Liberty and justice for all United States persons abroad

The Isaac Brock Society

35 thoughts on “A Canadian article carries Shulman's water”

  1. Well, this is what I feared, that a Canadian writer would just simply scare Canadians: This is what McKenna wrote:

    Failure to file so-called Foreign Bank Account Reports can result in penalties of $10,000 (U.S.) a year for every account – fines that can quickly reach hundreds of thousands of dollars. In some extreme cases, the IRS can seize up to half the contents of accounts.

    If you go to read the article, please give thumbs up to all the comments by Isaac Brock people, and that will keep them high in the priority list.

  2. Here is a youtube video put up by MP John Williamson of an answer from Parliamentary Secretary to Minister of Finance regarding FBAR.

    Now personally I would prefer to get a stronger response from the CDN govt regarding FATCA having said that statement is quite strong regarding FBAR to the point in my opinion that even if the CDN govt changed their mind on this and went after people on behalf of the US this statement by the government would have several legal consequences against the govt in a CDN court and the parliamentary secretary could be held in contempt of parliament.

  4. Another thing I’ll mention is statements like these do have legal meaning under international law. Essentially the Canadian government is making a claim of dominant nationality on the part of dual citizens living in Canada and thus entitling itself to advocate on their behalf with their other country of nationality. The US by acknowledging and to some degree accepting this advocacy on the part of public statement by the likes of Amb. Jacobson and even Schulman I would argue under international law is effectively not challenging and accepting this status of dominant nationality. From a pure legal standpoint I would argue the US should reject this advocacy on the part of the Canadian government of dual nationals if it wants to continue to be able tax these individuals as a matter of international law.

  6. No I got it from you but I had interesting discussion tonight with someone more familiar with international law than I am. A few conclusions we came to was that the so-called “savings clause” in US Canada double taxation treaty which supposedly allows the US to impose taxation on its citizens living in Canada was drafted back in the 1930s when there was no such thing as dual nationality(In fact back then all Canadians were technically British something I’ll get to in a little bit). So technically the people effected would be US citizens who were not Canadian Citizens residing in Canada who under the terms of original 1938 tax treaty who had to pay US tax as US citizens and Canadian tax as Canadian Residents.” In this era if you became Canadian(technically British citizen) you deemed to have automatically renounced your US citizenship and thus any US tax obligation ended. The possibility of becoming a dual US Canadian citizen only came about through legal changes in 1970s and 1980s on both sides of the border.
    The other thing is Victoria I believe mentioned something called the “Bancroft Treaties”. Well Britain and the US once had one which applied to Canada as part of the United Kingdom. While from what little I know United Kingdom terminated the treaty before the Statute of Westminister the person I was talking to indicated it was something that if this issue ever went to the Supreme Court of Canada the old Bancroft Treaty would be something they would want to look at. Remember the recent SCofC ruling on a National Securities Regulator was based on old Judicial Committee of the Imperial Privy Council rulings dating back to the 1880s. The Supreme Court of Canada is quite willing to take a long view of legal history. Next on my to do list find the text of the UK-US Bancroft Treaty and try to intrepet it 100 years later.
    To my original point about Dominant nationality is that if the US truely wants to bring down the hammer on dual nationals the smartest thing to would be whenever anyone from Canada advocates on the behalf the US should say the effected are US citizens and the US has the sovereign right to tax them as they please. Acknowledging the Canadian government advocacy on their behalf as Canadian Citizens I now believe is substantially weaking the US’s position under international law.

  7. Thank you. Please keep me apprised of anything else that you learn. I am pleased to learn that my posts are stimulating conversation. Cheers.

  8. One last point I’ll mention is interestingly enough the US still has a Bancroft Treaty “in force” with Bulgaria of all places. It is actually not a very long treaty and I suspect you would need to know a lot historical background to intepret it. I was take a complete stab in the dark one thing I would say that a claim of citizenship in country is stronger after residing in that country for more than two years. VIctoria??

  10. Thanks so much for that link, Petros. I went in and did as you advised and added my own comment.

    And I am tickled pink that some of my research into citizenship turns out to be useful in this context. Believe me, my friends and family do not share my fascination with the topic. 🙂 I had no idea that there were any Bancroft treaties still around. I’m going to have to look into that.

    I think you’re right, Tim, that residency is key here. However I would err on the side of caution because I think there are other things to look at as well: did the person in question “activate” or “exercise his citizenship rights” while abroad? Could things like voting in the home country or maintaining an address weaken one’s case?

    I’m asking this because I am thinking about my daughter who is a dual French/American citizen studying in Canada. She just turned 18, has lived in France nearly all her life and if there is a case to be made for residency being the main criteria for determining dominant nationality, she definitely qualifies. But would she weaken her case if she were to vote in the 2012 US elections? Could this be interpreted as activating her U.S. citizenship of her own free will? Or even if she asked for her first U.S. passport as an adult?

  11. Oh and in response to Jimmy who is trying to get the word out. I’ve been having this conversation with my husband who is French. He flat-out refused to believe me so I did the research and sent him the links from the IRS website. He is in shock.
    I also wrote this post for my blog. Please, if anyone out there has information that would contradict my analysis of what would happen if we moved to the U.S. and my husband got a Green Card, I would LOVE to hear it.
    http://thefranco-americanflophouse.blogspot.com/2012/01/consequences-of-being-us-person.html

  12. Victoria, I could find no errors in what you wrote. Actually, the link that I sent you of the DOJ / IRS prosecutions had a case of one wealthy gentleman that made his money in Europe (Italy). The problem is, he was a naturalizard US citizen, living in America, and he didn’t declare it. It doesn’t matter if the money was all made in a different country. They [The US] really don’t care where it comes from. If they can get a piece of the money, they want it.

    I really would not recommend that your husband move to the US unless you/he absolutely have to, like a once in a lifetime opportunity that only exists in America. He may declare everything correctly, but what about the future? This FACTA is creating so much confusion. I wouldn’t be surprised to see his French banks try to close his account. Moreover, based on reports, being a citizen, having a green card, or even paying taxes in America seem to “stain” people in the eyes of overseas institutions. Why create an unnecessary burden in your life if you don’t have to.

  13. Thank you very much, geeeez, for having a look. I wrote it because I was getting very tired of arguing with people (including him) about this. Now I just can hand them the link. 🙂

    I agree with you about moving back to the U.S. as long as this nonsense lasts. Unless of course my husband WANTS to be the first case of a French citizen before the European Court of Justice asking for protection from the U.S. gov. I suspect he would really rather not be that person….

  14. Good morning all. I just read the McKenna Globe article and the comments. I have never seen a better group of more insightful, intelligent and clearly articulated ideas.

    Congratulations! You have done every U.S. citizen living outside of the United States proud!

    P.S. It is clear that Mr McKenna is just regurgitating the IRS press releases and then relying on the so called “Cross Border Professionals” who want fan the flames of fear.

    Once again here is the problem with these so called “professionals”.

    http://renounceuscitizenship.wordpress.com/2012/01/05/the-taxpayer-the-irs-and-the-professionals-where-to-go-from-here/

    Thank you to all of you who commented!

  15. Further to my last comment, it is clear that the mainstream press needs a bit of education. So, my suggestion is that we organize a conference and we invite them all. It can be a day of education for them. Sure, we will “explain them” the law (as the great Gerry Spence” would say). But, we need to “explain them” how this has virtually ended the lives of many people as they knew them.

    And yes, we need to invite Canadian Government reps. If we offer them a free lunch they may have an incentive to come.

    I suggest that we organize this for Sunday February 19 in Toronto and it can be beamed by Internet throughout the world.

    They clearly don’t understand. They don’t understand because they are not educated. To be educated they must be “paying attention”. To be “paying attention” they must listen. Dump on these journalists as much as you want. But, at least they appear to be listening. That is the first step.

    How can we expect Mr. McKenna to understand this if your $600 dollar an hour lawyer can’t?

    Let’s go “educational”!

    Your thoughts?

  16. renounceuscitizenship – I think that is a brilliant idea and I would happily fly in to participate. If it works perhaps we could do the same thing in other places – one for Asia, another for Europe, South America, Australia and so on. We could work with ACA on it.

  17. Wonderful – what I suggest is that we just organize it and let other groups participate to – but we don’t have time for bureacracy (however the word is spelled). I say we organize it as a done deal and then invite other groups to present or whatever.

    We are simply running out of time. Let’s organize set the date and get it done.

    I like the idea of doing other cities too. I think that London is probably essential. They are a ton of U.S. expats there.

    This problem is consuming peoples lives – it must be brought to resolution NOW!

  18. A moderator at Expat Forum wrote: “Unless you can post official links as foundation for this – please consider this is an open forum for those wanting to ask questions and share factual information about the US and US immigration.”
    You are doing a great job over there, keep it up. And when they boot you off over there, you are always welcome here.

  19. “jimmy

    — January 11, 2012 at 1:53 am

    I tried to warn people, who are thinking about moving to the USA, about the consequences of holding US citizenship.
    What a mistake!
    Disbelief, contempt, questioning….
    Nobody in the US is at all aware of this problem!
    Have a look at the reactions on http://www.expatforum.com/expats/america-expat-forum-expats-living-america/99450-read-before-moving-us.html”

    And, no longer can you have a look at the link — it was CLOSED, that is CENSORED, as I was reading the thread. AGAIN.
    This is the same censorship and close-mindedness of so many in “exceptional” America. Disgusting.

  23. The link as you had it in the new thread had an extraneous symbol in it (“) in it and didn’t work. But still, the nazis (um, moderators) closed it down and forced the discussion to take place in the tax forum where they put all the embarrassing discussions. Pathetic.

    Actually, I wouldn’t be surprised if they wipe out all our accounts and the entire tax forum.

  25. @Tim – I just read the FP article. It sounds like a flaming *fundraiser* for the US! I can’t believe they go into so much trouble to discuss the steps necessary for people who live abroad with no SSN to obtain a TAX ID. You have to be kidding me!

    I have a real suspicion the IRS is funding these type of articles! It’s becoming too common, and of course, the actual instructions just give it away!

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