It occurs to me that there are two big obstacles for U.S. citizens living abroad who wish to comply with tax and reporting requirements.
The first obstacle is the cost. IRS tax and reporting requirements are too expensive for most people to manage.
The second obstacle is the confusing information and lack of clear guidelines from the IRS.
Your thoughts?
Agree. There’s a third reason too–threat of IRS seizing a large portion of our life savings–and those of our children and spouses. Plus, it’s invasive and draconian.
Here’s an article from today’s Globe and Mail by Barry McKenna: Clock is Ticking on Filing with IRS:
http://www.theglobeandmail.com/globe-investor/personal-finance/taxes/the-clock-is-ticking-on-filing-with-the-irs/article2304482/
This includes some options. None of these are acceptable to most of us.
I was going to start this as a new post, but I haven’t figured out how to do that yet. I sent it to Petros a few minutes ago,but then you posted this thread and I thought it might be a good fit here.
Also, here is a link to a position paper from Association of American Residents Abroad.
http://aaro.org/position-papers-2011?start=1
This was also posted elsewhere on this site, but I think it’s worthwhile to have it here so people can see. Their chart outlining the differential treatment between Americans in US and Americans outside is chilling and distressing. I think most of us knew this, but having it laid out in this format reinforces how incredibly outrageous this is.
Regarding Confusing (or lack thereof) Information I have just entered two questions at this site (neither have I ever gotten advice on any phone call I made to a US phone number): http://www.irs.gov/help/page/0,,id=133197,00.html to see if I get the same answer as before —
“The Answer To Your Question Is:
Thank you for your inquiry of October 13, 2011.
Unfortunately, your question regarding the valuation of assets for the purposes of determining your responsibilities regarding expatriation is beyond the scope of the service we intend to provide, due to its highly complex nature. The Internal Revenue Service’s tax law service is intended to work in partnership with the professional tax preparation community. Thus, we refer taxpayers to that resource when their questions involve complex issues and situations. You may want to seek the services of a tax attorney, certified public accountant or other tax professional. You may also find assistance in Publication 519, U.S. Tax Guide For Aliens, and in the instructions for Form 8854, Initial and Annual Expatriation Statement. We’re sorry for the inconvenience.
You can find all U.S. forms and publications on our website http://www.irs.gov. If you need further clarification of these questions or you would like to ask additional questions you can submit another email or you can call the international help line Monday through Friday, at 267-941-1000 from 6:00 am to 11:00 pm EDT. This is a toll call. From inside the U.S. you can call 1-800-829-1040.
We hope this answer is helpful to you. Thank you for using our service.
IRS forms and publications may be accessed on our web site at the following address: http://www.irs.gov or ordered through our toll-free forms line at: 800-829-3676
Expect delivery within 10 business days.
Other useful toll-free numbers include:
800-829-1040 IRS Tax Help Line for Individuals
800-829-4933 Business and Specialty Tax Help Line
800-829-1954 Refund Hotline
866-562-5227 Disaster Relief Toll-Free Number, Monday
through Friday, 7 am to 10:00 pm local time ”
http://canada.usembassy.gov/service/taxpayer-assistance2.html
“TAXPAYER ASSISTANCE
The information on this page is intended especially for taxpayers residing in Canada. Note: Owing to budget cutbacks, the Internal Revenue Service will not/not be providing any in-person assistance or tax seminars at the U.S. Embassy and certain of the Consulates General in Canada.
Important Information and Links
Information for U.S. Citizens or Dual Citizens Residing Outside the U.S.
IRS Website for International Taxpayers
Regarding Report of Foreign Bank and Financial Accounts (FBAR)
Regarding the Foreign Account Tax Compliance Act (FATCA)
Offshore Voluntary Disclosure Agreement (OVDI)
Answers to Frequently Asked Questions about the OVDI
More web links, phone numbers and mailing addresses are available here.
IRS Ottawa
The Internal Revenue Service (IRS) does not maintain an office in Canada. For information tailored to both U.S. citizens in Canada and Canadian citizens, please refer to this page at the IRS web site…”
@Blaze — Thanks for the link to the AARO’s ‘Taxation of Americans Abroad’ and ‘The Rights and Privileges of Americans in the US vs Americans Abroad According to US Federal Law — and you’re absolutely correct — CHILLING DISCRIMINATION that we need to keep in mind.
I’ve got the fourth reason (following up on No 2): the IRS and US consular network make no efforts to inform citizens of any changes in the tax laws as they apply to those overseas. You’re just supposed to know somehow that the FBARs exist and that there is now a form 8938. If we want to be even more cynical, we could read into the info in Calgary’s post that they will offer no seminars or info meetings in Canada due to budget cuts as evidence of this fact… Maybe they really don’t want you to know when they change something so that they can knock on your door five years down the line and ask for all the penalties on form XYZ No 231 that you failed to file.
Luckily I don’t think that this tactic will work again for them due to the in tune media and the increasing well-informed “US-Person” abroad. Then again, I have a colleague here in Belgium who lived in the US for ten years and became a citizen right when she could at 18, and she had no idea that she even had to file taxes, much less about the FBAR. This was a couple of weeks ago that I told her and she was absolutely dumbfounded and refused to believe me at first. This is why websites like this are so important in getting this message out. I know that the only reason I heard about the FBARs was due to an article in the Globe and Mail…
@DonPomodoro
The was period of time I believe after the introduction of the Visa Waiver Program that all of the US consulates in France outside of Paris were closed for cost reasons in a time of relatively strong economic growth. So in a time of weak economic conditions and spending cuts its inconcievable that further cuts could come. For example the US could keep its diplomatic presence in Brussels vis a vis the EU and NATO but move all consular activity to the Hague or Paris to “save money” as Canada does.
@Calgary411. THAT was the best they could do? That is absolute rubbish.
@Don The Paris office does make an effort. There are seminars in Paris offered through various expat organizations. But it’s not nearly enough. There are 100,000 Americans (don’t know the figures for U.S. person) in France. 25% of them live in the country. As for myself I live in a small city outside of Paris and I confess that that I almost never read American newspapers. It’s a question of time. It’s hard enough to make your way through one edition of Le Monde (aka Al-Jazeera sur Seine) much less add the New York Times on top of that. Le Monde has good international coverage so there’s a nice mix of local and international stories. I’ll hit an article in a U.S. paper if there’s a link to it but that’s about it. I don’t think I’m alone here and people are vastly overestimating the reach and influence of the American media abroad. If the IRS is depending on the U.S. media to keep us informed, that just isn’t going to work.
/end rant 🙂
(oh and there is an exception to the above – I ADORE both Jon Stewart and Stephen Colbert 🙂
Ah, the wonderful assistance the IRS Tax Help has for us:
I have received JANUARY 24, 2012, 10:50 PM two messages in response to the two questions asked on:
JANUARY 17, 2012 AT 3:21 PM
“Regarding Confusing (or lack thereof) Information,
I have just entered two questions at this site … to see if I get the same answer as before —”
No answer yet, but they were kind enough to reply:
“From: TaxHelp@hal1.ausc.irs.gov
Sent: Tuesday, January 24, 2012 10:50 PM
To: “calgary411”
Subject: IRS Email Tax Law Assistance
IRS Acknowledgement:
This is in response to the inquiry you submitted through our web site at http://www.irs.gov. Due either to unusual demand or the nature of your question, we have not been able to respond within the normal time. Please accept our apology for the delay. We will respond as quickly as our resources allow. Thank you for your patience.
Please do not send a reply to this message. If you have another question, please return to our web site at: http://www.irs.gov to submit it.
My phone queries to IRS have had similar results.