Hi, I found an interesting report from the 1990s the US Treasury did that deal with many of the issues being discussed here. For everyone’s reading pleasure I posted a link below.
http://www.treasury.gov/press-center/press-releases/Documents/tax598.pdf
Additional 1993 Report
http://archive.gao.gov/t2pbat6/149177.pdf
What is interesting is neither of these reports mention FBAR
Even treasury department don’t know or forgot about FBAR. How can a law abiding duel-citizen living in his country comply with unknown FBAR.
Copied from pdf: “out of 176 overseas taxpayers that IRS contacted who hadn’t filed returns, only one owed U.S. taxes, totaling $9,595. Similarly, in another initiative, only $2,126 was owed from a group of 140 delinquent filers, and in a third only $5,345 was owed from a group of 62 overseas nonfilers.”
I believe, these unpaid tax numbers are very high. The IRS most likely contacted high income individuals or people having lot of other income or assets in the USA (based on 1099-int). It is hard to find people borne or raised abroad. It is easy to find people who still have lot of contact (e.g. financial dealings) with the USA, but practically impossible to find people who have very little contact with the USA.
Now all this publicity about Swiss-banks and FBAR educated lot of expats about their obligations, the IRS must provide a way to become compliant, with out ‘bait-and-switch’ trap of imposing FBAR penalties. The IRS must provide a way to pay all back taxes and interest to expats.
This report have more common sense criteria for defining genuine expats for automatic exclusion. That class consists of:
(i) expatriates who were dual citizens at birth who have remained citizens of the second
country;
(ii) expatriates who at the time of expatriation (or within a reasonable period thereafter) were (or became) citizens of their country of birth or the country of birth of their spouses or of either of their (the expatriates’) parents;
(iii) expatriates who for the 10 years prior to expatriation were present in the United States for no more than 30 days in any year; and
(iv) expatriates who renounced U.S. citizenship before attaining the age of 18½.
@Tim; thank you for finding this! I’m only partway through, but note with interest that the report recommends the IRS “……..appropriately allocate its resources to projects and initiatives that properly BALANCE the goals of efficient revenue collection with the LEGITIMATE PRIVACY AND OTHER INTERESTS of Americans living and traveling overseas.” (emphasis mine) from pg. v. I also note that it goes on to note the EDUCATION function as being very important and details a list of possible avenues – not just the current ‘education’ accomplished via the IRS website plus the rack and the pyre…. It’s the first official acknowledgement I’ve seen, that Americans ‘abroad’ actually have ‘legitimate privacy and other interests” – rather than just referring to all of us as either potential, or actual ‘tax evaders’ ‘hiding’ millions ‘offshore’.
It would be interesting to see someone do a detailed analysis of the evolution of the official portrayal of Americans ‘abroad’ over time, using a social policy perspective and critical analysis/propaganda perspective. Tracing exactly when it became the official position to always discuss us as criminals in waiting and to never ever acknowledge any nuances or complexities. I am wondering what conscious strategy is behind the choice of the Obama/Biden 2008 campaign (and apparently there was a blog) identifying Americans abroad as an important group of concern, and to drop that (as far as I can see) in the 2012 race.
There was more common sense here than there is today. Do we know how much of this still applies?
I was particularly interested in this exclusion:
(ii) expatriates who at the time of expatriation (or within a reasonable period thereafter) were (or became) citizens of their country of birth or the country of birth of their spouses or of either of their (the expatriates’) parents;
Does anyone know if this still applies today or did US do another reversal? Based on my reading, doesn’t this exclude anyone who took on the citizenship of a spouse? That certainly applies to some of us.
Blaze. I read the original docs. for that section.
It is not an exclusion. It allows people in those categories to apply to the treasury for a ruling that they are not ‘expatriation for tax reasons’ even though they otherwise don’t meet the net worth threshold. If successful, I presume they would not be ‘covered expats’
‘Section 877 also provides, however, that certain expatriates who would otherwise be subject to the irrebuttable presumption can avoid the presumption by submitting a ruling request for a determination as to whether such loss had for one of its principal purposes the avoidance of U.S. taxes. The section provides that only a limited class of expatriates are eligible to submit a ruling request and thereby avoid the presumption.’
I have no idea whatsoever how this works in practice- I’m not a lawyer or accountant. I presume it would be time consuming but in some cases could be worthwhile. As far as I can tell- and it isn’t easy for an amateur to wade through this BS- it’s still in effect.
P.S. can anyone tell me how to change fonts or add bold, italics etc. in posts
@Tim; It would be interesting to hear of cases where non residents of the US received demand for return letters from the IRS. There are many so called “US persons” who receive both Social Security and some US pension or other income from the US who have never received anything from the IRS. I know of a few Green card holders who received demand letters, not knowing that they had to formally hand in their Green cards to escape US tax liabilities, even though their Green cards were no longer valid. These individuals had been filing US returns when they lived in the US and retired back to Canada with fairly good pensions and Social Security benefits.
@Brock the Badger:
If you haven’t seen it already, have a look at this paper: Expatriation, Expatriates, and Expats: The American Transformation of a Concept
@KalC
To change fonts or add bold, italics, etc., in posts, create your post in WordPerfect, Word, or Outlook Express with the text enhancements you want. Then (1) block the text you want to transfer to a post, (2) copy the blocked text, ctrl-c, (3) move cursor to where you want to insert the blocked text, and (4) paste the blocked text, ctrl-v.
I tried that with word. Some different formatting (bold, etc.) Selected all the text. Copied and pasted into the reply area. It ended up formatted with this font and style. Any idea what I’m doing wrong.
There is an even older GAO report from back in 1985 that suggested the IRS try to obtain all the T1 returns from US citizens residing in Canada from the Canadian government.
Thank you @Eric re the paper: “Expatriation, Expatriates, and Expats: The American Transformation of a Concept”. Great find. I skimmed it, and am going to give it another more detailed read when I can….
@KalC
From Outlook Express — bold. Hmm, doesn’t look very bold, does it. Though it is using the Arial font, at least in the reply window.
From Word Perfect – bold, italic. No bold or italic.
If you’re doing something wrong, I am too.
Tried using ctrl-b and ctrl-i in the post itself but that doesn’t work either. Imagine you already it, with the same result.
Maybe someone else will come up with another idea.
Only just came upon this report after seeing it in a US expat FB group posting!
Bubblebustin –
You provide one more reason to be glad I jumped ship on the waste-of-time InfoShop efforts in April 2014. (Sauve qui peut in another dimension.)
Specifically:
https://usxcanada.wordpress.com/documents/