As reported on April 9th, Democrats Abroad Canada held its annual general meeting on March 25th in Toronto. The minutes provided a very brief mention about DA’s FBAR/FATCA task force. Today, a new communiqué was released detailing the task force’s recent and upcoming activities. We are now heading into lobbying season, it appears, with both DA and ACA poised to make their annual pilgrimages to D.C. to plead our case – particularly interesting in an election year.
Here’s the new message:
FBAR/FATCA Task Force Update
Dear Democrats Abroad member,
Democrats Abroad’s FBAR/FATCA Task Force has been working consistently to develop an effective strategy to alleviate the burdens placed by new and newly-enforced tax legislation on US citizens abroad. The specific legislation we are focusing on is FATCA and the FBAR.
The Foreign Accounts Tax Compliance Act (FATCA) requires U.S. taxpayers with specified foreign financial assets that exceed certain thresholds to report those assets to the IRS. In addition, FATCA will require foreign financial institutions to report directly to the IRS information about financial accounts held by U.S. taxpayers, or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest.
The Report of Foreign Bank and Financial Accounts (FBAR) must be submitted if you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account. FBAR legislation has been in place since the 1970’s but only recently has the IRS begun to enforce this ruling. The threshold is currently set at $10,000 and the penalties for not filing can be considerable.
We are fortunate in having well-placed contacts in strategic government positions, and have made some headway in our efforts. In point form; here is the latest update on our activities:
* We have been in regular contact with senior staff at both the IRS and the Treasury Department, who have been receptive to our concerns.
* We have developed a strong and sympathetic working relationship with members of the Senate Finance Committee responsible for the FATCA legislation.
* We have shared with our contacts at the IRS, Treasury and Senate individual stories illustrating the stress and challenges placed on ordinary overseas Americans. These stories appear to have made a significant impact.
* Our former DA International Secretary, Amanda Klekowski von Koppenfels, a scholar in the field of politics and demographics, has compiled a detailed stratification of Americans abroad, which clearly refutes any imputation of tax evasion as a general motive for living overseas. The statistical breakdown has been of great interest to the Senate Finance Committee, and may figure prominently as supporting material to our upcoming requests and submissions.
* We helped facilitate a letter from Carol Maloney, Chair of the Americans Abroad Caucus, to Treasury Secretary Geithner requesting congressional hearings. Secretary Geithner himself has acknowledged there are concerns with FATCA and we have recently learned that Treasury will host later this month a meeting of groups representing overseas Americans, including Democrats Abroad.
* We are reaching out to senators who have been major promoters of FATCA to bring to their notice that the anti-tax laundering legislation they introduced will have disastrous, unintended consequence for millions of law-abiding overseas Americans, as well as serious implications on foreign investment in the US.
* We are requesting inclusion in an IRS hearing on FATCA in Washington, DC on May 15.
* We are arranging a meeting with Taxpayer Advocate Nina Olsen Olson, whose 2011 report to Congress is highly critical of IRS handling of overseas tax filers.
* We are preparing resolutions to present to the DPCA Resolutions Committee at the May global meeting in Mexico. If passed, Democrats Abroad will then submit those resolutions to be considered for inclusion in the Democratic Party 2012 Platform.
We remind our members once again that Democrats Abroad and its FBAR/FATCA Task Force cannot and does not offer tax advice. All those facing problems or having specific questions are urged to seek professional tax and/or legal counsel.
Respectfully submitted to the DA Membership,
Your DPCA FBAR/FATCA Task Force,
Joe Green (Canada) Chair (demcan@sympatico.ca)
Stanley Grossman (UK), Maureen Harwood (Canada), Carmelan Polce (Australia), Maya Samara (Switzerland) and Joe Smallhoover (France)
This is not only from Democrats Abroad Canada. This is from Democrats Abroad. I am encouraged. I think every American Abroad should join and contribute to ACA. http://www.aca.ch
This is encouraging to read. I hope they are coordinating their activities with ACA, as there is more strength in numbers. Now, where are the Republicans abroad?
I believe there is now a newly published comment letter from ACA dated April 4th I have linked to below.
http://bsmlegal.com/PDFs/American%20Citizens%20Abroad.pdf
Additionally I have heard that the Canadian American Business Council has placed FATCA on the top three issues for 2012 along with the Volcker Rule and building a new bridge between Windsor, ON and Detroit.
Democrats Abroad explain it…ACA puts heart into it. WOW!
Maya Samara was the person at the party who told me that she was “not a tax expert” and had no idea what FATCA. She said that these issues are only problems for people who never plan to go back.
Republicans Abroad appears to have a very explicit Repeal FATCA position.
http://www.republicansabroadeurope.org/tags/fatca
Democrats Abroad and President Obama should read this. Because they are going to lose the votes of six million Americans Abroad. Although I am a Democrat if they will support FATCA and they harassment of Americans Abroad I am going to vote Republican.
What I was told by DA here in France a few months ago was that they were “working in it” behind the scenes. I believed them but I didn’t see enough action nor a real willingness to take a strong public stand. Understandable – they have to support the President and senators from their party who after all signed this monstrosity. I see their limitations and I’m sympathetic. However, it wasn’t enough for me and I decided to throw my support and my vote elsewhere.
The problem I see is that the parties are whispering good intentions to us in hopes of roping in our donations and votes, but… there is no action. How different is all of this from nobledreamer’s very excellent post?
http://isaacbrocksociety.com/2012/04/10/senator-obamas-promises-to-americans-abroad/#comment-12714
I am practically a life-long Democrat, but I have such disdain for them now.
It is encouraging that the chairmanship f the Dems Abroad has moved from Switzerland to Canada. The Dems Abroad, under Caitlin was cliquish, superficial and effete, much like the UN and NGO culture. They were also from a different era, where the tragedy of the Bush presidency was playing out to different priorities. The only focus tax issues for USPA’s got was when it was a GOP led attack, like TIPRA.
When the Democrats got the House, Senate and Presidency, the Dems Abroad went mute on tax issues for Americans Abroad while their party, who portrayed themselves as our rescuer before he election, became our tormenter afterwards and inflicted far more damage than anything the GOP has ever done.
Under a Canadian chairmanship, we can hope that the focus will change to a more pragmatic view of our issues. Their leadership is now surrounded by angry USPA’s who would never tolerate the silence that was previously allowed on tax issues.
However, the new leadership should have a stronger challenge. The promises and nice talk mean nothing and should mean nothing unless urgent action is taken to effect law BEFORE THE ELECTION. Once the election is done, it’s over.
The worst thing we can do, right now, is to prove the parties right when they say that we do not matter.
One final point. No matter what actions they take right now, it is unlikely that the Democrats would be our advocates. The Democrats fundamentally believe that global taxation is rational, fair and manageable. The GOP don’t believe this. Only a few of the senior GOP , like Grassley, push for taxation on Americans Abroad, but he does this in order to rally our anger against tax rates, very much like his perennial patch job on AMT without eliminating it. AMT is a way to get middle-class Americans to demand lower tax rates. Eliminating FEIE achieves the same pressure.
If the Democrats ever get full power again, it will be bad news for us.
@Everyone
I feel as if we are spinning our wheels on this issue over the past few weeks. Any suggestions for new strategies. I have a few ideas but would like to hear from other people first.
More from Lawyer in Detroit…
http://ataxingmatter.blogs.com/tax/2012/03/still-havent-filed-your-fbar-dont-wait-til-you-get-hit-with-forfeiture-like-this-alaska-plastic-surg.html#comment-6a00d8341cf2a753ef016765280339970b
Jim Canadian said…
7,000,000+ disgruntled and annoyed expatriates will simply further fuel the profound anti-Americanism that is so prevalent in the world.
Does it mean nothing to you that the US and Eritrea are the only two nations on the planet with citizen-based taxation?
Reply April 12, 2012 at 10:37 AM
LindaMBeale said in reply to Jim Canadian…
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Jim One of the issues in determining appropriate tax policy in the US is this country’s idiosyncratic notions about individuals and social justice and the other is the power of money—especially after Citizens United. A considerable part of the developed world recognizes that taxes should be sufficient to cover important societal needs, and that programs to address those needs should not be cut back because some rich persons or companies don’t want to pay tax. The US has had forty years of anti-tax sloganeering paid for by some of the richest people and most powerful corporations in the world, and that has made it very hard to have wise legislators or to enact wise legislation. So the push for territorial taxation has to be considered in that context. It ultimately amounts to just another way to argue for the reduction in the already extraordinarily low tax burden on US multinational corporations and to push the tax burden down, regressively, on the lower income distribution. I can’t in good conscience support that. So while a full range discussion of tax systems and tax policies could lead to different conclusions in a different context, in today’s context I am not supportive of moving to a territorial system. It would amount to more tax relief for the richest, and higher taxes, with fewer benefits, for ordinary Americans. What expats think is, to be honest, not of the greatest interest to me. As expatriates, they are already likely to be less loyal to, and enamored of, the US as a country. I’d like us to be a country that people around the world respected, but even more, I’d like us to be a country that I respect…..
Linda
Reply April 12, 2012 at 01:05 PM
Jim Canadian said in reply to LindaMBeale…
You are not going to get the money from them in any event and all this does is make the USA more hated (not just by these expatriates but by all of their neighbours, friends, and yes, fellow citizens of these other nations). Quite frankly, I am happy with this, as anything that reduces US hegemony in the world is good for the world!
One of my “ideas” is a letter writing campaign to get Ms. Beale fired from Wayne University. Although I still consider this a relative waste of time compared to other methods. It would I suspect shake her up a little bit.
Rather than do that which smacks of McCarthyism :-), why not just keep annoying her about living in such a class-ridden, rich-dominated, unequal, violent, decaying society that is increasingly hated around the world!
Linda Beale said, ‘What expats think is, to be honest, not of the greatest interest to me.’ Yep, that is the truth for her, and for the US politicians and for 95% of regular US folks. If we don’t want to live in the US then we don’t matter and we deserve whatever evil falls us. There is that insularity again, glaring bright and clear.
Sadly, I have to agree with you. We have escaped from America and those who have not are envious of us. As many have commented, we should spend time influencing our own reps, PCs. Libs, and New Democrats. We are Canadian (or Swiss, or New Zealanders). This is what we have going for us and we should use this tool to secure our futures.
@Tim she’s not worth our time. I don’t know why anybody bothers with her.
We have had intelligent people with opposing views come here and engage in civilized conversation with us. We’ve learned from them and they have learned from us.
Ms. Beale belongs in a category all her own. I don’t doubt people who actually know her find her a waste of time as well.
@Tim, I have been thinking of this as well, as have probably others. I mean we’ve written all of our politicians, we’re commenting on posts such as Beale’s, keeping an eye out for opportunities… What I don’t know is how to get this to the attention of regular people. I am convinced that if more non-US related Canadians were aware of what the US is trying to do they would be outraged, as well, particularly regarding FATCA. There is already a general feeling of resentment against US meddling in our affairs, and suspicion of our government’s perhaps-too-close ties to US big business. BUT how does one tap into that? When you look at how videos go viral, or tweets make the news, and oftentimes on pretty trivial matters, there has got to be a way. However, I’m not willing to make a fool of myself to get attention and I’m sure no one else on here is either. So, how does one do something that gets noticed? I just don’t know, personally. Someone suggested a petition (sorry, just don’t remember who, don’t know if it was you or not), but how do you get attention to the petition to get people to sign. I’m convinced that until we get some media to start reporting on our story we can’t get the attention we need. I wrote W5 but they’ve never bothered to respond. Others have had talked to newspapers, journalists, etc, but it’s all stayed fairly local, and hasn’t even caused a blip on the radar for people not involved personally. After I did a radio interview on CBC, I did have a handful of co-workers come up and offer sympathy and they did express outrage at the US, but that’s been it…..
It is hard for us to be heard. It hard for us to be understood. But for either to happen we need to be able to communicate.
Reagan once said:
“When you can’t make them see the light, make them feel the heat.”
To use an Obamaism:
“The pundits like to slice and dice our country into red states and blue states; red states for Republicans, blue states for Democrats, but I’ve got news for them, too. We worship an awesome God in the blue states, and we don’t like federal agents poking around our libraries in the red states. We coach Little League in the blue states and have gay friends in the red states. There are patriots who opposed the war in Iraq and patriots who supported it. We are one people, all of us pledging allegiance to the Stars and Stripes, all of us defending the United States of America.”
–Barack Obama, July 27, Democratic National Convention Keynote Speech
We need to bring all groups together (Repulicans, Democrats, the works) together to defeat Barack Obama. Create a ‘Citizens of the World Against Obama coaltion”. Could include the FATCA haters as well. We must find a way to make Obama feel the heat. He has had the ability to stop this, but has declined to do so. Therefore, he must pay a price – he must not be reelected.
I don’t believe that citizenship-based taxation will be the issue that will bring him down. But, it can be included with other issues.
Not sure how to do this, but I believe it can be done. I don’t even believe that there is a single member of “Democrats Abroad” who would vote for this guy. There is no U.S. citizen living abroad who would vote for Obama.
On this note, consider the following. It is stupid to consider this to be a Republican vs. Democrat issue. Obama is not a Democrat and Romeney is not a Republican. They are both “Independents” who simply latched on to those two parties to promote their own interests. The independents elected Obama and the independents will elect the next President. The mainstream parties do NOT have enough support to, without more, elect the next president. So, all U.S. citizens abroad need to think of themselves as independents and forget this party crap.
Also, once had another thought that was quickly dismissed. But, I will offer it again. We need publicity. Why not get a U.S. citizen abroad to run for President. It will generate some media attention. We would only need to get the person on the ballot in one or two states to accomplish this. We would then have a central command.
It’s too bad that Petros has renounced. He would have been the perfect candidate for president of the United States. Perhaps JustMe?
The above is not so much a suggestion as just some thoughts.
@Joe Smith
Re: your Linda Beale comment.
You know what they say, those who can’t do teach!
@outragedcanadian, when I first read about this taxing expats business I ignored it too as something that was insane and not worth wasting my time.
If it wasn’t for the fact that my husband was born in the US and the issue kept coming up in my Google news searches, I would’ve just forgotten about it. There are more important things in life like survival.
Our neighbors may care, but there’s really nothing they can do about it. In fact it would even be hard for them to empathize because the concept is so insane it’s difficult for them to imagine it.
The best use of our time is to keep encouraging our politicians to find a solution. You can bet that if Flaherty doesn’t solve this, the opposition parties will make it an issue all Canadians will hear about.
I think Barrie McKenna or Donald Cayo would be the media people we would need.
The angle: “American xenophobia makes life miserable for millions abroad.”
I am cautiously optimistic on where things stand in Canada. The challenge I keep coming across and this relates to Democrats Abroad is who exactly is the “decisionmaker” on FATCA in Washington and no I don’t think it is Obama. ACA and Democrats Abroad I think know who it is but are not sharing that information with us which I find immensely frustrating. If I knew for sure that person was Geithner, Carl Levin, Max Baucus, Charlie Rangel etc I would suggest focusing a huge portion of our energies at targeting that person specifically and making that person’s life miserable. Its also interesting after of the hoopla about offshore accounts back in 2007 and 2008 there has not been a single congressional hearing on the matter since 2009 which ACA could genuinely make a claim to attend.
@all
A couple of times I have suggested organizing a major live conference on these topics in Toronto (or somewhere else). Certainly with something like that we would have a better chance of getting the important Canadian media people to attend. We might also be able to get some exposure from foreigh media.
We could also attract people by including topical seminars on citizenship renunciations, etc.
A conference would also make it clear that we are a well organized, well educated and vocal group. It would be a learning experience.
We should also invite the U.S tax types like Linda Beale, Mospick, and others. Get them to really understand the problem.
Do you remember the scene from the Billy Jack movie from the 70s when they invite the town people to the school? Could be a bit like that.
Sure, we need to be heard. But, we must define ourselves ad educators. A couple of weeks ago, members of the Isaac Brock Society did a fantastic job educating WhoaitsSteve.
Your thoughts on a live conference? (We can also nominate our candidate for president – only half serious about that).
What concerns me from reading the original memo from Democrats Abroad is it does not appear that any of Flaherty’s previous intervention on the matter has caused any concern on the part of whoever is the FATCA “decision maker” in Washington. Thus my feeling is we have to find out whoever this person is and as CANADIANS target our country’s outrage towards that person. If it really is Carl Level that means Michigan tourism and business boycotts. If it is someone else it means targeted actions by Canadians against their state’s businesses and citizens.
renounceuscitizenship said “A couple of weeks ago, members of the Isaac Brock Society did a fantastic job educating WhoaitsSteve.”
We do well with intelligent, open minded people. Not everybody is going to be like that.
In my opinion, Obama is one of those closed minded people who cannot overcome this even when it means helping US residents. We’re not the only people suffering because of Obama’s extreme way of thinking. Problem solving requires you to see all sides, not just your own.
The only thing we have control over is our own politicians. We have to leave American politicians to the Americans. I would like to think that their suffering over the last 3 years has caused them to rethink their choice of leadership.