Cross-posted from the Franco-American Flophouse.
Just Me thought it would be a dandy idea to post this here even though the video has already been circulated in the comments section. This video is quite good and deserves wider circulation. I received some wonderful mail in response to the post. I was contacted by a few of what I would describe as Quiet Renunciants. Their reflections started much earlier than mine but when I read about how they came to the conclusion that renouncing was the only sane option, I recognize my own thinking which is just a few steps behind theirs. It’s both exhilarating and humbling – I need to be reminded on a regular basis that I’m not alone and that there’s nothing particularly special about my case, my angst and my anger.
Another extraordinary resource passed along by Just Me. The Life of An American Abroad is a twenty minute video that was filmed during a tax seminar earlier this year.
An actor plays the role of a very naive American who moves to the UK to study and work and who ends up falling in love, getting a permanent residency permit, buying a house, getting married, having children, saving for retirement, and ultimately passing away in his host country.
Now if this person were from any other country in the world (i.e. not the U.S.) you know what we’d call him? An emigrant/immigrant. I find it very amusing that, for the most part, we don’t and I think that’s a problem. As Camus once said, “Mal nommer les choses, c’est ajouter au malheur du monde.” (Calling things by incorrect names is adding to the misery in the world.)
As this American tells his life story, a panel of tax advisors is there to explain to him what he has to do to stay compliant with the U.S. worldwide tax and reporting regime (citizenship-based taxation). To his horror (and mine) not one thing that he does in that life remains untouched by the IRS. Well, perhaps that is an overstatement since he is allowed to eat, breathe, and eliminate waste without the U.S. government looking over his shoulder. How generous of them.
I personally know many Americans who have experienced all the life events talked about this video and I think I’m on very firm ground here when I say that even the folks I know who think they are compliant, probably aren’t.
So I strongly urge everyone to watch this video and I mean everyone.
For those of you reading this blog who are not U.S. citizens or Green Card holders and who think this does not concern them, please think again. You are indirectly concerned because many of your governments find the American system rather admirable (the French, for example). Members of other diasporas ( French, German, Mexican, Brazilians and so on) would do well to be aware of how U.S. worldwide taxation works so they can fight efforts to have something similar imposed on them. As for those of you who are married or contemplating marriage to a U.S. citizen, best to know what you’re getting into (or the merde you are already in).
For Flophouse readers who live in the U.S. and who are still under the impression that Americans abroad are making a big deal out of nothing, watch the video and ask yourself: would you be willing to live like this? And what about your children who may one day wish to live and work abroad? Do you want them to be captive citizens shut out from all the goodies associated with globalization, unable to take that great job in Shanghai or London because no one will hire Americans anymore or because the cost of compliance with all the U.S. requirements is simply too high?
And finally for my fellow Americans abroad, I’d like you to do something for me before you click “start.” Find a quiet place, take a deep breathe, and relax. You have options. Not all of them will make you happy and some will require effort on your part. What you do with this information is entirely up to you. I fully understand and empathize with those who are renouncing. There are others who are fighting like demons: joining American Citizens Abroad and the Association of American Residents Overseas, writing letters, putting pressure on politicians, voting this year against those lawmakers who are refusing to listen, and pestering the homeland media to get the story out. And, yes, there are folks who are doing a Deep Dive and cutting all ties to the U.S., avoiding the U.S. embassy like plague-infested territory, not renewing their passports and so on. I’m not sure the last is viable given the arrival of FATCA, and I wouldn’t do it, but it’s a big big world out there and surely some of them will succeed.
Wherever you are in this mess, the important thing is that you do the next right thing and I honestly think that the only wrong answer here is to kick back and pretend it isn’t happening at all.
@Just Me,
Excellent background info for Neal Conan to follow-up on his promise to Mark! Thank you.
I have just sent this message to NPR :
Just Me—-I couldn’t see the comments section—I could only see the contact us section. Can you post your link?
@Mark Twain…
You have to go all the way down to the bottom, and click on the small icon ‘Comments’ and then it opens a comment block.
http://www.npr.org/2012/10/31/164040598/sandys-october-surprise-may-change-2012-race#commentBlock
My comment has still not shown up, but I did email it as promised, and I have tweeted it to Talk of the Nation @TOLN and @PlanetMoney too.
Also tweeted them the link to the video that Christrophe just posted on another thread. This is United States, Charles Adams, co-chairman of Americans Abroad for Obama and member of the National Finance Committee of the Obama Campaign being interviewed. Maybe you can go on the NPR comment site and post it, so someone else besides me is commenting… 🙂
re; “Charles Adams, co-chairman of Americans Abroad for Obama
and member of the National Finance Committee of the Obama Campaign being
interviewed”
Charles Adams is quite deliberate in smoothly equating ALL of our everyday legal post-tax bank accounts outside the US, owned by ordinary Americans abroad with those held by resident Americans stashing accounts abroad – and labelling it all the same crime. He offers zero proof that those living abroad, with accounts where they live, would actually owe the US taxes on those savings – or have them in order to evade/avoid US tax. He knows perfectly well that the FBAR for example, is far broader in the accounts and assets it covers – including employer accts, and other accts (ex. local community volunteer run peewee hockey league, or other charitable fundraising) where there is signatory but NO financial interest, and no opportunity for any US tax to actually be owed or assessed – much less evaded. He is lying by omission, as he also knows very well that the FBAR and FATCA also include chequing accts in many cases – which accrue little or no interest, or Power of Attorney over accts that may not be actually in force until a triggering event occurs (such as mental incompetence) which may be decades away – or never. In other cases, the accts are already automatically overseen and reported on to the revenue agency of the country where they are located, and statements of the taxable interest are generated annually – which must be declared by the owners, to the country where they actually live – and taxed there.
Offers no reason why those born in another country abroad should owe the US anything at all, and why duals should owe the US over and above what their country of birth and residence already demands of them.
Cute comment about the money being stashed within easy weekend travel – but coyly doesn’t name names or offer any evidence. That is to legitimate why there is no distinction being made between countries or individuals in terms of enforcement – and why they refuse to make any exceptions – even for Canada, with the most extensive reciprocal tax treaty.
Pretends that the US listened to expats – and offers as evidence – FATCA delays – but deliberately omits that it is really pushback from banks and other interests, especially those homeland US based – ex. politicians in Florida ( Rubio, etc.) not individuals abroad that might have caused some delay in implementation. The US hasn’t ever acknowledged the plight of individuals abroad re FATCA, only the banking and similar industries and organizations.
FATCA reporting was already enforced on individuals as of this June 2012, in spite of the problems GAO flagged with the forms and ample opportunities for confusing those taxpayers attempting to comply – and notes the usual draconian and layered penalties for even inadvertant errors http://www.gao.gov/assets/590/589717.txt
looks like my comment made it in immediately—with the 2 links
Charles Adams looks like a Patriot NPR will love. Pooh poohs a major problem so as not to alarm the electorate of his choice. The perfect sly mush mush to attract NPR into the debate.
http://youtu.be/J9wNJKEch14 “Overcriminalization: Criminalizing the Everyday“
I watched this video on Jack Townsend’s Federal Tax Crime site http://federaltaxcrimes.blogspot.ca/2012/09/a-great-opt-out-result-irs-gets-good.html#comment-694154808 , and highly recommend it. They speak of the growing impulse of the US to ‘Criminalize the Everyday’, to ‘regulate behaviour’ in ordinary lives of ordinary people – by making everything a crime – and, noted specifically the impulse to make it a federal crime, and they point the finger at Congress – making too many laws, too broadly, too ill-defined, etc.
For example, at 6.00, where the speaker basically says ; how can an individual comply with US laws if there are problems with the number, the breadth, ambiguity, complexity, etc. ?
The previous speaker notes the danger of the federal government taking the position that individuals have victimized the government (reminds me of the repeated quote that ‘when US citizens abroad don’t pay their taxes, blah blah, they unfairly burden other US taxpayers at home, blah, blah….). The IRS and Treasury must feel that not only do they need to generate hatred and ill will towards us so that they can proceed to mistreat us anyway they see fit, but, they have to do what the speaker said – create a victim (other than us!), and cast themselves as victims. See speaker at 5.00
The speakers (all lawyers) are not specifically speaking of US tax law, or speaking of US persons abroad, but, to extrapolate; if those inside the US don’t know about laws like the BSA, or creations like the FBAR, the 3520, etc., then how can the IRS say that those born abroad should know? How? Through a pre-programmed chip embedded in us at birth when we inherit US citizenship? And, those of us reading here, and at other sites, still don’t understand the nuances and details, and we are average people, but unnaturally motivated to find answers. And answers are not only hard to find, but not definitive. Anyone here who has asked questions of the paid ‘experts’ might have found already that there are often no specific or reliable answers to be had – no matter how much you’ve paid per hour.
How much energy and effort and legal, post-tax savings generated in another country, should go into perfect ‘compliance’ with US laws imposed on us from afar due only to citizenship? Should we all become enrolled agents? Must all those deemed US citizens abroad not only read, but master the Internal Revenue manual? I think that Just Me has already said that if you don’t have the IRS site bookmarked as your home page, that’s a crime!
@badger
Right now NSA and HMS are scanning all IP addresses to see what browser they are using, and if IRS.gov is the homepage. It seems, that also buried in the 2010 Hire act was an amendment for non willful penalties for these failures, and next year the IRS is rolling out OVDBI, Offshore Voluntary Disclosure Browser initiative with $10K penalites for failure, so hopefully you are compliant. Of course I joke, but who knows what is possible in the future…
I also posted this video at this IBS post.
Plea Bargaining, Even When You’re Innocent
The 3rd through 11 candidates for president have been shut out of media coverage. No doubt this was done by the debate exclusivity contracts coupled to the humongous advertising budgets. They are doing a debate on the eve of election night.
http://freeandequal.org/updates/contact-the-media-outlets/
Contact the Media Outlets!
….We need your help. We would like you to contact the following media outlets and ask them to cover/air the November 5th debate. Please be respectful as we are trying to build
thank you so much for your continued support! Together we can make this debate better than the last. Lets spread the word!
Free and Equal
I can’t only fight one battle at a time—I only list this as these folks share in the misery of totalitarianism. Gary Johnson is a very credible candidate, and the other parties would have their followings if they were allowed to.
@Just Me, I know it’s a joke, but they do have that scary message on the IRS site now about cookies and tracking, and conditions of use. I can believe anything where they are concerned – they have demonstrated that at least up at the top – ethics have nothing to do with their behaviour – it’s all what they can get away with, and currently no-one is reining them in. Soon it’ll be the IRS Commissioner actually running the US.
Glad you reminded me of that prior post about people paying up even though innocent, just to regain some semblance of normalcy, because it is so very true, and the IRS is working that consciously for all it’s worth – leaving so much threat and uncertainty that no-one knows whether to pay their lawyer and accountant tens of thousands, or just give in and pay the same amount to the IRS as an involuntary donation. Very few can afford both. And, with all the uncertainty, the drudgery sometimes only takes an amateur so far.
Look at the guidelines for the ‘streamlined compliance’ procedure: where claiming a refund – even if legitimately owed to you, (or as a result of the child tax credit?) increases the risk level – but we’re not to be told how any factor is weighted. In two of the years they asked for, ’09, and ’10, there were some kind of economic stimulus credits that resulted in refund money to lots of people (even higher income professionals like doctors). So, now hapless wouldbe applicants have to decide whether to claim the refund that would help to pay off some small portion of the crazy accounting and legal fees they’re paying in order to participate and become compliant, or forego it in fear that they’ll thereby raise their ‘risk’ level and be subjected to something closer to OVDI – and the IRS refuses to make it any clearer. What is funny about that is that if all the > 6million of us abroad had filed timely, that might be some large proportion of the 6 million who would have gotten a refund for two years in a row. I doubt that the IRS wanted that to happen. So basically when they costed out that offer, they must have counted on people abroad not filing, and so not getting the stimulus money times some proportion of 6 million.
*Folks,
Ive just read through the un-ratified agreement the UK had with the US, published a few weeks ago. Hillarious stuff… love how they slip these things in thinking nobody will notice… go lawyer obfuscation!
(for this purpose, a U.S. citizen is considered to be resident in the United States for tax purposes, even if the account holder is also a tax resident of another country)
@Andrew- this is nothing more than a restatement of the “savings clause”. It is clear that based on the number of days under the tax residency rules of the U.S. and other countries, that a U.S. person cannot tax resident for both. There just aren’t enough days in a year for such a situation to arise.
This is a clear human rights violation and the sanctomonious U.S. should be ashamed of itself for being a big violator of the very principles that it purports to defend.
@recalcitrantexpat
I get lost in the semantics of all of this, but under citizenship taxation, doesn’t a US citizen living in the UK, effectively become tax resident in both countries?
Are you making a distinction without a difference when it comes to how the US views it citizens? You say they can not be tax resident for both, but if the US declares they are, than they are! That is what Andrew indicates they are saying. They have to spell it out, as it is such a bizarre concept for the UK or any reasonable person to understand! Am I missing a point? Probably! 🙂
@Just Me- you have not missed anything. I am objecting to the fact that the U.S.’s positon lacks any logic. You can’t be present somewhere where you are not. The fact that these highly educated men/women can seriously state that people are present somewhere when they have not taken any actions that indicate residency is a sheer miscarriage of justice.
The U.S. doesn’t get to make up its own rules surrounding what constitutes residency or even what constitututes the establishment of a taxable situation. The other countries need to stand up and oppose this illogical stance. This is a CLEAR human rights violation and the U.S. needs to be called to account on it just the same as Iran, China, Syria, Cuba, would be called to account for their human rights violations.
By spelling it out all that they show is their own collective ignorance.
@Just Me- I guess that I see this act of Congress as being no different that the dirty cop who plants evidence on an innocent person. Or a crooked judge who deliberately suppresses the evidence that would free an innocent man/woman.
The game is rigged from the start and it really doesn’t bother them that they have rigged it. They actually find comfort in their crookedness. This is not justice but is a set up instead. It is a deliberate and opportunistic punishment ot people who are naively exercising what they thought was their right of movement.
It just goes to show the disdain with which American politicians look at their citizens.
the various tax treaties are loaded with overlapping claims upon residence. Primarily of interest is that most countries determine that if you have housing available to you in a particular country, you are then a tax resident of that country. So, if you leave your home in the USA empty while you work in Europe, you are liable to tax as resident at your US home, and vice versa. You must rent or sell in order to get out of this. You can petition to declare one or the other, which would be a billshit process.
In addition, if you work in a different country than your residence, many countries demand that you pay tax in the country where you work (this is my situation). One prays each year that the home country doesn’t chime in and ask for more or the difference. For me, this has generated an inquiry many years, along with other problems.
Top it off, if you were to be retired and travel away from your home for 183 days per year, then there are conflicts between your residence home and the place where you have been for 183 days.
A good day today — got two “plain” Brock quarters in our change — hoping the next one will have the red maple leaf on it. Anyway I was just thinking that if an American wants to explore the world, perhaps in search of the ideal location to live out his/her retirement years, then it would make sense to first move to a country with easy citizenship requirements, acquire citizenship in that country, renounce US citizenship and thus be free of the IRS and able to move about the world as easily as non-US citizens are able to do. My husband and I are looking forward to the day he is released from his American citizenship anchor and we can both move to another country, if we so desire, without all the taxation turmoil which comes with being American. We could even start a little business, if we so desire, without the tug of two tax systems to complicate things. Realistically we will probably not do these things but it will be great to know that we can, if we so desire. One thing is for sure, it will be a huge relief to be able to “normalize” our finances because it makes us both uneasy that my husband doesn’t have “signing authority” over any of my accounts at this time. I guess that pretty much sums up what the tax implications of a life lived abroad means to us.
@recalcitrantexpat Re ur “am objecting to the fact that the U.S.’s position lacks any logic.”
Ok, I get it. I am a little more awake today. You get no argument out of me on that point. Logic is not what US Citizenship tax policy is about! It is about what they can do, not what is logical or right. They define the terms anyway they want, and defy you to object. Obviously the UK Treasury has not objected.
If the UK is stupid enough to accept that definition, within their IGA without objection, then we have co-conspirators in a grand fraud on what it really means to be ‘tax resident’. The concept loses all meaning, if they sign and agree to such nonsense.
That means they are accepting that many thousands of their own UK citizens and residents are dual tax resident. You would hope some UK Tax attorney would point out the fallacy of this.
Right now, I am in some email conversations with a EU journalist that has taken a keen interest in FATCA. I have been parceling out information in digestible chunks, for his personal drudgery to understand the complex nature of the FATCA subject.
He says, he is planning a 3 part story. The media source not know, but according to his bio he is a He’s a regular commentator for the BBC, ITN, Sky, Al Jazeera, and CNN on Spain-related current affairs and news. We shall see if anything comes of it, or not.
I might use this example in the IGA to help him understand what idiocy is being signed onto by the likes of the UK Treasury, and what they are asking Parliament to approve. Always looking for an angle that might resonant with an offshore audience to build opposition, and that specific definition language might do it.
It might be a good angle of attack to take. It implies, that the UK knowingly is allowing the IRS access to tax its UK Citizens under this dual tax residency illogical concept? This is NOT accidental or unintended consequences. They read the terms, understood the definitions and signed on the dotted line.
Hey, Boris Johnson, the UK Treasury has decided that you are indeed a dual tax resident of America and the UK! So, better pay up to the US of A now and join the OVDI. With the IGA, the HMRC is going to help force you into compliance. This is really brilliant!
@Just Me- that is exactly my point. I do hope that you decide to play up this fact to your journalist friend. The British and EU citizens should know that FATCA and the U.S. tax treaties contain this clause that permits the U.S.A. to drain their treasuries while yet at the same time it lectures them on their need to get their collective fiscal houses in order.
I really don’t think that the citizens of Britain would be happy to know that the U.S. persons that they have accepted into their midst are tax Trojan Horses for the U.S.A. Treasury. I think that they would be really mad once they learn that some of these Trojan Horses are also British citizens. Talk about adding insult to injury. Maybe the way to also sum it up and get them to take notice is if you were to put it this way:
FATCA and U.S. tax treaties turn Britain, the former colonizer into the colonized.
I think that would be a good headline for his article. It would certainly get every reader’s attention and probably get the article onto the front page of whatever section of the paper it appeared in.
Keep up the good work.
@recalcitrantexpat
I like the Trojan Horse symbolism and the colonized becoming the colonizer. I think I will use it. I will wait for my next contact with the journalist. After what I sent him today, I am sure he is digesting it and don’t want to hit him with too much. I gave him my big picture view of FATCA begetting DATCA begetting GATCA . I will see how that resonants, and then lead him to the Trojan Horse.
Thanks for your help.
The homelanders think they have it tough with the complexity of Form Nation compliance. We’ve already filed with one country (where we live, perhaps were born, and where we earn and save) and the US demands we satisfy them too – from ‘abroad’. Where is the article bemoaning the useless waste of time, anxiety and money to file to a second country – the US, to show yet again that we are not money laundering drug lords (unlike some of the depositors that US banks welcome and depend on http://www.guardian.co.uk/world/2012/jul/21/drug-cartels-banks-hsbc-money-laundering
http://www.economist.com/blogs/democracyinamerica/2013/04/filing-taxes
‘Filing taxes; It shouldn’t be so hard’
Apr 2nd 2013, 14:01 by R.M. | WASHINGTON, DC