I wanted to post an interesting FATCA comment letter below that deals with many of the issues we discuss here.
http://bsmlegal.com/PDFs/vonKoppenfels.pdf
There is additional letter to from ACA. In it they acknowledge the IRS has told them that to exempt accounts of US Person’s in their countries of residence if effectively to defeat the purpose of FATCA as passed by Congress. So in some sense I don’t know where this will go. Still no comment letter yet from the Canadian Bankers Association. I get the gist though overall that FATCA will be delayed by one year (If for anything do to issues on the US side of things) and the ability to be a “recalcitrant” account holder as permitted by local law will be allowed for a significant period of time.
@whoaIt’sSteve- the tax thing is the crux of the matter when you live outside of the States. It is amazing to think that people would actually rather suffer “the slings and arrows” of the IRS rather than to live with dignity.
What the IRS and citizenship based taxation do is to relegate you to a life of absolute poverty, if you are to live by the rules. There is no dignity or freedom in being a U.S. citizen if you reside outside of the U.S. And today I don’t believe that there is any freedom associated with life in the U.S.A. When your government has the power to put you in indefinite detention without a trial, NDAA, then your citizenship isn’t worth much. And to think that the U.S. has the nerve to criticise China for doing the same thing as is is built into NDAA.
Even the title of this Act shows the imperialistic nature of the U.S. North America and the U.S. are not equivalent references. The U.S. has a habit of forgetting that it shares this continent with two other countries. I don’t believe that Canada asked to be included in the totalitarian legislation?
@recalcitrant The NDAA is bad, really bad, but Islamic extremism wanting to kill us all is even worse. Where is Canada included? I never saw anything about that.
@whoait’ssteve- Canada and Mexico are subsumed in the first two words of the legislation’s title- North America.
Would you rather have one group trying to kill you or two? Under the NADAA the U.S. government is just as much of a threat to your life, liberty and pursuit of happiness as is the Islamic extremist. And don’t forget that it is Obama, a supposed Constitutional lawyer, who believes that Americans are fair game when it comes to government sponsored assasination.
Just because America is willing to shred its Constitution doesn’t mean that it can use FATCA and citizenship based taxation to demand that other countries do the same with their constitutions.
I thought NDAA stood for National Defense Authorization Act. I couldn’t find references to North America anywhere.
@omghesstillanamerican- I stand corrected. You are right. I goofed up.
No problem recalcitrantexpat. You had me scared there for a while 🙂
@recalcitrant I’m not worried about the US Government coming after me, I however have become concerned with all of you guys plight. I don’t think being negative about the US serve’s any purpose, and being bewildered that someone still loves the US even after spending years abroad seems to me to be like someone who has been living in an echo chamber of anti-American sentiment.
There are people who really love the US, and sometimes they move abroad, why is it shocking that they wouldn’t feel they want or need to acquire a foreign citizenship?
You’re right Steve, there are people who feel a very close attachment to their country of birth even after they’ve lived abroad for 30 or 40 years.
My mother never became a Canadian citizen even though she worked here for 35 years. We’re originally from India. Everybody else in the family has Canadian citizenship but she doesn’t. We always thought she was strange but she lives in India now and feels like she never betrayed her first love.
@whoait’ssteve
Of course not – US citizenship is obviously better than many other citizenships to have. What I find impossible to believe, based on the survey results, was that so many of them could live years, decades even, in another country and that so many had no intention of taking on another nationality or officially integrating where they live even if it meant that they would be able to hold dual nationality.
Tax issues aside, there is nothing to be lost by taking on another country’s nationality and everything to gain. In my opinion, the only thing stopping these expats from broadening their work opportunities and those of their children is misplaced patriotism. I think the main difference here is that Americans tend to view their citizenship as an “allegiance”, whilst in Europe we have “nationalities”. I was born in the US to European parents, and I have always viewed myself as holding various nationalities, not allegiances.
Holding a second nationality also offers a layer of protection from government abuse. All of the people who have already naturalised now have the choice of whether or not to renounce US citizenship, while those who have waited until now will be stuck in the IRS trap net for years to come with less protection than holding another citizenship or being able to renounce the US one would offer. Those with dual Canadian-US citizenship, for example, can safely retain both nationalities and be protected by the double taxation treaty by the Canadian government by virtue of holding Canadian citizenship. Single citizen “US persons” do not have the same level of protection.
@Don Pomodoro
Absolutely correct. I have 6 clients, born in the U.S. They have all lived in Canada anywhere from 12 years to 51 years. Three of them have never bothered to become Canadian citizens. They now really don’t have any choice, but to comply and file U.S. tax returns. If they choose not to do that, they won’t be protected by the Canadian government. One of them was actually ‘appalled’ that I had relinquished my U.S. citizenship 40 years ago when I swore a ‘renunciatory oath’ at the time of my Canadian citizenship ceremony. Although, I kept my mouth shut, I was equally as appalled that she lived in Canada for forty years and had never become a citizen of Canada. My thinking was and still is – how can you live in a country, enjoy what it offers and not want to be able to vote in its’ elections
@omghesstillanamerican, whoait’sSteve- I know of at least one person in my church who is in a similar situation. The family is originally from Holland. Everyone in the family, including the husband, has become Canadian but she refuses to give up her Dutch passport. I also have a friend in the States who is Canadian but refuses to become an American even though the rest of her family is American.
I guess that for me it wouldn’t be so much of an issue if it weren’t for citizenship based taxation. It is easy to remain the citizen of another country when that country doesn’t impose its laws on an extraterritorial basis. In the case of America though that is not the case.
When your home country puts restrictions upon your life that relegate you to the status of second class in the place where you reside then keeping that country’s citizenship becomes a burden and a self inflicted wound.
I know that there are many on this blog who refuse to give up their U.S. citizenship but in the end there are no rewards or pot of gold at the end of that rainbow. Involuntary suffering is one thing. But to set yourself up for a beating day after day is quite another.
I guess that if you are single and you chose to endure the monetary injustice of citizenship based taxation and restrictions on personal movement then it is okay. But if you have any one who is dependent upon you I think that it is unfair to make them suffer along with you. Because suffer they will. Every dollar that you send to the U.S. is a dollar that you can’t give them. Every investment opportunity that the U.S. forbids as an associated opportunity cost that you will never regain.
@tiger- the right to vote is what cinched it for me. There was no way that I was going to live here and not be able to have a say in my government at all levels.
@all
Three days ago I had a ‘friend’ ask me for a loan to cover her rent and some other things. She told me she had gambled the rent money away at the casino. After being more than a bit shocked, my response was no. I felt quite guilty about my answer but have not changed my mind about it.
Reading on our site, I realize that my friends ‘request’ is not unlike what the U.S. is expecting from many of us. They want us to help cover their debts and in a very real way, they have contributed to the mess they now find themselves facing ie ‘out of money’. Well, my answer to the U.S. will be the same as my answer to my friend – NO.
I have a neighbor who I thought was my best friend. As I got to know her and her family better I came to the realization that I had been completely duped and she was the world’s biggest user.
So I did what I always do when I want to get rid of somebody for good. I told her she was a really good person and I wanted us to remain friends but I needed to take a step back from our friendship. She said ok. I never called her again and she never called me, she lives right next door. I think she realized I had figured out her game and she should move on to using someone else.
I think we should all do to the US what we do to friends who use and abuse us. Ignore them.
@tiger I don’t think your analogy is entirely accurate. Big government leads to big spending leads to big taxes. And the US Federal Government is just simply too big, we are not unitary we are a federation, the sooner DC is brought down to size the better.
@tiger,
Re “Although, I kept my mouth shut, I was equally as appalled that she lived in Canada for forty years and had never become a citizen of Canada. My thinking was and still is – how can you live in a country, enjoy what it offers and not want to be able to vote in its’ elections”
My exact sentiments. Canada is where I wanted to live, raise my family, earn my living, pay my taxes, volunteer my time to strengthen my community, and vote for government to represent me. It was my choice to become a Canadian citizen as this is where I would thrive and enjoy life with my family and I wanted to give back and contribute to my new country, Canada. I am a Canadian!
@WhoaIt’sSteve,
My answer is still the same- I don’t personally care how “big” the US government has become or what it’s financial ‘needs’ are – I have been a Canadian for 40+ years; I really don’t mind paying taxes to Canada, after all, they have educated my children, provided health care to myself, my children and my late husband when he needed it; perhaps, sometime in the future they will provide nursing home care to me. But I will be damned if the United States government will get one cent from me or my late husband’s estate. They can damn well tax their own residents and stay out of my country, my home.
I know this thread has moved on to bigger and better things but offered here for its sheer entertainment value is the Eritrean Foreign Ministry’s response to Ms. Rice’s condemnation of its “diaspora tax”.
The link to the whole response is here:
http://www.biddho.com/
Here’s a clip of the fun stuff:
Eritrea has never used the Diaspora tax to “destabilize the Horn of Africa region or …. for purposes such as procuring arms and related material for transfer to armed opposition groups … “etc. as Op. 10 of Resolution 2023 presumes. Curiously enough, the limited revenues that accrue from this provision have been mystified and exaggerated beyond proportion. But irrespective of the actual amount, it must be underlined that the legality of the tax is robust and beyond any reproach. The domestic legislation that created the tax is noncontroversial; the social objective noble; and, standing at 2%, the amount is not onerous by any standards. As the proceeds of this tax are funneled towards providing social cushion for the dependents of martyrs of war and/or for national reconstruction and development, the individual contributions ought to be eligible for tax-deduction in the host countries that allow similar provisions for charitable purposes. In any case, it should not constitute a cause for official scorn or witch-hunting. And least of all, the United States cannot be hypocritical to cry foul and prevent Eritrea from collecting any tax from its citizens. The United States in fact levies full income tax from its citizens abroad. To this end, it routinely utilizes unorthodox means including divulgence by foreign banks of accounts held by US nationals via the Qualified Intermediary Programme; court summons issued by the US Department of Justice to foreign banks; international conventions that support the issuance of administrative subpoenas upon wealthy Americans; and, bilateral agreements with individual countries to solicit their assistance in both criminal and civil tax investigations by the IRS, to assess and ascertain the amount of collectable individual income tax.
Is there no honor among thieves?
@todundsteuer- I love that very honest response. I bet Secretary Clinton didn’t like this one bit.