47 thoughts on “Comment from a 30-year IRS vet”

1. @Petros, I’m very glad that he/she is already here. It will be nice if he has experience in the particular areas that affect expats the most. To him, I say Welcome!!

2. @ 30 Year IRS Vet.

   Thanks so much for coming. We really, really hope you stay around and will give us the benefit of your expertise. You sound like a good person to have done so. I hope you have had a good look around this site and that you can see and feel the stress, both financially and emotionally, that this is creating for individuals and families and “accidental Americans”.

   We are good citizens of the countries that we chose to live in, raise our families in, earn our livings in, pay our taxes in, volunteer our time for, vote in, etc., etc.

   To learn of all this when the US has in fact let this whole thing ride for, say, most of the 43 years I’ve lived in Canada, and now to lower the boom is unconscionable. The US did not go out of its way to inform us, but some of us now get it (and some still don’t know) — you are now. Is there not some kind of precedent that was set with the US being relatively silent on this for all these years, until now?

   What we most cannot forgive (or I should speak only for myself) is that the country I was born in paints me and my fellow US citizens in Canada and around the world Tax Evaders, Tax Cheats, Traitors — we’ve seen the media from the States; we’ve heard the congressmen and senators who have used these words. It has been accomplished — a lot of our relatives and friends in the States (and some here in our countries of choice) have bought the story being told too. We are trying to educate people that this is not the case.

   It is not the true story. We have to get our lives back and stop the waste of precious time being devoted to this monstrosity in our lives. Joy has been removed from our lives; we cannot sleep at night; many have health issues around worrying if the money they saved for their retirements and to pass on to their children (some of whom are disabled, like one of mine) will be sucked away by the land that refuses to tax as most of the other countries of the world with the much fairer taxation based on residence. We did choose where we want to reside; we did not choose where we were born nor did our children choose to have US citizen parents who forever bound them to the US. and we didn’t choose to be taxed on our US citizenship.

   Sorry, I just had to get that off my chest, so yes I guess it is venting, but it is also educating. I really do appreciate you joining us. I really, really do!! Thank you.

3. Well said, Calgary. Bravo!

4. 30 years of IRS experience has to be worth something, so I would like to thank the gentleman for his overture. Also, while it is certainly not the primary purpose of this site, we all are guilty of “venting” here from time to time and that’s perfectly OK – it’s therapeutic.

   If I were to try to summarise the underlying philosophy and purpose of this site and the end-game of our efforts, it would be to one day celebrate the repeal of every American law and policy relating to citizenship-based taxation, period. Everything else is just a symptom or an outcome of this hideous, antiquated philosophy of taxation. Even grandiose plans to repeal FATCA are missing the mark if they are not part of a larger effort to bring the US in line with the residency-based taxation systems of every other nation on earth (except good old Eritrea, of course). With its 72,000+ pages of incomprehensible tax code, the US has nothing useful to teach the world when it comes to taxation policy in a civilized society, so it is now their turn to learn from the rest of the world. Anyone who can help promote vital, constructive change will be a valuable ally to our cause. Anyone who merely advises compliance with a badly-flawed, destructive and immoral status quo can frankly move on.

   Hopefully, sir, you can contribute much insight to our cause, but be aware that we are here to fight for change and freedom, not acquiescence and slavery. We fight not just for ourselves, but for our families, our adopted countries whose very sovereignty is at stake, and for the entire world, whose economic future is dependent on waking America from its terrible slumber, before it’s too late.

5. @Deckard1138 I think this post you just wrote is the best one I’ve read on this forum or any other regarding this insane situation. Thanks.

6. Please allow me as a retired US citizen who has lived abroad and traveled in my work to 98 different countries over some about 45 years that what you who are Canadians are going through is not unique to Canada. The same thing is going on in Europe. To be sure Canada likely has the largest concentration of persons holding US citizenship in any country. I state “likely” because the last official -source statistics that I am aware that were published on Americans living abroad with data from 1999 and 2000 listed Mexico with more US citizens living there then in Canada. It shows 1,036,300 for Mexico and 687,700 for Canada.

   I have a full color map from back then with the number of Americans living abroad posted for most of the countries. A note in the lower right hand corner states: “Country figures on the map are for private sector Americans only. There are also some 550,000 military and government personnel and their dependents abroad, the majority of whom are in Europe and Asia. Source: US Department of Defense 2000 and US Department of State 1999.”
   The total private sector Americans then was 4.1 million.

   I am aware that subsequent inquiries to the State Department have resulted in responses to the effect that this information is no longer available. There is no assurance that the numbers back then were accurate either, but they were likely the best guess available at that time.

   There are some sizable colonies of US retirees that live in Mexico, and I am sure that there are many “Mexicans” with citizenship roots in the US. In my travels to Mexico City where I used to go frequently I knew and worked with several of them.

   So far I have not heard a peep from US citizens in Mexico about these tax problems, but I don’t have any contacts today with any of them so it is not a surprise that I have not heard anything.

7. Just to let everyone know I was having some previous discussions with 30 year IRS vet and suggested he visit here. I do believe my suggestions to him are being taken seriously and being passed along to the the US Treasury and I sent him some fairly detailed analysis of the policy issues (much more detailed than I have even discussed here) vis a vis FATCA, FBAR, etc and how they affect Canadian law. Unfortunately I feel the US has boxed themselves into a corner quite badly on this issue and doesn’t have an easy of a way out. I don’t know exactly what is being considered but “if” for example they were to designate ALL Canadian Financial institutions as “low risk” for tax evasion and exempt them from FATCA (I don’t know for sure whether this is being considered but it is a power of the US Treasury Secretary) they probably open themselves up to legal challenge from banks in other countries.

   I also don’t think the US wants to refight Cooke, the case made citizenship based taxation constitutional bank in the 1920s on someone born in the US who became a Canadian citizen 40 years ago and has made no apparent attempt to keep/remain a US Citizen. My biggest personal frustration is why someone such myself who is knowledgeable about this issue but has absolutely no official role (in terms of my day job) when there are people in Ottawa and on Bay Street(there are many in DC and New York too) being making far more money than I am whom this “is” supposed to be their job responsiblity to deal with.

8. @ 30-yr IRS vet: I really appreciate and like your retort to my response to your comment. Bravo. As you read some of the comments from others you can get a feel for where people are coming from.

   I have personally decided that I will do the minimum of compliance in order to satisfy the CRA (Canada Revenue Agency); this means filing my tax returns up to the moment that I became a Canadian citizen. After that I would consider filing a 8854 only to the point it will not incriminate me. But since FBAR is not a part of the tax code, I will not be filing any FBARs. This is because the Canadian government has said it will not collect FBAR fines. I became a Canadian on February 28, 2011, and I don’t need the United States approval to have expatriated, as it is a fundamental right. No government which is just and free ever stands in the way of the fundamental rights of individuals. To do so is tyrannical. Therefore, I do not feel as a Canadian that the IRS has any more say in my life, after the date that I became a Canadian. The form 8854 is violation of the expatriation laws of the United States and international law. When laws contradict one another, the laws which uphold fundamental rights take precedence.

   I am personally involved in this blog to encourage others to stand up for their rights as human beings and as Canadians (if they live in Canada) and to resist the unlawful oppressive tax policies of the United States.

9. @ tim Thanks for your initiative and encouraging 30yr IRS vet to comment here. Much appreciated.

10. @Tim, thanks for inviting 30 years!! Welcome 30 years!!

11. @omg – thank you very much for the compliment. You too have been contributing much and we all appreciate it.

    @Roger Conklin – thank you, sir, for reminding everyone that this is far from being a uniquely Canadian issue. I know how sensitive ACA has been about the preponderance of news emanating from Canada on this subject and I personally always try to enlarge the scope to the global dimension where it rightly belongs. Having said that, I think the lesson here is that bold and vociferous protest needs to take root in every country in the world, not just in Canada. We are all in this together.

    I believe we must begin to build an international coalition unprecedented in its scope and purpose – a coordinated effort consisting of government representatives from all “foreign” nations, financial institutions, think tanks, policy analysts, writers, journalists, artists and, of course, ordinary citizens like us who are being caught in the crossfire. The “rest” of the world needs to stand as one and draw its own line in the sand, refusing to bow to this dangerous overreach by the US. At the same time, we need to persuade the Americans that it is ultimately in THEIR best interest to abandon this horrific project as it will surely destroy what remains of their own economy.

12. I agree this is not just a Canadian issue, but we do seem to have the most number of “US persons” living here. We also have a government and media which have been more outspoken about it than in some other countries.

    I hope we can build a strong coalition to fight this.

13. @Everyone — it is such a humbling experience to be in the midst of such caring, literate, people, me a “mom” who has a voice among you. Thank you 30 Year IRS Vet — perhaps you can be a link from us to those who really need to understand what the consequences have been for us. And, there are so many more out there that we speak for as well. Tim, Roger, Deckard, Blaze, Geeeez, OMG, and of course Petros, and so many others, now including 30 Year IRS Vet, my thanks and respect to you all.

14. I am just moving my comment to “IRS Vet of 30 years” from the older FBAR thread, and revising a bit, as it will be better if additional commentary is here.

    @ IRS Vet…. I want to salute your courage in being willing to post comments on this site. We know some IRS agents lurk around, but rarely do they make comments and identify themselves, and so to you I say, …”Bravo” (although, I assume your years at the IRS are now passed, but correct me if I am wrong.)

    I am mulling over what exactly to say to you, and help you understand the situation that many have been going through the past 3 years. I think I will reserve my full comments and make them a little later when I see if you are willing to continue engagement.

    In the meantime, I would encourage you to read this thread:

    Has your life been stolen from you by the IRS?

    http://isaacbrocksociety.com/2012/01/21/has-your-life-been-stolen-from-you/

    If you know others at the IRS that need to see this, why not send it to them too, if as you say, “IRS is under an enormous amount of pressure to “be reasonable” in its administration of these new penalties and statutes.”

    Maybe they are now open to listening about the unintended consequences of their headstrong and misguided OVDP and OVDI efforts plus FATCA.

    It has been 3 years of IRS ‘willful blindness’ to these issues, and if at long last there is this new found ‘pressure to be reasonable’, now is the time for them to be reading things like this. Although I must ask, why would pressure even be necessary, if the agency really wanted to do the right thing and if compliance, not revenue collection was it goal?

    Surely it is only because of Nina Olson and the Tax Advocacy Office’s report to Congress and her TAD that the IRS is now listening and under pressure, but not yet responding.

    January 26th deadline for a response has now come and gone, and there is nothing from Commissioner Shulman yet. He is 7 days over due. I trust there are no 20% penalties for late action on his part! Does he have “reasonable cause” for the delay or is this “willful” behavior on his part? What are the mitigating factors before I assess the penalties?

    So if you are serious that the IRS is under an enormous amount of pressure to “be reasonable”, then they can start by affirming the TAD. That could begin to re-establish some credibility.

    Other actions the IRS could take:

    Stop the press releases that call this revenue grab an amnesty. The CRA does amnesties, the IRS does penalties.

    Kill off the narrative in the press that all who are in the program are “Tax Cheats.” Surely there are some, but not to the degree that the IRS has allowed the media to believe.

    Stop the declarations about how highly successful this program is based upon 2 stats which do not a story tell. 33,000 and $4.4 Billion mean absolutely nothing without other comparative numbers to base a judgment on. All we know for sure, is that 33,000 is greater than 32,999. But, if you should have netted 3 million, 33,000 is insignificant.

    Here is a number the IRS could start with, and that is the Whale to Minnow ratio within those 33,000.

    I personally think, they have netted way more Minnows then they ever considered, being so focused on the Whales as they were at the start of the OVDP. It is hard for them to admit now that they were not getting the intended target to the degree they hoped after trumpeting it in the press about all the successes. If they had to show off all their minnows, it my belie the narrative. I will freely admit that this is just an assertion on my part based upon anecdotal evidence, but since the IRS won’t release any stats on this without a FOIA, how would we know? Prove me wrong.

    Let’s have some meaningful stats about compliance % increases, that would show if the program is really so successful. Has compliance increased from 3% to 7%, 10% Higher or lower? What is considered statistically significant? Show us the number, and let us judge the claims.

    How many FBARs have been filed in 2011, compared to 2009? How many should have been, do you think? That would help in our judgement of success.

    If you do a few of those basic things, I will begin to believe the IRS again. Right now, except for the TAS, the IRS has zero credibility with me.

    However, none of these changes deals with the whole ridiculous Citizenship taxation model which we all know, (except for ignorant US Homelanders) is core to all the misguided policies and efforts now being undertaken by the IRS. We know that it is Congressional Statues that set the law, but the IRS has influence to change them, and discretion as to how aggressive it wants to be, as we have so recently seen!

    “By it’s actions, ye shall know them,” to paraphrase an old biblical text. So show us some actions that represent reasonableness on the IRS part.

    More later….

    and thanks again for your bravery! 🙂

15. New comment by 30yr-IRS vet here:

    Well It sure looks like I stirred up a hornet’s nest! I just came back from a week in Panama talking about FATCA with people who have an American connection down there. I thought they were angry!? Let me say that my legal ethical requirements as an attorney prevent me from giving specific advice here, but for those of you who wish to contact me directly, I may be in a position to be more helpful. On this web site, I can say what the law is and give some history or perspective and answer some very general questions regarding the law.

    First it is important to note that your anger should not be directed at the IRS but rather the US Congress. The poor folks at the IRS are simply trying to figure out what Congress meant when they passed FATCA, and do their duty to administer a very difficult law. The examples you all cite here are situations which simply must be addressed in the final regulations which are set to be published any day now. That publication date starts a comment period during which Canadians and others do have the opportunity to make their views known.

    I would urge everyone of you to write to the IRS Commissioner and express your concerns. Believe me, I used to work in Washington for the Commissioner’s Chief Counsel. The IRS does read these comments and each one is carefully considered. I can assure you that simply by the volume of your comments, you will be heard. A literal application of the FATCA rules to Canadians simply cannot stand. Moreover, whatever the final regulations say, the IRS would not have nearly enough resources or the desire to pursue Canadians over this except for the most egregious situations which is what the law was intended to cover in the first place.
    http://www.mopsicktaxlaw.com

16. @Everyone

    One things of the things I’ll say to add upon what has been already said is that if you look at any GAO report about US tax collection one of the key points mentioned is the IRS essentially works off Social Security Numbers as key indentifiers. Thus as the situation of many of the people here is notwithstanding the fact that under some interpretation of nationality laws some Canadians “might” also be American if you don’t have a US Social Security number you don’t really exist to US. I don’t really see FATCA at this point changing that on basis of having a Canadian passport saying you born in the US (I do blame some Canadian financial institutions for saying things such as in the future if your passport says you were born in the US you need to provide a CLN). In all honesty this just ain’t goin happen. Thirty to forty percent of Canadians don’t have passports and the US domestically is no better if not far worse. I am going to try to make a new post on what I think at least from a Canadian perspective what I think could a realistic demand list on this issue.

    One thing I mentioned to 30 year tax lawyer is how integrated the US and Canada are in some pretty serious areas of national security and law enforcement things such as NORAD, customs/drug enforcement air interdiction, and export control. I just can’t see how something like making people file FBAR’s on basic Canadian bank accounts under penalities of tens of thousands of dollars for law enforcement makes sense when Canadians and Americans sit together at Cheyenne Mountain(NORAD).

17. @30 year IRS vet

    Let me be one of the many to welcome you and thank you for posting your thoughts on this matter.

    Your presence has given us a moment of pause as we contemplate the inner workings of the IRS…(something we have never had other than speculation).

    I hope you stay active and check back with us from time to time. Your experience is invaluable and your presence here has raised the bar for the Isaac Brock Society.

    As you are aware from reading our testimonials, most of us just want to become ‘compliant’ and move on with our lives.

    We feel that this process is like walking through a mine field….only these mines are being planted behind us as we try and move forward.

    Thank you again for your insight.

18. @IRS Vet – Thank you for your messages and your counsel. I’m in France which has a U.S. citizen population of about 100,000 people. There are even more in UK. To say that we’re pretty riled up too is an understatement. I’ve talked to a friend in Japan. Another in Germany. Ditto. No one is happy about this. Everyone is confused. Thank goodness for forums like this one where we can express our anger AND work toward change. Your point about the IRS is well taken – there is no way these folks can implement these ridiculous rules without some serious staffing adjustments which it sounds like they are not going to get. They have been given Mission Impossible and it will end badly for everyone. My .02.

    @Everyone – I just wanted to thank you all for pointing that this is a worldwide problem – not just one between the US and Canada. There are US persons all over the globe – I’m still amazed that the US congress hasn’t heard of a little thing called “globalization.” 🙂 Thank you, thank you, thank you for sticking up for us too.

19. @IRS Vet: Thanks for your suggestion we let IRS know of our concerns. I think most of us worry contacting them to let them know of our very real fears and concerns will put us on their radar.

    Unfortunately, IRS is are forcing us to stay as far away as we can. Petros has written to them, but he’s far braver than I am.

    You say you thought people in Panama were angry. Well, angry doesn’t even begin to describe how we feel. I’m glad you’ve connected with us and hope we haven’t scared you away with our passion and drive as Isaac Brock warriors.

    On another thread, I posted my rewritten lyrics to the old song by the Guess Who, American Woman Stay Away From Me. I would love to find a musician to perform this so we could post it YouTube or elsewhere. In the meantime, please feel free to pass it onto IRS on my behalf (just please don’t tell them where to find me!)

    Here it is, with changes to the original song in caps.

    American TAXMAN, stay away from me
    American TAXMAN, JUST let me be
    Don’t come a hangin’ around my door
    I don’t wanna see your face no more
    I got more important things to do
    Than spend my time MESSIN’ with you
    Now TAXMAN, I said stay away
    American TAXMAN, listen what I say-ay-ay-ay-ay-ay

    American TAXMAN, get away from me
    American TAXMAN, JUST let me be
    Don’t come a knockin’ around my door
    Don’t wanna see your shadow no more
    YOU MAY THINK YOU can hypnotize
    I SEE RIGHT THROUGH YOUR LIES
    Now TAXMAN, I said get away
    American TAXMAN, listen what I say-ay-ay-ay
    Now TAXMAN, get away from me
    American TAXMAN, JUST let me be

    American TAXMAN, said get away
    American TAXMAN, listen what I say
    Don’t come a hangin’ around my door
    Don’t wanna see your face no more
    I don’t need your war machines
    I don’t need your ghetto scenes
    YOU MAY THINK YOU can hypnotize
    I SEE RIGHT THROUGH YOUR LIES
    Now TAXMAN, get away from me
    American TAXMAN, JUST let me be

    Go, gotta get away, gotta get away now go, go, go
    I LEFT YOU LONG AGO
    WHY ARE YOU NOW MY FOE?
    Bye-bye Bye-bye Bye-bye Bye-bye
    You’re no good for me
    I’m no good for you

20. @30yearIRSvet In my case, I was told by so called-experts on the matter (Swiss tax authorites) in two different Swiss jurisdictions that double taxation was forbidden and that I must not declare any of my Swiss income to the IRS. I cannot plead ignorance of the revenue code, but was lead to believe it did not apply to me because of my country of residence and Swiss nationality.

21. I am so glad this is becoming an international group that share some problems. I am not in Canada but I am an American (dual citizen) living in my Country of origin. I became an American by choice and I learned to love this Country, which I still do. I am not that young, went back to my country of origin and since 2009 I am regretting have become an US citizen. In 2009 was when I learn, by chance about the FBARS and I was told by an US lawyer that I was already a criminal. He wanted from me 15,000 dollars do “defend” me…upfront. Since then I have spend ore than 5,000 dollars with US CPAs and lawyers trying to do the right thing. I could go on and on. But most of you know the rest of the story. I get conflicting advises from the experts, I am living in fear that suddenly I will have to pay 27.5 of life savings…Mind you it is not 27.5% of your dividends, It is the principal! My God. I never heard of an amnesty with such heavy penalties… in my life. Couldn´t they have found another word?…But I still trust that the US government and the IRS will be fair. This is the history of this Country. I can´t believe what is happening to us Americans Abroad.

22. @Mark: How about Offshore Voluntary Disclosure “Extortion” program, rather than “Amnesty”?

23. This would reflect more what I think they are proposing to do. At least it would be more true. Amnesty to me means something else. But I got used to this in the USA. Americans know how to use words to their benefit. For instance, who can be against “Health Maintenance Organization”?…Then go and see what this has done to health care…It could be Penalty for not knowing about FBARS,,,

24. Moving comment from http://isaacbrocksociety.com/2012/01/13/ask-your-questions-about-us-expat-tax-fbar-and-fatca-discussion-thread/

    @Roger… @ 30 yr IRS Vet.

    Thanks for making the point about IRS collaboration with Carl Levin to slip FATCA into the Hire act in the dead of night. I think that point is missed or not known by many…

    Yes, ultimately Congress is responsible for the Statutes they create, and that is a fair point. But…..as I understand it, the IRS was working as a Lobbyist for these ridiculous statutes, and helping create the language that would be added to the Hire Act.

    With all due respect, …To now beg off any responsibility or complicity by saying….. “The poor folks at the IRS are simply trying to figure out what Congress meant when they passed FATCA, and do their duty to administer a very difficult law”…… is a bit much for me to stomach! I didn’t fall off the turnip truck yesterday! It is disingenuous at best, or shows a total lack of understanding how Statutes get created in the first place. Maybe that is not what you meant to convey.

    Carl is incapable of writing this, and someone with inside knowledge of what they wanted, had to construct the language. Would that be just some young 20 something staffer with a BIG vision of world financial reporting? Hardly. It is some committee from the IRS probably comprised of attorneys, knowing what the IRS leadership wanted. They said, “Here is our opportunity, and here is our complicit Senator who will do our bidding and sponsor this amendment.” They wrote it and targeted it as an amendment on a Statute that was sure to pass. Which Democrat was going to vote against something called a “Hire” act during this time of financial strife?

    Well…Mission accomplished. FATCA is Fact, and now you tell us the IRS are just poor victims struggling to determine Congressional intent? Hell Congress didn’t even know the provisions were in the bill, as they don’t read them, remember? How many pages was the Hire Act anyway? Actually small by Congressional standards. They could have read it. It was only 125 pages, if my googling is correct.

    So, with all due respect, the justification you site for our misplaced anger, might apply down at lower level manager or staffer, i.e., someone “just doing their job.” Can’t really be angry at them. I get that! However, this justification does not hold any water for the Leadership who has been lusting after this additional power. Hold the “woe is me” refrains from the “poor IRS people” for those that are easily duped, as I am not buying it.

    And in less you think, I am just some old cynic out here in the ether, I speak from some experience as how laws get passed. I have one amendment to one Congressional Statute that has my imprint all over it. And I am not proud of it.

    A law was passed that helped divvy up “USPS mail” between airlines in Alaska that got slipped into a spending Statute by the late Uncle Senator Ted Stevens. (Call it the ‘mail to nowhere’ bill if you like!)

    Little ‘ole me, got a ‘real politic’ lesson on how legislation happens, and had a major hand in writing the language working as a lobbyist for an airline group. We got our way! And when the Alaska villages protested the changes in flight schedules that resulted, I could say, “Oh we are just poor little airlines trying to figure out the intent of Congress, and if you don’t like it, you should direct your anger at them, not us!” Yea, right. I became a cynic on that day!

25. @Just Me
    There is a difference between the IRS and the US Treasury department of tax policy office. In theory the tax policy office is reponsible for designing tax policy whereas the IRS is responsible for enforcing it. Having said that the tax policy office is a badly degraded office compared to what it once was and most definately compared to its Canadian equivilent Finance Canada’s tax policy branch. Its not clear whose fingerprints were on this act precisely. My experience in Canada is governments like to give themselves a lot of flexibility in implementing actual legistlation whereas in the US the Treasury and IRS don’t seem to have a lot flexibility in this one. Congress does maintain a fairly extensive internal tax policy department as part of the JTC(Joint tax committee) so I suppose that is one place to look.