Liberty and justice for all United States persons abroad

The Isaac Brock Society

1,795 thoughts on “Renunciation and Relinquishment of United States Citizenship: Discussion thread (Ask your questions)”

  1. Does anyone have any insight as to what is meant in the isntructions for Part IV(A)(6) of Form 8854 which says for people who have expatriated in 2012:

    “Check the “Yes” box if you have complied with your tax obligations for the 5 tax years ending before the date on which you expatriated, including but not limited to, your obligations to file income tax, employment tax, gift tax, and information returns, if applicable, and your obligation to pay all relevant tax liabilities, interest, and penalties “

    Does “information returns” include paperwork for Canadian RESPs and TFSAs, and does “tax liabilities” include filing complicated paperwork for Canadian mutual funds even if the actual tax liability would (probably) be zero?

    I don’t need it for this year, but I am assuming there will be a similar clause in future years.      

  2. *@a123

    “information returns” means completed US tax forms with ALL necessary extra forms needed to constitute a complete and accurate return. So yes, it means all the necessary complicated paperwork if you have to file 1040 returns.

    (If you qualify to submit 1040NR (non-resident) forms it’s much simpler, and you only identify income from US sources, and don’t need all those complicated forms.)

  4. The old “we’ll send in the Marines to save you” argument to justify citizenship-based taxation for ex-pats seems to be holding less water (not that it ever held any) every day: 

    Does Increasing U.S. Arrests Abroad Show the Demise of America’s Global Power?

    http://gestetnerupdates.com/2012/12/13/does-increasing-u-s-arrests-abroad-show-the-demise-of-americas-global-power/

    From the article:

    “Imagine being charged for a crime only a third world country could uphold. Imagine no one coming to your rescue.”

    Really? Imagine that.

     

  5. @john Brown..

    Wait until all the FATCA data collection of all US Persons living abroad is complete and available to every mafia financial institution and unsavory government in the world to say nothing of the hackers of the world.  There will be a lot more ‘US person’ targets to draw from for capture and extortion.  It will be like shooting fish in a barrel.  Thank you Congress.  

  8. @a123, @DavidM, Apparently the information returns mentioned in the certification of form 8854 do not include the FBAR. The relevant section of law, 26 USC 877(a)(2)(C), says:

    (C) such individual fails to certify under penalty of perjury that he has met the requirements of this title for the 5 preceding taxable years or fails to submit such evidence of such compliance as the Secretary may require.

    “This title” is title 26, the Internal Revenue Code. The FBAR is in title 31, Money and Finance.

  9. In 1995, Senator Daniel Patrick Moynihan (D-NY) proposed an exit tax similar to the current one eventually enacted in 2008, but which excluded US real estate and US and foreign retirement plans, and also increased the basis of assets of immigrants (S. 700). In 1996, he strongly condemned the Reed amendment right after it was enacted:

    The provision imposes an extraordinary penalty on certain persons who exercise the legal prerogative of expatriation: permanent exile from the United States. Wealthy individuals who renounce their American citizenship to avoid U.S. taxation–expatriates, as they are called–have now been added to the list of terrorists, convicted criminals, persons with communicable diseases, and others who are by statute deemed unworthy of admission to the United States.
    (…)
    I believed–and I said on the Senate floor more than once–that it was our duty to act with special care when dealing with the rights of persons who are despised.
    (…)
    Now, having failed to adopt the preferable–in my view–Senate expatriation measure, we have compounded our error by enacting an ill-advised provision to punish tax-motivated expatriates by banishing them from the land.
    (…)
    Mr. President, we were unable in this Congress to secure needed changes in the tax laws to resolve, again in my view, the expatriation problem. We ought to have enacted S. 700. Instead, we have enacted a measure that does not reflect well on a free society.

    After being a senator for 24 years, senator Moynihan retired in 2001 and passed away in 2003. Two years before he retired, Chuck Schumer was elected senator of his same state of New York. What a replacement.

  12. @Shadow Raider, thanks again for the information.  Do you (or anyone out there) have an opinion on whether or not it would be perjury to check “yes” on Form 8854 if you haven’t filled out Form 3520 for an RESP or TFSA?  More specifically, has the IRS ever said affirmatively that these types of accounts are foreign trusts and that Canadians are required to use Form 3520 to report them?  If there is any question about whether TFSAs and RESPs are indeed foreign trusts (and my understanding is that there is a question), then I don’t see how it could be perjury.             

  13. Haarezt.com: “Lawyers: New tax rates will spur Americans in Israel to renounce U.S. citizenship”

    http://www.haaretz.com/weekend/anglo-file/lawyers-new-tax-rates-will-spur-americans-in-israel-to-renounce-u-s-citizenship.premium-1.490478

    From the article:

    “Ifat Ginsburg of the Tel Aviv law firm Ginsburg & Co. Advocates said that ‘we’re going to see more and more people who are going to renounce their U.S. citizenship’ to avoid expected tax rate increases and closer scrutiny of their overseas accounts by the Internal Revenue Service.” 

     “‘I also think the IRS will be much more sophisticated,’ Ginsburg said during a discussion of future tax trends. ‘When you come back to the U.S., you’ll have to sign [at the airport] that you filed your U.S. tax returns.'”

  15. @Just Me – A very pertinent article, given that Depardieu has also left for financial reasons.  Governments seem to think people will put up with being taxed out of existence and are then surprised when they go elsewhere and renounce citizenship.  It’s very much a case of “We don’t want your business/expertise, just give us your money.”

  16. *Just Me, the article has been printed in a few papers that I listed here:

    http://isaacbrocksociety.ca/2013/01/01/canada-russia-and-adoptions/#comments

    Now, it’s also been printed in this one:

    http://www.dispatch.com/content/stories/editorials/2013/01/02/u-s–tax-code-pushes-some-citizens-across-the-border.html

    The last paper titled it: “U.S. tax code pushes some citizens across the border”, yet it is my understanding that Saverin, “Sam”, and many others had been living abroad years before he renounced and thus it is questionable if they were pushed abroad due to taxes.  I can understand the need for the media to use celebrities to get people’s attention, especially now with the fiscal stuff, but it would be better if the article content matched the title.

  17. @SwissPinoy

    Thanks for those other links. I had not read the adoption post yet.  Getting the title to match the content is always the problem, eh?  Headlines are for attention, of course.  I emailed this author to assure that he knew about FATCA which was unstated within the contents, but I am sure I was reading it between the lines.

  18. One cannot help but wonder what Gandhi’s approach would be for ending the injustice of citizenship-based taxation:

  19. Passport burning for the first FATCA protest!!!!!! Perfect!!!!!!

    Flags are bigger—-they can add to the effect!!!!!!!!!

    When?

  20. *Mark Twain, that would certainly get the attention of Americans, but it would have to be well planned and done carefully to not backfire.  It would be easier to convince Americans that islamists are using FATCA to destroy America.

  23. It has been about a year since I found out about this mess.

    1 Senator (Rubio) didn’t answer my letters or calls, the other (Bill Nelson) wrote he was not going to change.  The rep didn’t answer.

    I moved states, one Senator doesn’t like FATCA, the other says he will Watch how FATCA plays out.  I am waiting for a representative to give a response.

    I have contacted 2 or 3 medias–no response.

    What are the remaining options?:

    —renounce–not an option, wouldn’t be successful anyways

    — enter OVDP/OVDP?: you know the answer to that
    —Wait and worry?

    Objectives

    —US persons must find out what is happening to them. You can’t fight for common rights if people don’t know their rights are gone.
    — Other parties must understand what is happening to us, so that they can lend support to our cause.
    — What are the alternatives? Wait? How long? Meanwhile, did you incriminate yourself for 2010 tax year with form 8938 or are you also now in deeper sh_t each year?

  24. Wow, Ron Paul never fails. I don’t know if someone has mentioned this here before, but Ron Paul criticized the HEART Act of 2008, which created the current exit tax:

    I applaud efforts to shore up health care for veterans, and make sure that veterans know about the services available to them. I strongly support improving educational opportunities for veterans. I also believe a pay raise is well-deserved, and long overdue for our men and women in uniform. These benefits constitute their pay for serving our country. What I do not support is inserting immoral, unconstitutional provisions into veterans’ bills. For example, HR 6081 the Heroes Earnings Assistance and Relief Tax Act, in addition to providing important tax benefits for soldiers, sends the IRS after civilians who move overseas. This method of funding is actually a slap in the face to our soldiers who vow to keep us free. Afterall, how free are we, if we are not really free to leave? Congress should not use the military as an excuse to behave tyrannically.

    The HEART Act was passed with 403 votes in favor in the House and unanimously in the Senate. Ron Paul was one of the only 32 members of Congress who did not approve it.

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