One of the things that bothers me the most about this hideous situation is that little emphasis is placed upon the responsibility of the US government/government agencies to notify citizens abroad of their requirements to file tax and information returns. I came across this list of recommendations from the Department of Treasury, Office of Tax Policy, May 1998 report, requested by Congress. This report has been discussed by Schubert1975 with regard to CLN’s being backdated to the expatriating act (with the effect of negating tax liabilities for many “citizens”). At the end of the report, are a number of efforts suggested to improve revenue collection while balancing “legitimate privacy and other interests of Americans living and traveling overseas.”
In my 30 years of living in Canada, I cannot think of a single time I have ever noticed anything that would point to the implementation of any of these recommendations. For example, I have never seen any specialized media releases regarding compliance or any advertised seminars or outreach events designed to inform the public of USC obligations to the IRS.
Does this bother anyone else? Doesn’t it matter at all that we have a legitimate basis for being unaware of these requirements? How justifiable is even a “non-willful violation” at $10k per violation?
V. Conclusion and Recommendation
It is therefore Treasury’s recommendation that upon the completion of the IRS demographic
study, IRS appropriately allocate its resources to projects and initiatives that properly balance the
goal of efficient revenue collection with the legitimate privacy and other interests of Americans living
and traveling overseas. Based on IRS’ experience in its Middle East Compliance Initiative and other
successful compliance initiatives, such efforts should include:
- analysis of local information sources,
- local financial news media
- DOS and Department of Labor data,
- identify employers of U.S. citizens,
- organizations with U.S. citizenship membership
- education resources used by U.S. citizens or dependents
- to aid in targeting education and compliance projects
- identification of local tax practitioners used by U.S. citizens to provide such practitioners with the resources and education necessary to improve compliance with U.S. tax laws;
- identification of local media outlets accessed by U.S. citizens and
- development of specialized media releases to educate U.S. citizens regarding identified areas of non-compliance
- development and implementation of market segment educationand compliance projects
- conducting outreach and informational seminars
- pursuing appropriate individual examinations and investigations
@geeez- Those guys that you advertise in the media about how they can “help” you settle your IRS issues for pennies on the dollar are not all they are cracked up to be. Last year 60 Minutes did a segment on one of the heaviest advertisers in this field and his business was shown to be a sham. No satisfied customers but lots of legal fees.
One of the problems with this whole extra jurisdictional taxation issue is the lack of reliable and clear rules for completing taxation forms. In the U.S. the majority of tax filers do NOT complete their own tax returns so how does the IRS think that it is possible for non resident citizens to find trustworthy tax assistance in their countries of residence? The U.S. tax code is one of the most complicated tax codes in existence and when it is applied outside of the U.S. boundaries all that you get is confusion.
What the U.S. wants, by forcefully applying its tax code outside of its boundaries, is for us to live outside of America as if we are still in America. There is no reason why we or our government of jurisdiction, should have to ge begging to the IRS for permission to use the tax benefits that are applicable in our country of residence. To make us do so is insulting not only to us but is also an insult to other sovereign nations.
This lack of affordable and reliable tax advice is an inequity that just screams for a change in U.S. tax policy.
Bank accounts and other financial products that are held in one’s country of residence should not be counted as foreign bank accounts. They can’t be foreign accounts if they are held where the holder resides. We are not extensions of U.S. territory and sovereingty!!!
Only Commissioner Shulman, a few Congressman who are totally ignorant and the patriotic uniformed farmer from Kansas would argue with you! Well said.
Someone once said, that all tax software should be banned, and every person should be required to fill out their forms manually. They should have to read the unfathomable publications the IRS issues to explain how to complete the forms. If that happened, there would be an immediate tax revolt, as software lulls you into complacency and you don’t see all the underlying complexity that exists.
I thank all of you for the suggestions and sharing. I am going to try to process everything I read and I may come back with some ideas or questions. But let me say that I never had a major problem with IRS questions and I have lived back and fourth in two Countries,Starting in 2009 when by chance I learned about FBARS I have been disturbed trying to find how to deal with it. I prefer ti think that the USA is a fair Country and that this is going to become clear and easy for us to handle. Will be back.
When I first learned of FBARs I contacted an US lawyer who said he would have to defend me from criminal charges and asked me US$15,000.00 up front. Panic! If we had known about FBARS when they came out I would have no problems! But I guess they think it is up to me to know even though I am in a third world country far away from any US CPA. Yes, I kind of feel annoyed when I am compared with Americans Living in the USA and hiding investments offshore. I am living in a foreign country, I have savings from moneys earned in the country. This makes a big difference, But apparently the IRS lumps us together,
Markpinetree…
Relax mate. That attorney was not very helpful, so would never go back to him. That is an outrageous assertion and an ask without even examining or understanding your facts.
Start doing the drudgery, as you are not under a time limit now in the newest version of the OVDI. It is no fun, I know, but this process and risks are all understandable once you get your brain around it. You don’t have to be a lawyer to understand this crap, it just takes time and frequent exposure for it to really sink in. I have to read things many times before it all got into my thick skull, and I am still leaning. There are many much better at this than me, so if I can, you can. You will get their Mate.
If you are not willing to do that, then at least consult with a knowledgeable OVDI attorney. Jack maintains list of them at his blog. They are not cheap, but I doubt they would ask for front end money to defend you from criminal charges without at least understanding some basic facts.
ahh.. and the Brazilians here complain about the Brazilian government because they think politicians like to steal. But at least they leave people alone, and especially overseas people — they leave them alone altogether!
I would love to go to the consulte tomorrow to renounce, but it’s freaking hot where the embassy and consultates are located. I live high up in the mountains. where it’s NOT hot, and I would pass out dead in that heat, and I wouldn’t be able to help “the cause.”
Mark.. acho que você pode relaxar um poucinho. Há bastante gente aqui que já passou por a mesma coisa que você está passando. Tem os forúns também. Pode perguntar a vontade! Para mim, é bom ver outra pessoa que já tem “dificuldades” com os EUA. Eu, pessoalmente, pretendo renunciar logo que for possível. Eu acho que os EUA é “mara”, mas não para quem tem passaporte cor de azul que mora FORA de lá. Infelizmente é assim.
Nao conheço aqui nenhum americano self employed. Brazil has no Tax Treaty with the USA so I end up having to pay Social Security Self Employment Tax to the two Countries. 16% each. If I was employed this would not happen. If I knew about the FBARSwhen they started I would be OK even though I was paying a lot of tax. Why they did not tell me? I don´t know anyone in my home town who knows about USA Taxes.
@markpinetree – Believe me you are not the only one who was in the dark. My family and friends in the US had no idea. My French husband had no idea (and he did have a Green Card at one time). I’ve been on the phone with American friends here in France and they had no idea either. Some of the expat bloggers I’ve talked to had no idea. Even the CPA I talked to in Seattle wasn’t sure. I’m beginning to feel like a bearer of bad tidings. 🙂
It’s not you. Really. It’s not your fault. You are not a mind reader and neither are the rest of us. We genuinely did not know and given the level of information sharing coming out of the US ‘fisc” there was almost no way any of us could have known.
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