In the following scene, Doctor Who had just saved planet earth from the Atraxi threat to destroy the earth. Now, he calls them back and asks them three questions. The Atraxi answer the questions as follows: (1) earth poses no threat to them; (2) earth has not broken any Atraxi laws; (3) earth is protected, by none other than the Doctor, the last remaining Timelord, in his eleven iterations. Once the Atraxi have fully reviewed the threat to them, the Doctor says to them one word, “Run!”
I want to ask three questions now that the American people have re-elected the Persecutor in Chief of US Expats, President Barack Hussein Obama.
(1) Is the United States likely to repeal FATCA, FBAR, and citizenship-based taxation?
(2) Is the US dollar likely to experience serious devaluation thus making the assets of expats explode in value in the eyes of the IRS?
(3) Are the American people likely to change their opinion of Americans abroad and see them as a persecuted minority rather than tax cheats, traitors, and cowards?
On the basis of a sober assessment of the situation, I have only one recommendation, in the words of the Doctor, “RUN!”
I can only say this: yesterday’s election shows me that the USA is not ready to change this problem for us. And so, I consider my decision to shed my US citizenship wise in that it has solved my immediate problem for the next 4+ years. Had new leadership come in and replaced citizenship-based taxation with one that is residence-based, had suddenly the persecution of expats ended, I might have perhaps regretted my decision to relinquish. Today I stand before you with nothing to regret.
*Isn’t that what I just said last night? RUN!!!? Run for your life!!!
*http://ca.finance.yahoo.com/news/flaherty-says-u-fiscal-cliff-likely-push-canada-183500258.html – I wonder why the hell I continue to beat the drum when nobody freakin’ listens. That’s exactly what I told Wade Flaherty when I contacted him earlier in the year about FATCA…and now he realizes this…AFTER THE ELECTION????!!!!! And we Canadians elect these MORONS into office?????
*http://news.yahoo.com/top-republican-obama-avoid-fiscal-cliff-203717611–finance.html – Top Republican: will work with Obama to avoid fiscal cliff –
That pretty much seals the deal. Can you say, Handshake with the Devil? Yep, time to renounce and get the hell out of the United States of America. Because they’ll be coming after you from both parties…in lockstep. Consider yourself WARNED! Because if you think there’s going to be any support from this Conservative government of Canada, let’s just say that they’ll roll over to allow the US carte blanche. Get rid of your US citizenship while you still can!
*@Animal, that sounds so stark. I feel stuck until my statues of limitation run on my amended returns though.
It’s still a grey area as it is, especially as I’ll never know for certain whether the returns were corrected completely accurately because they were so complicated that i honestly don’t understand exactly what they did. But as an enrolled agent, I don’t think she would have been willing to correct my earlier tax returns herself if she thought I posed a significant legal risk; had i been considered too risky, she would have referred me onto an attorney, which she has to do with some of her clients. I will have to trust that she did a sufficient job of it to keep me safe. She certainly wasn’t cheap!! Thankfully, she felt I had a strong case for reasonable cause.
I hate feeling so vulnerable and stuck. But at least I’m getting compliant so that if I do decide to go through with it that I will be more easily able to do so. Seems such a risky business though.
I’d like to think though that people like Lioness’s nightmare are from glitches on the IRS computers and that with some legal help, she’ll be able to get things sorted because I’m sure she has a strong case for reasonable cause, especially with all those foreign trust forms. Common sense would suggest that they’ll focus on homelanders hiding money offshore rather than expats or accidentals who have no assets in the US and are thus no low-hanging fruit.
For them to hit Lioness with a $57,000 fine for an honest omission seems cruel and unusual punishment and thus a breach of the 8th Amendment.
Yo bro! Fiscal cliff. Just like I was saying last night. Over and out in 2012. Or strapped to the chair to get juiced in 2013!
I’m looking at Vietnam, it seems like a beautiful place to hide.
An interesting proposal from ACA:
Tax-News.com: “Tax Reform Proposed For US Expats”
http://www.tax-news.com/news/Tax_Reform_Proposed_For_US_Expats____58172.html
A very good initiative, but probably won’t gain much traction until the amount of renunciations becomes a liability for whoever is ruling the roost at the time.
Hat tip to ACA!
Here is how Phil Hodgen puts it after offering the testimony of yet another OVDI voluntary disclosure horror story:
He refers to the IRS treatment as the guillotine. Liberty, equality, fraternity, or death!
My answers:
1. I want to believe that it will. Jim Jatras thinks FATCA will eventually be abandoned because it is unworkable. As John Brown mentioned above, ACA now has a detailed proposal to end citizenship-based taxation designed to appeal to congressmen.
2. Currency exchange rates are impossible to predict. Other developed countries are also facing serious debt, so my guess is that rates will remain more or less the same for a while.
3. I think US residents have no opinion about Americans abroad, but they sympathize if told the facts. Everyone here to whom I told about the problems, from various political preferences, agrees that citizenship-based taxation doesn’t make any sense. The only people that I’ve seen supporting it are certain members of the Senate Finance Committee.
Tomorrow I have a meeting with senator Jim DeMint’s assistant.
*
Shadow Raider, the US government states that if an innocent middle class American patriot renounces their US citizenship to save their mortgage or checking account, since they would otherwise be unable to do so as a US person due to national origin discrimination, that they will forever be American patriots without US citizenship, unconditionally. One thing that you might want to mention to people is that, with such a strong position, America should really make a much greater effort to not pressure its patriots to renounce. The current situation of the US government is just insane. Many American nationalists have gone mad with their war against the innocent American patriot abroad.
(1) Is the United States likely to repeal FATCA, FBAR, and citizenship-based taxation?
No.
(2) Is the US dollar likely to experience serious devaluation thus making the assets of expats explode in value in the eyes of the IRS?
Yes.
(3) Are the American people likely to change their opinion of Americans abroad and see them as a persecuted minority rather than tax cheats, traitors, and cowards?
No.
@Shadowraider:
I greatly admire your optimism and appreciate the constructive efforts you put forth.
@statelessman:
I unfortunately share the opinion you wrote above but hope Shadowraider proves me to be wrong.
@Shadowraider, I don’t share your optimism. But thank you for your many efforts. If the Homelanders ever see the light it will be because of the tireless work of folks like you, Roger Conklin, and Just Me.
But the problem is one of people not understanding basic civics. The college professors scored 55% (D-) on this basic civics exam. Imagine that: your smartest people are scoring a D minus on a civics exam. The scores of others, including politicians, goes down hill from there. The exam requires that a person understand basic rights and how business functions. No wonder your politicians congratulate themselves for saving 30 billion on a 1.5 trillion dollar deficit budget. No wonder Obama thinks that saving 100 million on departmental expenses is even worth talking to the press about after announcing a 1.4 trillion dollar deficit budget. I wonder how Constitutional professor Barack Hussein Obama would score on the civics test? I wonder.
So when the dunces in the United States re-elect this man, they are showing their complete misunderstanding of how the real world works. They live in their bubble and one day that bubble is going to be pricked, and the American people will suffer and wonder who is to blame. They will naturally blame US expats, China, and Canada. Scapegoats. Yeah, they feel momentary sympathy for the plight of expats, but that’s like the feelings they have when watching a sad movie. They soon get over it. It’s not their problem.
@Petros, I admit that sometimes I’m overly optimistic.
I got 94% on the civics test.
@Shadowraider, congratulations on the score. It’s really not that hard (my score was similar). You would think that politicians should do better. You have to get to the last screen before they say what politicians average.
I’m afraid that the light at the end of the tunnel any expats might see is a train.
@Petros
At the airport in Ft Lauderdale we were in line with a teacher who was ecstatic that Obama was sending her in a group of educators to China for some reason I didn’t get a chance to ask her about. Rome’s burning and Obama’s supplying fiddles to the masses.
@bubblebustin, I’ve been mortally afraid for the last year, pinned to the tracks with the headlights getting closer. Where is my Dudley Do-Right?
http://en.wikipedia.org/wiki/Dudley_Do-Right http://en.wikipedia.org/wiki/Dudley_Do-Right_%28film%29
Speculations here http://www.accountingtoday.com/news/Tax-Reform-Prospects-Dim-Election-64582-1.html?ET=webcpa:e6285:243968a:&st=email that the US can’t/won’t make reforms to the tax system. Not that I thought we’d be taken into account anyway. We’re just captives held hostage on the train tracks by the US unless we are in a position to renounce.
@badger
For your and other Canadians viewing enjoyment:
*I still think the IRS are going to concentrate on egregious cases.
Anyone without any assets in the US is no longer a low-hanging fruit. The IRS can’t simply freeze a non-US account without going through the foreign courts. Even though the UK is prepared to exchange information with the IRS, I can’t somehow see them readily enforcing draconian fines for mere footfaults, especially when no tax or minimal taxes are due.
To pursue ordinary expats through the foreign courts costs the IRS BIG MONEY so it’s not in their interest unless blatant fraud has been taking place. I’m convinced that if they started routinely doing this that it would create a diplomatic incident. This is also what my accountant believes. In fact, she and my financial adviser have both attended functions hosted by the tax attache at the US Embassy in London; the attache explained that they are really after egregious offenders, not the minnows; they merely want them filing and honestly stating their foreign accounts on their FBARS and 8938s.
I am not as paranoid as the rest of people here.
*Badger, the US is currently making reforms to the tax system. These reforms involve increasing enforcement, as I learned from Jack Townsend today in his blog concerning Shulman’s view on the matter:
*monalisa1776, that’s how I see it too, but I still need to have a checking account and a mortgage and can’t afford losing such while the US chases after the big tax cheats.
Shulman wrote: “It’s perhaps more important that we’re bringing U.S. taxpayers back into the system”.
I wonder who those people might be that he’s bringing back into the system. Could it be … Expats?
Petros says –
They live in their bubble and one day that bubble is going to be pricked, and the American people will suffer and wonder who is to blame. They will naturally blame US expats, China, and Canada. Scapegoats.
Look what we have going here. Pride in the
contrarycountry that is too big to fail. Envy of those who live better lives elsewhere. Wrath directed at imaginary offshore tax cheats. Sloth in dealing with a fiscal cliff. Avarice in wanting anybody else to pay the bill. Gluttony in sucking ever more symbolic $$$ into the black hole of debt. Lust to keep on being so great on the backs (hoo! don’t miss this pun) of the entire rest of the world. A maelstrom cesspool of deadly sins – that’s the terminally addicted USer.@monalisa1776, there’s a saying; “just because you’re paranoid doesn’t mean someone isn’t out to get you”. If professionals like Jack Townsend and Phil Hodgen say that the IRS doesn’t distinguish between the big fish and the krill, I tend to believe them.
If they’re really not interested in the non-egregious cases, they could have drawn those ‘streamlined’ compliance parameters a lot broader, and made some solid commitments to be reasonable. Obama, or Romney could have addressed their concerns about the issue and intent to address it. Shulman or Geithner could have acknowledged the unintended consequences. But they chose not to.
If they wanted to, they could just make accounts that are ‘local’ to us exempt from FBARs, or make the threshold higher for reporting. Or exempted our legal savings in registered accounts like Canadian education savings – which can only be used for narrow purposes like tuition. It is hardly likely that a money-laundering drug-dealer terror-funder would be hiding untaxed US funds in an account registered with a Canada Revenue number, which could only be used for post-secondary tuition in Canada.
But the US and the IRS refuse to remedy even the most ludicrous examples of conflict and unintended consequences.
It was only recently that they agreed to let RRSPs be exempted from US tax liability – but still forced us to file annual elections to do so – and they could not be done after the fact without a $2000. private letter ruling.
Those are not the actions of a government or agency who intends to be reasonable, or to distinguish the whales from the minnows, or even the krill.
That is why those who can, must divest themselves of US status – in order to live our normal lives abroad – and in order not to continue to burden our non-US family with this – now, and when we die. Canadian children with US parents can’t even be given an RESP by a Canadian grandparent. We can’t hold TFSAs like other citizens in Canada. We can’t be co-signatories or hold power of attorney for others – or we’d have to report their Canadian accounts to the IRS.
I’m not saying that renouncing is for everyone’s situation – I know that for some scenarios, there are current and future considerations. But I’m not paranoid either. I don’t believe we’ll see it get better.
@monalisa,
If the IRS and the likes of ex-Commissioner Shulman are just after egregious offenders, not the minnows, then their communication, education, actions must not be based on fear-mongering and punitive legislation (like the Ex-Patriot Act).
If they offer an amnesty it must fit the definition of a real amnesty, not more gobbelygook instructions.
If they do not provide answers to the likes of Nina Olsen and the TAS, who tries her best to help the minnows, the IRS and the Congressmen who float the laws are obstructionist and elitist and show me they don’t really give a damn. Words like “As we increased our enforcement efforts and gained significant momentum, we gave taxpayers a chance to come in voluntarily and avoid going to jail.” does not inspire compliance — it inspires innocents with no extra funds to fight this into hiding.
The minnows have not been adequately educated over the years. A blind eye has been turned for decades and now they are calling in the chips. Education is lacking, especially for immigrants to the US. There is real entrapment of people without good financial literacy as some of without jobs move from the US to other countries to search work to support their families. There is no route to compliance without bankruptcy for many.
There is very little real communication; real problem solving. Show me some real solutions for people and I, and many others, will not be so paranoid. (Remember: “Just because you’re not paranoid, doesn’t mean they are not after you.”)
This whole process could be much more humane if common sense were used instead of the big stick.