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.
Further to my earlier comment today on my thread on the proposed amendment to the enabling legislation, regarding comments veering off-topic on various threads, and without pointing the obvious fingers that I’m tempted to point:
I think WhiteKat’s suggestion for a Bitch and Moan thread on this website (or maybe worded a bit more politely, or not, to preference …) is a good one, if people will stick to it.
I am very concerned when we get certain posts from some participants veering off into the Twilight Zone, in the midst of threads where some very serious and carefully-considered ideas are being suggested, and where it is entirely possible that MP staffers and others who are either genuinely curious about what we’re about, or also staffers from certain quarters who do NOT have our best interests at heart and might be looking for ammunition to use against us, might stumble over some comments that perhaps don’t show some of us at our best and sanest lights.
I think you know what I’m saying, so I won’t go into more detail. I know no one likes censorship, but I do wish that some regular posters to this site would put their brains in motion before their mouths, contemplate the range of people who might visit our site and how they might react to certain forms of ranting, and how that might impact on our collective credibility and support where we need it most — among those who aren’t already in the choir singing from our hymnbooks.
I understand angst, anger, fear, and rage in this context — I had it myself more than two years ago, until I rediscovered my own CLN and calmed down and started to help my wife and others to do something concrete, practical and realistic to deal with this nightmare. Rants have their place I guess, but I wish we could sequester them away from the serious business of dealing realistically and sanely with the situation.
Enough said, I hope.
Some brains don’t have filters and it all comes out, schubert. I agree with you 100%. I’ve relied on your wisdom quite a bit in the last couple of years — when did we meet online? Thank you for your words for thought.
Brock data morass is so nothing new. Like wearing pantoufles to muck out the stable.
Understand that this is a geometric and not an arithmetic situation. To double the activity means to quadruple the burdens of usability.
A new world since February … and a newer world on the way.
Yours truly, scrutinizing the titubation while minimizing bloat acceleration. Sauve qui peut.
Hello All. When I recently learned about FATCA and how it affected me and my family I have never experienced such terror and feelings of hopelessness. Finding your website has helped me more than I can say. Reading your comments here and related blogs has been both extemely informative and inspirational. Over the past few months terror has turned to outrage and a determination to fight has replaced the hopelessness. You’ll be hearing more from me in the near future but in meantime I’d like to express my sincerest thanks for this site and all your efforts. (PS. This type of media is completely new to me so please keep this in mind if I inadvertently commit some faux pas.)
@ MrsUKSofA
Welcome to Brock and we look forward to hearing more from you. Don’t worry about a “faux pas”. This is a pretty easy-going place to gather, even though FATCA keeps some of us wound up like watch springs, at least part of the time. It’s one of the rare places you can go where everybody understands the issue (also maplesandbox.ca) so that helps immensely. Ever been passed from one person to the next when phoning a place like the IRS for instance? With each new arrival on the other end of the line you have to explain everything all over again. Well, here you can usually jump right in and we’re pretty likely to catch your drift and if we need something made clearer we’ll just ask you. Again, welcome!
@Pvt Milhouse, just in case you are still reading on this thread, sorry that it doesn’t look as if your question was addressed. I just revisited here, and saw your post.
In terms of the letter pleading non-wilfulness and ‘reasonable cause’, look at the this thread, and read the submissions of Just Me, Not That Lisa / anon5% , ij and moby.
http://isaacbrocksociety.ca/2013/06/16/an-irs-ovdi-ordeal-with-a-happy-ending-an-opt-out-success-story-as-told-by-not-that-lisa/
http://isaacbrocksociety.ca/2012/01/28/the-ovdi-drudgery-for-minnows/
http://isaacbrocksociety.ca/2012/02/07/what-facts-will-not-support-reasonable-cause-arguments-for-fbar/
http://isaacbrocksociety.ca/2012/03/10/moby-opt-out-update/
See how you can adapt in ways that speak directly to your own specific facts and circumstances.
@MrsUKSofA, Welcome to IBS. All I can say is me too. I’m not into all the social media stuff, but IBS is more than that. It’s a place to get answers you can work with regarding FATCA and how it’s going to affect your life, what options you have to deal with it, etc. We’ve all been in the same place you’re in now so don’t worry that you’ll sound silly or stupid. The whole thing is enough to make anyone feel crazy. Take your time, research your options and if you have questions, then feel free to ask. We’ll help in any way we can to get you through this and out the other side.
Where are you based? What IGA will be affecting you personally?
Hello All. When I recently learned about FATCA and how it affected me and my family I have never experienced such terror and feelings of hopelessness. Finding your website has helped me more than I can say. Reading your comments here and related blogs has been extemely informative and inspirational and comforting. Over the past few months terror has turned to outrage and a determination to fight has replaced the hopelessness. You’ll be hearing more from me in the near future but in meantime I’d like to express my sincerest thanks for this site and all your efforts. (PS This type of media is completely new to me so please keep this in mind if I inadvertently commit some posting “faux pax”. )
(Apologies for double posting. My device seemed to crash at my 1st attempt.)
@Em & MedeaFleecestealer
Thanks for the warm welcome and offers of support. As you rightly suggested looking at all the options and not rushing is very important. I’ll admit I totally freaked out to begin with and taking action at that point could have made me quite vulnerable. IBS helped me feel like I can take charge of my future and for this I am very grateful.
I am a dual citizen EU/US (born in the US to Europeans) who has been living in the UK for over 20 years, basically all of my adult life. My husband is UK (NRA) and has earned the vast majority of our income whilst I stayed home to raise our children. From what I understand about the UK IGA it is not an immediate threat to us but more like a silent cobra ready to strike. We’re effectively living in our pension so if we sold our family home or either one of us passed away the financial consequences of being a “US person” could be devastating. I think it’s fair to say that the IGA has impacted me more psychologically than anything else. Fear, hopelessness and disbelief as it goes against everything taught throughout my US education. Constitutional rights? What a load of “beep”! “Land of the free”? I feel anything but free and there is the Atlantic between us! I used to feel proud of my “international” upbringing and now I feel completely trapped by it. With this anger in mind I can only imagine the outrage felt by those of you who never even lived in the US as well as those who became Canadians but have now been “reclaimed” as “US persons”.
It could just be my limited UK circles but I am really concerned about the apparent lack of FATCA awareness. No one even seems to have heard of it. Is it better in Canada (or other parts of the UK/world?)
MrsUKSofA said “It could just be my limited UK circles but I am really concerned about the apparent lack of FATCA awareness. No one even seems to have heard of it. Is it better in Canada…”
Let’s just say when I first mentioned to my psychiatrist that FATCA was making me anxious he didn’t say what’s that. He understood exactly why I was freaking out since my husband was born in the US. He did not require a detailed explanation. My psychiatrist told me a lot of people in Canada who work in the medical profession have a FATCA problem.
I was surprised at how easily he was willing to prescribe me anxiety medication without me evening asking for it. He must get a lot of FATCA related anxiety patients.
@MrsUKSofA, okay you sound as if your situation is similar to mine. I left US over 40 years ago to move to the UK and never knew that I needed to file anything. My British husband and I moved to Switzerland about 16 years ago and I haven’t worked since then so have no income. We do share joint bank accounts though and I did have an SSN. So here’s one option that might be suitable:
I renounced my US citizenship here in Bern in March 2013. I then contacted a US tax adviser as I had no idea of what, if anything, I needed to file. Because I have no income I only needed to file FBAR’s (Foreign Bank Account Reporting) for the last 6 years under the Streamlined system which was introduced by the IRS in 2012. FBAR’s are any accounts over which you have any kind of signatory authority and must be reported if the aggregate total comes to more than $10,000+ at any point in a year. That took care of my filing obligations so that this year I was able to file the 8854 form and a final FBAR to cover up to March 2013 when I renounced. FBAR’s are now filed electronically and have to be file by the 30th June each year, there are no extensions. The 8854 form, which clears you from the US tax system, can be filed any time after you renounce up to 15th June of the year following your renunciation, i.e. I renounced in March 2013 and have until 15th June 2014 to file it. You must do your necessary filing first though. This makes sure you won’t be considered a “covered expat”. There’s more on these forms here:
http://www.irs.gov/uac/Instructions-for-New-Streamlined-Filing-Compliance-Procedures-for-Non-Resident-Non-Filer-US-Taxpayers
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-FBAR
http://www.irs.gov/instructions/i8854/index.html
If you wanted to, you could do the necessary filing first and then renounce, it really doesn’t make any difference.
Where do you get your pensions from? I know the US doesn’t always exempt pensions so you’d need to check on that – or someone else here may know more on that side of things.
You may feel you need a US tax adviser to help you, but I suggest first contacting the IRS department at the London embassy to see if they can help:
http://london.usembassy.gov/irs/
As for why people don’t really know about FATCA much in the UK, I think it’s because they haven’t gone through the problems Americans have been having with their Swiss banks. There’s not really been any attempts by UK banks to restrict/deny accounts to Americans in the way that the Swiss banks have. Many Americans here have been thrown out of their banks, even though they’ve been customers for years. It was when we were trying in 2011 to get a mortgage from our bank and they queried my US citizenship that I first became aware of FATCA and it’s implications on my life. Luckily our bank didn’t throw us out and granted our mortgage. The US-UK IGA was passed by Parliament very quickly and quietly so I doubt it got much publicity at all. And I think the UK banks themselves are only just beginning to realise what they need to do to be compliant under FATCA.
@omgheestillanamerican
“My psychiatrist told me a lot of people in Canada who work in the medical profession have a FATCA problem…”
I’m so glad you brought up anxiety problems. I hope the treatment is helping you? Been trying to hide mine from everyone and struggling to comprehend why I feel so bad especially when I’ve read about people’s FATCA situations being far, far worse than mine. I’ve never experienced anything like this so thought I must be over reacting. It really helps to know it’s not unusual. If this is a common problem then I wonder how this is/will impact our health care systems? If the NHS also gets a surge in people needing psychiatric referrals and treatment then surely FATCA could put an additional strain on limited resources? I can see the headlines in The Daily Mail now..”Americans Strain & Drain Our NHS!”.
@ MrsUKSofA
You are definitely not alone with how you are feeling. This thread shows that most of us have been there and sometimes return there when we least expect it:
http://isaacbrocksociety.ca/2012/01/21/has-your-life-been-stolen-from-you
@MrsUKSofA, it’s another reason not to rush into anything and take your time deciding what’s best for you. The shock/anger/fear/dismay you feel when you find out about this isn’t when you should be making decisions about how to tackle it. Wait until you calm down a bit and research thoroughly so you can make sure it’s the right decision and not one made on the spur of the moment due to your chaotic emotional state. It’s hard, of course. The immediate reaction is what can I do NOW to make this go away, but taking the time to find out as much as you can and then deciding is the better plan of action.
Remember too that we are here for you always, we know what you’re feeling as we’ve been there also.
@MedeaFleecestealer
“…you sound as if your situation is similar to mine…”
Yes, definitely lots in common and thank you so much for all the information. It’s like you’ve read my mind. My initial reaction was to ring the embassy IMMEDIATELY and get an appt to renounce. Thank goodness I didn’t. A few months on I’m still learning new things every day. Do you mind me asking how you feel now it’s all behind you? All I can think of is the relief. Sadness too but overwhelming relief.
I decided to apply for UK citizenship (application went in last week) then renounce my US once I have my UK passport. I wasn’t sure how to tackle the US side of things yet so everything you’ve posted is really helpful. I’ve only just started looking for help with US tax services. Like you I was also unaware of my filing requirements. I personally found the FBAR reporting and potential penalties even more shocking! I’ve had some part time work in recent years which probably puts me over the filing threshold but am hoping the “streamlined” program could still be an option for me.
The 8854 is a worrying potential pitfall because the value of houses in our area have gone up dramatically since we bought our home nearly 2 decades ago. Also, I’m assuming assets held in my husband’s name only wouldn’t need to be included on the 8854? He wants absolute certainty before I act. You can imagine how he regards the possibility of an exit tax just because he’s married to me.
The banking situation in Switzerland must have been incredibly stressful. I imagine it’s still more difficult than in the UK. We are very fortunate here in that respect. From what I can see UK banks are fully FATCA ready & compliant for the opening of new accounts. I’ve looked at many online applications and they all ask for birthplace and additional citizenships now. I don’t recall this ever being asked in the past. Thought it would be interesting for my UK/US teen to try to open current accounts on the high street and ask them why they need this information. Hoping it leads to him challenging why he should be treated differently than other UK citizens. He likes a good debate!
Thanks again for your support.
@MrsUKOFUSA
I assume your husband is not a US citizen or green card holder?
If after reviewing the 8854 you find you have over $2 million in assets, you might want to transfer some into your husbands name before renouncing to bring you below this level (a house can be transferred and then later transferred back).
If you prove to be a ‘covered expatriate’ remember that you will only pay the exit tax on ‘ unrealized gains’…house appreciation, stocks etc and you are allowed a $650,000 gain before the tax kicks in.
Being a ‘covered expatriate’ comes with the risk of being banned from entering the US in the future (if Mr Shumer gets his way…but unlikely). It also comes with the bonus of a high estate tax 40% I believe ( if you survive your husband) when a covered ex pat leaves their estate to US children . So avoid being covered if at all possible.
Phil Hodgen’s blog explains some of this, also the ‘renounce citizenship guide’ found on this site.
Keep calm and you will come through this like many of us.
@MrsUKSofA, yes it is a relief now it’s all over. I’ve completed all the necessary filing, including the 8854, so that’s it for me. But I did feel sad on the day I renounced because I’d always considered myself American first and British second. When this all blew up it made me think about it all and I realised that really I wasn’t that American after all. I’d left when I was 16 and had spent my working life in the UK. I’d seen the world from outside the US’s borders which I’d never really heard much about in my part of the country. We were lucky if we got news of things happening in New York or California, even mind the rest of the world. My views and attitudes to things had become more British/European than American so in the end it wasn’t that much of a wrench to renounce. In many ways it is still “home” because that’s where I was born and spent my early years, but I don’t think I could live there easily again. I’ve changed too much and so has the country I was born in.
It’s good that you didn’t rush into renouncing. It’s not against the law to make yourself “stateless”, but I know some American embassies have refused to accept renunciations because of it. Also you can plan to have a document to take with you to your British citizenship ceremony so that you can get whoever witnesses your oath to sign it. This will be a document stating that you’re taking out British citizenship with the intention of losing your American one. I can’t give you the exact wording, but I think several examples have been posted at IBS somewhere in the blogs. It all adds weight to your final renunciation.
No, assets held in your husband’s name only don’t have to be reported, it’s only those things either in your name or held jointly. Do you still have a mortgage on your property? That can be deducted from the house value on the 8854 which may help. As you’ve got some time to plan this, see if Heidi’s suggestion of transferring some assets is possible. You could even look at having your name taken off your house deeds until you renounce, then it wouldn’t be a reportable asset. It would cost you a little to do this change and then put it back afterwards, but it can be done fairly easily I believe. Talk to your solicitor about it and see what he says. Your name off of any joint accounts is obvious, but you may not want to do that, depending on how long it’s going to take to get the UK citizenship. 8854 figures apply on the day you renounce, so anything moved before then doesn’t count. You do need to put down any tax liabilities for the previous 5 years on the form though. And remember to send any non-electronic filings by registered post so you can track the delivery and then print off the proof that they’ve been delivered on time.
Yes, my husband found it rather incredulous that our accounts had to be reported simply because we held them jointly, even though he’s the one earning the money in them. I would involve your son in this as much as you can as if he holds US citizenship this is going to affect him too eventually. Depending on his plans for his future he may need to follow you in renouncing or decide that keeping the citizenship outweighs the disadvantages.
@MrsUKSofA
Yes, we are all sad, but most of all we are angry.
The USA is morally bankrupt, otherwise how could they treat their citizens in this way?
They have rejected that wonderful document the Constitution
Don’t waste any tears on them.
@MrsUKOFUSA
You might notice that the Brock Society blog is basically group therapy, both with personal accounts and a good deal of information by very informed people. Groups for alcoholics (like AA and Smart Recovery) do this type of therapy, even on blogs. You just can’t have anti-anxiety drugs prescribed by Petros. Because of IBS, I found renunciation a breeze — I could have never done it by myself.
Dear Mr/Mrs,
My name is Ellen Belova. I am a representative of the Voice of Russia Radio.
Today we cover the topic of the Us citizenship renunciations tendency in 2014 and would like to hold a short interview with an expert in this field who can tell our audience more details on this topic, the “yes” and “nos” – with one of you.
This is why I am now addressing to you to ask for a possibility of an inteview to bring the light to this question. The interview won’t take more than 10 minutes.
The interview time will be held during the day on Wednesday, June 18. Time slots are every hour from 11 to 13 and 16 to 22 Moscow time. We hope your expert will be able to devote few minutes of their time for a little conversation by phone with our presenter.
Please let me know if the interview is possible and which phone number our presenter should call to reach.
Hope to hear one of your experts soon on air!
Best regards,
Ellen Belova
News Producer
The Voice of Russia
DId anyone contact Ellen Belova.?
oops
You could say with the website transfer her comment got “lost”. I have seen some of the Voice of Russia interviews.
MrsUKSofA.. It appears to be relatively common practice to renounce, obtain a CLN and then do nothing further.
I spoke to a former IRS deputy commissioner who told me that a decision such as that is not a legal decision or a moral decision. It is in his words a business decision. I.E. Do the rewards of doing nothing further outweigh the risks? The answer is different for each of us.
Indeed KCal. Everyone must research thoroughly and make their decisions based on what is right for them.