IRS cracking down on U.S. expat taxpayers: Steep penalties for Americans who don’t comply with U.S. tax laws (Updated: CBC has corrected the article)
We should call for an apology from reporters from our own government funded media who fail to point out the specific protections that the Canadian government has offered: (1) Never to collect taxes for the United States from a Canadian citizen. (2) Never to collect an FBAR fine from anyone ever. Why does Jon Hembrey of CBC News fail to point out these protections in his article? Instead, this is what we get:
There are also steep fines for failing to file FBARs — up $10,000 US for non-willful violations and the greater of either $100,000 US or 50 per cent of the account balance for willfully failing to file.
The same December release from the IRS said FBAR penalties would be waived if they were the result of a “reasonable cause.”
Bewick said many people have expressed anger at the rules governing U.S. citizens living abroad, some going so far as to suggest they would renounce their citizenship to avoid the reporting requirements.
Renouncing American citizenship, however, requires a person to file five years of income tax returns, Bewick said.
“People just think it’s unfair — it’s completely unfair — and it probably is unfair. But unfortunately the law is the law and it’s just better to get compliant than try to fight off the IRS,” he said.
The issues of FBAR, FATCA and US extra-territorial taxation, have been around for a while, but Hembrey seems like a newbie, who has learned about the problem yesterday, and he relies mainly on United States government sources and Bewick, a cross border accountant.
UPDATE: The Isaac Brock Society (as reflected in the comment stream) has apparently been instrumental in getting the CBC to make certain corrections to this article. It now has the following note at the bottom:
Corrections and Clarifications
- CBC News added information to this story noting that the Canadian government says the CRA will not collect penalties imposed on Canadian citizens by the IRS under FBAR. The story was also updated to reflect the fact that the U.S. government requires Americans to file annual Reports of Foreign Bank and Financial Account (FBARs) if the aggregate value of all their foreign financial accounts exceeded $10,000 at any time during the calendar year. March 7, 2012 | 12:30 p.m. ET
Good job everyone!
I echo Joe Smith – a big well done! Small, but important steps. Imagine if we, collectively, keep doing this – pointing out the inaccuracies, holding reporters accountable for what they’re reporting – maybe attention will be paid by the media, finally.
@blaze, great idea re W5! I wonder if the host of the CBC radio show from September 2001 would do an update – (and include the possible advent of FATCA?)
I saw a twitter tweet this morning from some FM radio host in Red Deer Alberta indicating he was affected and basically the US could go hell after the original CBC story was posted. I can’t remember the station though or the name of the host and the tweet has dissappeared.
Twitter is someplace we need to be more active it isn’t that difficult to take of #CDNPOLI feed just like vikileaks did with the Vic Toews scandal. I am trying to figure out if WordPress will let us add hashtag #FATCA to all our twitter updates.
I got it
Paul O’Neil morning host of BIG 105 FM radio in Red Deer Alberta. Born in Montana with Canadian citizenship.
@Tim and all,
You Canadians are doing yeoman work on keeping the media accurate with it’s reporting. Unfortunately, there is not even one story in New Zealand media, and I don’t know of a similar community of US Expats working the issues like the Canadians are.
Maybe I need to look around on other Expat blogs, but if anyone knows of any, let me know.
I am working on finding a sympathetic Reporter at the NZ Herald, but no luck so far.
In the meantime, I tweet as an experiment, and generally don’t have much of a following, although that is not unexpected. I also try to reach specific reporters or programs via Twitter that I am trying to interest in the story.
Tim you are right to encourage others to do more with Twitter. I almost always use the hash tag #FATCA. That one seems to get the most following right now. Sometimes I try other hash tags to see if it gets picked up.
https://twitter.com/#!/FBAR_Compliant/status/177467442728153088
https://twitter.com/#!/FBAR_Compliant/status/177470985556082689
Just to let everyone know they should take a look at which two US government agencies are following Isaac Brock Society on Twitter. Take any guesses.
@Just Me
The Australian Bankers Association on behalf of both NZ and Australia(I guess Australia owns all the NZ Banks has been fairly aggressive in their comment letters on FATCA. The head guy’s name at ABA is someone named Tony Burke who from his tone is his letter seems like a real Aussie tough guy. One thing I also happen to understand is that in NZ and AUS banks don’t offer investment accounts that you can buy US securities in. In fact there is a no NZ Bank that even participates in the existing proto FATCA QI program. I believe I saw a comment a couple of months ago from the head of tax compliance at one of the big Australian/New Zealand banks that they were giving serious consideration to just being a FATCA non participant.
@Calgary, Brock: I can’t take credit for W5 idea. It wasn’t mine. I think it was Outragec
@Tim My guess is IRS and DOS. Am I right? Do I win a certified CLN?
@Tim, My husband, who is Canadian, and is as outraged as I am, got me an interview on CBC radio Calgary, thanks entirely to the outrage in his voice, keeps urging me to use the social media – that to make a real impact and reach the thousands that we need, we should be using twitter and facebook extensively. He’s usually got good instincts about things like that. I don’t quite know how to go about it, though. I wonder if anyone would be interested in creating a post perhaps, giving instructions and/or tips? I’m sure I’m not the only one who doesn’t know how to use this stuff as yet.
About a week ago I wrote a letter to W5 asking them to do a story on this. It’s posted on my website, so I won’t paste the thing in here. If enough of us do this, surely they will – it’s their kind of story.
whoa, sorry for the typos in the above!
@Blaze, LOL. It’s good to have something to snicker about, win a CLN, indeed!
We’re being followed by:
– Treasury Department
– IRS
– Taxpayer Advocate
Interesting considering we only have 15 followers!
Oops I think I got that wrong, that’s who we’re following … creeped myself out there.
I think we’re actually being followed by IRS Tax Support.
@Tim,
I knew the Australian Bankers Association was fairly aggressive, but I have not seen much of anything in the Sydney Morning Herald, or the Australian the two newspapers of record there. When you do a search on FATCA on SMH
0 results found for FATCA.
In the Australian, there is one story from back in September.
http://bit.ly/qk8RjW
So, not much coverage there either. Again, I have to wonder if there aren’t a lot of US expats or Australian Dual citizens there that are being impacted, but they are silent or don’t have any forums like this.
I have a couple brother-in-laws that are in the financial services area, and they say there isn’t much talk about FATCA. It is assumed that they will just all become compliant, especially given that they are now going to host the US Marines up in Darwin now. They all love Obama down there, (Julia Gillard was most rapturous and fawning when O visited recently) If he wants another US military outpost, in exchange for FATCA compliance, they can’t see Australia putting up any fuss.
As for Isaac Brock twitter followers go, you do have a couple of interest, I see, but somehow need to get the numbers up, and finding the right strategy to do that is something I am still learning.
And as for Tony Burke, I wonder if that is different than the Tony Burke who is currently Australian Minister for Sustainability, Environment, Water, Population and Communities. Surely not the same…
If you have a reference to that letter, I would love to see it.
Thnx
@Just Me. Yes, I’ve also noticed nothing on FATCA in the Sydney Morning Herald, which I read a few times a week. I’ve seen comments on the net for months about Australia strongly opposing FATCA, but I have never noticed anything about it when reading the Herald. So I, too, have periodically searched FATCA on the SMH site and always come up blank.
If you’re wondering why I’m a fairly regular reader of the SMH living here in Canada, I’ve always had an attraction to Australia, can’t wait to spend at least a month there when I retire, so I’ve gotten into reading the paper on the net and listening to ABC Jazz. I also love vegemite, so there’s a theory I may have been swapped at birth … oh, no, not another citizenship! 🙂
Pacifica777
Well, they are being flooded out this year, so you might wait until it drys out before you head south. My wife is an Auzzie, so we stay in touch with the politics and the happenings there regularly. Heading that way again, the first of May.
I have tried to stir up some of my friends about FATCA, but there is that “She’ll be right, Mate” response that doesn’t get too worked up if it isn’t effecting them! Got to luv ’em! 🙂
@outragec, Blaze and Brock and everyone.
My apologies for attributing the W5 submission to Blaze instead of outragec!! All of you are so prolific and active, I can’t keep up with you. Thanks you three for all you’ve been doing. Amazing work on this CBC BUsiness correction work too. A lot has happened while I’ve been away this afternoon.
@Calgary411
I just thought of something was Jim Prentice formerly your MP where you live.
Yes — he was and a much better representative than the one I have now.
@Brock and @Blaze,
I’ve already gotten an acknowledgement on what I sent today to the Canadian Civil Liberties Association regarding my submission on the issue of discrimination shown by the IRS in not allowing parents / guardians / trustees in Canada renounce US citizenship for the developmentally delayed (or otherwise disabled) person for whom they are responsible in making other, sometimes life and death, decisions.
The CCLA states that they will have a look at what I sent as part of their ongoing efforts to monitor the state of civil liberties in Canada.
Yeah! @calgary411 – that is fast, here’s hoping they pursue it (and I wonder if the ACLU would consider a parallel look if their Canadian counterparts were interested?). Good news!
I know everyone here as been focused on CBC, and with good cause, but, I did just want to acknowledge Roger Conklin’s work at getting an Editorial response printed in the Wall Street Journal. That is no minor accomplishment. Thanks Roger for the perseverance!
I have targeted it to a Reporter for NRP and the NYTs who writes on these issues… Adam Davidson.
https://twitter.com/#!/FBAR_Compliant/status/177631424554352641
Here’s a link to the on-line Wall Street Journal. Seems that Roger’s submission is in yesterday’s print edition as well! I think this is a pretty rare achievement! Thanks, Roger.
http://online.wsj.com/article/SB10001424052970203753704577257412042442758.html#articleTabs_comments
@roger, that is quite an achievement!
@calgary411 – not a problem. I don’t think it much matters who contacts the media as long as we keep on trying. Also, congrats on your progress with the CCLA, I know we’re all rooting for you.
@Roger – congratulations to you too! It is a great achievement.