Over the past half-year, tens of thousands of words have swirled around the current situation of extraterritorial citizens of the United States.
In all that flood of comment, one piece stands out for treatment of an important but little-considered facet. Early on, financial planner (fee-for-service) David Christianson squarely addressed the topic of personality in Long arm of American tax law. It is good to see that his perceptive take at Winnipeg Free Press still remains available, just a click away.
A column that Christianson had written the previous week attracted “more emails and phone calls … than any in the last 16 years” of publishing his column. He found it “fascinating to observe the incredible range of reactions.”
Christianson encountered types ranging from rampant deniers to angry defiers to “borderline pathological rule followers … prone to panic.”
At the end the columnist offers a final counsel: “Try to objectively evaluate your reaction to all of this and what it reveals about your money personality.”
Those words resonate. Back in 1988 Katherine Gurney published a memorable book titled with that same phrase: Your Money Personality.
Commonalities can be perceived among the individual personalities that have gravitated into the orbit of Isaac Brock Society. Those commonalities also coalesce to produce a Brocker group personality.
At the same time, we can see big differences among Petros and Blaze and geeez and Mona and Tim and Victoria and Arrow and tiger and Eric and nobledreamer and schubert1975 and Calgary411 and ij and rivka88 and the rest of the numerous crew. Almost 200 of us have names now. (Lots of lurkers out there wondering if/how to transition past pure denial?)
This mess is not just about money. It is about fairness and honesty and justice and freedom. And lots of other things too.
Your Citizenship Personality. Isn’t criticizing and countering and vanquishing the hubris and insensitivity and overreach of United States authorities the most American thing you can do?
Yes, I’m one of the nervous sorts, LOL. I am an honest sort who regards tax compliance as my duty as a US citizen though I’m wily enough to want to survive relatively intact. Unlike some of the others, I am going to become super-compliant and probably move all my assets into FATCA-compliant accounts because I need to be able to sleep at night.
I wouldn’t even put it past the IRS to start tracking outspoken dissidents on here.
…and Mona I have become one of the less nervous types, although having been run through the mill, as they say. I understand those that are struggling with the decisions on how to react to this particular American madness. I keep thinking, this too will pass, but as has been seen by the most recent Senate amendments, Congress just keeps upping the ante.
I am not a partisan, and nothing on the political horizon gives me any hope that things would be better under the GOP vs the Dems. As the “Real Americans” in their ranks don’t seem to understand the impacts of US foreign policies beyond its borders, (Ron Paul excepted) and this FATCA / FBAR crap is just an extension of US foreign policy without drones or tanks.
I am not a tax protester, or even an activist as I am trying to be compliant to all this nonsense, but it just kills me to see the US be so stupid in how it approaches those of us/you who would normally be champions of America abroad, and are now the most vocal critics.
How could one country create such a negative marketing campaign? They couldn’t have designed it better if they had intentionally tried.
For me this whole FATCA issue has been more like going through the five stages of grief. I was one of the deniers at first for two reasons. When I moved here, a US CPA told me I didn’t have any tax obligations to the States as I no longer had any US source income. And when my partner told me his mother had seen a story on the evening news about tax filing requirements of US citizens in Canada, I thought, “No, that’s ridiculous! How could I need to file a tax return when I didn’t make any money from there?!”
So then I researched the issue and realized it was all true. I became incredibly angry that a government can enforce such an unjust and quite possibly illegitimate law.
I researched some more and tried to find ways to get around this law. Was there a way to move money around where they couldn’t find it? Was there any lawyer out there saying this was all unenforceable? I just wanted someone to tell me there was nothing to worry about.
After some time, I began agonizing about what I was going to do, how I was going to get out of this mess. And I felt incredibly sad and disappointed that the country of my birth could treat its citizens this way, simply because they wanted to make a life of their own somewhere else.
I’ve now gotten to the acceptance stage, though I’m not simply going to take all this lying down. For me, renunciation is the best path if I ever want to get my life back. Dual citizenship with the US is simply not manageable. The laws are becoming more draconian every year, and we’ve seen some of the most intrusive pieces of legislation come out in the past two. I suspect that many younger people who have gone abroad will likely come to the same conclusion.
Sorry for the long response, but the article definitely inspired me. Thanks for the post, usxcanada.
@usxcanada and All,
That was a great read, reinforcing that we are all different or certainly in the different stages, just as in the famous steps of grief (and it is that). We are all fighting the same devil.
Some of us are have stronger or more effective problem-solving abilities. Some of us have more education or life experience. I have certainly learned from the literacy represented here and am strengthened by the commitment and advocacy shown. The generosity and support given to each of us is golden.
For me, I cannot sit back and let this all happen to me, my family and others, many without a voice. So much energy and money is going into this fight for getting our lives back — what better things could it be used for?
We all know that there is a grievous injustice being done. We all know that we are the lucky ones to have moved from the land of our birth to where we are now, where we wish to stay. I will never take for granted that I moved to Canada so long ago, raised my family here, worked and paid taxes here, and have been a contributing member of this society.
“Injustice anywhere is a threat to justice everywhere.”
― Martin Luther King Jr.
OR
“It’s my duty as a human being to be pissed off”
― Eric Bogosian, subUrbia
I suppose I’ve become cynical enough to be pragmatic rather than believe that America’s golden ideals completely exist. This is not Heaven and sometimes these things are too big for me to fight directly.
I hope though that eventually our voices will be heard but in the meantime have to grit my teeth and get on with it.
I guess I’m still in denial stage as I desperately want to prove I’m not a US citizen, not just for the reporting & tax implications, but for my own identity. I hadn’t realized how very strongly I felt about being Canadian (only) until I found out that the US was trying to take that away from me. My mother, on the other hand, falls into the pathological category, and became immediately panic stricken, (“I’m going to end up old and destitute”) and engaged a firm to do her taxes and get her caught up, hoping for the best. My sister is a ‘full ostrich’, hoping she will never be found out. It’s a mixed bag in my family. Also, I’d probably end up divorced if I voluntarily gave any money to the US – my husband feels just as strongly as I do, if not more, about this. If not being compliant means never going to the US again, I can absolutely live with that. If it comes out at the end of all this that they actually CAN reach me, then we’ll have to see, but at this stage I’m chanting ‘no, no, I won’t go’ (so-to-speak)…
I have been aware of all this for at least a decade. I have also been aware that since the slaughter of millions in Vietnam — and the hundreds of thousand during the banana wars of the early 20th century, I did not want to have ANYTHING to do with the USA. So the situation has become very simple.
1. Filing these forms is an affirmation of US violation of the Declaration of Human Rights, article 15 and makes you liable for anything and everything that red-neck legislators will come up with for decades to come.
2. The CRA will not go after any Canadian citizen on behalf of the USA. This really is the bottom line.
3. Credit Unions will not report your accounts unless you go out of your way to make them do so.
4. You cannot be extradited, deported, otherwise detained in Canada.
5. If you go to the USA, who knows? Solution: do not go to the USA. All the money you save by not hiring fancy lawyers and accountants can pay for your relatives to visit you.
5. Remember, there are close to ONE MILLION similar susceptible people in Canada. First, they have to find you. Second they have to somehow get access to your accounts. Third, they have to bill you. Fourth, you have to come to them by crossing the border.
6. IRS is going to be so busy going after those who are painting bulls-eyes on their chests to worry about all the others.
Chill out!
@Joe, I’m not really freaking out, but I do suspect that I will come to their attention sooner rather than later, since my mother is filing. I could be wrong about that. In the meantime, I’m taking steps to try and protect my finances, and also prove I’m Canadian only. It is definitely calming to know that the CRA won’t collect on behalf, but I’m also concerned about how much pressure the US can bring to bear on our banks and our gov’t. I’m not quite ‘chill’, but maybe I’m at the ‘cool’ stage.
As Albert Ellis used to say (A New Guide to Rational Living) let’s assume the worse. What would be the worse possible scenario to play out? For me it is not visiting the USA.
but I’m also concerned about how much pressure the US can bring to bear on our banks
ONE MILLION CANADIAN CITIZENS. NO GOVERNMENT IN CANADA IS GOING TO RISK ALIENATING THESE NUMBER OF VOTERS.
I knew I had to ‘come clean’ when I became aware to my horror last year that I should have been declaring my income and capital gains on my UK tax-free investment accounts. Had thought it was enough that I was filing correctly to the UK but hadn’t been aware of all the savings clauses in the tax treaty that allowed for double taxation for US citizens. With FATCA on the horizon, I realized I was frozen in the headlights.
I also need to be able to visit my relatives and will eventually probably wind up inheriting a few hundred thousand dollars…I thus concluded I had no other option but to clean up the mess.
I had done all my financial planning as a Brit and had cometely unintentionally overlooked the US tax angle. i knew I had to file but had thought nominal returns were sufficient because I also had mistakingly assumed that my savings interest and dividends were covered by the foreign earned income exclusion because of the tax treaties which supposedly protected me from double taxation.
I accept that ignorance is no excuse but I felt that my mistakes had been innocent so felt that OVDI wasn’t fair or apprpriate for me. But I saw no way out of paying what I owed with the standard interest and penalties. I amcaught in the middle if two tax regimes but blame myself for having been too much of a DIY investir and filer. i am very upset but feel philosophical.
I think there is still the problem with the banks. Without an agreement between Canada and the US on FATCA, they will be caught in the FATCA net, with potential30% withholding. So I don’t know if Canada’s unwillingness to fall in line with the US demands is going to save us in the end. I can’t see how this can possibly all work out
If all one had to do was avoid going to the US, that would be fine. It is nice to know that Canada will not collect FBAR fines and taxes, and that will be my final fallback if all else fails.
But I would like to know what happens to my estate when I die. Unless I can manage to avoid letting the US know about it, which given my circumstances is unlikley, will they be able to claim some ridiculous amount of fines/interest etc? At that point, staying away from the US is not within my control. I won’t be around to know about it, but it would affect my children, and on principle, I don’t want any of my money ending up in the IRS. Alternately, when my mother (in the US) dies, will they just take whatever they might think I owe them out of my inheritance? Does anyone know?
We live in a diffferent nation. Period.
@Joe Smith yes, your worst case scenario is not very bad because in Canada you have the best case environment:
But this is an international blog, and readers in other countries face worse situations. For example, in Hong Kong:
Point well taken!
Canuck Doc. When your Mother dies, her estate is taxed. They cannot take an unknown amount that you could possibly maybe owe from her estate.
What happens when you die depends on whether or not your heirs are American. If they are not, forget about it.
I notice that Christianson only proposed 2 paths, OVDI or becoming compliant going forward, Looking for work? There are lots of other alternatives including the full ostrich. Be determined not to give them a dime! Don’t panic. We have gone fro panic to defiance.
I am in a similar position to Zucchero. I, too, was told I didn’t have to file if I had no source income from the U.S. Now I just want a “divorce” from the U.S., but it will bankrupt my non-U.S. family. I am am angry because I am considered U.S. property even though I moved away years ago. I am angry that I have no voice in the country I was indoctrinated into thinking was the greatest in the world. I am angry that I am considered a traitor and a criminal because I choose to make my life in another country. But most of all, I am angry that now my son will have to face this all as a dual national. The utter futility of taxing extra-territorial U.S. citizens–once again the U.S. jumps over dollars to pick-up dimes! Being a U.S. citizen is akin to joining the mob; you can NEVER get out. I want NOTHING further to do with the country of my birth.
Was son born in USA? If so, he can renounce relatively easily, I believe, if he is less than 18 years of age. If born elsewhere, he’s home free.
Same story / same sentiments, Krispy Mac!!
@KrispyMac, Again same story, a real shame Accidental American children are caught in this horrible situation. It is really not fair at all. A terrible Shame!!
@Joe
I have to agree. Explaining this to my Father (who was in the USAF from ’56 to ’60), and asking him when he thought everything in the US went ‘wrong’. His reply is that ‘it has always been this way’, nothing has changed or will change.
As for myself, I filed and gave up all my information to the IRS and US D of T. One thing i will not do is sign my privacy away to accomodate FATCA.
Re loss of citizenship
Section 349(a)(1) of the Immigration and Nationality Act, as Schubert1975 pointed out, says “…shall [not will] lose his nationality by obtaining naturalization in a foreign state…” Nothing about intent. As well, the act uses not the ordinary future ‘will’ but ‘shall,’ which connotes something more, such as determination, promise, threat, or command, i.e., something permanent and irrevocable, as Blaze was told by a consular person.
In mid 1977 I received a letter from the Department of State signed by the chief of the foreign and special operations division of the passport office. I quote below those sections of his letter that may be of interest to those who believe they are not U.S. citizens but have not received a CLN.
He begins by telling me that I became a naturalized Canadian citizen in 1973 and thereby jeopardized my U.S. citizenship by this action under Section 349(a)(1) of the INA. He enclosed a copy of the relevant section of the act and added, “The provisions of Section 349(a)(1) have been marked in the enclosed circular M-321 for your information.”
He also wrote, “The U.S. as a matter of policy does not recognize officially, or approve of, dual nationality. It does, however, accept the fact that some U.S. citizens may also possess another nationality as the result of separate, conflicting laws of other countries which cannot be controlled by the U.S. For example, a child born abroad to American parents may acquire at birth not only U.S. citizenship but also the nationality of the country in which the child is born.”
He explained expatriation further, “A U.S. citizen who acquires a foreign nationality on his own application may expatriate himself under Section 349(a)(1) of the Immigration and Nationality Act if the naturalization is done voluntarily with the intent to relinquish U.S. nationality or transfer allegiance to the foreign state in question. Intent is determined on the basis of objective evidence as well as subjective statements. The U.S. Attorney General in his Statement of Interpretation of the U.S. Supreme Court’s Decision in Afroyim v. Rusk, 34 Federal Register 1079 (1969) indicated that naturalization in a foreign state constitutes in and of itself highly persuasive evidence of an intent to relinquish U.S. nationality and normally results in a finding of loss of nationality.”
I have read numerous references to the retroactive application of … I’m never sure what policy, statute, law, etc., is being referred to. Someone wrote In a previous thought that their interpretation of retroactivity, in the context of citizenship, was that anyone who lost their citizenship before State changed its administrative presumption regarding intent to relinquish could restore their U.S. citizenship if (important proviso, if) they wanted to. That has been my interpretation too, but I’m wondering whether anyone knows about the ex post facto application of a policy, statute, or law to people who will be disadvantaged by its application to them. Does the law allow this?
So, when I saw the title of this post I thought I would be clicking on a quiz to determine which country I should be a citizen of based on my personality 😛
Anyway, I am like Mona and the US turned me into a nervous wreck when it comes to money and financial planning. FATCA and the FBAR absolutely terrified me into actively trying to make as little money as possible for years. When I did a year of voluntary service I was thrilled that I was only going to make 300 Euros a month because it wouldn’t be reportable to the US. Meanwhile half of my friends were making 10x more than me per month and I wasn’t even jealous. I went out of my way to keep my bank accounts under 10,000 dollars and would withdraw funds in advance just to keep the balance under. I only have current accounts: no savings, no mutual funds, nothing. Why the fear? I was absolutely terrified of the penalties and legalese that I simply did not understand when I first encountered them. I couldn’t afford to pay some lawyer or tax planner 1000 Euros to get any legal advice.
I have now calmed down a bit, but I will not comply with FATCA. I will not subject myself to a lifetime of open discrimination within my own country nor will I sign away my protection to privacy as guaranteed under local data protection laws. I will also not try to “play the system” or do all of my banking at some credit union or mom and pop bank that is in the middle of nowhere. I like my current banks and don’t blame them in the slightest for wanting to cut me as a client due US birth place. The only solution for me is to renounce and hope that the CLN comes before my banks want me to sign away my privacy or close my account. I am eligible to relinquish citizenship but I will speifically renounce so that it cannot be challenged or slowed down. I would gladly pay 10x the 450 dollars to get rid of US citizenship. If the IRS says that they want some penalty that I overlooked I will pay whatever it is without a challenge: My only goal is to get rid of US citizenship and tax association as quickly as possible, no matter what the cost.
I don’t plan to ever visit the US again, invest in the US, hold any US stock, bonds, mutual funds, nothing. I will completely disconnect myself financially and physically and will actively warn all potential immigrants to the US to not fall into the IRS tax trap and to steer clear. I trust that the huge negative publicity from FATCA will do this work for me starting next year. The only question is when will the US start to wake up and see the reality of the damage they are doing to themselves? Never?
I want to comply even though it is becoming very difficult for me. And you may no tbelieve me but I still trust that if I am doing my best to comply I will not be penalized.