Just Me has written a lengthy response to the question, Has the IRS stolen your life? This is an important statement from the most famous minnow in the 2009 Overseas Voluntary Disclosure Program, about whom Amy Feldman wrote in her Reuters article. The IRS fined him $172,000 but the Tax Advocate Service managed to have it reduced to a non-wilful fine of $25,000. We are grateful for the contributions that Just Me has made to the Isaac Brock Society.
So, has my life been stolen from me? Hummm. Nah, not really, but a big chunk of time has been misappropriated, and it is up to me now to see what I can recoup from the IRS’s ill gotten gains.
Not to be a Polly Anna or an ornery contrarian here, but allow me a minute or two to focus on some positives, as every FBAR cloud has a silver lining, as they say.
I don’t think I need to repeat much of my experiences again here, as I have commented about them a lot at Jack Townsend’s blog, allowed Amy Feldman to publish some of it on the Reuters story, and have posted some of them here. I have also spoken to a few of you on the phone.
As you may know, I have often lamented the loss of LCUs (life credit units) that get devoted to all this unnecessary crap which is a total waste of human endeavor and time. I have felt the shock, the emotional trauma, loss of sleep and total waking hours obsession that many of you have felt, and really empathize with those feelings. I have felt the isolation of not being able to share what you are going through with family or friends mostly out of embarrassment, but also not wanting to be characterized as a tax cheat by those who know nothing of what the IRS has embarked upon and subjecting you to.
I have been equally outraged how immigrants to America are being treated, especially new ones, who arguably had an obligation to know the tax rules, but just benignly got caught out when the IRS decided to launch its education program via threats of criminal prosecution. For what? Failure to file an administrative form that very few professionals even paid attention to, the infamous FBAR.
Maybe my affinity for immigrants is because my wife is an Australian and a green card carrying US person, and just could not comprehend the absurdity of it all. It wasn’t logical to her. Australia didn’t treat her this way, but as I pointed out, with tax law, logic is the last thing you should expect. It is all about what they can do, not what they logically should do.
It is just shocking to me to see how brazen the IRS has been. Pulling that old piece of worthless paper off the “rarely used Statutes shelf”, and then applying it as a penalty hammer against all sinners in an equal punishment regime when they should have been narrowly focused on the USB type cheating Whales in the Homeland.
Who could have known that this was a ticking time bomb just waiting to go off? Well, actually, some professionals did, as I learned later. Hale Sheppard for one. He was the Nouriel Roubini of the FBAR melt down. Wished I had known about his writings back in 2005 when he was warning about the coming FBAR debacle we are now enduring.
I have posted his link before, but might just do it again. It is worth the read for those wondering how we got here.
Title: EVOLUTION OF THE FBAR: WHERE WE WERE, WHERE WE ARE, AND WHY IT MATTERS
The dilemma of the immigrants really pisses me off, as they say, and embarrasses me for how my country is treating them. After this episode, I think we should modify the Statue of Liberty inscription a bit about “your huddled masses yearning to breathe free” Perhaps France should reclaim it, as the IRS has shown the US to be unworthy of the gift anymore.
I have also been indignant at the mischaracterization by Commissioner Shulman about the great “success” he is having in bringing offshore tax cheats into compliance. and how much tax money he is recouping. I have been incredulous to learn that many Reporters work mostly as scribes. They just repeat IRS press release assertions without so much as one skeptical question. Like, what is the profile of those that were netted? What was the compliance improvement percentage that is being claimed? What was the Minnow to Whale ratio? What portion of funds collected was new tax, and what portion were penalties? The list is endless, if you have an inquiring mind. No one in the media has wanted to take it on, and it just befuddles me to no end.
So, I have had my share of anger and frustration, however, at the risk of sounding a bit sanctimonious, and as a coping mechanism, I have tried real hard to control my anger outwardly. IE, be measured in my responses with the IRS, and be sure I don’t take it out on those around me. Also,I try hard to keep my rants to a minimum for those whose antenna aren’t tuned for reception. Anger leads to hate, and hate harms you more than the object of your venom. Of course, you all know that, and yet it can’t help but eat away at you. Sometimes you do want to yell out, “I am as mad as hell, and I am not going to take it anymore.”
Then, you calm down, make a business decision and settle with the IRS hoping they will now just go away and leave you alone. Fatcat chance! 🙂
So, here I am 28 months after the discovery of my non compliance still writing about it, and sharing its impacts and lessons I have learned. I should let it go, and get my gardening done, but I guess I am captured by the passion of it all. Maybe I needed a cause in retirement, or maybe there is a bit of evangelical preacher in me that is coming out, or maybe I am an educator at heart, I don’t know. However, it has had a benefit for me, when I think about it. It has energized me in a way I haven’t felt for a while since the last big project I worked on before I retired. So there is a positive there, that I would not have considered prior to this.
So thanks for your post, as it has forced me to reflect and think about it a bit.
There is another positive. And, that comes from meeting folks like Roger Conklin, the 80 year old “rock-the-boat” star who energized me with his comments I had first seen at the WSJ and now his great contributions to this blog. I have come to appreciate the knowledge he has from the years he has been working on his passion to end US citizenship taxation. I have taken on board lessons from his example.
I have also had the pleasure of becoming acquainted with Jackie and Marylouise at ACA whose tireless efforts have given us all material and references to use in our education efforts for the US Homelander. Jackie was the one that directed me towards the TAS as a possible relief mechanism, when no attorney offered that advice. For that I am eternally grateful.
Then, there is all of you, many whose names I do not know, who came together in common purpose to “birth this blog” as an outlet for information sharing and expressions of comfort or hope. Is that not a BIG positive?
Another positive, believe it or not, was working with my examiner, Pauline, as drawn out and tedious as it was from long distance. She was always cheery, and willing to laugh at my jokes at her expense. She was a lovely gal, very polite and professional, doing her job as best she could, given the limitations put upon her. In a different setting, I think I could have enjoyed knowing her personally. She helped me realize that IRS agents are not all red-tailed devils inside the bureaucracy. In some ways, I felt she too was victimized by this process with the total lack of discretionary ability to do the right thing. If you are thinking that was a little Stockholm syndrome creeping in, I will give you that! 🙂
Another positive was getting to know about the TAS, an agency I didn’t know existed. I met some very fine folks there who really did advocate on my behalf, like Nina, Robin, Rosty, and Lucy to name a few. It was just amazing to find this best kept secret at the IRS! I could not ask for a more professional group to deal with who really went out of their way to be responsive to my plight. Every schedule and commitment they made, they kept. It restored my faith in one small US bureaucracy, and removed just a smidgen of cynicism I have about government in general.
I will always recall the comment from Rosty, the TAS attorney I was ranting to about what was wrong with the OVDP, and why I was not the willful cheat they were looking for. He cut me off mid stream and said, “You don’t get it. You needn’t convince me. We understand. We are on your side!” That realization was breath taking for me, as up to that moment it felt like I was fighting the entire IRS bureaucracy that was deaf and blind to the harm they were doing. And, I like to think, modestly, that maybe my experience had some impact on the TAD that Nina Olson’s office issued. Maybe not, but allow me the delusion, please. 🙂
Then there was this guy called Kevin McCarthy, who was (wait for this title) The Acting Director, Fraud/BSA Small Business/Self-Employed Division, Department of Treasury, IRS. Fit that onto a business card! He was assigned the task to reply to my first letter to Commission Shulman when I entered the OVDP. In that letter I was pleading for Minnow consideration and pointing out all the problems this was creating with as many logical arguments as I could muster. It didn’t matter, as it did not change a thing! However, ultimately it was his letter of reply, while unsatisfying at the time, did restate the terms of FAQ35. That turned out to be my ticket to a reasonably successful appeal via the TAS, long after FAQ35 had been rescinded.
When I was up against the wall with the VD process, I searched him out, called him, reminded him of his letter, and heard his audible human ‘sigh of recognition” when I pleaded my case. I pointed out that the penalties that arose from a program his department designed was resulting in totally disproportionate penalties for the “so called” crime. Was this want he wanted? How could this be right and just?
How did it measure up to the Geithner tax failure?
He too metamorphosized from a “devil from the dungeons of darkness” to a human with compassion for my plight. He arranged for a conference call with a Regional head of the OVDP, Gloria, that was totally outside the normal process and over the head of my examiner. This provided a forum for me to plead my case to an authority position. The TAS joined in that call, and I got a front row seat to one department of government grilling another in my defense. How sweet was that? The price for admission to that show was steep, but I recall it fondly. It was beneficial for me to see, and realize that there was some heart at the center of the beast.
Also, a very positive experience was my dealings with Jack Townsend, Phil Hodgen, and Hale Sheppard which restored my faith in attorneys as something better than ambulance chasing, blood sucking parasites, the unfair characterization we all like to joke about. They all did yeomen work, and their advice, both paid for, and complimentary was another positive aspect of this “adventure”. Jack’s and Phil’s blogs were especially helpful for great learning and excellent forums for commenting and sharing information.
Then there was the positive reward of having a well known author and The Atlantic blogger, James Fallows to actually spend some time reading my unsolicited emails, responding to me with advice, patiently acknowledging me on avalanche of follow ups, and actually comprehending what I was saying. That resulted in a 3 episode FATCA chronicles that stirred a lot of interest and discussion around the internet. The hash tag #FATCA lit up on Twitter, when he did his stories.
I have learned that even some minnow like me, who is willing to put in the time sending hundreds of emails, to various unknown reporters, with patience and persistence can eventually generate some attention. Will it change the world? No. However, it does give me comfort to know that it is still possible to influence a wider media discussion of issues important to me and others not seen. You just have to plug away at it. “Nothing ventured, nothing gained,” really rang true in practice. It was not just another soapy slogan on a self help poster!
Another positive of this, came during the “darkest of times” where I thought I was alone in a (not to be hyperbolic here) life and death financial struggle with the IRS, there were others experiencing my same fate. I began to realize that on this thing called an internet, there were some very active blogs dealing with these matters. There were many others going through the same agony as me. Maybe I wasn’t just a lone nutcase in the wilderness after all, crying out with my assertions that this entire VDP process was so wrong, and citizenship taxation, as I have learned, was at the core of the problem.
I have also learned that some out there in the vast “Ether” there are many too timid to post something on a blog or even ask a question. My activism and willingness to “tell my story” could work as a surrogate for their feelings and frustrations and help them out in their decision making. They do watch for your every word, perspective and comment, and you don’t know how many or who they are.
You too, dear reader, as much more sophisticated bloggers than me, are having a big impact on folks you will never meet. You may never get the thanks for it, but you should take comfort in your contribution and recognize the education and solace your commentary provides to others unseen or unspoken. With this comes a responsibility too, and that is to keep the forum as open, embracing and non partisan as you can. Don’t let it degenerate into a Left or Right ranting society. Just my opinion, and hope it is well taken.
I never fully realized these impacts, until the other day, when an Indian immigrant, who had been in America for 10 years, searched me out (I am not hard to find) and called me in New Zealand long distance from California. He wasn’t looking for advice on what to do, as he had already joined the OVDI, but he was looking for someone who could commiserate with him about the impact this was having on him and his family. He couldn’t express it to his friends. They didn’t understand. I knew exactly where he was coming from, and at that moment, I thought to myself, “Wow, my efforts are worth it to someone I never knew, and will never meet. How great is that? ”
In the end, this too will pass, one way or another, and some will leave this community of bloggers and new ones will join in. I may eventually fade away too, as time goes on. It will be interesting to see how it evolves.
Unfortunately, while America may extract from our backsides some relatively minor revenue to support the spending habits that an Empire requires, it will also lose much more. Citizens who have talent, energy and productive value will either renounce their Citizenship, grudgingly comply but join in the active negative marketing campaign around the world, or just go underground never to be seen again. That is a huge unintended cost to my birth nation from this ill conceived and misguided OVDP process. Sadly, it is so myopic that even the TAS Optometrist, Nina Olson, may not be able to mill a corrective lens for their broken glasses. So it goes.
Well said Just me. I didn’t know the specifics of your situation, but I just read the Reuters article. Probably not a good thing to do a couple of hours before I go to bed. My blood is boiling for you–and at IRS.
I will take some of the information you shared about TAS and pass it on to friends who have a friend who has lived in Canada for 20 years, but never became a Canadian citizen. I don’t know the specifics, but she’s just learned she owes IRS $50,000. I hope TAS can help her as it helped you.
You’re a strong force to be reckoned with Just Me.
An inspiring post! Thank you so much for sharing that.
Just Me,
It is because decent/fair minded American like you that makes America still a worthy place for immigrants,
My salute !
Just Me, thank you for your amazing story, being another inspiring contributor, for all of your many intelligent posts and, especially, being part of the Isaac Brock site, further strengthening what is here. You and so many others are such a positive force in making the unjust US citizenship-based tax story known.
Just Me – you and Peter have been an enormous source of inspiration for me. I was one of the “timid” ones. Too scared to say much, embarrassed to share with friends and family, much less come out publicly and talk about it. (I wrote a few blog posts and sent a few letters but that was about it.) Reading your words inspired me to get a backbone and to try to do something about it. Being part of Isaac Brock has finally given me a place where I can meet others in the same situation and where we can work together to be heard. Thank you for everything you’ve done. We may not win but we are fighting the good fight and, if nothing else, the American Diaspora will make itself heard at last.
@Victoria… I have enjoyed getting to know you through your writings at the Flop House blog. I see you come from Seattle, my stomping grounds too when we return to the States. I left from Bellingham back in 1989 to sail out to Australia, and my 85 year old mother is still there. You caught my attention with that. You are much more thoughtful and well read than I, and I look forward to reading the posts you have been putting up. I may not comment on all of them, but you can know for sure, I am reading. Thanks for your kind words, and contributions here. Yes, it is the good fight. We will see what comes of it, but as Roger said to me in an email today quoting Winston Churchill during England ‘s darkest hour; “We will never give up.”
@calagy411 thanks to for your words and contributions. I appreciate all the references and comments you have in your posts.
Hey IJ… glad to see you are over here. You have been giving some good advice to those other immigrants that are coming to Jack’s blogs. I am always looking to see what you have to say.
Blaze… Well, I hope the blood pressure has settled, mine almost popped a few time! Need an even keel to keep this struggle going. My particulars are mostly over at Jack’s blog. I need to sign up here and put my entire narrative in one place, but just haven’t gotten around to it. It is too intimidating for me to get a Word Press account, but I promised Petros I would do so, so I had better get to it, but not tonight. Still have an email to get off to that Detroit Reporter Susan.
and Rodgrod, I don’t know who you are, but I hope you steer clear of trouble. All the best.
I’ve been one of the “unseen” and “unspoken”. To you all, thank you for contributing to this site. I’ve only found you a week or so ago, and quite honestly I’m reading your posts every night, trying to figure out what the right path is for me and my family. Through all of your stories and thoughts, the path that I must take has become clear. Thanks!
@JustMe, thanks for sharing your story.
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I can’t sleep, lost waight, I think I’ll become sick just from the unknown. What do they ask you in this procces? I was so scared I tried to close my account and didn’t do so. I am too am an imigrant and this account was existing before I even met my American spouse..
@ Paranoia
Thanks for resurrecting this post. When you find your way to Brock, you also find that you are not alone. It’s the one place you won’t have to struggle to try to explain — because we know. Immigrants and emigrants, we’re all experiencing the uncertainty and life disruption of FATCA. Here’s another older post which you might want to take a look at …
http://isaacbrocksociety.ca/2012/07/10/are-you-the-same-person-you-were-one-year-ago-how-has-the-last-year-affected-your-life/comment-page-1/#comments
@ Paranoia
And maybe this one too …
http://isaacbrocksociety.com/2012/06/04/how-do-you-cope-with-anxiety/#comment-21678
….restored my faith in attorneys as something better than ambulance chasing, blood sucking parasites, the unfair characterization we all like to joke about….. sorry but I could not disagree more with regards to OVDI representation, the fast majority is nothing short of @#&% … you get my drift.
Reading this blog and two or three others gives you all the tools,knowledge and motivation you need to do it yourself , to have the guts to say NO to tax lawyers and their $20,000 retainers .
Use TAS , you will be pleasantly surprised.
wOw. How did I miss this when you wrote it? SUper cool.
TIme to look for some civil, peaceful disobedience. Where can it be found?
@Paranoia, you’re not alone. I am in the same boat. Probably millions more are and don’t know it.
I wished I lost weight instead of gaining it 🙂
The IRS steals every year my time and money:
it is clearly obvious when you look at the size of my US 1040s return compared to my local one.
local return : 11 pages
US 1040 : > 60 pages (not included copies of 1099s or matched trades for wash sale adjustments)
Paranoia –
Perhaps some useful perspectives in these, perhaps even comfort –
http://usxcanada.wordpress.com/perspectives/#uncertainty
http://usxcanada.wordpress.com/perspectives/#ex
@Mike, my amended returns were all over 150 pages long per year while 2011’s was over 270 pages!! My local returns were only about 16 pages each year…
My US returns were 47 pages long and I am retired with only social security, a simple TIA pension fund and diminishing interest from a few bank accounts to report. I suppose I have to be ‘thankful’ to the Swiss banks for cutting me adrift and forcing me to make the decision to renounce. My deepest gratitude is to Petros and also all you IBS Brockers who have helped guide me through and keep me sane. I really feel for all those US citizens abroad who have no inkling of this Orwellian nightmare that is to hit them. I will try to guide as many as I can to this site.
I too missed some of this thread. Sorry @Paranoia that you are suffering so – I can empathize, and report a similar experience. Only made it by trying to keep up with all the good information here, and by trying to do something constructive on the broader front – even if feel powerless on the personal side.
@Dinosaur Jr., I see it was a year ago you wrote here. Hope you continued to find good information and some solace, even if you didn’t get a reply on this thread. Just hard to keep up with it all.
oh god. I file 10 pages USA per year. Sounds like I must have missed 140 pages of something. I wonder how many hundred thousand dollars that will cost me.
@Mark, my situation was unusual because I had a LOAD of different PFIC’s but all with only small holdings but they nevertheless still each required a separate 8621 form (each of which is three pages long, itself). I also had a lot of dormant accounts that nonetheless still had to be declared so my 8938 was over 30 pages. I believe my tax return for 2012 will be closer to 100 pages which is still a lot but is a huge drop at least.
I think that my accountant is filing my tax returns pedantically correct to help reduce the chances of a possible audit. I must admit that I still don’t fully understand what she did but trust her judgement. I have followed her posts on several accounting forums so believe she really knows her stuff. On the other hand, if someone had simply not known they’d had to file versus incomplete filing and reporting (as I’d done as a DIY’er), I’d imagine that the IRS would be reasonably satisfied with a more basic sort of tax return, especially if the person was not wealthy.
If one only has a simple banking and checking account along with a straightforward stocks portfolio without any mutual funds, I’d imagine that filing would be a lot less complicated. Though of course I’m sure that many living abroad have inadvertently invested in PFICs or have personal pension plans that could be arguably foreign trusts to the IRS, plus sales on real estate, etc. I suspect that many expats, especially accidental U.S. Persons who’d done their financial planning locally could find out to their horror that they will in fact owe the IRS money just as I did due to all the anomalies.
I suspect that the IRS would be reasonably happy with a minnow just honestly declaring all their income and gains and saving’s interest though. I’ll always wonder if I could have done that too but wanted to be able to sleep at night. I concluded that because of FATCA coming in that it would no longer be possible to do that and that I’d have to declare all the PFICs correctly.
Common sense tells me that because of limited budgets the IRS and FINCEN will still focus on egregious cases and that they’d still be reasonably happy if the minnows are filing and honestly listing all their income and accounts even if they didn’t do all the PFIC calculations. But it wasn’t a chance I was willing to take. I may have been duped into spending a lot more on accounting fees and extra taxes than if I’d just started declaring all my passive income and FBARs going forward instead of amending the earlier returns but I considered a hedge. After all, I could have wound up being railroaded by a feral accounting firm into OVDI and ruined. So I still have to count my blessings…
OMG!
I think I have waited too long from the first time I learned about it and asked for the advice of the wrong lawyer (in DC)… He got angry at us because when I cried after realizing that all my money will be gone, he said something like – ‘at least you got your health’ and my spouse ‘told him off’ for dissmissing my shock and for saying that to me…. he got angry and asked us to leave his office….
now I have a UPS letter on the way, when I didn’t order anything! I know it’s sounds crazy, but It’s coming from a state we use to live before our current address (that we told him in the meeting), and he got my first name, telephone number, the company I’m working with so all he needs to blow the whistle is the address…
He gave the impression he is connected to government people….
What am I going to do??
I know it sound fiction, but if he did this, even thought I’m not a big whale, he can still make a lot of money considering all the fines they can give…. what will I do?? who do I talk to? I will be under investigation and wont even be able to do this OVDI plan. I’m dying here… after I read all the horror stories on the internet and I know all they want is money, I know it’s all lost for me….
He really hated us and talked to us like an interigator.
OMG I can’t sleep or think straight. I want to run back to my country, but we have a little daughter – she is the light of my life and I can’t even be strong for her. this is wrong,
I have to be strong, even if they go after me just to scare the others into doing the OVDI, can they put me in jail? my money was earnde through hard work of my family and me back in my home country…
thank you so much EM, Chris, usxcanada and badger for the support but we are alone in this right? if they will start an audit or an investigation then ít’s too late for TAS right?
Okay, sorry, I think it’s fals alarm…
That’s it! it’s official, I’m loosing my sanity…
@monalisa.. how did you have the courage to do this? Didn’t the lawyers warn you from civil fraud, audits, fines that will be much larger than the OVDI? I too have pension plans that I got through my work place at my home country and a condo…
Sometimes I’m thinking maybe it’s a test from God so I can get into proportion about what is really important in life and the next thing I think it’s just a defeatist way to cope with this whole nightmare.
If someone told me to pay all the 27.5% (but it comes out to be more than 50% not considering my pension that I don’t view as something I can use now) today just to get it over with I would do it, just to get my piece of mind.
Can I give back my American citinzenship after I’m done with this? I really don’t like this country now…
@Paranoia.
A couple things that I hope will make you feel better.
1) Have you considered the FBAR penalty mitigation guidelines? In short, while the IRS claim that the non-willfull penlaty is $10,000 per year for the 6 years of statute of limitation, the Internal Revenue Manual, which is supposed to be the bible for IRS agents lists much more reasonable penalties based on the size of the account. Check this link at towards the bottom.
Compare that to the 27.5% OVDI penalty.
2) Not legal advice, but I am delighted when I see tax lawyers talking like that of OVDI:
“If there is a lesson the world should have learned since the whole Voluntary Disclosure Debacle started in 2009, it is that ordinary people should stay the f— away from it.”
http://hodgen.com/yet-another-fbar-minnow-to-the-guillotine/
3) Look at the sentencing for this whale:
http://federaltaxcrimes.blogspot.com/2013/02/ahuja-sentencing-21213.html
Omitted income: $2.7 million for years 2005 through 2009
Tax Loss: ~$967,944.66
Actual Sentence: Incarceration – 0 months; probation 3 years.
Home Detention: 3 months
His only loss wa monetary. Basically 50% of his stashed money.
You won’t go to jail.
4) The TAS is here to help, even if you’re audited. That’s their purpose.
5) You’re American. They can’t deport you.
In my case, I am a green card holder. My immigration lawyer told me that I need to fix the issue or else she won’t help me with green card renewal or citizenship application.
I refuse to go along with their OVDI extortion, and the numbers show that I might be better off anyway if I get audited. The only catch is that I fear they might charge me with filing a false tax return which would garantee me a one way ticket out of here if that happens.
I am married to an American and we have 2 kids. My wife is not interested in moving to my country of origin, and told me she doesn’t like the person I’ve become. She’s not supportive. Looks like she’s staying because of the kids and because I am the bread winner.
Living in uncertainty is hard and I hate it, but it looks like it’s going to be like that for another 5 years or so.
Bottomline: some situations might be worse than yours if that makes you feel better.
I wished I had never come to that country. I guess the one thing that keeps me going is a job and a company I love.