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.
*In the WSJ article I read, “If a taxpayer lies, the IRS can declare the expatriation invalid and proceed against him or her, according to Scott Michel, an attorney with Caplin & Drysdale in Washington.” Surely this is not true. The IRS can try to claim taxes, but it cannot say the expatriation is invalid. (For instance, if the US were suddenly to restore the draft, the person could not be obliged to serve in the US armed forces.)
@dax This is to the “savings clause” in treaties that the US has with other countries on double taxation “avoidance”. Such savings clauses state that the US has the right to tax its citizens and former citizens, notwithstanding the treaty! How foreign governments can in their right mind and good faith possibly agree to such clauses is beyond my understanding.
@zuludogm, that is me, at your service, sir. Unfortunately, I made a few typos and should elaborate more often, but most of all I learned that I need to organize the facts better because my old brain is getting older.
@All, you guys did an awesome job! As you know, try to refrain from being hostile, though. I know that it is tempting, but the stateside folks will attempt to dismiss our comments as “tax cheats” when they are unfriendly. The best response to hostility, in my view, is reversed psychology. Angel is an excellent candidate for such. The individual claimed to be an American veteran while smearing Americans (abroad) with unnecessary hostility. That’s a simple no-go which easily qualifies him/her as being classified as being an anti-American traitor for spewing hatred against Americans (or former Americans). Veterans who make that failure need to quickly change their shoes. The best argument in defense of FATCA was likely made by Mr(s). C. Veil, who basically stressed that it is acceptable to harm millions of Americans abroad in order to catch 17 tax cheats. To make his/her argument appear more relevant, he/she tried to include 4,450 more individuals into the equation, but acknowledge in the writings that they were simply names which were “handed over” and not found guilty of anything.
The comments on the WSJ article are most insightful and made me to reflect a bit about the large gap between the “homelanders” and ex-pats points of view.
Homelander perceptions of ex-pats:
1. Ex-pats are a bunch of ungrateful whiners.
2. As citizens of the greatest nation on earth, ex-pats must pay their “fair share” of taxes.
3. Ex-pats have the right to live and work in the US any time they want.
4. The US will come to the rescue of ex-pats if they are in need.
5. Americans living outside the US are suspicious and must be tax evaders .
6. Don’t let the door hit those “traitors” who renounce their citizenship in the @$$.
Perception of ex-pats:
1. “No Taxation Without Representation” was the primary justification for America’s War for Independence. Not respecting it is beyond hypocritical, to the point of being just plain “un-American.”
2. Taxation without receiving any commensurate services in return is a Human Rights abuse.
3. The Exit Tax is a violation of the UN Universal Declaration of Human Rights. Its sole purpose is to impede Americans’ freedom to change their citizenship.
4. America condemned Eritrea’s Diaspora Tax via a recent UN Resolution but insists on keeping its own right to tax its Diaspora.
5. Pay “fair share” of taxes, what about receiving “fair share” of services?
6. Americans’ abroad are discriminated against by banks that are refusing accounts for them.
7. Americans abroad are discriminated against by multinationals who prefer hiring ex-pats from other countries because Americans are too expensive due to citizenship-based taxation.
8. Americans abroad are discriminated against by potential business partners and/or spouses because they do not want to bear their own soles to a foreign tax agency.
9. Nobody can sell American ex-ports abroad better than Americans. The US should support their citizens abroad like other countries do instead of placing so many restrictions and burdens upon them.
10. The amount of complicated paperwork for filing US taxes is mind boggling for ex-pats. It is much more complicated than for Americans living inside the US. It can also be very difficult if not impossible to find professional help abroad.
@Wilderness Some of the same arguments, especially “whining” or “go back to the US” are proffered by non-USPs in Europe. We need to educate these people as well that allowing their government to bow to US hegemony is against their interest.
The list is not exhaustive and “off the cuff.” If anyone is interested, please feel free to expand upon it.
You are right. Europeans need to understand how hard it is to be an American living abroad. The treatment American ex-pats receive from the Homeland government amounts to outright persecution.
A link http://thehill.com/blogs/congress-blog/presidential-campaign/262261-born-overseas-to-american-parents-but-unable-to-vote to a very well written article:
‘Born overseas to American parents, but unable to vote‘
by Brett Goodin,former fellow, International Center for Jefferson Studies at Monticello, Charlottesville, Va.
The author describes how many US citizens born and living abroad are disenfranchised – not eligible to vote – and he underscores that this disenfranchisement does not however, exempt them from the obligations imposed by the US for taxation and the US military draft. A very good link to include in your comments rebutting the ignorant opinions expressed by homelanders who insist that the enforcement of US extraterritorial citizenship-based tax ‘buys’ the right to vote.
*Thanks Badger. The most amazing thing about this, in my view, is that a decade after 911 and with all of this chatter about illegal immigration, the US government is still heavily defensive of a system which makes it rather clueless of who is or is not a US citizen. I asked the Overseas Vote Foundation why I need to register to vote in a state rather than the embassy, and they stressed that that is their means of identifying folks abroad. Unbelievable.
It’s clear from reading your lists that the US government and many of its citizens want to punish any USP who lives outside the US, regardless of why. How do I hate thee, let me count the ways, for surely it must be hatred of us when they leave us no other viable choice than to rid ourselves of US citizenship?
re “how do I hate thee, let me count the ways…”
That hatred and resentment expressed by those US politicians and homelanders who abhor ‘US persons’ living or born outside the US is clearly reflected in official publications, like the official reason given for the US rejection of comments on the FBAR reporting burden, by FINCEN, who says that “With respect to the comments raised by United States persons living
abroad, FinCEN does not believe than an exemption is appropriate simply
because a United States person chooses to live outside the United
States.”” http://www.gpo.gov/fdsys/pkg/FR-2011-02-24/html/2011-4048.htm http://americansabroad.org/issues/fbar/new-fbar-form/ What better proof of a subjective and prejudiced mindset than that wording – using only a presumption of a choice that FINCEN obviously implies is illegitimate and suspicious – thus denying all reality – firmly in denial that US citizens do also merely inherit the status and matching FBAR burden without ever having set foot in the US in their entire lives, or are actually born duals after being born to non-US citizens in the US temporarily, or as border babies – born in border hospitals, or who have been living outside the US for decades, since infancy. And since that is a recent report by FINCEN, it means they are firmly in denial of the existence of the world outside the US, and of the increased global mobility of people – which is now a very common phenomena.
When official bodies like FINCEN rely on their subjective ‘beliefs‘ to justify the persecution of those living or born outside the US, and spokespersons for the IRS and Treasury, like Shulman and Emily McMahon – in official public statements, effectively call everyone living abroad potential or actual cheats, evaders, money launderers, terror-funders, and criminals, they encourage the average American to adopt the same beliefs. We’ve been found guilty before the fact, of serious crimes without evidence and without justification – simply because we live – by birth, or by ‘choice’, outside the US – and US Representatives and Senators can use us as punching-bags and scapegoats without recourse or fear of repercussions http://www.nytimes.com/2012/04/16/business/global/for-americans-abroad-taxes-just-got-more-complicated.html?pagewanted=all .
The US government demonstrates that it effectively abhors US citizens who were born or live outside the US, and uses that hatred to justify confiscating our legal post-tax savings through penalties, and hidden taxes – like the costs we must incur to prove our innocence of financial crimes – annually – for the rest of our lives, and that of our children who inherited the US status burden.
*Here is the german edition of the article:
“With respect to the comments raised by United States persons living
abroad, FinCEN does not believe than an exemption is appropriate simply
because a United States person chooses to live outside the United
This myopic view of US policies and how they effect others will surely be the end of the US. For many of us, the only choice we have is to renounce citizenship if we are lucky enough to be able to do so. Others who can’t/don’t/won’t will adjust, but few will continue to live life as before. FATCA and what it reveals about US citizenship will surely alter the landscape in terms of the flow of people and money into the US. The sh*t has yet to hit the fan and it’s not going to be pretty. Last years 1780 plus canaries are not enough of an alarm, apparently. Speaking of which, the Federal Registry’s Q3 renunciation numbers are due shortly!
@ bubblebustin; I came across this quote, (but unfortunately without any attribution as to the source or basis of the *statistic cited) “I t is estimated that *one in three European families have a US
citizen as an extended family member (through birth, immigration or
marriage). The taxation by the US of its citizens’ worldwide income
and gains regardless of residency is an inescapable shadow. There
is a growing sense that belonging to this group by association is
contagious and brings trouble.…” from http://www.stepjournal.org/journal_archive/2011/step_journal_may_2011/the_long_arm_of_the_us_tax_man.aspx
Renouncing/Relinquishing is a family matter. In terms of the s*** hitting the fan – increasingly, Non-US families with a US citizen member are and will be putting pressure on the US citizen to renounce, to ensure the well-being of the entire family unit. It isn’t just an individual’s personal decision anymore. It is increasingly impossible for a non-US spouse to accept a US citizen/taxable person’s reporting and concomitant penalty liability and jeopardy because it would wipe out the entire assets of a household. It is not just the potential liability of the US individual. I would love to be able to just frankly tell the DOS that renouncing/relinquishing is in part a necessity to protect my non-US family and preserve my marriage.
It is not possible for me to justify to my non-US spouse the burden and danger that choosing to keep US status represents to all of us – now and in the future.
Families living outside the US have already had to use substantial sums of joint savings to pay for legal and accounting advice – even if only one of them was actually the US citizen. The FBAR applies to the jointly held accounts as well as those owned solely by the US individual. Which effectively subjects the non-US owners of the accounts to IRS reporting – and the effects of any penalty assessed specifically against their US status spouse, or child, or parent. In a family, the assets of one are generally the assets of all.
I would be very frank with my child/ren about the effects of marrying someone with US citizen/taxable person status, and warn them not to enter into that situation, and not to hold any accounts jointly. Currently there would be instances where the US status cannot be passed on to children, and so it would be wise to choose to arrange things so that the burden is not inherited by the next generation. We already know also, that adoption of a US status child would subject the family to the reporting obligation on their behalf, and prevent them from benefiting from an RESP, TFSA and RDSP.
I await the Renunciation numbers with anticipation – and hope to see that the numbers are up substantially. It is one of the only concrete forms of protest that we have.
*@Badger, but to be fair, many could still regard US citizenship as an opportunity to live there to work and study. I don’t think it’s completely toxic. 😉
I’ve often thought about the potential long-term threats from Iran, North Korea, or China and can’t help surmising that these places could pose an even greater overall threat to our well-being. Yes, of course I find my compliance burdens and a degree of ongoing double taxation an expense and hassle I could be doing without. But at least for now, I still feel that my options to go back to America if I ever wanted to at some point in the future outweigh the inconveniences and costs. I honestly believe that China and Iran could pose a far greater threat than the US. Maybe I’m naive but that’s still how I see it…
As ConfederationH can testify, a female non-US citizen should not marry the US father who of her child in order to avoid passing US citizenship onto her child ‘by descent’, should the father qualify to do so. Same female US citizens are not so lucky. Her children are marked.
I was no longer sure of the situation so I googled it. I appears than my grandson (born to unmarried US person and Swiss mother) is a slave if the empire has its way. It may already be to late to prevent his enslavement since the young family has already traveled to the US and the fingerprints and family relationships have been established and are in the US government’s slave database.
Would this comment of badger’s (on another post) be of use to you?
@monalisa, if someone wants to exercise that as a conscious, deliberate and informed choice as an adult – that is their purview. But the reporting liability and the punishment of our savings that would support a wouldbe student studying abroad in the US prevent that from being at all realistic – the punishing reporting and tax burden is triggered well before adulthood – starting with the needlessly punitive treatment of our registered savings plans. If we can’t save and use the tax benefits our home government offers, because the US penalizes all of them, we’re stuck with putting coins in a sock. That doesn’t pay US college tuition or support us in our old age. We have many fine schools, and healthcare, and a better chance for quality of life where we are.
One can currently study in the US without being a citizen, or try to get a greencard if so desired. And, over a child’s lifetime growing up outside the US, their US citizen parent would have paid quite a sum in compliance costs, and foregone RESPs here, and all that would have contributed zero to the child’s college funding, or to anything else of use – apart from keeping lawyers and accountants in work.
Studying in the US is way out of reach for many living abroad anyway, and for example, our Canadian RESPs (registered education savings plans – which US considers a ‘foreign trust’) wouldn’t work in the US even if we weren’t heavily penalized by the IRS for saving for education using them. And you have to establish residency in the US to get benefit of lower state tuition rates.
As a family, we can’t afford to pay the annual US compliance costs for a lifetime, for some speculative potential benefit to one member – particularly when the compliance and potential for inadvertent but bankrupting penalties is so high. The jeopardy is just too great – and who wants to be a part of a country that relentlessly and falsely vilifies it’s citizens abroad without proof of a crime?
I’m not criticizing those who choose to remain connected, or for whom the potential benefits outweigh the risks – each person must make their own choices based on their own circumstances – and I recall that you have specific compelling reasons for yours. But the US has stated very clearly that further enforcement against all those abroad is an ongoing priority – without any evidence whatsoever that we are actually engaged in anything illegal – and that many/most do not actually owe the US any tax. Look at the willfully blind attitudes that Treasury Congress and the IRS have taken – denying that those abroad – even the fully compliant, should be able to bank in the countries where they live. Congress has made no move to even acknowledge our concerns about basic banking. It doesn’t look good for the future. This has been a scarring experience, and I myself cannot live this way. I have almost lost my self. I haven’t been able to function well for my family. There is no way I can justify to my non-US family that they may become responsible for my insane US reporting jeopardy up to and after my death as well as handling the expected Canadian compliance side. I can’t justify to my spouse, spending thousands of our joint assets to prove annually that I STILL owe the US no tax and that I’m STILL not a criminal money launderer-tax-evading-terror-funding-criminal. I resent proving that every year – I resent being considered a criminal in waiting for life. I resent being burdened with the onus of planning our life together
based on the dangerous caprices of the US Congress, IRS and Treasury. I feel suffocated and trapped – and that is a situation I’ll never forget or forgive the US for. It is toxic for me and my family.
The stakes will no doubt continue to be raised over and above the ridiculously confiscatory and insane levels they’re currently at.
@bubblebustin, yes, there is the gendered side of this to consider as well. And the military draft.
I assume that all the conditions need to be met in order to establish US citizenship for your grandchild? Certainly your son can avoid ‘legitimating’ (what constitutes that?) paternity, or signing a document under oath, can he not? There is something very wrong with the necessity to avoid legitimating paternity in order to protect a child from a life of servitude to the US and, conversely, requiring the legitimating act to be done prior to the child being able to make the legal decision for himself. Can we expect lawsuits against parents who unwittingly throw their children to the wolves before they can make that decision for themselves?
“Certainly your son can avoid ‘legitimating’ (what constitutes that?) paternity, or signing a document under oath, can he not? “
In order to affirm his paternal rights he was forced to “legitimize” paternity to the Swiss courts. The thought of consulting an international tax lawyer to determine the “advisability” of this never crossed his or our minds. At some point you just have to decide that it is their entire charade that is “illegitimate” and act accordingly. Unlike the majority of Canadians, I and my heirs will not willingly be their slaves.
As usual, you succinctly express all I and many others feel. Thank you very much.
I, too, resent being considered a criminal by many uninformed patriot Homelanders, but even more so by the US Congress who has made the punitive laws for IRS and Treasury to serve to US Persons Abroad. I need to rid myself of this toxic relationship — which is what the US wishes it to be if I don’t comply with ever-increasing absurdity of US law.
Thank you @calgary411. May we all be able to stay the course and move beyond this.
@bubblebustin; “There is something very wrong with the necessity to avoid legitimating
paternity in order to protect a child from a life of servitude to the US
and, conversely, requiring the legitimating act to be done prior to the
child being able to make the legal decision for himself.” And having to protect a child who cannot ever make that legal decision for themselves and whose parent or guardian is prevented by the US from doing so in their best interest – as in the case of calgary411’s son, and other parents here facing similar barriers. And wrong for all those here to have to be worried about all our children – young and old, who inherited this burden from us, as well as worrying that we have used up family savings – that would have benefited them, but now has been eaten up for crossborder US tax and legal help.
What kind of country is the US when we need to protect ourselves and our children from it?
Thanks for the link to the Hill blog and the commentary above. I see the date on that one is Oct 16th, and so has aged, but I put up a short comment any way. I tend to do that, even though I know there will not be much play or reading now occurring. My feeling is, we need to put up comments online as much as possible for just basic education of those who think, like Stacey, that Accidental Americans have no right to vote, but don’t know that the IRS thinks it has a right to tax them.
@ dax @ Jefferson
That bothered me a lot too, so I looked into it. It apparently is different according to country. Canada does not have the saving clause that allows taxation of former citizens except those who fall under the 10 year rules for expatriating for tax purposes. Unfortunately, Switzerland has a saving clause that allows for the taxation of former citizens regardless of the reason for the loss of citizenship. For complete lists: