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@despairing expat
It’s been a year since my husband and I entered OVDI and we haven’t yet gotten a response. When we realized as a result of Nina Olson’s 2011 Report to Congress that we’d been duped into OVDI (in being misled by the IRS into believing that penalty mitigating provisions under the Internal Revenue Manual were not available to us) we contact TAS. At that time, which was several months ago, the TAS agent we spoke with told us that they are negotiating to reduce or eliminate penalties within OVDI but she couldn’t do anything for us until we hear back from the IRS on our submission. So we sit in limbo until they get around to dealing with us. I suspect that how the minnows (us) are being dealt with is evolving constantly in the shifting sands of what we know to characterize IRS. In the meantime, I asked my lawyer about renouncing as this is going on, and he said that would be like waving a red flag in front of the IRS and advised against it. There has also been discussion about whether those who renounce/relinquish would lose some taxpayers rights by doing so, and I intend on asking my TAS agent about that when we eventually speak with her again. I don’t know whether any of this information helps you at all and if there is any solace in knowing that you share the same hell as others, but I like the company!
@Despairing Expat
I feel your pain, but want to give you encouragement too. You can do this OVDI process alone, now that you are netted. I did it, but it does come at a cost in LCUs, but you don’t need to spend real dollars on professional help, if you have the time.
The ‘Opt Out’ might me a option, and I would not be so fearful outside the OVDI now. The TAS is very helpful, if they take your case, so I do think you will emerge ok, in the end where IRM discretion is applied.
You just have to be patience, have faith, and I know that is hard to do! Be strong, and assertive, as they will roll over the meek and happy extract what is not theirs to have! Learn that IRM and know it better than your Examiner. You have to be challenging to their hyperbolic, and recognize, that at the lower ranks of the IRS, there are some that are more sympathetic to you situation than you might believe.
I see you have read our cases, but will leave the links here for others that might be reading. My case, or Moby’s or IJs, as these might provide some guidance or ideas for others reading here.
This video was posted earlier somewhere else on this blog, but its well worth viewing again:
Americans abroad 2
A very good interview of Edward Karr of the American International Club of Geneva. Karr is very articulate from the perspective of American employees of large US companies operating overseas. He does not discuss problems encountered by ex-pats who have “gone native” and taken up permanent residency and/or citizenship (emigres) in their newly adopted countries. In any case, the interview is very good and Karr explains things very well from his perspective.
Thank you for all the advice and support. Greatly appreciated, and probably is helping other readers who are even more afraid than I am now. Hope to be able to be more frank in time.
Had thought the new ‘streamlined guidelines’ might help.
Was looking forward to renouncing.
As always, Just Me, thanks for all the help you give such as Despairing Expat. Regards.
It’s great that you have gotten some support here, Despairing Expat. Just Me is such a wealth of knowledge for those like you.
You are absolutely correct that your comments here today will greatly help others. So thanks very much for sharing with us.
https://intaxicating.wordpress.com/2012/07/10/what-is-fbar-i-know-what-fubar-means-but-not-fbar ‘ What is FBAR? I know what FUBAR means, but not FBAR ‘
July 10, 2012 by Urban Daddy
Found it interesting what a self described “..former CRA agent, current senior tax manager” says about FBARs. Including the confirmation that the FBAR is obscure and not well known or understood here in Canada.
Am posting here for archival reasons. Mostly from 2011, but worth reading through the personal testimonials of people in shock from first hearing about FBARs. Interesting expat stories re the OVDI and FBAR dilemma, here:
http://www.pappasontaxes.com/index.php/2010/10/20/19508/
‘FBAR Penalties Absurd, Unfair’ , October 20th, 2010
So much like the stories and concerns people have described at IBS. Some are from Canada. Makes you really wonder how this hasn’t exploded into a bigger diplomatic mess than we can see – although who knows what has happened behind the scenes.
I spoke with my Senator’s tax assistant today by half hour phone. They had had a meeting with Mary Serrato and Jackie Bugnion and as a result were including the citizenship based taxation ideas into the corporate tax bill proposal. ACA has been in the ways and means and the Senate equivalent groups. I asked that they make this more publicly known but had difficulty in persuading him of that. Implementation would be a long way off into winter or spring, and no doubt the deal will have serious problems with the known demonicrats.
Appreciate the update on your latest efforts, Mark Twain. Too bad these steps are to buried, not in the media. Thanks again.
I focused my discussion upon how normal people are getting screwed. I will continue to ask for public response to the taxpayer advocate reports to Congress. They are addressed to Congress and one would expect a response
@Mark Twain, Does this mean that ACA was finally able to convince a member of Congress to introduce their proposal? Do you know what exactly they are including in the corporate tax bill? Is it just an extension of the FEIE, or a real change to residential taxation eliminating also the reporting requirements? Thanks for your efforts too.
1) yes–he mentioned their meeting and understood & accepted the arguments. Please understand that this is a unique, logical state with real human beings in office. 2) I understood it is the corporate double tax issue–tax em locally then tax em when they patriate profits (where corporations would therefore be imbeciles to patriate profits to USA). Our moderator possibly could forward rhe email I use to you and we could compare notes. (I don’t check it often, but I can)
(territorial corporate tax)
@Mark, Sorry but I didn’t understand very well. I know that the Republicans want to make territorial taxation for corporations, but is their bill going to include something like territorial or residential taxation for individuals too?
the discussion presented was to bundle the 2 together. I got the feeling that there was a momentum for the corporate side based on the platform. Although those issues have synergies, there is a political risk of bundling together a corporate issue and a personal issue, especially when presented by the team which is not winning. Anything corporate has its natural attackers which could burden the personal issues we want to have legislated.
However, it is difficult to understand how issues are bundled in the Washington mumbo jumbo world.
Hello,
A couple tricky questions I find myself facing, and just wondering if anyone can advise.
I currently live abroad and work for a foreign employer. I will qualify for the Foreign Income Exclusion under the bona fide residence test for 2012, and my understanding is that I can exclude foreign earned income for both the year of bona fide residence (2012) as well as the years immediately prior (2011) and after (2013).
In early 2013, I will start working for a US employer, but there will be a 3-week period that I will work remotely for the US employer while still living abroad. My understanding is that I can exclude income paid by the US employer during this period, since the pay is for services I will perform abroad.
Beyond whether those initial assumptions are correct, my question is two-fold:
First, can I exclude the income from my US employer for services I perform abroad even if the income is received (paid) after I return to the US?
Second, if I receive a signing bonus from the US employer, paid to me (in a US bank account) while I am abroad, could that be considered pay for services performed abroad and so also be excludable?
your tax consultants have the real answers.
Where you perform the work and where you are living at the time is the key to where you are taxed.
Careful about what you ought to be reporting to the place you are living and working, unless you are planning never to ever return
Is Filing Your First FBAR Admitting To A Crime?
Is filing your first FBAR admitting to a crime? Hardly, but this is a common worry. Perhaps you learned only recently that you had to file annual FBARs for foreign accounts. Now that you do, should you file? See Should You File FBAR For The First Time?
Almost missed this one, but I think we should keep our eyes on the Supreme Court..
United States: Supreme Court Agrees To Hear Divided Circuit Case Regarding Creditability Of Foreign Taxes
In PPL Corporation v. Commissioner, the Supreme Court will likely set forth the test of how U.S. taxpayers should determine whether a foreign tax is creditable for U.S. income tax purposes. This decision may have far-reaching ramifications for many U.S. taxpayers who routinely claim foreign tax credits.
Regarding discussions with politicians, I believed it was important to stress that the FBAR form, in itself, makes it impossible for a US person to be a CFO, CEO, Business Manager, or accounts payable person in a company. Therefore, there will be no US personal presence overseas. Big Bad for persons. Big Bad for USA.
Response so far has been. “Interesting point” hmm
*Good point, Just Me. I notice from the article that the US gives income tax credits for foreign income tax, “war tax”, and “excess-profit tax”. What about value-added taxes and sales taxes? Some countries are tending to replace income taxes by such consumption taxes. What happens then? Are “US persons” to be taxed on their income by the US and then again on their consumption by their country of residence?
Another unprotected reference to this story on the Supreme Court taking up the Foreign Tax Credit issue. It got me curious what this was all about, and this has more back ground links and discussion…
http://appellatetax.com/2012/08/01/supreme-court-asked-to-resolve-circuit-split-on-foreign-tax-creditability-of-u-k-windfall-tax/
Not sure exactly where to put this, but might put here for now…and move it to a more appropriate thread later.
Steven Mopsick, has a new post,
Offshore Voluntary Disclosures Update: Where Is IRS Appeals?