Liberty and justice for all United States persons abroad

The Isaac Brock Society

1,012 thoughts on “FATCA Discussion Thread (Ask your questions) Part One”

  1. @Marie

    Better than raising the reporting thresholds for accounts under FATCA (8938) I would have been more pleased to hear that they’ve raised FBAR to an amount that corresponds with this and combined the two forms, but then the USG isn’t about making things easier and less costly for the taxpayer is it.

    Dem’s Abroad’s comment “compliance will likely involve a financial cost associated with the privilege of living abroad” reminded my why USCitizenAbroad refers to them as “Stepford Wives”: 

    Democrats Abroad are like The Stepford Wives

  2. Freedomworks.org: FATCA Will Have Devastating Impact on American Expatriates

    http://m.freedomworks.org/blog/jborowski/fatca-will-have-devastating-impact-on-american-exp

    “Most of us are aware how U.S. government regulations hurt people living in the United States. But too little attention is paid to how federal regulations can be damaging towards U.S. citizens living outside the country. American expatriates cannot even escape the regulatory nightmare that’s coming out of Washington, D.C.”

    “A growing number of Americans living abroad are actually renouncing their U.S. citizenship. This seemingly drastic step makes it much easier for them to have a bank account and operate a business overseas. In Time Magazine, a business owner John based in Switzerland says that, “the U.S. government creates conflict and abuses me. I feel under duress to understand and comply with laws that have nothing to do with and are constantly changing—almost never in my favor… Every time I turn around, I get smacked in the face with some new restriction as a result of being a U.S. citizen abroad. “

    “The IRS should not bully American citizens living and working outside of the United States’ borders. FATCA will have devastating impacts on the U.S. economy while infringing on the liberty of American expatriates. It needs to be repealed immediately.” 



  3. @Woofy

    @bubblebustin

    Yes, Canada did require individuals to renounce allegiance to any other foreign sovereign or state until 1973. Canada did not actually allow dual citizenship until 1977 but the ‘renunciatory oath’ was removed from the Canadian citizenship oath in April, 1973.

    The U.S. may now state they don’t recognize that ‘renunciation’ but prior to becoming a Canadian citizen in October, 1972, I phoned the U.S. consulate in Toronto. It was that consulate that told me about the ‘renunciatory oath’. They also said in no uncertain terms that my loss of U.S. citizenship would be ‘permanent and irrevocable’.

  4. *@bubblebustin

    Tiger answered the first part of the question, except that we took the oath in 1974 and it was still the old one with renunciation.  During our pre-oath interview, the citizenship judge made it quite clear to us that we would be losing our U.S. citizenship when we took the oath.  The U.S. does, or could, consider that an act of expatriation.  It is interesting that some time ago, when I was younger and stupider (is it a word?) I actually contacted the U.S. embassy about becoming a dual citizen and they advised me that it was possible but not recommended.  So I, luckily, didn’t do it.

    As to what the trade off would be – how about Canada insisting that the U.S. recognize Canadian citizenship law prior to Canada signing on to the U.S. FACTA crap?

  5. *And as an afterthought, once FATCA really kicks in I wonder how long the waiting list for renunciation at the consulate will be?  I’m thinking that six months now could easily stretch out to decades!

  6. @tiger

    I didn’t know about Canada’s former ‘renunciatory oath’, thank you.

    The US’s former policy of what it considered an expatriating act (taking Canadian citizenship) was not predicated on Canada’s ‘renunciatory oath’, was it? In other words, the US said “reject us? consider yourself rejected!”. Interesting, as I pointed out, that the US still requires its naturalized citizens to take a renunciatory oath, yet Canada still recognizes its own regardless of this.

  8. *@bubblebustin

    The leverage could be that it is required by Canada for the US State Dept AND the US IRS to recognize Canadian citizenship law prior to Canada signing on to FATCA – meaning that those who took the old oath would not be considered subjects for FATCA or FBAR.  That could solve a lot of problems for those of us who took the old oath (but not others).

    It could also solve the problems with waiting lists and evident staff shortages at the consulates.  If the waiting list for relinquisment appointments grew much longer, it might also raise legal issues as well.


  9. algary411January 15, 2013 at 8:51 pm

    http://www.globes.co.il/serveen/globes/docview.asp?did=1000814455

    Israeli investment houses to report on US citizens’ accountsTASE tells brokers: We’re examining FATCA’s provisions and their significance.15 January 13 13:20, Irit Avissar and Lital IstamatiThe US Foreign Account Tax Compliance Act (FATCA), which requires non-US financial institutions to provide the US Internal Revenue Service (IRS) with details of bank accounts of American customers, will also affect foreign investment houses. Sources inform ”Globes” that, two weeks ago, the Tel Aviv Stock Exchange (TASE) notified its members that they should prepare to implement FATCA at their institutions. TASE members have until Sunday, January 20, to confirm their awareness of the matter and that they are preparing for it

  10. Pingback: The Isaac Brock Society - @Demsabroad is out with a memo on FATCA

  12. @john Brown.

    Thanks for the Freedom Works article.

    Now we need a similar on on Daily Kos for balance.     Fat chance.

  14. @bubblebustin,

    The U.S. considered taking out citizenship in another country as ‘an expatriating act’ even when there was not a renunciatory oath. Up until (I think around 1994), they assumed if you became a citizen of another country, then you intended to lose your U.S. citizenship. You did not need to ‘prove’ that was your intent. After some time in the early 90’s, their reasoning changed to you must prove to us that your intent was to relinquish.

    This change in attitude is why people like myself are so frustrated by the present attitude. When I phoned the U.S. consulate back in 1972 and they told me ‘loss of U.S. citizenship would be permanent and irrevocable’, they never mentioned a CLN. Had they, I would have definitely applied for a CLN.

  15. @all, re the memo from the Democrats Abroad. Interesting wording for someone who presumably carefully considered the message and tone they wanted to convey  – so now, living abroad is a ‘privilege‘? We should be grateful that the US and IRS allows us to?

    And if you were born a dual abroad, or your family moved you abroad as an infant or minor? Those events – not under individual volition, are subject to a mandatory annual US fee – the compliance costs – to prove you still owe the US nothing and that you’re not a criminal money launderer – because you exercised a ‘privilege’?

    And, this cost of living outside the US is rationalized by the Dems Abroad in an official communication, as just the cost of residing outside the US – that we have to accept? I used the term extortionate to apply to US methods, but now, no other word will do. Ransom and hostage also come to mind.

    For shame.

  16. @John Brown

    Don;t you just love that ‘come clean’ meme that these attorneys use to describe what Expats have to do.  Imply they are criminals that have to ‘come clean’ of their sins.

  17. The FATCA Compliance Complex profits heavily exploiting the “come clean” meme. Perhaps that’s why so-called legal scholars like Edward Zelinsky spend so much time writing articles attempting to justify the “peculiar institution” of citizenship-based taxation using even the most dubious of arguments– they profit from it. 

  19. *With FATCA threshold reporting requirements now at 400k for single filers and 600k for joint filers, it makes absolutely no sense why FBAR’s remain at 10k.

  21. Complying with FATCA, the Podcast…

    Bought to you by the fine folks at Accounting Today….Enjoy…  🙂

    Want to bet what the message is before you listen? 

  22. American FATCA punishes law-abiding Canadians

    Last time the United States tried to rule us, we sent them packing.

    Yet 200 years later, our government is about to surrender without a fight.

    The assault comes under America’s new Foreign Account Tax Compliance Act (FATCA).

    Aimed at those using foreign havens to dodge taxes, this law will punish law-abiding Canadian citizens and residents.

  23. Thanks Just Me! Love love the title. And, it points out that it doesn’t only apply to duals or residents of US origin.

    If it’s in the Barrie and Innisfil papers, it’s hitting the mainstream now. Only hope that some of these articles are in the print versions too, since many still wouldn’t see them otherwise.

  25. Interesting questions re the Mexico-US FATCA agreement – by Prof. Alison Christians:

    http://taxpol.blogspot.ca/2013/01/us-mexico-iga-on-faca-in-force-as-of.html

    ……..”I confess, I still don’t see it. How can an agreement to implement a law
    passed in the US in 2010 “interpret” an existing treaty that predates
    it, especially when the law in question would override the treaty? A
    possible explanation is that Mexico’s internal financial reporting rules
    already require financial institutions with the specific information
    being asked by the US, and that this is just a matter of turning over an
    existing data stream on an automatic basis. But how can that be–is it
    likely that Mexican financial institutions already as all of their
    clients for indicia of US person status? And that it imposes withholding
    taxes on US-source payments in excess of treaty rates in cases of
    noncomplianee? Not likely, and obviously not, respectively.”….

    Makes me wonder if this is how Minister Flaherty is going to try and cast any FATCA IGA  to evade any public comment or input or parliamentary process – as merely a ‘clarification’ , ‘interpretation’ or extension of the already extensive – and flawed Canada-US tax treaty (re ‘savings clause’, ‘last in time rule’, absence of exemptions for registered savings TFSAs, RESPs, etc.). If so, shame shame, the Harper government will go down in history as the betrayers of > 1million Canadian households who are law-abiding Canadian taxpayers.

    We will then be the next US state – and the anniversary of the War of 1812 won’t mean a thing.

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