Just Me offers advice to newbies to the subject of FBAR compliance and OVDP considerations. To join or not to join. That is the question. This is a must read post.
A link to his Case Study of Communication with the IRS through the entire 851 day process is here.
The purpose of this post is to address Minnows who may be new to Isaac Brock. By Minnows, I mean those of you who were not the original target of the IRS offshore account jihad that started in 2009. Those I call Whales. They were the UBS type tax evading “US persons” living in the Homeland and squirreling away their money in “offshore” secret Swiss Bank accounts specifically to hide it from the IRS. If this is not you, then you can read on. If you are a Whale, or if you have already been around the block on all these IRS VD issues and feel well-informed, you can probably skip reading this post.
If you are a Minnow visiting the Isaac Brock Society you are probably concerned about recent IRS programs and what it all means for you as an US Expat, accidental US Citizen abroad, or an immigrant to America. Some of you are now faced with a hard decision as to what your response will be. You want to know whether or not to join the most recent iteration of the Offshore Voluntary Disclosure Program (OVDP) which may be driven by fear as result of a disingenuous marketing effort created by IRS press releases and totally mischaracterized by a compliant and non skeptical US media. This is a very tough decision that many of you are struggling to make. Far be it from me to give you advice on what you should do. You will not find that answer in this post. However, I can point you in the direction that might help you with the decision that only you can make.
Since I am always reticent to provide specific advice on a blog as to what one should or should not do, I want to be sure you understand that information here does not imply that I am encouraging anyone to do anything other than self educate!
I recognize there are others who will advocate strongly for not joining, or will provide more detailed advice then I am willing to do. I would always caution new readers to be wary of specific advice provided in a causal or generalized way in any online forum. Blogs are a great source of information for continuing education, but when it comes to the OVDI issues, they don’t substitute for good legal advice based upon your very specific facts. But…., before you throw good money at a tax practitioner, you need to go down the self-education route. You need to do some drudgery!
Let’s start now. This may be in the category of conventional wisdom, but it is worth repeating.
I have to assume by now, you have read the About Isaac Brock Society, and know this is a great information sharing site with lots of knowledgeable and good bloggers, but I want to direct your attention to some of the excellent information that is also provided on another blog by a tax attorney professional named Jack Townsend. His blog is called Federal Tax Crimes.
There are many other blogs around the internet, but I am going to suggest that you just focus on these two sites right now. Links here at Isaac Brock will expand your learning universe, but at the start of an educational journey you might try maintaining a site specific core focus to begin with, and Jack’s blog might be a good beginning. Then come back here for additional learning and updates. If you start wandering all over the internet and googling everything, you are just going to get lost and confused. There are many attorneys or bloggers telling you what a great thing it is to declare your sins at the OVDI altar and “come clean.” Run away from anyone that tells you that without knowing anything about you or your specific facts.
Jack’s blog was designed for attorneys and students and not lay people. However, with the advent of the first OVDP of 2009, it has become an excellent source for learning for the rest of us non experts. Jack has indulged many lay readers with his time, answers, and advice. He has provided an excellent forum for information exchange amongst novices on specific OVDI procedures. That is why I am placing a high value on it, and why Isaac Brock lists it as an external resource at the bottom of this page.
Between Isaac Brock and Jack’s blog, you should garner enough good information to make an intelligent decision that is right for you. Once you get through all the reading that I will suggest you do, and you update yourself with the new information that is flowing into here daily, you should be well armed with the prerequisite knowledge necessary to approach an attorney for strategic advice and help, if required. That is why I am proposing that do your own due diligence drudgery first, before you run to some unknown practitioner or blog for help in deciding what to do.
Now, I know this is probably the last thing you really want to do. “Why should you have to do it?” you might say. It is absolutely ridiculous that the US government is treating you this way, and you are angry and a bit fearful. You are not alone. We have all felt that way and expressed it.
You maybe overwhelmed and beleaguered by it all. “Now, you want me to do some additional drudgery too?” you might ask. Just accept that as a fact, and do it anyway! I know, I know! Who in their right mind wants to read legalese, endless blog posts, IRS manuals (IRM) and pour over every nuance of the FAQS the IRS issues about the OVDI? None of us do, I think. But you are reading this, so you must know in your heart that you have to.
The tax practitioners know that many of us are either too lazy or not so inclined to dig into these unfathomable subjects. Some of them have spent a lot of time studying the issues and laws, (or not!) and that is why they charge so much to “take care of it” for you.
Information = power = $.
However, if these experts are not up to speed on OVDI issues, and heaven knows a lot of them are not, the last thing you want to do is pay for their education!! If you are overseas it is especially hard to consult with a good knowledgeable one, but it can be done via phone conferences back to the States on Skype. Therefore, because of the communication ease these days, I would almost never rely on an attorney in your resident country (with some notable exceptions in Canada) for advice on how to navigate the OVDI Minnow processing plant!
At this stage of your education, just take a deep breath, and devote some meaningful time on your personal drudgery. Remember, you are doing this, as much as anything, so you don’t make a wrong choice in the professional practitioner market place, should you decide to go down that route.
It is a “Buyer Beware World” out there. Some attorneys are very good, and know the ins and outs of the IRS VD programs. Some are just looking for your money. There is a lot of good commentary at the Isaac Brock Society to those points, but I want to caution you again. You have to learn to identify them. Self-education is required for you do that.
As fun as attorney bashing can be, don’t discount all of them either. A good attorney who can provide you a sounding board with critical advice at key decision points is worth every penny of the price they may charge. At least that has been my experience.
Should you decide to enter the OVDI program, and again I am not suggesting that you should, there are a lot more strategies now on how to minimize the cost in dollars then there were back in 2009.
The “Opt Out” for all its faults is beginning to look like a good option for Minnows if you are already in the OVDI process. There may be strategies on joining the OVDI and immediately asking to “Opt Out”, or just doing a straight up VD, or a Quiet Disclosure (QD), or just start filing the FBARs and 1040s from now on going forward. There are other approaches too. Some are put forth here at IBS and in other blogs that say you shouldn’t join in the first place. I am not going to advocate one way or the other about that here. Each has its own set of risks and rewards depending on facts and ones need to sleep at night.
Unfortunately, what ever your decision is across the wide spectrum of choices from doing nothing to renouncing your US Citizenship, there will still be a big cost in LCUs. (Life Credit Units). It will consume a lot of your time figuring it all out. You shouldn’t have to this, and we can bemoan it all we want, but there it is. It is what it is! You are going to have to spend something, your money or your time, and it is up to you to work out what you can afford and in what portions.
At this point, I would just say, accept that fact that this drudgery for dummies is something you have to do for yourself. At first, for some of you, it will just be incomprehensible and totally illogical. Don’t get bogged down with whether or not any of this makes logical sense. My wife had a hard time dealing with that, and kept getting distracted on the logic tangent!
For a cynic like me, tax statutes by definition are often illogical, as they are written by lobbyist, passed by politicians for heaven’s sake, defined by technical IRS writers and then interpreted by tax attorneys! And then there is you at the end of the unintended consequence train wreck chain reaction to complexity . You have to deal with the impossible compliance mess that results.
Tax laws can be stupid, arbitrary and capricious, and all that complexity gets magnified every step of way until they are applied to you. We can rant endless about it, but what’s the point other than make you feel better? It doesn’t change anything. So, just get back to the recognition that you have to bear up under the burden of lots of reading and research now to work out what to do. However, if you do it slowly, but surely, the information will seep in and stick in your brain. At least that is how it works for me! You eat this elephant one bite at a time, and surprisingly, you find out that you can digest it!
It is not easy however, and not without heart burn. It took me forever to get my little brain around the legal technicalities of willful, non willful and willful blindness issues and what penalties could apply. Understanding who had the burden of proof, what were the appeal processes inside and outside the 2009 OVDP, what litigation ‘might’ happen or not, took effort and constant re-reading and repetition. These are not natural subjects for me. Then, coming to terms with an honest assessment of where I sat on that spectrum of failure and risk took time.
Trust me on this. If you do the drudgery now, and are disciplined in the incremental learning process, eventually the way forward will become clearer and appear. The right decision for you will emerge.
If you are not already in the OVDI, the “recycled” new one without deadlines for participation, means you have time for that knowledge evolution to occur. That is an advantage you have, that a lot of folks back in the days of VDPs with deadlines didn’t have. Fear, urgency and incorrect practitioner advice drove many to make mistakes in their decision-making process. You now have time to get it right! I don’t think you need to feel rushed into a decision. You also have the advantage of reading about the experience of those who have gone before you on the processing conveyor belt. There is much to be gained from their stories.
As a good example, if you haven’t read Moby’s experience yet, this would be one that you can go to school on. (3/11/2012 Note update at end of this text)
So, if it were me, coming new to this subject, I would start reading the specific blogs which I have listed below. I would systematically work through the ones I provide in a progressive manner, starting with the oldest post first. There will be duplication of information between blog threads, but like any learning experience you need repetition for concepts to stick with you. Some of us need it more than others. And yes, again, it is a drudgery, except for a very few of you sick ones out there that love this stuff! I joke! 🙂 Who could love this? Ah yes, they have the titles like attorney and CPA attached to their names! Mate, they are not like us, but with a little effort, you can become more like them. In these matters you have to, or so it seems to me.
On Jack’s blog I would start reading in May of 2011. I don’t think you need to go back farther than that, although you certainly can using the monthly archives. The selected list below is not exhaustive, or even authoritative, but it represents progressive learning which has occurred as the OVDI was developing, and the controversies surrounding the OVDP were being discussed. I would read every comment and every additional reference provided. If Jack or someone provides a link, I would follow it to see what it says.
The special and unique thing about Jack’s blog is that sometimes he provides excellent and detailed advice around a certain set of specific facts based upon his extensive legal background and knowledge. That is very helpful. He is the professor and is qualified to do so, while I am not! I have found him to be a very valuable resource. Also, he reviews with the readers the decision tree he uses to help some of his own clients decide on their best course of action. I put great weight on what he has to say.
You will also hear many folks asking very similar questions that you may have. You will read about others sharing their experiences and giving novice responses which too can be very helpful. Of course there are plenty of opinions, as we all have one, so take that on board with a grain of salt. Since his site is moderated, if someone gets off on a wild tangent or something, it may not be put up. You don’t have to slug through a bunch of over-the-top rants although, I have had some that have been borderline! LOL
When you get done with all this reading, plus the information you are picking up here at Isaac Brock, you are now armed and ready to talk to an attorney, should you decide you want to (or not). With a strong knowledge background, you can cut to the chase, and not waste a lot of money on an attorney telling you things you already know! They then become a partner in your strategic and tactical decisions, rather than an expert dictator of what you should do!
If you are not willing to do this drudgery than be prepared to pay out BIG $. If you have more money than time, you may be tempted to do that, however you can still incur significant and unnecessary risks in spite of the money spent. By definition those reading here are probably Minnows, and likely not anxious to spend the bucks. You may be a DIY person. I was. You can go through the entire process without giving power of attorney (POA) to anyone. You can learn to trust your own council, if you do what I suggest. Just remember, if you put your OVDI life in a tax practitioner’s hands, how do you judge the quality of the advice you are given? Think about that! If you don’t have a strong knowledge foundation to measure advice against, you are setting yourself up to be fish fertilizer. So, do the drudgery now and become Fool Proof and Process Proof later!
That is the best advice I can give you for now. Hope it helps.
Happy reading!
1. Looking for Mr Fbar (added 3/11/2012)
2. Evolution of the FBAR, Where we were, where we are and why it matters, 2006 by Hale Sheppard (added 3/11/2012)
3. To OVDI or Not to OVDI – That is the Question (Of Quiet Disclosures and Doing Nothing) (5/23/11)
4. Opting Out of the IRS 2009 OVDP and 2011 OVDI (6/14/11)
5. To OVDI or not to OVDI – Part 2 (7/31/11)
6. Of Fear and Hostages: A Mid-Sight Editorial on The OVDI Program and Extortion (8/1/11)
8. Opting Out Considerations by Jeff Neiman (9/10/11)
9. Experiences Inside OVDP / OVDI (9/14/11)
10. IRS Promotes the Success of OVDI and Related Items (9/16/11)
11. Article on OVDI and Beyond – Highly Recommended (10/24/11)
12. Excellent Article on Offshore Accounts – History and Future (11/9/11)
13. IRS will Give Canadians Some Breaks!!! (12/2/11)
15. “Opting Out” of OVDI and OVDP; What is Really Happening? (12/12/11)
16. Tax Notes Discusses Dispute Between the Taxpayer Advocate and the IRS About OVDP 2011 (1/6/12)
17. IRS Re-Opens Offshore Voluntary Disclosure Program (1/9/12)
19. “Opting Out” #2 (3/2/12) (added 3/11/2012)
20. Moby “Opt Out” update (added 3/11/2012)
21. “Experiences Inside OVDP / OVDI #2 (4/4/12) (added 4/5/2012)
22. “Opting Out” #3 (4/4/12) (added 4/5/2012)
23. Open Forum Comments to Congress and IRS Regarding Tax Administration for Offshore Accounts (4/9/12)
24. IRS OVDI June 1st, 2011 Opt Out Guidelines (added 4/12/2012)
25. Article by Scott Michel, a DC attorney on foreign reporting requirements and initiatives. (added 5/8/2012)
Special note on this article, where Scott, good as he is, might have gotten something wrong. This note has been confirmed by Jack Townsend.
Scott says..
Opting out enables the IRS to conduct a full audit, and if the taxpayer can satisfy to the IRS that their conduct was not willful, lesser penalties might be imposed (for example, the non-willful FBAR penalty).
Note: It is not up to the taxpayer to satisfy the IRS, it is up to the IRS to establish willfulness. Anything the taxpayer can present in defense of non-wilfulness is useful, but ultimately, the IRS has to prove willfulness.That requires a high standard!
I think that Scott, like the IRS, slips into assuming “willfulness” if you are in the OVDI. It was what the program was designed for, willful tax evading homeland Whales. However, as we now know, given how it has been administered, and given IRS hyperbolic threats, a lot of benignly non willful minnows were in the program and should be Opting Out now rather than paying disproportional penalties.
26. IRS Warning Letters May be Sufficient for Some NonWillful Violations (5/18/12) (added 5/18/2012)
27. Burden on Government to Prove Willfulness in FBAR Matters. (Added 6/08/2012)
– Link to Jack’s discussion and comments
28. The 2012 IRS Offshore Voluntary Disclosure Initiative by Charles Rettig (Added 6/08/2012)
– Link to Jack’s discussion and comments
29. Making Voluntary Disclosures to the IRS, by Jack Townsend (Added 6/10/2012) Abstract: This paper discusses the IRS Voluntary Disclosure Practice, including tips for the practitioner. Topics include noisy disclosures and quiet disclosures as well, in some cases, just making no disclosure at all. The article places particular emphasis on the recent offshore financial account voluntary disclosure program and its alternatives.
30. National Taxpayer Advocate Report to Congress (6/27/12)
32. Tax Advocate Report Identifies IRS’ OVDP / OVDI As Problem (1/9/13) Good stats and discussion of the Opt Out process, and complexities of Offshore tax filings.
33. Report on Webinar on Opting Out and Litigating FBAR Penalties (added 1/17/13 ) This is a Must Read for those currently stuck in the OVDP and considering Opting Out.
34. Warnings on Continued Government Patience for Offshore Account Ostriches (1/31/13)
35. Report of Government Comments on FBAR Penalties at ABA Tax Section Meeting (2/1/13)
36. Article on Taxing Administration for Offshore Accounts (2/2/13)
37. IRS has New Forms for Offshore Voluntary Disclosure Letter and Attachment (3/23/13) (added 3/35/2013)
38. Hale Sheppard Article on Willful FBAR Penalty Cases (4/26/13)
39. More on the GAO Report on IRS Offshore Disclosure Initiatives (4/27/13)
41. Guest Blog: Analysis of the Data in the GAO Report (5/13/13)
42. New York State Bar Letter to Treasury to Restore OVDP Integrity by Not Ejecting Precleared Taxpayers (5/21/13)
43. IRS Modifies Policy for First-Time Penalty Relief (5/31/13)
44. Offshore Items from Report on NYU Tax Controversy Forum (6/11/’13)
45. Rubinstein on the State of Offshore Bank Account Compliance (6/12/13) (note comment by Jack where he infers that U.S. will have some type of triage that will ignore the minnows)
46. Quiet Disclosures That Don’t Stay Quiet – Civil Examinations (6/13/13)
47. An OVDI Odyssey – an Opt Out Success Story (6/16/13)
Finally: Below is the link to my personal story that is told through the letters of communication I had with the IRS through out the entire OVDP process. It starts with my letters to Commissioner Shulman, and ends with the Tax Advocacy Appeal letter that allowed me to have FAQ 35 (consider this an inside the OVDP opt out) relief. That lowered my penalty from $172K to $25k for a ‘nonwillful’ failure. Still a lot of money, and in retrospect way too much for my failure. However, the process does exhaust you, and like a plea bargain, even when you are innocent, it did allow me to put an end to a 2+year process without any willfulness charge or more lengthy appeal process or expense. Without TAS intersession, (the one bright spot in my story) I am uncertain what would have happened. Maybe I would have had even a better outcome like Moby did with his ‘Opt Out’ which came later, or maybe I would have been fish fertilizer, but will never know.
48. My Story: Letters to Shulman, or a Case Study of OVDP communication attempts with the IRS. An insider’s view of the process. (added 3/11/2012)
One final comment, which I would be remiss not to mention. Phil Hodgen’s has up until recently maintained a fine blog on OVDP and OVDI issues. I used it extensively during by own personal drudgery. I checked it daily. You will notice that Isaac Brock has it listed in the resources, and Petros comment in the thread about Phil is right on point. I like Phil’s style of writing, his cynical wit, and his advocacy on behalf of Minnows. I did do some posting there, but since the majority of my experience sharing was on Jack Townsend’s blog, I decided to keep your focus there in your discovery process.
If you read all the threads and comments that I suggest, you will note that there are often links back to Phil, and you should definitely read what he has to say. There are other blogs by attorneys that I could mention also. I have found many to be reputable and very helpful in understanding the history of how this FBAR mess all came to be. Not wanting to clutter a long post any further, I left them out. Again, if you just methodically work through the Townsend threads I have highlighted you will discover them too. It all depends on your personal tolerance level for drudgery. Not many find this discovery process an exhilarating one! 🙂
The point about the cost of all this nonsense in Life Credit Units can’t be overstated. I was deep into something or other published by the National Taxpayer Advocate just now when my six-year-old came in bored and lonely and wanting help putting together the wooden dinosaur he got for Christmas (so I did, or course, and we had a great time talking about all kinds of things, none of which had anything to do with American taxes.)
But I mean, WTF? Why do I let so much time be sucked away by this? This is an good a reason to renounce (*entirely* and *absolutely* renounce) as any other – there are thousands of other things I could be doing with my life other than wasting it on torturous American tax paperwork set in motion by somebody’s administrative mistake. You know what I want to do? I want to put together wooden dinosaurs. And get this f*cking succubus citizenship, and this tax system based on imperial vanity, out of my life permanently.
/rant
@Mona
Check Phil Hodgen’s site — he has a section of Expatriation http://hodgen.com/expatriation-tax-services/.
@Geeez, I mentioned elsewhere to you how I agree with you about the potential problems of not being able to open or keep existing accounts abroad. I also feel that our ability to invest abroad is compromised due to the onerous types of taxes on offshore mutual funds, capital gains taxes, etc.
It’s not so much the double taxation though as it is the burden of compliance costs such as accounting fees and all the stress of having to file each year and worrying about possible fines for not having the forms filled in perfectly correctly.
@Petros, I agree that they probably are trying to ensnare minnows in the OVDI, especially as they introduced that new 5% rate. That’s still a very high percentage if all ones’ personal assets are located in one’s country of residence, especially if the lack of filing or filing incorrectly had been done unintentionally. I agree that if it were a true amnesty that they would only perhaps charge interest on any taxes due with a ‘go an sin no more’ letter.
@USXCanada, I agree that the 8938 is probably being devised as a way to ensnare the unwary more easily than via the FBAR. The potential fines start at $10,000 going up to $50,000 per year, which is of course far lower than potential FBAR civil fines. Thus, the IRS could more easily argue that their FATCA fines were still constitutional.
I would have thus guessed that the last year it would have been possible to easily still submit an quiet disclosure reporting increased foreign income would have been for the 2010 tax year.
And @Broken Man, I completely agree that it stinks that you’ve got to be wasting precious time on all this rubbish when you could have been spending time with your son building dinosaurs.
I literally feel trapped by my circumstances. I’ve more or less had to put my life on hold at least till I get through the SOLs. I suppose we all have our crosses. I don’t want to renounce and hope that they will have reformed things to make it less onerous for genuine expats and accidentals by the time I would be free to start considering it. But if things become impossible, I may have no other choice.
@A broken man on a Halifax pier. You know what — I want to help you and your son build dinosaurs. ‘Life is too short and we need to live every moment’ as most of us find out in many ways — often from the mouths of babes.
I simply cannot make the decisions for my life and how I’m wasting it based on some non-tangible blind patriotism, some ideal long lost in the land of my birth.
It no longer makes any sense to me, but then that is just what I’ve decided.
@monalisa1776: I looked at OVDI briefly back in August and did the math. 5% of the highest value of the accounts over a eight-year period covered the point where we sold a house (you know how a huge amount of money goes in and out of an account over a day or so when you’re selling a house and buying another), and so the penalty would have actually come to C$22,000. I had a certain lack of interest in paying $22,000 plus accounting fees to enter an amnesty program for criminal tax evaders when I didn’t owe any US taxes in the first place. Regrets? None.
The dinosaur is gluing up.
Good for you, don’t let the b**tards get you down 🙂
Pingback: We get a nod from Phil Hodgen | The Isaac Brock Society
I am amazed at how much conversation this post has stirred up! Thanks for the comments that have been made, and the references to Phil Hodgen’s blog. I really debated whether or not to list him as a reference or not in what I wrote. In the end, I decided for Newbies, to try to keep them focused, knowing that if they followed by advice, they would end up coming to the many links to Phil’s comments I had put in Jacks blogs.
BTW, here is what I just posted over at Hodgen’s blog…
Phil,
Many, many thanks for the shout out and recommendation on the Drudgery piece. That means a lot to me, coming from you. You have been an inspiration and big help to a lot of us. You are one of a kind!
I toiled over the Drudgery post trying to decide whether I should also list your site as a reference for excellent information or not. In the end, for simplicity, I decided to focus on Jack’s blog. I knew you were moving on to other areas of practice, for real good reasons I could understand. I also figured, once folks start reading those threads at Jacks in the order I think they should, and if they follow my advice to then read references that are made there, they are going to come to the many many links I have made to specific posts that you did that were extremely helpful to me.
Your advice, and your wit, and general encouragement have kept me sane throughout this process, and I wish you nothing but continued success. Given the current course of IRS actions, you will be very very busy! Sad for America, but good for you!
All the best..
Reblogged this on Stop Unconstitutional Double Taxation and commented:
Excellent post from IsaacBrockSociety.com about ordinary people “Minnows” negotiating the FBAR swamp.
@Just Me, @all Phil’s blog is indispensible along side Jack’s. I would say to a degree I found Phil’s blog more aimed at minnows–Townsend really is a criminal tax lawyer, as even his blog title suggests “Federal Tax Crimes”. As a result, many readers will find Hodgen’s blog more accessible.
What Hodgen’s blog did for me is made me realize how wrong the government was in its approach to FBAR. I therefore relied on it heavily in my first article (with Monty Pelerin) for the American Thinker. See http://isaacbrocksociety.com/2011/12/10/when-government-turns-predator/
“Filing tax returns is too difficult for a mathematician. It takes a philosopher.”
– Albert Einstein
@Petros — I don’t think the iRS could ever bring criminal charges for any crime, including tax crimes. Criminal charges are always brought by the DoJ (or by US attorney’s in conjunction with DoJ). I think its the same for all other US government departments as well (i.e. all criminal charges are brought by the DoJ). Even with some of the insider trading scandals recently, I read that the SEC could only bring civil or administrative charges, not criminal charges. Criminal charges were brought by the US Attorney for Manhattan, and so on.
For those of you doing your personal drudgery, I want to give you a recent example of why I place high value on Townsend’s blog for advice helping you navigate the OVDI minefield.
Here is a recent comment he has made to someone asking for help. Not all get these types of lengthy replies, but the ones that he does do, are usually gems. His observations are worthy of your attention… This was dated Jan 31st
http://federaltaxcrimes.blogspot.co.nz/2012/01/irs-re-opens-offshore-voluntary.html?showComment=1328016625733#c6834067378406854097
If you were doing the reading I suggested, you might have gotten up to this point by now, but I am hereby giving you permission to jump the queue and read this one now! LOL
Just me: Yes those were very useful comments by Jack. His “go-forward” advice is extremely relevant to many people here.
http://www.nixonpeabody.com/publications_detail3.asp?ID=4189
And Anon123…. We are still waiting for that answer to Nina’s TAD. Shulman is running late on this January 26th deadline. Wonder if there is a “failure to file” penalty associated with that! LOL
Just Me,
I would not hold my breath. His rules can change at will just like FAQ 35 and all the other modifications made to the programs over the last few years. Who in their right mind would trust these people to do what they say they are going to do given the history. The 2012 deal sounds even more open to bait and switch.
The more I ponder on this process and what is has done to me and so many others…well I just am in disbelief! We need to converge on this matter and get it cleansed with sunshine and the light of day. I wonder if there are legal methods of civil disobedience to throw monkey wrenches in the fish fertilizer pulverizing mechanism. Maybe everyone should file multiple defensive FBARs along with the new forms they are coming out with. Even if it is for years already filed. Just to make sure they got them so they do not grind us up again. It would also be interesting if those already ground up filed for refunds as the Nixon Peabody article suggests. With the Nina Olson TAD, this may be a very credible action. At least it may clog some arteries up sort of speak.
@Anon123…
It surely is stunning what is happening, and continues unabated. More stunning how little US Homelanders seem to know or care. You wonder when this train will run off the tracks, or when they will just get just get so swamped in their data mining and not have enough agents to process what they have received or will receive come FATCA.
You are right about Shulman making up the rules and can change them at a whim. Still, the TAD will require some Congressional oversight, I think, if he rules in the negative or does not respond, which surely he has to do.
I have to call my TAS officer this week, as my reconciliation has still not been completed after receiving my 906. The IRS still owes me money. I have only gotten 2 of the 5 year notices where they try to collect accuracy penalties and interest. They want me to send them more money, even though they can clearly see I have a credit running for more than 2 years now since 2010. It is always something with these guys. Their processes are so fragmented and disjointed. They don’t work in chronological year order, so it is amazing they collect anything! No business could survive if they were this inept. She said to get back with her in early February if nothing is done to complete this reconciliation, so at the same time as I do that, I will see if she has any further insights as to what is happening with the TAD.
Just Me,
I got a little back. It came about 2 or 3 months after the 906. My attorney did not want to close because he figured that the 4549A were overbilling by this amount. I think it was some $1200.00. I did not want to argue with the agent over $1200 after almost two years of this crap so I closed and to my surprise they refunded the overpayment a few months later.
They made big mistakes in my process. After we were initially contacted by a revenue agent (post CI clearance letter) one of the IRS campus sights started issuing collection letters for two of my applicable 5 years. No one knew how to stop it as the letters became more threatening as time elapsed. No one knew why this happened. Not my attorney nor my revenue agent were able to stop it. We ended up paying those two years directly to the campus after the agent agreed in writing to make adjustments in the final calculation. This cost a boatload of attorney fees. It was a sad joke. No wonder I suffered heart failure in October of 2011. I now have 18% kidney function and am very close to going on dialysis. The reason: high blood pressure from this outlandish process. For crying out loud, my work career has been as a paint salesman and I even spent a couple years as a Big Brother volunteer. Some criminal I am! My goal now is to live for another two years so I can see my son graduate from college. Mr. Shulman needs to get a clue.
@anon123
I feel so bad for you Mate. I have read all your comments at Jack’s blog, and followed your story carefully. I was concerned when you went silent, and then worried about your health when you let us know what had been happening. Thanks for adding personal details here.
What can one say? This whole episode is a sorry tale. You tried to do the right thing, and after a big cost in dollars, LCUs and health, all you have to show is the certainty of your moral superiority over the likes of Commissioner Shulman. He is probably like a lot of government people, individually, he might be dismayed at what he has wrought, but the bubble they live in, means they really do not have a clue. Willful blindness maybe? I am trying to be generous!
I do wish, that every OVDP participant, who knows in their heart they were a Minnow, would clog up the works by applying for a refund on their 20% and 25% penalties that they may have unwittingly paid out of fear or mistaken advice of Council. I wished all of them would have a mass Opt Out in the OVDI. However, reaching out to them is difficult, as so few even comment on blogs like this, and there is no way to pull that universe of victims together into common cause. The IRS wins by fear, secrecy, and dispersion of the victims. There is no way they can know of each other, and mobilize for advocacy. The TAS TAD is the only hope, and that is a very long shot too. Nina does not operate in a political vacuum, and even though she is trying to do the right thing, her voice may not be heard or listened to. Worse yet, it might be suppressed. I guess we will get to see what “Change we can believe in” will look like.
Side Note: I hate to be a sexist here, but the males in any administration often run rough shod over the females, even when the females are so very right. Look at Elizabeth Warren (CFPB) or Shelia Bair (FDIC). Women I very much admire for being right and trying to do the right thing against strong lobbyist and Administration opposition. Both are now gone.
I am also reminded of Brooksley Born at the CFTC, and her run in with Greenspan and Robert Rubin during the Bush Administration where she was warning of the dangers of derivatives, and they were determined to shut her up and did.
If you never saw this Frontline documentary, I would highly recommend it. It puts in perspective what Nina might be running up against, if Shulman and Geithner, political animals that they are, decide to oppose her.
Nina is challenging their much proclaimed “highly successful” program, and with their egos being what they probably are, it would be hard to climb down from that!
The Warning.
http://www.pbs.org/wgbh/pages/frontline/warning/view/
Keep the faith Mate, and here is hoping for the best healthy outcome for you.
Anon123. I just saw your comments over at Jacks blog, and thought I would reference them here. I think they have some valuable considerations for those wondering what to do about the OVDI.
They start out as…
“Wow! This is an example of the IRS programs giving incentive not to clean up the past. Would it not make more sense to make the programs less draconian and encourage noncriminals to clean up history and comply going forward…….”
Read more at….
http://federaltaxcrimes.blogspot.co.nz/2012/01/irs-re-opens-offshore-voluntary.html?showComment=1328094220545#c2202436124088285126
Also read Jacks comments that follow! Important considerations.
Pingback: Letters to Shulman………………………….., or a case study of OVDP communication attempts with the IRS | The Isaac Brock Society
My Son born in the USA when I was on H1 visa and returned to India when he was 3 years old. He is now 19 years old and can barely remember days in the USA. He inherited some property from grandparents and a tax cheat as per IRS for not filing taxes and FBAR. Since income tax brackets are so low, he owes no taxes on his investment income. He is a student. He is treated no differently than milliners who are living in the USA and intentionally hide money in tax heavens to evade taxes. When I told my son about FBAR, he hasn’t yet believed me. He said, it impossible that free country like the USA can imprison him for not filing FBAR, when no taxes are due. He agreed with me when I said I will file his nill tax returns and FBARs. But he said, he is ready to fight FBAR in courts, if any penalties are applied. He can’t afford a lawyer, so hopeful Tax payers advocacy or some other’s would help him.
Just me,
I think I am in line of opt out now. I was told today by my agent who previously told me “they had internally discussed and decided not to impose penalty on RRSP”, but now they would.
So I was ready to pay penalty for being responsible and fair (compared to expats and visa workers), but not for RRSP.
I have passed all my bank records, and they have all they can audit — so why not I just opt out and ask for reasonable cause ? If I failed to file other tax credit form that I could claim money from IRS, why would not I fail to fill other form — only thing they can prove is that I am stupid and careless — but I am at least honest to make it right and ready to accept my responsibility.
This may be another 2 years LCUs — and maybe worse outcome.