I see that the House has finally passed a bill that would automatically grant green card status to anyone foreign graduate of an American university whose degree is in one of the so called S.T.E.M. (science, technology, engineering, mathematics) disciplines. Now given the strident attitude that the Congress has displayed towards any U.S. person who voluntarily gives up citizenship and their accusations of “traitor”. It really makes you wonder how these Congressmen/women would view a person from another country who would so easily be seduced to take up permanent residence in America?
Don’t these people owe something to their country of birth that is just as deep as what it is claimed a U.S. person owes to the U.S.? It should be noted that these foreign students can in no way be accused of being “ungrateful” to the U.S. government, since many of them have actually paid a hefty sum for the priviliege of attending a U.S. educational institution. There are actually some U.S. educational institutions that would not be able to survive if it weren’t for their foreign students. Many top U.S. universities have programs that actively court foreign students.
Will the U.S. Congress also attach to these green cards a full disclosure document detailing the very unique tax obligations that are a part of becoming a U.S. person? Are these people simply expected to “know” about Pub. 54 and the other IRC’s?
Thankfully the article says that passage of this bill is not likely and I hope that the author is right. The idea that America should go about topbankinfo.ru poaching students from other countries- some of those countries being poor countries- would be another new low for American exceptionalism.
It is not a big surprise. America has no qualms about poaching money from foreign treasuries with citizen based taxation. Why would one expect them to have any objection to poaching educated workers from other countries?
It sounds like it won’t pass anyway. Congress is so dysfunctional these days. They don’t seem to be able to accomplish anything. On CNN (I watch while I am doing my gym workout) it was said that the focus by politicians in Washington now is getting ready for the 2016 election!
@canuckdoc
I saw the same CNN program this morning. Even the pundits are election weary and admit congress is useless in getting anything done.
@recalcitrantexpat
“We should staple a green card to their diplomas,” said Rep. Jeff Flake, R-Ariz.,”
After all, who wouldn’t want one foisted upon them?
So, no way to opt out of this if the student doesn’t want one? I hope that you have to at least signal your intention and that they’re not “automatic”.
Also, after reading through that article I couldn’t believe that the US uses a “Diversity Lottery System” for visas. Why on earth would you give out visas to random people with only high school degrees. At least the STEM legislation makes sense from the point of view of attracting the right kind of immigrants.
So give them a green card and let them go on about their lives.
When they leave the country, give them the IRS booklet outlining their obligations to file a US tax return and pay US taxes on their worldwide income no matter where they live!!
It’s about damn time they start paying!
@Marilyn
The recipient of a green card should be made aware of their obligations from the get-go, as while resident in the US, all citizens and permanent residents should report on bank accounts over certain thresholds and income generated outside of the US. Indications are most people in the amnesty programs are actually resident within the US and failed to make the proper reporting.
@Don Pomodoro, The bill (H.R. 6429) specifies the procedure to grant this kind of green card. The graduate or an employer would have to petition for it, it will not be “stapled to their diploma” as politicians are saying. The US government is not that crazy to give green cards automatically without the recipients’ consent (although it does that with citizenship).
The diversity visa lottery was created in 1995. Its purpose was to “diversify” the immigrant population in the US, so the lottery is not available for people from countries that already send many immigrants to the US, like Mexico, China and India, and more visas are given to continents with currently low rates of immigration to the US, like Europe and Africa. (Ironically, Europe and Africa are the origin of most of the US population, so the “diversity” purpose of the lottery is controversial.) Besides being from an eligible country, the only requirement is that the person must have graduated from high school, or worked for two years in a job that requires two years of training. The lottery gives 50,000 visas, which is less than 5% of the total number of immigrants to the US per year. Although the lottery is free to enter, with a simple form in a US government website, many businesses advertise their services to register a person in the lottery, charging a fee. Part of the criticism of the lottery is the existence of these services, some of which are scams that pose as the US government, make false promises or may not correctly register the person in the lottery. (By the way, I’ve heard that something similar is happening with ESTA, the online form required of people from countries that do not need a visa to travel to the US.)
The media is also reporting the number of visas currently in the lottery, and for the new graduate program if the bill passes, as 55,000. This is incorrect. The law initially stated 55,000 but 5,000 of the visas were later allocated to an “adjustment” program for people from Central American and the former Soviet Union, so 50,000 visas remain. (Yes, US immigration has many little programs that few people know about.)
Since the people receiving green cards in this bill would be recent graduates who probably don’t have any income or assets, are already living in the US and intend to remain there, I don’t think taxes will be an issue. But sure, they should be informed of the tax implications in case they later decide to return to their countries or inherit assets there, especially because now as foreign students they are taxed as nonresident aliens. It’s absurd that the US immigration service doesn’t mention taxes anywhere.
@Shadow Raider.
“Since the people receiving green cards in this bill would be recent graduates who probably don’t have any income or assets, are already living in the US and intend to remain there, I don’t think taxes will be an issue.“
I must disagree. That is exactly what happened to me. I got my first job in the US, but not after having done a couple internships and summer jobs in my country of origin. That income, in addition to a bit of money given by my parents and grandparents was enough to make my country of origin bank account go over the ridiculously low FBAR threshold, and generate a bit of interest.
@Christophe, You’re right. The green cards would be for graduate students, so it’s very possible that they already worked for a while in their countries before coming to the US, like you. I’ve also read about the common practice in some countries of parents adding their children’s names to their bank accounts.
With 6 million emigrants, 40 million immigrants, and less than 1 million FBARs filed, the number of people who are not compliant is huge. Maybe a good result of FATCA will be to make evident how widespread the problem is. It’s a travesty that Congress equates a foreign bank account with tax evasion.
@all- it isn’t the media’s fault for reporting on the granting of these green cards in the manner that they have. I have been watching the news shows in which this topic has been discussed and it is the members of Congress who have said that a green card should be stapled to every diploma that is received by these foreign students. The media are simply parroting what comes out of Washington.
Although most of the graduate students are and always have-been graduate assistants (cheap labor in the labs and grading tests), they still must have an account at home for transfers in both directions.
@Shadow Raider
I guess I just don’t understand how there isn’t a huge amount of public backlash against such a visa system. I couldn’t imagine a similar scheme for people with just high school diplomas ever surviving the current anti-immigrant climate found in most EU countries at all. I understand the desire to diversify, but don’t you have to ask at some point whether it is beneficial to have so many low skill immigrants coming through?
More information: The current diversity visa program started in 1995, but similar programs already existed since 1986. The current program was originally invented by senator Chuck Schumer. He is the one who also recently proposed a visa for foreigners who buy US real estate, and the infamous Ex-Patriot Act. This makes me wonder if his true intention is actually to trap wealthy foreigners into the US tax system.
@Don Pomodoro, Although the requirement is only a high school education, it doesn’t mean that all diversity immigrants are low-skilled. A famous diversity immigrant is David Charvet, a French actor in the TV series Baywatch in the 1990s. Two thirds of immigrants come to the US through marriage or family ties, and they don’t have to satisfy any education or training requirement at all. I imagine this is similar for other countries too. Again, this doesn’t mean that these immigrants are not educated or low-skilled. But one thing that all immigrants must show before getting a visa is that they will be able to support themselves in the US, either on their own or through family members.
There is little criticism of the visa lottery for the same reasons that there is little criticism of citizenship-based taxation, FATCA and FBAR: few people know about it, and it doesn’t affect them.
@Shadow, PLEASE do try to have a meeting with Schumer. If you do, ask him some of the concerns that you raised here. I, for one, want to know WTF he is thinking in most of his proposals!! I’m not challenging, rather, just asking for transparency and rationale. Any law-abiding American would/should do the same.
My feelings at the end of the day: I’s the same in the US as anywhere else: <in law terms here>” throw the greatest amount of #$%% to the wall, and whatever sticks, sticks.” They do that in the US too, obviously. What Schumer’s [domestic] advisers can’t see is 6 MILLION people overseas. I could be wrong, but I really think that a Schumer trying to benefit expats could be his guarantee…. but if he doesn’t want to play the card, it’s his loss.
To sum it up: With the way of things are currently, I’m going to renounce or relinquish, whatever comes first. There’s hope for the next gerneration… If Shadow talks to Sen Schumer! hahah, no pressure! Go Shadow! go shadow!
@Shadow Raider- I believe that a more relevant question to ask Senator Schumer is, how does he reconcile the U.S. desire to tax expats on earnings that they have from transactions in another country with the anger of Tom Price and Kenny Marchant over France’s extraterritorial “Financial Transaction” tax?
http://tomprice.house.gov/press-release/price-introduces-bill-opposing-financial-transaction-tax
“Paying taxes to other countries is a bad idea – and we need a law to stop it!”
Thank you for your continued efforts to right this injustice.
@geeez, Schumer? Really? Well, maybe that’s not a bad idea, I’ve always thought that people should try to talk to each other to solve their conflicts. I already have a meeting with a congressman’s assistant later this week, but I may contact Schumer’s office later. Thank you for encouraging me.
@recalcitrantexpat, Now that’s new. The EU financial transaction tax (FTT) would be applied to transactions made by European banks even if they take place outside the EU. The US doesn’t want its financial transactions to be taxed, even if they are made by foreign banks. Doesn’t this sounds incredibly similar to FATCA (even the name is similar), but the other way around? This thing is getting more interesting each day.
But apparently Tom Price really thinks that each country should tax only inside it. He cosponsored an unlimited extension of FEIE, and he probably supports territorial taxation.
Shadow, yes.. Sen Schumer. You live in DC. What an opportunity! (I used to live in the DC area– loved it!) My bet is that he is aware of our situation, but sees us as “collateral damage”. But it would be nice to hear it from him.
Christophe, have you already worked out your situation? If not: if I were you, I would contact the TAS and prove that the money had nothing to do with ill-gotten gains or money laundering. You are right on the ridiculously low amounts. I think those $10k numbers came into effect when $10k had the buying power of 100k nowadays.
@geez, well, I basically chose what Jack Townsend called the “Go Forward”. I filed my first FBAR this year, correctly paid the taxes on the small interest of that account, but chose not to correct the past. The cost of OVDI is just crazy for what I owe in taxes, plus I did not know what the impact of being investigated by the criminal division of the IRS would have on my green card renewal. So I ruled that out. And since the IRS was claiming that they were monitoring quiet disclosures for people who tried to fix the past that way and treat them harshly if they were trying to do that, I did not even do that. I paid for lawyers advice which was wasted money in my opinion, since I got all possible answers from OVDI, to QD, to file forward. I am not living very well the uncertainty, but that’s how it is.
@Geez. TAS were not helpful. First, they said they could not help because I was not in trouble yet. And second, they told me to enter OVDI and that was the only way to fix my issues. TAS is only there to help if you’re assessed high penalties by the IRS and you don’t think it’s fair to pay up.
http://www.youtube.com/results?search_query=we+all+belong+to+the+government+&oq=ALL+BELONG+TO+THE+GO&gs_l=youtube.1.0.0i5l3.3991.7892.0.10485.20.16.0.0.0.0.545.3405.2j9j2j0j1j2.16.0…0.0…1ac.1.54BM8SiPGIA
We all belong to the government.
WHOOPIE
@mark twain
Whoopie indeed! This is testament to the state of critical thinking in America.
@ShadowRaider, re; “The current program was originally invented by senator Chuck Schumer. He
is the one who also recently proposed a visa for foreigners who buy US
real estate, and the infamous Ex-Patriot Act. This makes me wonder if
his true intention is actually to trap wealthy foreigners into the US
tax system.”
Absolutely, Yes. Bring assets into the US by whatever means, and keep it there by whatever means. Let domestic US Florida and Texas banks solicit and launder L.American and Mexican drug money, but call our trifling local savings in Canada ‘hidden, offshore, foreign accounts’ – merely because they’re not in the US. People like Schumer, Levin, Shulman, Geithner, etc. seem to have absolutely no honor or honesty. Otherwise, they would think twice about continuing to apply the equal force and punitive treatment to those born and living and banking legally in Canada and elsewhere, that
they do to resident Americans with Cayman accounts. Otherwise by now, they would have done something to help immigrants to the US become aware of the effects on their pre-existing homecountry assets before the US declared them now subject to US taxation and the penalty revenue machine. People do not amass savings and property in their homeland of origin – BEFORE emigrating to the US, in order to evade US taxes. People do not arrange to be born outside the US in order to evade US taxes and banking laws. That is just absurd.
Citizenship or any other relationship with the US from the outside, has become absolutely only about an official policy to increase the numbers of those deemed ‘taxable US persons’ – and confiscation of our non-US assets, with no regard to ethics, honesty, justice or even logic. The US government has shown itself to have no honour or ethics. It is all about taxes, nothing else. FATCA is as much about laying claim to our future assets as it is about identifying current taxable earnings. It is about laying claim to our estates, and the eventual sale of our principal residences. That is implied in a paper by Scott D. Michel – where he says that FATCA (vs. the FBAR, or in concert with it) has broad goals – not primarily just the identification of taxable interest earned on an investment. The US justifies it as an anti-crime measure to blunt any dissent, but it is really the parallel of their use of property records in California to identify property transferred through estates – that have not been declared. I read somewhere that the percentage of US residents who do not declare estates to the IRS is huge. US residents are not compliant with the IRS estate reporting http://www.forbes.com/sites/janetnovack/2011/12/18/federal-judge-green-lights-irs-search-for-california-gift-tax-cheats/
The US is even going to export unemployed ex-armed forces personnel to Canada, to work in the oil fields of Alberta – without telling them how complex their US tax and banking situation will become as a result. First send people (many only reservists who needed the money) off to die in Afghanistan and Iraq, then if they make it home, don’t help them get jobs in the US, but ship them off to another country (Canada) to work, and subject their Canadian earnings to the complex, punitive and confiscatory extraterritorial US tax and banking laws known as the FBAR and ‘taxable US person abroad’ Fundraiser. Only the ablebodied and ableminded (without PTSD) veterans will be able to get and hold those oilfield jobs – so what happens to the rest? The US has decided to invest in maximizing revenues – not through tax on those abroad, but through the fines and penalties for footfaults made by those picking their way through the IRS and Treasury created minefield of incomprehensible and illogical penalties on our legal and local banking and savings outside the US. I believe they are deliberately trying to get around the FEIE, and also responding to US bank pressure (like they did when they chose to severely punish Canadian mutual funds) to minimize banking options outside the US. I believe that they know exactly what they are doing, and have chosen to continue on the same path.
For shame.
If it weren’t for the actions of people like you Shadow Raider, and the TAS Nina Olson and her staff, and the existence of my family there, I would curse the US forever. I know there are good people there, but how we are being treated makes me very angry and bitter. The fact that they won’t let the millions of us abroad attempt to solve it, in a reasonable and just way confirms for me that the US is deliberately choosing to continue to act in bad faith – no matter what the cost. I will never ever travel or spend money in the US again, except for family emergency. I am committed to oppose any US interests in Canada, forever. This has cost my Canadian family a substantial sum in professional fees – though I owed no US tax ever. My Canadian extended family and friends now think the US is an arrogant monster and find it all incomprehensible. Even the fairly apolitical are roused. The US has managed only to confirm and further entrench the undercurrent of anti-American feeling that lies within Canadian society. For example, casual conversation with Canadian-only neighbours has them dissing the US and they have close family down there. Our stories already confirm what they are already primed to believe – that the US is an arrogant imperialistic bully who is always seeking to steal Canadian resources. Wonder how US Ambassador Jacobson feels about that? Sure, he’s got a pulpit via his website, and his dinners with the elite in Ottawa, but that just may not be enough to cut it in the end.
The US Ambassador and the US government has massive resources – to drown out our dissent, but our family and friends will pass on our stories by word of mouth – and though we may not be able to change what has happened to us, it is so horrific, that no who knows us personally will believe the US over our word. These stories have a life of their own. This site is a permanent record of that. The more of us who achieve renunciation, and freedom to come forward publicly (which is more and more likely as time passes), the more the story will come out.
The US politicians might want to think about that effect multiplied as the numbers of renunciants and relinquishers build. Eventually I think the real numbers will be pursued by researchers, or others.
@Christophe;
The TAS actually advised that your only/best method to become compliant was to enter OVD specifically?
and,
How much trouble (isn’t this whole situation trouble enough?) does one have to face before they will assist? If the IRS were transparent about FBARs, ‘reasonable cause’, ‘willfulness’ etc., then we’d know how to weigh the costs of various choices. But otherwise, all we had to go on was threats and obfuscation.
Doesn’t it make sense for the IRS to proactively help untangle a situation BEFORE going through a lengthy and costly process like the OVDs rather than AFTER – only to find out they’ve only captured krill?
@Christophe, Badger
TAS announced last September that it “changed its criteria for accepting individual taxpayer cases for assistance, reducing the instances in which it will accept cases. The TAS said it took this action so that it can focus on cases “where we can add the most value.”
The article describes under what circumstances TAS would accept cases, however it’s important to note in the last paragraph that “it also would accept cases referred by a congressional office or those where “the taxpayer specifically requests and insists” it do so.”
http://www.journalofaccountancy.com/News/20126385.htm
@Badger, yes. The TAS agent when she heard foreign bank account said that my only compliance path was OVDI, even though the taxes due were ridiculously low. They’re not lawyers. They’re just following the rules the IRS publishes.When I told her I would not do it, she proposed to connect me to an IRS lawyer, where I had to specify SSN and identification information, at which point I hung up. Very frustrating. My wife just doesn’t understand why we can’t just go and pay the couple hundred bucks we owe within the SOL and put that behind us. I am just terrified of the immigration consequences of an audit following a QD, so I did not even do that. And Jack Townsend said that it would not be much different than one resulting in a go forward filing, so the logical path was the GF to limit the risks. And I am going to have to change immigration lawyer who said she will only help me once I take care of that, since I am not really taking care of it. I had hopes that the September procedure would include immigrants, but unfortunately not.
It seems that the TAS will assist people who have already entered OVDI and opt out. I am not sure they can do much, from what people say, when you’re still inside the program. I guess they somehow bent the rules in Just Me’s case, where he actually signed a 906 where the penalty was not what it was supposed to be in the program. It seems like his conclusion was more one of an opt out.
You said: “How much trouble (isn’t this whole situation trouble enough?) does one have to face before they will assist?”
In French, they say “Ils se garantissent la securite de l’emploi”. Meaning they’re giving advice that guarantee them work.