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Could this be useful?
http://www.intltaxcounselors.com/blog/?p=13511&goback=%2Egde_3731046_member_205256200
Getting your private tax law
Our Congress does nothing and it does nothing very well.
When it comes to tax law, Congress gives the IRS an outline and orders them to write a few hundred pages of regulations for each law. These Regs become the real law. Often loopholes are put into the regulations.
In the early 1980′s, I attended my first IRS hearing. They did exactly what I asked. Ten hearings later, and they continue to respect my ideas. And they will do the same for you.
The magic is boss of the IRS, the Department of Treasury. The boss knows that small business creates 70% of all jobs. Thus, the IRS wants to help small business owners and their advisers.
To get your tax law, you merely ask by submitting a written comment. A few days ago, a simple to use web site to submit comments was created. This web site helps you find the laws that are being written and allows you to submit emailed comments. Here is the link.
First, there is nothing wrong with my suggestion. Not one thing. Who is the IRS to tell people that they can’t have 25 accounts abroad or 25 million accounts, provided that the money is legal and that you report the income in the accounts. And here I’m talking about those resident in the US. Expats outside the US should have no reporting requirements. If any structuring is going on, it’s Schulman’s and Geithner’s fail: making Expats report their accounts in contravention of the intention of the Bank Secrecy Act and persecuting Expats. To hell with such reporting requirements, I say. They are a violation of all the constitutional rights you ever thought you had.
So here is the thing. This is what I would do and I am not an expert. I am just a rabble rouser: if I were going to do an FBAR, and I have never done one in my life nor will I because I will not expose my Canadian wife to the capricious and arbitrary treatment of the IRS, I would open up extra accounts (which at this point would only need to be a few), until I had 25 or more, and then I would simply check off the 25 or more box and I would be relieved of having to report the actual numbers of the accounts and their contents. Then, if I were audited, I would refuse to give the information (and that’s when things would get fun). I am of the belief that the more information that a person gives to the IRS, the more they have to lynch you. I didn’t always believe that it was this bad, but I read every single stinking OVDI horror story that Phil Hodgen ever put on his blog about how Expats were receiving huge “in-lieu” fines for their innocent accounts in which they saved their retirement money. Just Me is a great example, having himself received a fine originally over 100K and who was able, yet only with the help of the Tax Advocate, to get the damn thing down to 25K–I am not going to fund the IRS 25K or even one red stinkin’ penny of worthless US currency to fund their wars and their handouts to voters of the democrat party.
It was at that point, having read the horror stories, that I determined that the IRS could not be trusted with my account information. They would use that information against me if at all. Therefore, I plead the 5th Amendment–and I know that the Required Records Doctrine has be invoked by the judges, and that is an absolute farce: for the information has to be of high regulatory use to the government, but they use the information for one thing and one thing only, to catch tax “crimes”. I still have Miranda Rights: “You have the right to remain silent, anything you say can and will be used against you in a court of law.” I choose to remain silent.
The reason that I have come out in the open about my stance is that the IRS can fine me all they want, the Canadian government has said it will not collect. So the IRS has no instrument by which they can collect any fines they assess to me. If one million Canadian residents said F-You to the IRS, there would, in my opinion, be a better situation for all of us. Now, the MO of the IRS is to pick us off one at a time, as Bubblebustin and Just Me are well aware.
*Does this sound like a reasonable argument?
If Canada imposes US tax law on me, a Canadian citizen and resident, because of my birthplace, this is an infringement of my rights under the Canadian Charter of Rights and Freedoms. Today, Canada cannot forward my personal financial info to another country. If Canada deems I am subject to the laws of another country while in Canada (through FATCA and IGA), then shouldn’t I have access to all the rights of that other country while in Canada? I’m talking specifically about my 2nd Amendment rights under the US constitution. By this reasoning, in Canada I should be able to own as many automatic guns with multi-clip do-hickey’s that I like, regardless of Canadian gun control laws. Remember, I’m treated differently because of my country of origin. If “US Persons” become subject to US law in Canada, shouldn’t US rights be extended to us as well?
(I have no desire or intention to ever own a gun, but though it was an interesting point given current events.)
@Marie- you have hit the nail on the head. The problem though is that the U.S. and its worshippers will never confront you on the basis of logic. The U.S. position is inherently illogical, immoral and illegal, but those FACTS don’t matter. The U.S. lives in its own world and treats everyone else as if they live there too.
How else can one explain that under FATCA the U.S. will allow a non-resident U.S. person to maintain his/her non-U.S. financial account only if that person is willing to waive all rights that may exist under the tax treaty that the U.S. government may have with that person’s country of residence?
So in sum you are being told by the U.S. that FATCA is being implemented under the existing tax treaty and yet you are being forced to abandon your rights under the same treaty. Where is the logic in that? Don’t these two things mean that the very treaty just been voided by FATCA and has thus completely eliminated the thing that the two acts are being engaged according too?
@Marie, This is why the application of FATCA in Canada is a violation of your charter rights. Nice point.
I like your argument @Marie;
If we’re to be treated as so very conveniently ‘exceptional’ by virtue of the US deeming us subject to double ‘taxable persons’ for life – based on inherited, birthplace or naturalized US citizenship, and having once had an expired greencard, or staying there too long as a snowbird, then why aren’t we so very exceptional for the purposes of accessing US privileges that US taxation is supposed to pay for in this case?
I think we’re on to something re the Obamacare tax since it is not exempt from the Canada-US tax treaty, and it looks as if we can’t use Canadian tax credits to offset it – if we have to pay, then we want a benefit. Those at the threshold for paying it will definitely be double-taxed.
This most current example of US arrogance is such a topical example of egregious extraterritorial citizenship-based US taxation, and very clearly is an extraterritorial double tax to pay for a US service that we have no benefit from. Our fellow Canadians would get it right away, because they know that we already pay for healthcare in Canada through our Canadian taxes – and healthcare is a significant portion of tax expenditures here.
Maybe we should inundate US Ambassador Jacobson with letters referring to his baseless claims that the US IRS is not ‘unsympathetic’ to our concerns; http://canada.usembassy.gov/ambassador.html . He can’t possibly explain this latest example away ( ex. http://canada.usembassy.gov/ambassador/news-and-speeches/18-october-2011-ambassador-jacobsons-remarks-to-the-canadian-club.html ) with vague and disingenuous claims – “…… I might add for the record that someone some place might have an
anomalous tax situation where they pay tax in Canada yet still owe tax
in the United States…..“ about the Canada-US tax treaty mostly preventing double taxation, or about how the IRS has to persecute those abroad, to make sure that it is getting all it is owed – no matter where we were born, live, earn and pay taxes – because of the existence of Cayman Island tax havens elsewhere in the universe. I don’t see how he can come up with any answer at all for this latest example – because he knows that there is no possible justification or rebuttal. He already knew at the time he made his remarks that we’re subjected by the US and IRS to US punitive taxation rules on the sale of our principal residences, and on our Canadian registered savings, and to Canadian mutual funds, and that these situations aren’t “anomalous”.
So now, we’re going to have FATCA, and the Obamacare adjunct tax thrust on us, while we’re still grappling with FBARs and 3520s, and the Fatca form for individuals, 8938 http://taxes.about.com/od/preparingyourtaxes/a/Foreign-Financial-Assets.htm
I’d love to see Ambassador Jacobson try to explain this away now.
I have to agree with Petros. I have never submitted a FBAR and now I figure that if they want that information so badly they can GO FISH! They’re the ones who are supposed to have the best surveillance and data mining that trillions can buy so SPLISH SPLASH fellows, see what you can find. The fact is that every penny I have has been legally obtained and no taxes are owed on any of it, neither to Canada nor the US of Arrogance. I like Marie’s reasoning and as badger suggests, Ambassador Jacobson has some splainin’ to do! If one person stomps his foot they will not hear it, but if a million do they certainly will. I’m picking up the beat of the Petros stomping foot and I hope others will too.
My question is: is being tax compliant in the US, a treasonous act against Canada?
@petros
You are absolutely right, and to me it’s surveillance we would expect in an Orwellian world. The CRA doesn’t even make this invasion into its citizens financial affairs.
Just found this important resource again:
It is also interesting to note that there used to be a page on the IRS website:
See the “SMALL BUSINESS/SELF EMPLOYED SUBGROUP REPORT” that said that the “The Filing Requirements for the Report of Foreign Bank and Financial Accounts (FBAR) are Confusing and Extremely Overbroad“.
http://webcache.googleusercontent.com/search?q=cache:iYqME6gorHQJ:www.irs.gov/Tax-Professionals/SMALL-BUSINESS-SELF-EMPLOYED-SUBGROUP-REPORT+&cd=1&hl=en&ct=clnk&gl=ca&client=firefox-a
It
is worth reading in entirety, and does not address many of our
complaints, but several of the recommendations would lighten the burden
somewhat, which the IRS in its wisdom has refused to do.
Excerpt:
Recommendations
later than the time for filing income tax returns so that the
individual’s tax advisor will be able to timely discuss the filing with
taxpayers. By using October 15th, all filers will have a consistent due
date.
filing system, just as state tax returns are similarly accommodated. A
separate electronic filing portal should be available to non-income tax
return filers. Some filers will have hundreds of accounts, making manual
filing needlessly cumbersome.
filings, just as it applies to federal income tax filings (see IRC §
7502). It is unreasonable to hold individuals responsible for delivery
delays beyond their control.
inadvertent non-filers should be limited to six years with the IRS agent
able to take advantage of the ability to require additional returns if
necessary consistent with Policy P-5-133. This would include cases in
which income from the account has been reported and existence of the
account has been noted on the annual income tax filing either by
checking the box for its existence in the case of income tax returns
that do not include balance sheets or by reporting on the entity’s
balance sheet for other persons. The existing relief from penalties is
not sufficient to encourage compliance when prior years’ filings are
numerous and compiling information is excessively burdensome.
authority to exercise discretion in waiving/abating FBAR related
penalties based on well-founded reasonable cause exceptions applicable
to the person’s facts and circumstances. The minimum $10,000 penalty for
non-willful violations is too severe and does not encourage compliance
in many cases.
exemption from FBAR filing for accounts with de minimis balances and
minimal activity during the year. The cost of compliance for these
accounts outweighs the benefit of the
information collected. In addition, the current limits should be adjusted annually for cost of living increases.
This is just a partial excerpt. The whole page (Page Last Reviewed or Updated: 2012-08-04) is worth reading – to see what the IRS has refused to do.
@Badger
Thanks for drawing attention to that again. It has been over a year since I read it, and had frankly forgot it. That should get a separate posting on it’s own, as a headline reminder that not only does the IRS leadership and Treasury ignore their NTA reports to Congress, they ignore their subcommittees too!
@Just Me, I remembered it because I think it was the TAS that referred to it – which is how I found it. It’s posted here at IBS somewhere else, but too far back to find easily.
ok. Let me put Everything together. In a secure country (Algeria) American and NATO-country oil workers are taken hostage for Money. Ten Days earlier, representatives from the IRS are happily presenting at a Conference in Qatar, explaining to hundereds of Mid-East bankers, how they are to implement the US demands for them to collect all critical financial data of US persons (bank account numbers, highest account balances per year, addresses local and in US, and what other accounts they are connected to)—–http://www.qatarisbooming.com/2013/01/10/doha-hosts-fatca-us-tax-legislation-symposium/
Representatives from U.S. Treasury will address the purpose and scope of FATCA, the implementation timetable, the model of international agreements, and an assessment of international responses to the new law.
The International Governments’ Responses panel discussion comprises treasury and tax officials from US, Europe and the GCC. Discussion, who will focus on managing the implementation of FATCA and progress on Intergovernmental Agreements (IGAs) to be entered into by the U.S. with other Governments to facilitate compliance with FATCA.
Use this to explain how US extraterritorial citizenship based taxation, FBARs, and FATCA harm the whole Canadian family – and burden marriages where one spouse is a “US person”:
http://www.jdsupra.com/legalnews/fbar-the-new-marriage-penalty-47426/
“FBAR-The New Marriage Penalty”
1/7/2013
by
Sanford Millar
http://www.navigant.com/insights/library/disputes_and_investigations/2012/fatca_highlights_volume_7/?goback=%2Egde_3731046_member_205912225
FATCA Highlights Volume 7 – HMRC Begins to Fill In Important Due Diligence
Details
By Ellen Zimiles , Richard Kando , Jeffrey Locke , Salvatore
LaScala
Tuesday, January 15, 2013
On 18 December 2012, the HM Revenue & Customs (“HMRC”) released
Implementation of International Tax Compliance (United States of America)
Regulations 2013, Guidance Notes (“HMRC FATCA Guidance”), which provides much
needed detail to the Intergovernmental Agreement (“IGA”) to implement FATCA
signed by the United Kingdom and United States on 12 September 2012 (“U.K.
Signed IGA”).
To read the full white paper, please click here.
So I’ve come to an awesome and interesting crossroad right now. My old bank account which never had more than 2K in it for more than 1-2 days a month until now (when it has 500K+), and was never FBAR’d for three years (my bad, I know), is also reportable under the Son of FBAR Form 8938. “Hey that’s ok” I say “I’m just going to FBAR it anyway this year.” That’s until I get to the tickbox where it asks me whether the account was opened this year (it wasn’t). Who wants to bet that the good old taxman is going to go back to my old FBAR filings and check whether I’ve included my fat new account?
All the income that I report regarding this account is reported on my 2012 return (and at least 8938 allows me to specify where I actually reported it) but as always, I worry about the good old F***BAR
Love you IRS…
welcome to the club
@badger…
Looks like Ambassador Jacobson is loved by all Canadians…
https://twitter.com/search?q=Ambassador%20Jacobson&src=typd
Canadian Tweeters out there, might try sending him some messages to
@usembassyottawa
@Mark Twain…
Regarding helping the IRS write tax law. It is the American way. That is how Paper people do it, (Corporations), so why not lowly DNA people too.
@Just Me,
re; “Looks like Ambassador Jacobson is loved by all Canadians…”
Yeah, if they’re for the tarsands and ceding national sovereignty/autonomy to the US on Canadian soil.
See: http://www.ctvnews.ca/canada/what-can-canadians-expect-with-four-more-years-of-obama-1.1120855
“what can Canada expect to see in terms of relations with our friends south of the border?
On CTV’s Power Play, David Jacobson, U.S. ambassador to Canada, and his
Canadian counterpart, Ambassador Gary Doer, broke down some Canada-
U.S. issues that could have lasting impact in the coming months and
years:
……”How the U.S. approaches the debt crisis will have a profound impact on Canada, Jacobson said.
“The most important thing that the United States can do for Canada is
to get our economic house in order,” Jacobson said. “When we do well,
you do well.”….
“BORDER PLAN:
“Doer said Canada and the U.S. are moving ahead with the Beyond the
Border perimeter security initiative unveiled by Prime Minister Stephen
Harper and Obama in early 2011.”………
“NORTH AMERICAN ENERGY:
A key priority for U.S.-Canada relations is the approval of the proposed Keystone XL pipeline, said Doer.
Both countries are now awaiting the approval of an amended route from
Nebraska Governor Dave Heineman. If the project gets the go-ahead,
Canada stands to play a large role in weaning the United States off oil
from overseas sources, Doer said.
Both U.S. and Canadian politicians are rallying for the approval.”……
http://www.ctvnews.ca/canada/what-can-canadians-expect-with-four-more-years-of-obama-1.1120855
This are the themes we’ve seen repeated by US ambassador Jacobson, and the Harper government for a long time now, and don’t tell me that the FATCA IGA talks aren’t entwined with those interests.
Here’s a riddle: “How many Canadian citizens and residents might Prime Minister Harper sacrifice to FATCA, in exchange for US approval of the tarsands pipeline?”
My answer: “Who knows, how many are there?”.
Am I wrong?
Here is a 90 minute infomercial to get customers of a $350 per hr Product
http://www.ey.com/GL/en/Issues/webcast_2013-01-28-1500_fatca-final-regulations-what-they-mean-to-your-business
FATCA final regulations: what they mean to your business
Many companies are near finalizing or have completed the initial assessment of how FATCA will impact their operations and business processes and are building detailed implementation plans. These regulations provide clarity for many of the issues that companies have been faced with as they determine how to implement the FATCA requirements. Ernst & Young LLP is hosting the first of a series of webcasts on the final FATCA regulations and related developments that will impact your business. Our panelists, including Jesse Eggert, from US Department of Treasury, will provide an overview of the final regulations and discuss the following issues:
“If the project gets the go-ahead, Canada stands to play a large role in weaning the United States off oil from overseas sources, Doer said.”
Well isn’t that special! For the USA, oil coming from Canada is not considered to be “overseas”, but somehow US citizens residing in Canada are considered to be living “overseas”. Funny how the wordage works. It appears our oil is their oil but our US source residents are their potential tax cheats, money launderers and terrorists and therefore require heavy-duty FATCA surveillance. So Canada gets to foul its own nest to provide energy for the USA and yet the USA which has more oil in shale and sands, on and under its soil than Canada, gets to keep its environment all clean and pretty — unless that XL pipeline springs a leak of course. Ambassador Jacobson is delusional if he thinks we all heart him and the country he represents. I truly believe Harper is trading FATCA for FATCAT oil profits and doesn’t give a hoot that those icky tarponds will keep on expanding and 1 million of Canada’s residents will be lying flattened under a FATCA bus. When our energy reserves are down to 10% of their former glory NAFTA makes sure the USA will still get the same percentage of our last 10% … and the clean-up will be on our Bluenosed dime.
@Badger Good point. Keystone approval = 1,000,000 US citizens in Canada turned over to the IRS in exchange. BTW, I just saw the headline yesterday that the Nebraska Governor approved the tweaked Keystone route.
The Keystone discusion is weird. Keystone is TransCanada, a Canadian oligopoly (they don’t have a good record). The Keystone pipeline has massive eminent domain issues. Canada could take the pipeline over the Rockies to the ocean, if they could take the ecologic risks upon themselves.
And @Em, our Canadian assets and accounts are ‘foreign’ ‘offshore’ assets ‘hidden’ in TaxHavenCanada, treated just the same as if they were in the Caymans,
but our Canadian oil is almost like home-made in the US – not like that ‘foreign’ ‘overseas’ oil.