of this ca. 1976 requirement to live in the US by the age of 21 in order for USC to “kick in” would be valuable to these folks.
I am not a lawyer, but the following is my understanding (which may be wrong in your case, for all I know). Technically I’m not sure under rigorous interpretation of US law you qualify for relinquishment, because you haven’t committed any expatriating acts of your own free will and with intention to relinquish USC, at least not anything mentioned in your post. (E.g., taking out Canadian or other non-US citizenship once over the age of 18, but citizenship at birth doesn’t count for that. Swearing an oath of allegiance to a non-US country and/or serving in their government or military may work, but there may be restrictions on rank or level for that.) But that letter raises some very interesting wrinkles, if you still have it. I think you need to consult a lawyer about how to approach this. I recommend a cross-border immigration/tax lawyer, preferably one based in Canada but qualified to practice in the US as well. The only one I can suggest (there may be others but I don’t know of them personally) is here
http://www.keelcottrelle.com/directory.php?lawyer=cperry Ms. Perry has handled a fairly large number of relinquishment and renunciation cases and is IMO a good person to consult (my wife and I did, as have a few other people I know). Contact her by email, outlining your particulars as above (and copying the letter to her if you still have it), and ask for an estimate for a consultation. She does consult by telephone if you aren’t in the Toronto area.
Good luck, and do let us know if you can lay your hands on that letter!
@BBB there is a Department of State Board of Appellate Review decision on September 2, 1988 that has relevance to your case, which I think you should read and perhaps discuss with a lawyer.
The link is here Department of State Board of Appellate Review, September 2, 1988
http://www.law.fsu.edu/library/collection/publishedopinions/povol05/5_BAR_(PO)_139_(1988).pdf , but I can’t get the PDF to display in my browser. However another Brocker emailed a copy to me (a year ago; it took me a while to dig it up).
If you go to the password-protected forum (upper right corner of home page of IBS) and log in, send me a private mail (find any post in that form by Schubert1975 and click on my name and follow the “private mail” prompts). This contacts me via the website and not by actual email, so your email identity and mine are both protected. Once you’ve done this, I will send you the PDF via that route. I would like to post it on this message in this board but I can’t find a way to do that.
Alternatively go to this link
http://www.law.fsu.edu/library/collection/publishedopinions/povol5.html
scroll down to the “P.B.A.” nationality case decision 139 about halfway down the list, right-click on the link and Save Target As to your desktop, then double-click on that download, it should open OK.
A further comment — this should apply to anyone born in the US of one or more parents of ANY non-US nationality, if that meant you were automatically a citizen of that other country by birth, and after your birth and before reaching the age of majority you and your parents relocated to the other country. The judgment makes it very clear that in US law as of 1988, such persons had to establish residence in the US by their 25th birthday or they would be considered to have expatriated themselves from the US. That age-25 requirement no longer applies; I’m not sure whether that is due to a legislative change or a Supreme Court ruling, but it seems to be you’d have a case that if you turned 25 before 1988 (and maybe were even born before 1988 or thereabouts) this would apply to you. But definitely talk to a knowledgeable lawyer about this before proceeding on this basis.
@BBB I thought I added the following to my previous reply, but it got lost somehow.
If the lawyer agrees that you have a relinquishment case on the basis of the 1988 decision linked above, my suggestion (discuss with your lawyer) is that you swear an affidavit about your particulars and that you believe this decision means that under US law at the time you turned age 25 you had expatriated yourself by failing to establish US residence by that age, and you wish to claim relinquishment on that basis. You would append the PDF printout as an attachment to the affidavit. You are allowed (even invited on the form) to attach a statement to form 4079 and this is a prime example of why you would want to take advantage of that option. Discuss with the lawyer how to word the affidavit, or pay the lawyer to do it for you (or draft it and then get the lawyer to review and edit it, that might be cheaper).
No guarantees this would work, but it seems worth a shot and certainly worth exploring with a lawyer. If it works, the lawyer’s consultation fees would be much cheaper than having to renounce in 2013 and get caught in the 8854 and FBAR and tax filing crap; with a 1984 expatriation (which I believe is when you turned 25) you’re way before any of those things can legally apply to you, I believe.
If you still have the letter you got saying you had to establish residence by age 21, so much the better — in fact, use BOTH arguments (even though there’s a discrepancy on the age cut-off, getting it in writing from a consulate or embassy on top of that appellate board decision would be really solid, I’d think). And still, please do post a sanitized (your name and address removed) scan of that letter if you find it.
And FINALLY, and somehow this disappeared from my previous reply, I wish to offer copious thanks to Deckard who found that PDF decision and shared it with me more than a year ago. It doesn’t apply to my wife (nor to me) and she didn’t need it, but pack rat that I am, I did save the link and the PDF in the hope that some day we might help someone with it.
Thanks so much, Schubert, for passing along all of your valued wisdom and expertise on this subject here at Isaac Brock and previously at ExpatForum. You have certainly educated me over the past year — and been a huge support. You’ve given me a lot of backbone as well. Cheers to you!
@Calgary What goes around comes around. I’ve benefitted a lot from others on both forums as well, Deckard being one example going back to the ExpatForum days, as both you and Petros well remember … and Pacifica and others too numerous to mention and besides I’m afraid I might forget someone … That’s what cooperation and sharing is supposed to be all about. I just wish we all could have got started on this earlier and learned faster, so various people (like you) needn’t have been tripped up by US officials bullying or cajoling you into doing something you needn’t and shouldn’t have …
Amen to that. Thanks to all who have helped one another through this.
*Schubert 1975 and all others who kindly responded to my post:
I have searched and, alas, I no longer have that letter from the State Department. Nevertheless, your comments and suggestions have been very helpful and I plan to pursue them.