Liberty and justice for all United States persons abroad

The Isaac Brock Society

45 thoughts on “IRS releases new FAQs for OVDI and rules for some non-filers – The perspective of the Accounting Industry”

  1. Glad to see Don Cayo covering this again, he did a good job last fall when all of this hit the fan.

    He missed TFSA’s though.

  2. Perhaps one of the professionals who visit here might have a comment or two?
    Re the TFSA issue raised in the comments here: http://www.mnp.ca/en/media-centre/blog/2012/6/27/new-irs-relief-for-americans-in-canada

    Statements on another site left me with the usual further questions :

    “The IRS may consider TFSAs to be Foreign trusts”….“To date there has been no official IRS position on whether these forms are required for TFSA holders” Is this really true? And what does that mean? IRS rulings can be made to apply retroactively – to the detriment of filers – like the one that determined that Canadian mutual funds were PFICs. So is that why the TFSA requires forms 3520 and 3520A – because an ‘official’ IRS ruling could appear and be applied retroactively confirming it? Or, it is a trust until someone applies for a ruling otherwise – and the IRS takes a position denying the challenge?
    </p

    What happens in this particular situation – re qualifying for the ‘simplified’ compliance regime if there has been no ‘official‘ IRS position taken (yet) specifically on TFSAs? If the determination of ‘low compliance risk’ hinges on whether the filer has an existing TFSA, and to date there has been no ‘official’ ruling made by the IRS, then….?

    And for any of those who still don’t know that these types of registered accounts are a big problem for those deemed US ‘persons’ in Canada, and recently obtained one; if the TFSA, RESP, or RDSP was only taken out in 2012 – would it still preclude the low risk category – even if it wasn’t non-compliant yet (i.e. hadn’t become late for reporting purposes yet)? There will probably be plenty who are still learning about all this still.

    Obviously no-one can or should rely on information randomly sprinkled on the internet, this cannot be and isn’t intended as tax advice, etc. etc., but as usual, there are more devils, details, and nuances than any ordinary person can grapple with. It’s fruitless to speculate without any official details – I guess by September the 1st it will all be made clear.

    Or not.

    .

  5. @just me, at least it is becoming ‘mainstream’ acceptable that there may be two district groups of citizens who have financial accounts abroad. That being said, many seem to believe that some sort of sound solution has been found for minnows, when in fact we know that this new initiative is just creating another layer of bureaucracy with its own ‘winners and losers’. With the determination of whether a taxpayer is a low or high compliance risk, a minnow still isn’t safe and could invariably be sent for full extraction once they enter the processing plant. Moody nails it, and did it in record time within hours of the announcement (Calgary411 linked it on another thread too).

  6. @bubblebustin…

    He did nail it, and I was alerted to it by Calgary411…

    I emailed Amy Feldman with links to the Moody story.  As some of you may recall, she is the one that wrote this story…  Taxpayers with overseas accounts seethe at penalties  So, I kept that in mind when writing her back. 

    I said…

    I read your most recent story with great interest, especially to see what perspective you would be getting from those attorneys that you consulted with. I think you represented the subject fairly and did a pretty good job with the core story.   Yes, there is relief for “some expats”, but I think it may be more narrowly drawn then Scott Michel, president of Caplin & Drysdale in Washington really understands yet.  And maybe I would have thrown in a couple more questions his way, but you do have editors! LOL

    I am sure you must be aware, that there are varying opinions about what these new provisions mean, and some are unanswerable until the September 1st guidelines are released.  I am taking my time before developing a fully formed opinion, as “the devil will be in those details” yet to come.

    However, I notice that there are already conflicts with the newest version of the 2012 OVDP FAQ 52.2 where they still want a 5% penalty out of the most innocent of innocent, “Foreign non residents who did not know they were U.S. Citizens”.  Let that sink in for a minute. They want 5% of world wide assets of those who could not possibly known they were Citizens, as they were accidental Americans by the lottery of birth, and yet the IRS wants to take that from them?  Hummm… That sure doesn’t sit well with IR-2012-65 relief announced on the very same day and of which you write!   Do we have two separate departments working at cross purposes or not communicating at the IRS? Maybe!

    Anyway, if and when you do a follow up story, here are some additional POVs just to add to your mix and help with your questions and probing of what is really happening. 

    Besides Moodys, I sent her to…

    The Vancouver Sun Article

    Jack Townsends’ blog on the same subject as her story

    This post  by Phil Hodgen  

    this by Victoria  

    The “ask your questions” thread at Isaac Brock Society is now up over 1020 

    Figured that those should be sufficient to keep her busy!  🙂

  7. @just me. Great letter, thank you. Did you read on her Brock thread my post about Boris’s US citizenship is in dispute? In his own words “he could be president”.

  8. @bubblebustin…

    No, I am a bit behind on my reading…  Too busy tweeting the President of Egypt about his dual citizen children!  LOL

  9. @just me 

    I saw that, LOL! You are relentless, thank goodness. Imagine what you could do with the power of Fb, lol.

  10. I just posted this on Reuters primarily to give immigrants a chance to draw attention to their plight.

    It is in moderation, as it has links that I am sure they want to check out.  I ended with this…

    The BIG question for me, is where is some reasonable relief for the minnow new immigrants who had no idea that they were entering an offshore tax trap when they got their visas. The State Department does not tell them anything of their FBAR obligations in the “Welcome to America” package they get. They are still waiting for someone in the media to understand their dilemmas on how to become compliant with all the Fwhat? forms! (FBAR and FATCA )without losing a BIG chunk of their hides and home country family assets.   Theirs is a BIG untold story. 

  11. @Just me. Thanks for thinking about us!
    The term “new” can be a little misleading. If you didn’t know about it, you didn’t know about it, wether you lived here 2 years or 10 years. They only started making noise about that a couple years ago, and just now, the accounting world is starting to get the message. I don’t think it got to immigration lawyers yet.
    I wouldn’t want them to say the new procedure we released for expats can be applicable to VISA holders only (not green carders, or put some arbitrary condition on the amount of time you lived in the US. That would be ridiculous!
    Actually, do you have an idea of the best way to get in touch with them to ask them to add immigrants to the new procedure?

  13. @Christrophe…

    I just checked and my comment on Amy’s article at Reuters just came out of moderation. There is only one other by citizensabroad, so come on guys, (Brockers and immigrants) this is a good opportunity to shape a narrative for a journalist who better understands these issues than most.  Don’t let this opportunity go buy!   It is good to post comments back and forth to each other here in our own little echo chamber, but we need more effort out in the media world.  🙂

  14. Hi, Just Me,

    I just submitted a short comment. Wish I had the ‘better way with words’ to make a significant difference.

    Thanks again for all of your contributions everywhere we look!

  15. @ Just Me

    I want to echo calgary411’s thanks for all you do … morning to night as it often appears. I do hope you won’t burn yourself out with this extra-ordinary effort because you will be needed for the long haul. You seem to be able to zip around the internet collecting valuable information and writing excellent comments in extra-quick fashion. However this is an issue which will have no easy, quick resolution and will need to be hammered upon for a long time I’m afraid. Wish it were not so but the IRS cedes ground in only very small increments and then sometimes sneaks back and reclaims it when you aren’t looking.

  16. @calargy and Em…

    Thanks ladies, every little bit helps.   Just keep pecking away at it, as you never know when something you say or write will hit a responsive chord with a reader of influence.  Also, if you are not tweeting, or have not tried it, I would encourage the effort.  It is the simplest and easiest way to quickly put a message into the Ethernet that can get picked up and repeated and bounced around the world. Sometimes I am amazed.  I am still experimenting with it, but I know it would have a lot more power if there were a few 1000 Expats instead of just a half a dozen tweeting about FBAR, FATCA, OVDI and Amerciansbroad !  🙂  I am looking for the day when one of those #hash tag terms begins to trend in the US twittersphere!

  19. *For a few minutes I thought I could sleep well again… Yes, Mr. Shulman seems to understand that he is dealing with two kinds of people (perhaps even more) and he can not simplify things to collect more money. But when he starts saying how he is going to handle the “non-residents” my anxiety started to raise… and yes…another sleepless night. The man wants my money and he is determined to get it one way or another… Shame on America.

    He is dealing with people. Of course he can go after the Americans living and working in the USA and investing dollars earned in the USA in hided foreign accounts. I have nothing against this. But Americans and dual citizens who are living and working abroad, earning their “foreign” money and depositing in their “foreign” banks are a different breed. Most of them with the Income Exclusion and Tax Credits have no reason to hide anything as it should be unless Mr. Shulman believes in double taxation.

    And of course, immigrants to the USA with GreenCards are a third breed. They may have left foreign bank accounts with foreign earned money in their countries of origin, and I know a recent one who received his welcome package without one word about FBARS.

    Is is a question of competence? Bad faith? How can we interpret people doing this to people? 

     

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