Tim alerted me to this article at the Wall Street Journal, and I think it merits the attention of a post. It was well written by Anita Greil, with assistance from Laura Saunders who I have communicated with via email in the past.
I would recommend reading the story and adding your comment as Roger and I have. You will notice that this story has a lot of named sources and quotes. It is not just anonymous references. That makes for a much more personal and effective story that resonants with readers, I think. It makes harder to just dismiss. It is early yet, and I see the comments are already up to 81.
*I made a comment or two and then all of the comments vanished. Is that because I’m not a paying subscriber? I’ll check back again later.
@SwissPinoy.
No, that should not matter. I am not a subscriber, and this story is not behind the paywall. BTW, since the journalist email is published, I also wrote her and Laura a message thanking them. Here is what I said.
@SwissPony…
I see what you mean about all comments vanishing. The tab shows 89 now, but when you click on it, nothing is there. It is late, so maybe they are doing some web maintenance. It is midnight here, so will check in the morning.
*Just Me, I figured that it was maintenance, but thanks for the confirmation that it’s not just me. 🙂
*The 89 comments are still there 🙂
We have tranches due in 2014, 15 and 16. We are very scared. I am not sure that we can fully separate from the US enough to keep our apartment. I am working on relinquishment, but then there is my wife and children and I am not sure if they will consider us sufficiently disconnected from US obligations.
A US guy approached me about getting a job in Europe this week and I told him that he would have to be crazy. It is now casual conversation to add renunciation and divorce to your retirement planning as if you were talking about choosing the right mutual funds. If that’s his idea of a “new experience”, then he is delusional.
I advised him to give his plans a rest for three weeks. If the Democrats win a majority, shelve that dream for another time. The only people who should be running in to a burning building are firemen.
Thank you for posting! 89 comments were visible at the time that I read it.
*Be sure click on the link to this WSJ article and read the comments that are posted there, as well as the comments posted here. More than a few of those comments demonstrate a total ignorance on the part of the posters. And it is precisely for this reason that the US has such onerous citizenship-based tax laws because the legislators who enact them are equally ignorant of their self-destricutive consequences.
They don’t know and they don’t want to know.
FATCA may provoke a trade war between the US and the rest of the world’s financial institutions. The tactics of trade war include: embargo, boycott, retaliatory duties and tariffs, and similar measures.
US persons in Switzerland are not simply being “shunned” – they are being embargoed. Escalation seems inevitable, especially when Russia, China and other BRIC nations push back.
Adding to this train wreck is an almost certain downgrade of US debt rating. Add the possibility of arbitrary withholding – and a strong measure of overall global ill will – to that already toxic mix. And US Federal Government needs debt for life support; in 2012 it borrowed 32% of every dollar spent.
Following is from Bloomberg Businessweek, Oct 17, 2012:
“US To Get Downgraded Amid ‘Fiscal Theatre’, Pimco Says”
“The U.S. will get downgraded, it’s a question of when,” Scott Mather, Pimco’s head of global portfolio management, said today in Wellington. “It depends on what the end of the year looks like, but it could be fairly soon after that…
Bill Gross, manager of Pimco’s $278 billion Total Return Fund, this month said that the U.S. will no longer be the first destination of global capital in search of safe returns unless fiscal spending and debt growth slows, saying the nation “frequently pleasures itself with budgetary crystal meth.” He reduced his holdings of Treasuries for a third consecutive month to the lowest level since last October.”
Nice posts, Roger and Marvin. We should keep a score of the “don’t let the door…” posts.
Always so clever. Always classy. 😉
@zuludogm,
The Roger and Marvin tag team is hard to beat. Thanks to both of you for all you for us in your dogged replies to media and trying to educate those who express in their opinions hatred for anything “expat” as traitorous.
I heard a story yesterday that has left me very disturbed. A friend told me about a couple he knows who are both in a prominent, high income profession in Canada. The wife is a US citizen who moved to Canada as a child. They have received good legal advice in Canada as to how to proceed, shunned it and decided to move all their assets into the husband’s name and never travel to the US again. This couple has now left themselves vulnerable to much that would not have existed otherwise, considering the fact that Canada will not collect tax and penalties against Canadian citizens for the IRS. Besides the transfer of community property and the pitfalls of doing that, this American citizen may become known to have taken evasive action come FATCA. As a result of the US government’s persecution of its citizens abroad, I suspect we’re going to see a lot more of this, divorces and lonely USP’s unable to find partners willing to join them in a life of US tax servitude!
@bubblebustin,
I, too, am disturbed on the decision of this couple who seem to have discarded legal advice, perhaps weighing the further financial cost to them and, then, feeling backed into a corner as a trapped animal, decided to take action that could more likely be eventually determined tax evasion, but wishing to be protected by Canada in not again crossing the border (one of their better decisions). I think actions like this will reflect on those of us who are deciding to find a legal, if more costly to us, solution or decide to abide by the status quo. There are no easy answers. I hope these people haven’t shot themselves in the foot.
@zuludogm
That don’t let the “door hit your *ss” is a tiring meme, isn’t it? I just responded to one of them, and probably should do a few more, but other things to do today, and it won’t change their narrow minds and lack of empathy. So it goes. Still, you are welcome to take on one, if you like. I try to keep it civil. 🙂
@ Just Me
OK – bagged one, but it’s usually a retard and there is no point to engagement. Calling expats in this situation trash was the worst statement.
@just me, zulogm, the correct response is, “Don’t let it swing back and hit your upturned nose.”
@Calgary, bubblebustin, Shunning legal advice is exactly what Mr. Williams wishes he had done, as reported to Arrow.
Now, I personally sought no legal advice from any cross border specialist. I used an autodidactic method based on internet sources to inform myself about how to separate myself from the United States. I refused to pay the outrageous bill that the IRS sent me, disallowing my FEIE. And I did ask my Canadian lawyer if I could be extradited to the US: never on a tax matter he said. So this whole thing has cost me very little because I have shunned the advice of specialists. Not only do specialists cost a lot of money themselves, but their advice usually comes with its own compliance costs. My main specialist who I received the most important advice, Jim Flaherty, has said that they weren’t going to collect FBAR.
bubblebustin – Good story share. This couple falls into the still-by-a-long-shot majority class in Canada pursuing some variety of full ostrich. I’ve heard at reliable second hand of similar off-the-books shifting of assets, and of adoption of never-cross-the-border-again strategies. Earlier this fall I had a woman telling me how OK she was because someone who she thought was some sort of professional expert told her in offhand conversation that she could continue to lie low, no problem. Imagine, as this juggernaut rolls forward, what is going to happen when almost no one could plausibly claim not to know about technical filing requirements. And what if the US then decides to ramp up the pressures by advertising and rapidly honoring rich little bounties for the snitches?
*I also spoke with an innocent fellow in Switzerland who was considering going under instead of seeking compliance. I guess, everyone has their own different situation and seeks their own means of dealing with it.
Other news orgs are starting to run stories on the topic.
UPI: “Swiss banks closing U.S. accounts”
http://www.upi.com/Business_News/2012/10/20/Swiss-banks-closing-US-accounts/UPI-31441350748997/
@petros
It’s obvious that this couple has neither taken legal advice, nor any they can glean from outside sources! This particular lawyer this couple saw also has in the past told potential clients that they also have the option of doing nothing if they so choose and that the CRA will not collect tax and penalties against Canadians. I don’t think anyone anywhere who knows anything about our predicament would advise anyone to shift all assets to the non US spouse. That’s just foolhardy when the CRA says they won’t collect tax and penalties from Canadians for the IRS. I’d like anyone to prove to me otherwise with FATCA coming.
@usxcanada
I welcome the USG ramping up advertising because they have been truly negligent in this regard and certainly more people wouldn’t be finding themselves in this predicament if they had. Perhaps even, citizenship based taxation would be abolished by now when more realize the negative effects of it. After all, the US is the last developed nation on earth to have it. The snitch possibility is truly frightening. How our governments spin FATCA to the general public is what is going to encourage/discourage the incidences of this. Will Canadians in Canada happily turn in their neighbours who happen to hold a kryptonite card or US citizenship?
*Another article got printed 2 hours ago:
Oh… looks like John Brown found it before me!
Comments on FATCA continue to be received by the IRS. A good source of those comments is at:
http://bsmlegal.com/fatca-comments.asp
Kudos to Daniel Kuettel on the WSJ comments section. He is all over it.
Love the use of the word ‘PERMISSION’ to renounce US citizenship. Are we coming closer then to an international human rights claim against the US? When the US itself says a citizens has the right to renounce? And so does the UN? And when the US itself lists specific acts which are relinquishing or renunciatory – such as taking out another citizenship and swearing allegiance to another country, etc.? Now, we need to get the IRS permission to renounce. Not the approval of the State department, but the tax authorities. Not Congress, but the IRS. Exactly who is in charge in the US?
“U.S. officials said those wishing to disclaim their U.S. citizenship
must prove they have been in compliance with tax laws for five years
before they renounce. Otherwise, authorities can cancel revoke the
permission to renounce citizenship….
And then there are the same predictable *lies from Senator Baucus and his ilk, making claims against those abroad with no factual evidence. Scapegoating all of us born or living abroad.
And as usual, with absolutely NO mention of resident, domestic US tax evasion, tax avoidance, and the loophole exploiting highjinks of US corporations. Or the failure of the IRS to collect from US federal departments, federal employees, US elected politicians, and US banks ‘too big to fail’.
*……”Foreign tax evasion is a drain on the federal budget worth tens of
billions of dollars, and it puts an unfair burden on law-abiding
American taxpayers to fill that gap,” said an aide to Sen. Max Baucus, D-Mont, the Senate Finance Committee chairman and sponsor of the bill known as Fatca.”
Read more: http://www.upi.com/Business_News/2012/10/20/Swiss-banks-closing-US-accounts/UPI-31441350748997/#ixzz29rw51lIT
We’ll never get that US commission on issues faced by US citizens abroad – because it would prove too embarrassing for Senator Baucus and his ilk when the truth exposes his deliberate lies.
@zuludogm
Daniel sure is. I just stopped work to check how the comments were going. I see it is up to 210 now, and so I did a couple others in response, or “bag one” as you say! 🙂