I was sent this account from an anonymous participant at a recent Tax Seminar given by the US embassy in Norway. It was held in the basement fellowship hall of the local American church.
The participant did not want his name used, but did want to publish his account of the event.
I have agreed to provide the vehicle for this on Isaac Brock. This report is provided so others could hear what is being presented to Americans Abroad, at least in this one formal setting in Norway. Not sure that it represents any other countries approach to the problems of U.S. Citizenship taxation. I have been assured that the events written about, happened as described, with characterizations those of the sender.
The participant writes:
Invitations to this tax seminar went out by general media—-word of mouth, Reps abroad, Dems abroad, American women abroad organizations. In a slightly modified form, the invite looked like this:
The U.S. Embassy will host a Tax Seminar at the American Lutheran Congregation on Thursday, January 31, 2013 from 6:30 -8:30 pm.
An IRS Tax Attaché (name withheld) from the Internal Revenue Service Office at the U.S. Embassy in London will be the guest speaker and will present information on tax issues for U.S. citizens overseas. After the presentation, there will be a question and answer session.
If you are interested in attending the Tax Seminar, please contact the U.S. Citizen Services section by e-mail at firstname.lastname@example.org Please bring you passport for identification to the Seminar.
Personal note: This was apparently an invitation for attendance by sign-up only. No unregistered walk-ins allowed.
I replied to that email address, and the confirmation came back with an IRS logo cut and pasted to look official, I guess.
Thank you for your interest in the Tax Seminar. We have added you to our guest list. We look forward to seeing you there.
On the day of the seminar there were ~45 attendees and they filled about half the seats in the assembly hall. Since registration was required by email, the reception was manned by 3 women with the list of the attendees names spread out equally in front of them on four sheets of paper. Two Local (in-country secret service?) agents guarded the exterior and entryway of the church.
The first greeting received at the door was “We need id!” I see now that the invite stated one should bring one’s PASSPORT. One gentlemen had politely told them no, (unsaid if whether he forgot for flatly refused), which was first met with a negative response and tone, but was corrected by the woman in the center who allowed that gentleman in. All attendees were checked off the list.
A pamphlet with some tax basics and an assembly of IRS due dates and telephone help numbers was provided at the door.
The introduction was by the Ambassador, whose senior staff administrator was at his side. He stated that his philosophy was that every person should be able to file their own taxes. He finished the introduction, then stated that this was the last opportunity to ask him questions. (Note: I guess he did not want to be part of the Q & A at the end of the session.)
The audience primarily consisted of 45+ persons. There were a few people that looked obviously like young corporate-sponsored family types, whose accountants certainly ought to have been doing things correctly during their short stay. However, the majority of the audience were long-term Norway residents who had just learned of the offshore jihad FBAR and FATCA searches via media reports.
None of them mentioned they had received any helpful advice or instruction from US government about what to do. There was no indication that any were using tax accountants. None exhibited strong understanding of the various form(s) requirements. Some of the attendees were:
–A woman who had lived Norway for 40 years and had never known that she ought to have been filing.
–A 65+ man, who spoke bad English, who had obviously found out the consequences of being a U.S. person.
–A U.S. person (male) with good English, who was there not only in his own interest, but also in the interest of the widow of his U.S. father.
- -A man in his 50’s with an East Coast accent, whose local wife was programming FATCA software at the bank.
–The balance were people who had no accountants and had little understanding of the concepts of filing U.S. tax forms with all the complexity of ‘excluding this” and “crediting that” and FBAR’ing your bank accounts. The majority did not seem to understand the basics of filing.
The presentation was made by a very average woman approximately 50 years old, who had come from the head European office. She presented herself as the IRS Tax Attaché and much of her background was audits and penalties. You would have thought that someone who had experience in actual income tax ‘filing ‘questions would have been a better choice. That is who people wanted to hear from—rather then a message delivered from a “Penalizer”.
The presentation was just horrible.
Obviously she no experience or expertise on how to present a subject in an organized manner to an audience. She began babbling, continued babbling, and finished babbling. She mentioned declarations, exclusions and credits, but gave no form numbers or explanations of how or why. She provided little in the way of the overall filing principles and processes.
She mentioned the FBAR, but gave no explanation about its contents. FATCA Form 8938 wasn’t mentioned by name. She told all kinds of side stories about tax evaders. She talked periodically about the US / Norway tax treaty, which actually was not even part of her area of expertise or policy authority. (IMO, that is the policy business of the Ambassador, and he should have spoke to it).
She threw in lots of little barbs about tax evaders, hah, hah, hah. At one point, she mentioned harshly how audits could be done. “We might actually travel up to this country and perform the audit here”
She was questioned as to how many FBAR’s had been filed previously, to which she emphatically responded “millions”, with a facial expression, body language, and delivery as if she knew that this not to be true. Or, to be fair, maybe she was talking about the total number of FBARs filed since the beginning of the 1970 Bank Secrecy Act! There certainly are NOT millions filed yearly.
Some of the things she said during her babble, made me wonder if she had been reading the Brock site. If not, she either was ignorant herself, or she out and out lied about the number of FBAR forms filed.
She stated the penalties for FBAR incorrectly, and had to be prompted to mention that the $10,000 penalty could be per account per year for a non willful failure. The difference between ‘nonwillful’ penalties and ‘willful’ penalties was not discussed. The $100,000 penalty never got mentioned, whereas the 50% penalties were bundled together with the $10,000 penalties.
OVDI was not mentioned. A ”streamlined procedure” for past failures was mentioned but not explained. She said often that people should file if they hadn’t been doing so, and that they should include an extra explanation as to why they had not been filing.
She stated that people should maintain their records for 4 years, then burn them. This was followed by her cute story about shoe boxes with year numbers on them. (Shouldn’t that be 7 years?)
Benefits of Citizenship:
At one point, the Tax Attaché started talking about enjoying the benefits of citizenship. At this point, the ’40-yrs-in-Norway’ lady responded “What benefits?”. To that question, she responded correctly “You have the right to enter the United States and work whenever you like” (and no more). That was the sole benefit. This was the answer that made me suspicious that she had been reading IBS.
The “R” word raised:
At one point, a woman asked “What about the number of renunciations connected to this”? The ambassador’s assistant squirmed around in her chair and answered by saying renunciations would be met with strict enforcement and audits, and that no one should consider renouncing if their intention is to escape tax.
The Tax Attaché further stated that the act of renunciation could result in serious consequences of not being allowed back into USA and some other negative blah, blah, blah. She then went on to explain some of the filing procedures for renunciations—of filing first a citizen tax form and then filing a final non resident alien tax form for the remainder, etc, etc. She was corrected by the embassy staff assistant and implied that some of the threats mentioned were not totally accurate. She had been squirming uncomfortably in her chair during this part of the discussion. I don’t think she wanted the conversation to go this direction.
U.S. Tax Policy Questions:
There were a number of questions that were related to policy—why the US taxes its citizens? Why did they make these laws? When will they stop taxing citizens overseas, etc.? The Tax Attaché answered them. Neither the Ambassador nor his staff assistant attempted to do their job and to represent the U.S. policy! They let the Tax Attaché babble out the answers for questions which had nothing to do with her authority or expertise.
The Tax Attaché mentioned that after some people renounce, their company wants to send them back to USA to work again. She stated that a U.S. visa is then granted, and then ridiculed the person who would do such a thing in the first place. As she was stating that a visa for those that renounce would be granted, the Ambassador’s assistant visibly upset bounded out of her chair and blurted out a comment implying something like “we won’t allow that to happen here”.
In Conclusion, Mission Accomplished?
The presentation by the Tax Attaché ended without a request for further questions. However, she did say to ask questions after the break, one on one, to the U.S. representatives in attendance.
In my opinion, her presentation consisted of babble and showed no real comprehensive understanding the process of filing taxes overseas and impacts on Americans abroad. The content was of NO useful value to people who already had a reasonable background in these matters. For newbies, they gained little but new twinges of fear.
What she did accomplish, was to weave in enough threats of penalties and examples of evaders to make the point, “you must comply”. Her advice was to file the required forms and attach a nice letter with the filing explaining why it hadn’t been done so previously. This was pleasantly presented and primarily received with courtesy. There was no explanation about what constitutes reasonable cause, what was a ‘low risk’ profile, and how the IRS will review, accept or reject, and what the audit probabilities were. However, we were certainly informed about the penalty potentials for failure to comply!
What happened to the Attendance List?
At the end of the meeting, a woman who had lived 40 yrs in Norway asked what they were going to do with the attendee list. The senior staff consulate woman stated that it would not be kept. However, the emails which were received by the embassy to request attendance, and the confirmation emails sent back out on an IRS letterhead couldn’t be erased, could they? Don’t they live forever on email servers?
A Plea to the Ambassador:
One gentlemen then pleaded the case to the Ambassador, beginning by asking him to write a report to the Executive branch (he visibly stumbled as if he couldn’t stomach saying the president’s name), explaining that none of the people in the room understand how to do their U.S. taxes, as it is so complex.
The Ambassador’s first response was something like, “Well,… NOW they do, don’t they?”
The gentleman further stated that people don’t come to this country to evade taxes (top marginal rate nears 50%). To which, the Ambassador escalated the discussion further—stating that “They just needed to file!” End of story. “They (IRS?) aren’t after normal people. They are after rich people with millions of dollars. “
To which the gentleman responded that “No, they are not just after the rich, they were also looking for normal people. As of Jan 1, 2013, with FATCA, they were looking at all of their accounts (and his) and ordering the Norwegian banks to go out and find US persons. “
The Ambassador did not seem to comprehend what was happening with FATCA at all. His response was to the tune of “What are you hiding?” “If you don’t have much money, they won’t get you. They are not after you if you don’t have a bunch of money. Just file it, Use form 7770, it only takes ten minutes.”
To this, the gentleman (in his 50’s) responded that indeed people his age ought to have some retirement savings (which could be construed as “being rich”), and that the penalties that they were giving out were not just about filing today, but also about failure to file for the last eight years.
The Ambassador had only been in Norway a couple years, so he apparently couldn’t understand anything about the past IRS OVDP processes.
During the ensuing conversation, the Ambassador stated a number of times to “Just file it, what are you hiding?” And, final warning, “You better file them now or the penalties are gonna be a lot worse later!”
Get Professional Help
His last response was “If you have money, then you should have been getting professional help.” (contrary to his intro speech about filing your taxes yourself)”. By this time, the body language of the Ambassador looked like he was going to club the guy with his cane.
Time for cookies and coffee
At this point, other people began cutting in, as the coffee and cookies were ready and many people were anxious to have a private chat with the Ambassador. A number of ‘Stepford-wives’ types told the gentleman that they had just sent their FBAR’s in, and they hadn’t gotten any penalties. (YET!)
The event broke to cookies and coffee.
The gentleman left, and at that time you could notice that the 2 or 3 US ‘agents’ in the room had their eyes open and watching carefully.
Seminar purpose? Scare the bajeebers out of you?
So, as you can see, this event provided no useful instruction about how to do ones U.S. taxes. The majority of questions really related to policy questions, to which the Ambassador did not respond or help with. The Ambassador never elucidated on any U.S. taxation policy matters, a subject the audience had a keen interest in.
The event, however, did succeed in its main objectives, which was to take attendance, to encourage and scare the bajeebers of never-before-filers. Mission accomplished with this audience of older residents who have had no idea that the government of their ‘person hood’ has been preparing to ‘frag’ them with FATCA.
In my opinion, this meeting seemed to show that, under pressure, the Ambassador was chosen to deliver a message, “We are going to get “rich people!” (the definition of which could be adjusted according to current political whim). He was perfect for the job, because of his innate narrow perspectives of what living abroad means.
Bottomline, the US citizens in Norway were to follow the orders of the US government & his boss, period! He was not here to serve the interests or concerns of the US citizens living there. There was absolutely zero recognition of, or consideration for, the innate innocence of the U.S. ‘persons’ present in Norway!
The meeting also showed that the person leading the professional embassy staff was one who believed that the US citizens living in Norway must follow the laws of USA. Renunciations will be processed under her authority, and will not be viewed favorably.
This presentation confirmed for me that the US ambassador solely represents the Executive Branch of the United States. That ought not to be a surprise. His job includes the duty to see that the citizens located in Norway follow U.S. tax laws. He does not represents the interests of the citizens that reside here. It is not his job to report their concerns back to the USA. His executive duties are not like those of a Congressman who works for constituency interests. As an Ambassador, he has one constituent, the US State Department and by extension the President. U.S. Citizens in Norway were not his constituents, and he did not appear interested in advocating for their interests.
However, he does arrange for good cookies and coffee!