Now that “the Bernank” has announced QE III, a.k.a. Unlimited QE (I prefer “QE Infinity”), Marc Faber says that it will destroy world. Zero Hedge estimates that the Federal Reserve’s new money base will increase to 4 trillion from 2.8 trillion (=43%) by the end of 2013–that’s because Bernanke is going to add at least 40 billion to the money base every month, with no limit, no specified target. If you are lucky enough to be in a jurisdiction that doesn’t debase its currency at the same rate, then you better renounce your US citizenship quickly: pretty soon the average home in Vancouver, Calgary or Toronto will be worth two million US dollars, while the Loonie threatens to rise to unforeseeable levels against the Greenback, unless of course Mark Carney debases Canadian currency in this race to the bottom.
A couple more items: Joel Bowman asks the question why it is that if a man rats on the US government to the people, they lock him up and throw out the key, but if he rats on the people to the government, he gets a nice cold $100 million: The Tale of Two Whistleblowers. Also, apparently the US marines protecting the US embassy in Cairo don’t have bullets in their guns, at least until they officially denied the rumour.
Finally, I think I am the first Canadian resident whose FEIE (Foreign Earned Income Exemption) has been officially denied. In the on-going saga of my 2009 taxes, I’ve tried to send the IRS four times my Form 2555, which they say that the first time, I did not fill out correctly. So I sent 2555 via e-mail around in early May. Then they sent a bill for $3294, including fines and interest. Then I called them up and the IRS form nation representative said that I just had to send properly completed Form 2555, and she gave me a fax number. I faxed that off 27 July. Then I received two identical letters on the same day that said that they had not received page 3 of the Form 2555 (which is the least important and just repeats information that was on the original tax return in the first place). We checked the fax and sure enough one of the pages must have jammed. So on August 27, 2012, I faxed page three of Form 2555, and this time, the IRS received all pages. Then on September 10, 2012, they have sent letter insisting that send them $3356 immediately. Earlier today I experienced a slight fit of rage with numerous four letter words and you can see the result below–Tertia hid under the bed.
I have to say that this bill has really upset me. This is now four times that the IRS has received my 2555 and has tacitly refused my right to the FEIE. But I suppose that there is really nothing that they can do and I’ll go back to life as usual, in my idyllic existence as a DIY investor, shorting the US dollar in favour of gold and oil, a trade that can hardly go wrong.
So this is what I think. I will not pay this. I am not going to contact the geniuses that work for the IRS again. I might, however, take my case to the Tax Advocate Service. If the US tries to have the CRA collect it, they won’t get very far because they have disallowed my FEIE. And besides, I have charitable donations and Foreign Tax Credits that I haven’t even claimed. You see, I paid my taxes in Canada in 2009. I am not a tax evader. Since I no longer an American, I will never need to renew my US passport, just in case they lower the limit for getting a passport to an amount under $50,000.
In the meantime, high inflation will eat away this bill–likely faster than the fines and interest will accrue. There are some benefits to ZIRP and QE infinity. Living in Canada it is unlikely that an armed IRS agent will come to my door, though I bet they would have live ammo in their guns if they did. “Good-willed people at the IRS” my foot. It is not a benevolent organization, except when it comes to rewarding stool pigeons.