Cross-posted from RenounceUScitizenship.
This is a response to the email from Professor Green. Note to members of the Isaac Brock Society: This post is in part, an attempt to consolidate a number of the comments to Professor Green’s email.
Dear Professor Green:
U.S. citizens abroad – Democrats, Republicans and Independents – thank you for the “FBAR/FATCA Task Force” and we note with gratitude that:
Your FBAR/FATCA Task Force has been working steadily to seek relief for overseas Americans facing onerous tax reporting burdens.
Furthermore, your six proposals would be welcomed by U.S. citizens abroad – to be specific:
- 1. Define a foreign or offshore account as an account in a country other than one’s country of residence or the US, thereby recognizing the legitimate need for local banking services;
- 2. Raise the FATCA reporting threshold to $1 million to put the focus on taxpayers with wealth sizeable enough to justify the costly and complex investment structures normally used to conceal assessable earnings;
- 3. Index the reporting threshold to inflation so that it goes up every year just as the Section 911 income exclusion does;
- 4. Add a provision that excuses anyone who does not owe taxes (because of the Section 911 exclusion or any other exemption or a tax treaty) from the obligation to file form 8938, regardless of the threshold reporting;
- 5. Merge the FBAR reporting requirement with the developing FATCA legislation to eliminate duplication in filings; and
- 6. Offer amnesty to overseas Americans who are delinquent taxpayers, inviting them to pay what they may owe and restore their status as tax-compliant citizens. (See our opening remarks for our success in this area.)
That said, your proposals are merely an attempt to improve the conditions of the prison of citizenship-based taxation. You are essentially just accepting the ideas of citizenship-based taxation, FATCA, FBAR and the rest. Gotta be in prison anyway. Why not put the effort into getting along better with the guards!
I once heard the following story:
During the time period that Obama was looking for the “First Dog”, he was out jogging. He met a man with a litter of beautiful puppies. He asked the man the following question:
What kind of puppies are these? The man answered, they are democrats Mr. President.
A week later, Obama brought his wife back to look at the puppies.
Naturally she asked: what kind of puppies are these? The man answered, they are Republicans.
Obama said what? Last week you told me these puppies were Democrats.
The man answered. Well, I was telling you the truth.
Last week they were Democrats. But, this week their eyes have opened and they are Republicans.
Professor Green: I think you need to open your eyes too.
My read of your bulletin is that you are making two broad points:
1. The Obama Democrats really are friends of U.S. citizens abroad. Here are your reasons:
Compliance: “The Internal Revenue Service has made a significant concession to overseas voters who present little or no risk to tax avoidance.”
Professor Green: It’s clear you haven’t read the “concessions”. What the IRS is saying is that for those who have not filed tax returns, and are a “low compliance risk“, people will not face penalties. Furthermore, if you keep your eyes open as you read, you will see that owing less than $1500 tax is NOT a guarantee that one is “low compliance risk”. In addition, it is impossible that this could affect more than a small percentage of taxpayers. Let’s not forget the reign of terror coming from the Obama administration. Hundreds of innocent people terrorized into entering OVDI. Remember “The silence was deafening“. Remember Ambassador Jacobson’s statement: “we are not unreasonable …” (while 70 year old grandmothers were terrorized into OVDI). Remember the IRS letting the 2011 tax season pass without following up on their January 9, 2012 promise of procedures to come into compliance. The effect of not giving people timely directives for how to come into compliance is that they remain out of compliance. (Of course this does allow the IRS to levy more penalties.) Remember the failure to respond to the TAD from Nina Olsen with the respect to the infamous Q. 35 “bait and switch” in the 2009 OVDP? And what about the treatment of those overseas Americans who didn’t even know they were Americans. The IRS is graciously telling them that they must pay 5% of their assets to the IRS. This latest message from the IRS seems to me to be an attempt to get more people into the system. The problem is of course, as all long-term tax filers will know, is that (assuming no filing of FBAR), they are at great risk of penalties because they are in the system.
I could go on, but I won’t. So, Professor Green, it doesn’t look like there any significant concessions to me.
FATCA: “The good news is that the threshold for reporting under the FATCA regime (Form 8938) has been raised from $50,000 to $200,000 for individual-filing Americans living abroad (to $400,000 for Americans living abroad filing jointly).”
Professor Green: To say this is good news is to say only that the impact could be worse or that a smaller number of people will be affected by FATCA. You assume that FATCA is inherently good. But, that only its application to U.S. citizens abroad is bad. This is ridiculous. FATCA is an an attack on the sovereignty and freedom of all nations and all free people. I will say it another way: FATCA is inherently bad. FATCA is he beginning of the end of freedom and democracy the world over. People the world over, need to oppose FATCA, and not just how it applies to certain U.S. citizens abroad. Believe me, sooner or later it will apply to all. The time to take a stand is now. Somehow, the following poem by Martin Niemoeller comes to mind:
First they came for the Communists but I was not a Communist so I did not speak out. Then they came for the Socialists and the Trade Unionists but I was not one of them, so I did not speak out. Then they came for the Jews but I was not Jewish so I did not speak out. And when they came for me, there was no one left to speak out for me.
You should be opposing FATCA and not just the application of FATCA to certain groups!
But, you do make the point that:
The Government should be attacking tax cheats: You proudly state that:
In our discussions with political and bureaucratic officials we go to great lengths to express our support for the Government’s crack down on money launderers and tax cheats before explaining the adverse impacts and outlining our recommendations for making FATCA less harmful to overseas Americans.
Professor Green: The Obama administration is defining U.S. citizens abroad as tax cheats. So, what you are really saying is: We express support for the IRS attacking U.S. citizens abroad, it’s just that it is harmful to U.S. citizens abroad to be attacked by the IRS.
Professor Green: U.S. citizens abroad are tax cheats only because the U.S. continues to terrorize its citizens with citizenship-based taxation (just like Eritrea). Citizenship-based taxation may be a violation of international law. There are some who believe that citizenship-based taxation is a crime against humanity. By using citizenship-based taxation, the U.S. has created a class of criminals that doesn’t exist in any other place except Eritrea. So, how about this for a novel idea:
Get rid of citizenship-based taxation. Lower the number of tax cheats. Lower crime.
Some comments on these points from readers from your email:
Here is a list of Democrats including @barackobama who are destroying the lifes of #americansabroad isaacbrocksociety.ca/2012/07/04/wha… #FATCA #FBAR #OVDI
— U.S. Citizen Abroad (@USCitizenAbroad) July 5, 2012
recent US laws designed to harm #expats and #ameriansabroad Much more than #FBAR #FATCA isaacbrocksociety.ca/2012/07/04/wha… Most comes from Democrats
— U.S. Citizen Abroad (@USCitizenAbroad) July 5, 2012
More #americansabroad punished for coming into #FBAR compliance isaacbrocksociety.ca/2012/07/04/wha… #OVDI rewards criminals and punishes innocents
— U.S. Citizen Abroad (@USCitizenAbroad) July 5, 2012
2. Americans abroad should get out and vote for Obama:
But, as we move forward toward November 6, please bear in mind that, as troubling as our tax issues are now, conditions would be much worse (taxes and way beyond) with a Romney presidency, a tea party House and a Senate without a filibuster-proof majority. Imagine a right wing activist Supreme Court for thirty years (despite the welcome news about the President’s historic health care initiative)!
Some comments on this point:
@aaforobama Q. Would you vote for @barackobama A.Get real! would you invite for dinner your child’s murderer? isaacbrocksociety.ca/2012/07/04/wha… #FATCA
— U.S. Citizen Abroad (@USCitizenAbroad) July 5, 2012
@demsabroad : although @barackobama bad to #americansabroad they should still vote for him isaacbrocksociety.ca/2012/07/04/wha… #FATCA #FBAR #OVDI
— U.S. Citizen Abroad (@USCitizenAbroad) July 5, 2012
@aaforobama Even members of @demsabroad will be among the #americansabroad not be voting for @barackobama isaacbrocksociety.ca/2012/07/04/wha… #FATCA #FBAR
— U.S. Citizen Abroad (@USCitizenAbroad) July 5, 2012
Professor Green: What is your objective here? Is it to promote the Obama administration or is to help U.S. citizens abroad? Unfortunately there is NO POSSIBILITY OF DOING BOTH. The Obama administration has declared war on U.S. citizens abroad. It has forever changed their lives as they knew them. Remember:
It’s not what you take from somebody, it’s what you leave them with!
Let’s explore the consequences of both promoting Obama and of supporting U.S. citizens abroad.
1. If you are trying to support U.S. citizens abroad, then you should be telling the Obama administration that if they don’t change their policies NOW that you will be encouraging your group – Democrats Abroad to vote for Romney. The only thing the Obama administration will understand is a loss of votes. With respect, the notion that we should trust these people to make changes after the election, ranks as one of the stupidest things I have ever heard! They have had a long time to change their policies toward U.S. citizens abroad. Instead, it is getting worse and worse. By suggesting that people should vote for Obama, Professor Green you are encouraging and supporting the same policies that you claim to protest.
Since, you are busy urging that people vote for Obama, it is clear that you do NOT represent the interests of U.S. citizens abroad. Comment after comment has demonstrated how hostile the Obama administration has been to U.S. citizens abroad. Let me put it another way:
The Obama administration has forever changed the lives of U.S. citizens abroad! The IRS and Obama administration have stolen the lives of hard working Americans. I venture to say that many U.S. citizens abroad are not even the same people they were a year ago.
2. If you are trying to support Obama, I suggest that give us a reason to support Obama that is related to Obama. You are doing what all Democrats do – “Romney would be worse”. As a professor, grading a paper, you would expect somebody to explain their position. So, far I would give you a very low grade. I ask you to explain your position. In fact I ask you to explain two specific things:
First: Exactly how or why would Romney be worse?
@demsabroad thinks that @mittromney would be worse than @barackobama Please explain how this could be the case isaacbrocksociety.ca/2012/07/04/wha… – #FATCA
— U.S. Citizen Abroad (@USCitizenAbroad) July 7, 2012
Second, how about offering a reason to vote for Obama that has something to do with Obama? I know it’s hard. But, surely you can come up with some reason. Here is another thought that captures this sentiment:
@aaforobama The administration of @barackobama has declared war on U.S. citizens abroad isaacbrocksociety.ca/2012/07/04/wha… #FATCA #FBAR
— U.S. Citizen Abroad (@USCitizenAbroad) July 7, 2012
Professor Green, I request that you provide answers to these two questions.
(Interestingly, a number of prominent democrats,including President Clinton believe that Romney is qualified to be president.)
Why no U.S. citizen “with his eyes open” should vote for Barack Obama
Obama is in charge of the executive branch of the U.S. government. He is in charge of First Tax Cheat Geithner, who is in charge of Shulman and the IRS. This attack on U.S. citizens abroad is NOT because of citizenship-based taxation (which is the result of an Act of Congress). It IS the result of the manner in which existing laws have been administered. The Obama administration is responsible for the administration of these laws and has used these laws to INTENTIONALLY attack U.S. citizens abroad.
U.S. citizens abroad should organize themselves one community at time to vote against Barack Obama.
In closing
I hate to sound like George Bush (You are either with the terrorists or you are with us). But, the reality is that the Obama administration has declared war (in a metaphorical sense) on U.S. citizens abroad. The only way to win this war is to defeat (in actuality) Barack Obama. Therefore, if you care about U.S. citizens abroad, I suggest that you encourage your members to vote for Romney. Romney has NOT declared war on U.S. citizens abroad.
On the other hand, if you and Democrats Abroad are just here to do Obama’s work in Canada (I thought this was Ambassador Jacobson’s job), then continue singing the “Let’s vote for Obama song”.
You need to decide what it is that you are trying to do. Are you a man of principle or are you a man of the Democratic Party?
Winston Churchill once said:
“Some people change their party for the sake of principle, and some people change their principles for the sake of party.”
_____________________________________________________________________
P.S. As an aside, I note with amusement your comment that:
Many of us living outside of the U.S. will likely need to continue to seek professional help for filing the various tax forms required of us. We have heard some pretty horrendous stories about Americans being fleeced by unscrupulous tax preparers, so we urge that you use caution in finding professional financial help.
Professor Green: The truth is that the accounting and legal costs of coming into U.S. tax compliance are so high that few people can afford to pay them. Some cannot pay them at all. Some are dipping into their retirement funds to come into compliance, but cannot pay them on an ongoing basis. People are forced to renounce U.S. citizenship for this reason alone. Renunciations of U.S. citizenship are soaring under Obama.
Some Thoughts On the Costs of “Cross-Border Professionals“:
Coming into compliance costs: Talk to anybody who has attempted this. The principle is this: the more one has tried to save for retirement the more expensive the costs of coming into compliance. For most people the costs will be in the mid five figure range (and some in the six figure range). You might talk to some of the people in OVDI about this!
Compliance on a going forward basis: It’s a tax on life. Canadians who are not U.S. citizens can use their money to invest, go on vacations, join fitness clubs, etc. U.S. citizens have to use that money for accountants. Think I am kidding? I explored this in an earlier post explaining why U.S. citizenship has been priced out of the market.
P.P.S.
Of course all of these problems could be solved if the U.S. would:
@ConfederateH
For one thing in Canada Alberta and Ontario have differents rates of taxation. Albertans in the top bracket only pay 10% income tax while Ontarians pay something closer to 15 to 20 percent the last time I looked(The top Federal rate of tax in Canada is 29% so the combined rate of tax in Alberta is 39%). You would been a big fan of a former Canadian politcian nicknamed “King Ralph” or Ralph Klein the former long time time premier of Alberta and mayor of Calgary. Here is a selection below of Ralph’s Greatest Hits. (Of course King Ralph left a huge infrastructure “deficit” in his wake by refusing to expand any schools or hospitals in Alberta despite a strongly growing population something the current AB govt is still trying to deal with)
http://www.cbc.ca/archives/categories/politics/provincial-territorial-politics/provincial-territorial-politics-general/ralph-kleins-bums-and-creeps.html
http://video.ca.msn.com/watch/video/ex-premier-klein-stars-in-game-show/185l9f5mm
ConfederateH I suspect would also be a fan of Canada’s current Foreign Minister John Baird who previously as the Ontario Minister of Social Services instituted a welfare fraud “Hotline”at 1-800-394-STOP if anyone has forgotten. Baird’s old boss was another colorful politician named Mike “Chainsaw” Harris.
http://news.ontario.ca/archive/en/2002/01/15/Thousands-caught-through-Harris-government39s-tough-welfare-fraud-measures.html
*ConfederateH, well, it actually means that one can have a smaller, less expensive and low-tax government which protects the environment and treats people fairly without prohibiting sex or forcing religion upon people. The current US government spends to much (stealing from people) regardless if the government leans left or right, since there is nothing to balance the leading two parties.
@swisspinoy, Seems like you are talking about small-government libertarianism. Perhaps you would have supported Ron Paul?
I actually think it’s too bad that Ron Paul doesn’t appeal too much to the right-wing. I endorsed him because he was the only one who talked about balancing the budget (really), abolishing the Federal Reserve Bank and the IRS.
*foo, the question is still there, but moved down and more difficult to find. I had to scroll up and down a few times to find it. Do a search for “offshore”. Here is a comment from a share:
“Left
two comments here but they erased the last one. In a nutshell, Obama is
begging for American ex-pat votes and they are basically telling him to
pound sand b/c his attack ads on Romney’s offshore accounts are leading
US based ppl to believe that expats are wealthy tax cheats. It’s hardly
the only disservice his admin has done us lately. I wouldn’t vote for
Obama again if he was running against Sarah Palin.”
*Petros, Ron Paul is the only presidential candidate that I know of who cosponsored the Working American Competitiveness Act, which seeks to remove the limit on the foreign earned income exclusion, basically going one step further towards residency-based taxation. See. He’s also the only one with a reasonable foreign policy and his budget makes the most sense for the current national debt. Thus, as of right now, nobody else qualifies for my vote.
@swisspinoy: IMO Ron Paul was the US’s last and only chance, so we can agree on him. Romney is better than Obama but he is owned by the many of the same people. Nothing will get fixed under Romney, it just might deteriorate a little slower.
Ron Paul was right on just about everything, but he is certainly not “leftist” in any sense of the word, so I wonder whether his stance on the size of government, feminism/lesbian rights (no special rights or quotas) or the environment (he is a AGW “denier”) would really suit you.
You say that the government should treat people “fairly” but don’t mention property rights. Who decides what “fair” is? Who pays for “fairness”? To an illegal alien swimming across the rio grande your having to pay taxes on your massive (to them) Swiss income in the US might seem really “fair”. So you would turn our fate over to politicians who would then determine the meaning of “fair”?
Endorsing Romney would make Joe green a pariah of the party, but it would elevate him to statesman by choosing countrymen over party. The word Abroad would have significance. It would also be a contrarian move that would gain US media attention and would endear him to 6 million people overnight.
But from the tone of the letter that they wrote to us, it would be a hard turn to pull off. He is likely too deeply inside the party. As Confed stated that Ron Paul might have been America’s last best hope, Joe Green choosing us over his party might have been our last hope. See you all at the consulate…
@Confederate: actually, the Mexican illegal probably thinks it fair indeed. All Mexico north of the Rio Grande territory was annexed by the United States from Mexico, with the exception of Texas, which fought a war of independence, and then joined the USA after a period as an independent republic. But California, New Mexico, Arizona, Wyoming, Nevada, Utah, Colorado all belonged to Mexico, and they are still pretty unhappy about it.
*@ConfederateH, I don’t agree with Ron Paul on many issues, but his main issues are the most relevant for the main problems facing America today. What is most important for America are not my personal interests or preferences, but rather the best means of solving the main issues and Ron Paul is the best man for that.
Fair, as far as I’m concerned in relation to Americans abroad, means that the Swiss government and the Swiss people have the right to benefit from my labors, not America. I left the US because California was unable or unwilling at the time to support me while I was looking for work. After I left, unemployment benefits in California doubled. Switzerland took me in, gave me work and supported me while I was looking for a new job. I have worked for dozens of companies in America, and 2 companies in Switzerland have treated me better than all of them. As such, everything that I have in Switzerland I owe to the Swiss people and the Swiss government. I could return to America now and possibly live better there than in Switzerland, thanks to Switzerland, but I have no reason or motive for such. America has the right to send me my unemployment check though that my foreign address hasn’t received it yet. Nevertheless, I would gladly donate to help America if it elected Ron Paul and slashed its spending to focus on getting out of debt. But, with Obama or Romney, I don’t see why Swiss money needs to be spent on Afghanistan, Iraq, Egypt, Iran, Israel or US illegal immigrants while the US national debt is increasing. If Obama and Romney wanted to do anything right, then they would look at Switzerland and follow its lead.
There is one, and only one reason why Americans are going to elect Romney or Obama. They are going to elect Romney or Obama because they fear that if they don’t vote for either, then one of the two will be elected. Most Americans don’t vote for America. They vote for the lesser of two believed evils.
@petros, imagine another outcome to the War of 1812, being annexed by the US, the French marginalized!
Gary Johnson, Libertarian nominee “Abolish the IRS” caught my attention.
http://www.garyjohnson2012.com/issues/economy-and-taxes
@swisspinoy, foo, all re Dems Abroad Fb post, you can also click on ‘more recent stories’ above ‘june’.
@swisspinoy, I can’t see why you were censored either. You’re no more anti-Obama than many others.
*bubblebustin, the funny thing is, I’m not anti-Obama, I’m not against democrats and I would be more than happy to vote for Obama if he stood up for Americans abroad. Yet, now my comment on id cards has also been censored. I wrote something along the lines that I would be fine voting with my American Abroad ID card at the nearest consulate, but would prefer to e-vote using my foreign address. I guess that I have to make a copy of every comment made there now, due to its heavy censorship. Americans abroad are not represented by these people. They focus on voting because they want for us to vote democrat, but they don’t make any effort to hear our concerns or work with our interests. Just about every day, they send me emails asking for money, but what do they provide in return?
@swisspinoy, are Dems Abroad Fb censoring all of your posts?
I’ll vote for anyone who gives us the time of day at this point, even someone who bans gay marriage and are for building walls on the US borders! Why? Because the pursuit of liberty and justice for all US persons abroad is paramount to me, not domestic issues concerning the liberty and justice of those living within US borders. Citizenship based taxation is anti-American and can only serve to continue to divide Americans along those lines.
*No, Dems Abroad censured about 50%. The democrat Tierney censured 100%. So, at the going rate, Democrats censor 75% of American abroad criticism. For being the “freest country in the world”, that’s one heck of a lot of censurship!
Good response. I thought the same thing when I read what Democrats Abroad posted. The democrats have been behind the worst and most harmful legislation aimed at Americans abroad–e.g. FATCA, Ex-PATRIOT Act, et al. The last thing we need is for Obama to remain president in a second term where, as he told Putin, he’ll be unconstrained by not having to worry about reelection. What we really need is freedom via Ron Paul. But since that’s unlikely, a vote for Romney is at least a vote against Obama.
@swisspinoy, did you know that Tierney’s wife was convicted of felony tax fraud in 2010?
http://www.boston.com/news/local/breaking_news/2010/10/congressman_tie_1.html
Edit: After more thinking, I just want to add that we, myself include, should keep in mind that both sides of the isle are harming Americans abroad. We should do our best to keep our eyes on the issue and not the partisan politics, if only for the practical matter that by not making it into a partisan issue, and instead focusing on it as an issue of *freedom* that it really is, then we are likely to gather more support overall.
Doesn’t matter who you vote for… both choices are, as usual, shit.
Turns out this year I can’t vote at all though. Cali was so overly intent on trying to tax worldwide income (due to me living there for a year) that I cancelled out any claim to residency. Can’t reregister to vote in any other state, as I do not have any bills, valid DL, or any other method to “establish” residency. Woohoo, I’m disenfranchised!
@Dan, If you live outside the US, you don’t have to establish residence
in any state, you are allowed to register to vote in the state where you
last resided before you left the US. From what I understand, you would
not be claiming residence in California by registering as an overseas
voter there.
@swisspinoy: I guess I’m just too much of an idiot, because I still cannot find it. I’m not a facebook user, so maybe I just don’t know the magic incantation, but I have tried, for example, expanding to show all articles posted in 2012, and still cannot find it.
I did see it when it was first mentioned a couple of days ago, but have not seen it since. Googling “http://www.facebook.com/DemsAbroad: offshore” shows a cache hit, but not the actual article or comments.
*Well, the Democrats Abroad did try to call attention for the issues. Yes, they must be conflicted between voting for President Obama and dealing with what his administration is doing to them. Americans Abroad should not be partisan but support the politicians that support us (do you know any?). In the mean time join ACA (www.aca.ch) and even send more contributions to them because they are doing a very good job. And of course support the Isaac Brock Society, even with some money. We have to become more and more visible within and outside the USA. We must fight to have representation and help ACA work for us.
The democratic congressman Tierney’s wife committed a major Tax fraud (money laundering of about US$7.7 million thru a bank account spanning many years), but sentenced only one month. We expats born and living abroad for decades and having power of attorney over small retirement savings accounts of aging parents are treated like terrorists and money lauding criminals for not knowing about FBAR and not reporting the accounts of our parents, who are foreign citizens and never even visited the USA.
This is sickening. The IRS deals rich and powerful with kid gloves, requesting leniency in the courts. On the other hand, the IRS uses threats and life ruining penalties against expats don’t owe taxes, but expat’s only mistake is not knowing FBAR. To the IRS, it is not a reasonable cause that an expat, who never even visited the USA in a decade might not even know an obscure FBAR law.
The tax cheat and money laundering Congressman claims “The congressman acknowledged that he knew that Robert Eremian ran what he thought was a legal online gambling site, but that he was never aware it was illegal.”, (http://www.itemlive.com/articles/2012/07/03/breaking_news/breaking09.txt) while his wife operated bank accounts of the business proceedings to launder money lying in tax returns that the money is commission from other businesses. If Gambling is legal, why not claim that the money is gains from gambling business?
*I did not know about FBARS even while having an USA CPA. This was a trap and it remains so.
*Shadow Rider, that’s the official version supported by federal law. It is my understanding that if one registers to vote in California, then one must also file Californian State taxes since one then has a connection to the State which demonstrates the intent to return. California appears to be very picky with that. Yet, if one has no connections to any State, like Dan’s circumstances, then one can probably register in any State, such as Florida, using the Voters Administration address as one’s US address, but one would have to fly to the US to argue one’s case and file a declaration of domicile.