I wanted to post this fact situation and generate some thoughts on how this problem can be solved.
Facts – Altered slightly to protect their identities:
Financial Assets: Last week I met with a couple in their 50s. They have been married about 25 years. They have lived in Canada all of their married lives. They have two children. The older is graduating from University this year. The younger is in her third year of high school (expectation that she will go on to University). It is not clear to me what is the citizenship status of the children. But, I think (since the US born mother lived in the US until the age of 18 and then moved to Canada) that they are both US citizens. If the children are US citizens I don’t think the US has ever been notified that they exist. The couple own (free and clear) a home (in both their names) with an approximate value of 1.4 million. They paid $245,000 for the home when purchased. They each have an RRSP. The husband’s value $450,000 and the wife value $200,000. They also have a brokerage account consisting primarily of Canadian mutual funds. The account is in the husband’s name (but both parties acknowledge that the account is jointly owned). The wife claims that she had some kind of signing authority (power of attorney perhaps) over the brokerage account (not sure whether she still does in view of the husband’s reaction to Mr. FBAR).
Citizenship status: The wife was born in the US She moved to Canada at the age of 18 to attend University where she met her Canadian husband. She has lived in Canada ever since. She became a Canadian citizen around 2000. Both children were born in Canada and have always lived in Canada. The wife has always filed US tax returns and believes that she is up-to-date and accurate with her U.S. taxes (is it possible for a US person to be completely tax compliant?). She always filed as a “married person” and simply noted that her husband was a NRA (Non Resident Alien). (Meaning that the IRS knows that she has an alien husband.) She doesn’t know what an 8891 RRSP form is, but since her taxes have been prepared by a U.S. tax professional I assume that she has filed the 8891. I don’t know whether she filed a form 8938. She had NOT been filing her FBARs. But, upon learning of them she filed 6 years and wrote the usual reasonable cause letter. She is NOT expecting further difficulties over the FBAR issue. But, the family accounts were disclosed to the IRS which enraged the husband. What happened at the point of the FBAR discovery and the fact that she filed the FBARs, was that her husband simply refused to have any more joint accounts with her. (As she put it: “All hell broke loose in my marriage.”) She is nervous about this because it has destabilized a fundamental assumption of their marriage – i.e. that family was run from a family/joint account. This is causing her great anxiety. Her husband will NOT allow her signing authority over any financial account that includes his money. This is a big problem and is related to the next problem.
Employment History:
Both the husband and wife had been employed by separate companies up to a year ago. Each of them lost their job. (Job market is NOT kind to people over 50. This of course has exacerbated the other difficulties.) Although, they are feeling a bit unanchored, they see this as an opportunity to work together to create their own business. (They are thinking of buying a franchise that will require financing.) This is actually a dream that they have had for years. They plan to use the money in the brokerage account to finance the business and to “carry them over” until the business is profitable.
Knowledge of issues caused by U.S. citizenship:
Until recently, (like the rest of the world) they knew nothing about the problems of U.S. citizenship. Their knowledge began whey they were introduced to Mr. FBAR.
They are now concerned that they may not be able to operate a business together.
Here is why:
1. The husband is adamant that he will NOT allow any of his financial information disclosed to the IRS.
2. The wife is scared out of her mind. She is already in the US tax system and is determined to file her tax and information returns according to US law.
3. They want to keep the business as simple as possible. They do NOT (at least at the moment) want the expense of creating a corporation. This means that the only real option is to operate as a partnership.
Now, here are some of the issues they are trying to work around:
A. If they carry on business as a partnership, the wife will have to file the relevant foreign partnership form to the IRS. This is a “deal breaker” for the husband.
B. If they were to create a corporation, then then she would have to file the 5471 and incur the other usual costs associated with the U.S. wife owning part of a CFC (Controlled Foreign Corporation) in Canada. Again, the husband is unwilling to have any of his business information included on an IRS information return.
C. The husband will not enter into any business where the the financial records are disclosed to the IRS. Therefore, he won’t allow the wife to have signing authority over the bank accounts of the business. This is an extension of the family bank account problem and is a real concern to the wife.
The fact of her US citizenship is clearly eroding the “good will” in their marriage. Neither of them is particularly employable (it’s the age thing). Therefore, they must think in terms of running their own business. It appears that the desire of the US wife to be US tax compliant is making it impossible for her to be a business partner with her husband.
Assuming they both want to save their marriage and create a family business, how should they deal with this problem? The husband will have NOTHING to do with the IRS.
If this cannot be solved:
– they may not be able to operate a family business
– each of the husband and wife, if they are to have business partners, will have to find different partners. In the case of the husband a partner who is not a US person. In the case of the wife, a parter who IS a US person
– they may be talking divorce which in addition to all the other problems will force the sale of the family home resulting in a significant reduction in the living standard for each of them individually. Furthermore, the wife will have to pay a US capital gains tax on her share.
Should the wife consider renouncing US citizenship?
Until 2011 the wife had always been a patriotic US citizen. She hates the problems that the U.S. has caused her and might entertain the idea of renouncing. The only thing that holds her back is that (paradoxically) the US tax problems have destabilized her marriage to the point that, should the marriage end, she would want the option of being able to return to be with family in the US
Should the children (assuming they are US citizens) consider renouncing?
The children were born in Canada.
How can these problems be solved?
@tdott says
2) If/when Canada gets on board the FATCA bandwagon, there is a likelihood that you will either have the US alerted to your existence, whereabouts, and financial situation, or you will be unable to find a Canadian financial institution (bank) to deal with.
ONE MILLION CANADIANS WITH NO BANKS TO PUT THEIR MILLIONS/BILLIONS IN? NOT LIKELY!!!
Yes, i think she should relinquish/renounce. As for her children, if they were born abroad and never registered with the US embassy, then they are not US citizens. My understanding of citizenship for people born abroad is that they have the right to claim it prior to age 18 if they, or their parents, choose to do so. I don’t think citizenship can imposed on a person that was not born in the U.S. Last year I contacted US Citizenship and Immigration because I was concerned about my Canadian-born children being US persons. Thankfully (still can’t believe I’m saying this) they’re not. I was not present in the US long enough to pass citizenship on to my children. That said, for anyone concerned about their children born abroad, I think it is worth contacting US citizenship and immigration with their situation and get the true facts on whether citizenship is automatically transferred, or whether it must be claimed. Hopefully the answers will calm some fears. They also told me that the US Citizenship and Immigration Act dictates who has claim to citizenship, not the IRS.
@todundsteier,
re; “..This does not sound like a tax or information return problem.
It sounds more like a domestic relations problem.”……
As someone on IBS observed before, there are three entities in this marriage bed, and one of them was uninvited – the US via the IRS and Treasury.
The US has arrogantly inserted itself by force into our personal, work and community lives from afar and significantly interferes with the affairs of even the non-US members via the FBAR and other tax and financial reporting demands. This is NOT just a domestic relations problem. Even the best relationship would be threatened if the IRS asserts the rights to know all about the accounts of NON-US persons merely if the other party has US status. For example – wouldn’t any other potential non-US business partner be perturbed by the introduction of the IRS into their possible business relationship – merely because one of the partners was a ‘US person’? Wouldn’t the IRS assertion that the US Bank Secrecy Act applies to non-US persons’ accounts – trumping any local laws, be very disturbing to ANY relationship? Would anyone else outside the US choose a ‘US person’ as an employee with co-signatory powers, or as a treasurer, or an executor, or to have a joint account with if it then opens the non-US assets up to IRS reporting obligations – and potentially, the draconian penalties?
Try telling non-US employers, family and fellow volunteers that the reason is so that the US can proactively monitor their non-US accounts for money laundering and other financial crimes.
Guaranteed to go over well.
I can’t see that you’d find anyone not bothered and affronted or angry about that situation. Even as a ‘US person’ myself, I do not want to bring that jeopardy into my household, my workplace, my voluntary roles, or anywhere else. In a household, eventually, separate accounts cease to work – because of death, incapacity or divorce. There is no way to effectively and permanently isolate and seal off the IRS demands from the affairs of the rest of the household.
Add to that, the US tax which would be levied on the sale of the family home, and what’s not to like?
There is also a reason why the ‘married filing separately’ filing from abroad is called ‘the marriage penalty’ – the filing threshold is purposely set so low in order to incentivize some to choose to file jointly. Isn’t it insane to try to entice people living and earning entirely abroad to elect to file in such a way as to agree to have the US tax their non-US spouse’s earnings as if they were a US person?
And that’s not even to address the estate problems.
How is it realistic to expect that a relationship should proceed normally under these conditions? Some of the Expat sites have people discussing whether they should get married to a US person. Some are worrying about whether to wait to get married, or to have children until after the US fiancee renounces. I certainly have that worry about some of my younger relatives who were born duals, and have urged them to renounce NOW, rather than wait and see.
It is even more stressful that the couple finds this out after the fact – too late to avoid or undo the complications that already exist – like joint accounts, or co-ownership of a home.
Badger, that’s there is the estate thing. I’d forgotten. This women’s husband isn’t automatically able to claim her half of their home or any of her estate b/c he would be taxed by the IRS at whatever the going death tax rate is down there.
As to her kids. if she left the US at 18, she does meet the requirements for residency as she lived there for four years past her 14th birthday. The US doesn’t require you do to anything really about birthright claims. You simply are a USC in their eyes whether you claim it or not and whether you know it or not. When they discover you, and it’s really naive to think that they won’t someday as more and more of our private info is sucked up by this and that entity, they will expect tribute. I wouldn’t trust any info you get from consulate workers or those at the border. It’s shocking how little some of them know about citizenship in many regards.
Registering your kids with the US when they are born just makes it easier for the US but not doing it is hardly a magic shield that will protect them for life. If you live in a country that collaborates with the US, the odds are better and better that someday, they will find you.
@Badger
Sorry, I am not convinced.
What happens if this woman takes the advice of the majority of commentors on this thread and renounces, hoping to thus eliminate the ostensible barrier preventing her and her husband from living happily ever after and it turns out that her marriage is, in fact, going south for the usual non-IRS-related reasons?
Her renunciation might foreclose or greatly hinder her from pursuing whatever post-divorce added opportunities that a US citizen might have in the USA.
She and her husband need marriage counseling before anyone starts making appointments at the local US Consulate.
Todundsteuer: Canada is not some backwater, but a very wonderful country to live in. If our friend renounces and then a divorce happens anyway, she can just stay here in Canada. Her children are here, as one person pointed out. Our economy is better than the United States, at least for now. I think she should make a genuine effort to save the situation at hand by renouncing her ties to the United States and showing her willingness to do what it takes to make this new family business work. One thing is clear: If you are slave and can buy your freedom, do so (1 Cor 7.21). All of life will improve without the status as a slave to a far away state. Suggesting that she should remain a citizen so as to have a place to go after a divorce is similar to saying that she should go back to her master in case her freedom doesn’t work out. At some point, the cost of freedom is risky; we have to risk that our situation after freedom might turn out worse than our situation as a slave. That is why some people prefer slavery over freedom, because they are afraid of the consequences of freedom. Your advice is to remain a slave. The advice of the majority here is to choose freedom.
Why would anyone want to move to the United States at this point?????? Please be real! The United States wouldn’t be harassing expats if it were a healthy freedom loving democracy. We expats are the canaries in the mine. The mine has poisonous gasses in it. Washington DC is trying to suck up the remaining oxygen. Everyone, especially those inside the borders of the United States will suffer asphyxiation–not just expats. We are just the first to go because we are the canaries. This is a warning that few are paying attention to: the United States has been poisoned. Everyone needs to get out of the mine now. It is a toxic environment that is just going to get worse.
@Petros It is a toxic environment that is just going to get worse.
Well said. My Canadian-born wife said she would leave if I told the IRS about her (our) assets!
@Petros—AMEN!!
How correct you are my friend!!
@Joe Smith, I can’t even mention anything about it at all, not even ONE WORD.. It is a tough situation.
Very Depressing for sure!!
I agree with @Todundsteuer.
The article seems to infer that she filed the FBARs without telling her husband. He might have felt betrayed for not being part of a decision that he should have been part of. If this is really the case, the lack of communication regarding this important issue is the problem – not the citizenship per se. And such a feeling of betrayal or lost of trust can be hard to get over. Counseling seems like a good idea.
@ Chris, I can’t agree with TodundSteuer that counseling is a priority over a consulate appointment. If she wants to go into business with her husband, the sine qua non of her partnership in the business is removal of her US tax obligations. When I first learned of the requirements that business owners who are US persons have vis-a-vis the IRS, I realized that it is not advisable for a US citizen to start a small business in a non-US country. I would never be partner with a US person in a small business in Canada. The IRS owns you. If want to have the freedom to own a business in a non-US country, the first thing is to get rid of your US citizenship. I would never advise an American to open a business in a foreign country without first getting rid of US citizenship. To do otherwise, is to make yourself a slave to tax filing requirements in two different countries. I opened my own business only after my US citizenship had become history. I am therefore not advising something that I haven’t done myself.
Just to offer a sample of the complexity facing a US person who is a business owner, why not just have a look at Phil Hodgen’s list of forms: http://hodgen.com/list-international-tax-forms/
The problem we’re all having with this is that we really don’t know the state of their relationship. How could we? But Todundsteuer is not wrong in suggesting that they need to work out the issues in their relationship and that counselling might be in order. You can see the threads of betrayal through this. Did she file FBARs w/o her husbands knowledge? Does she consider her US citizenship to come before her family? Is this just a convenient excuse on his part to end a relationship? We really have no idea.
Having said that, it in no way absolves the US government from applying its tax policies extra-territorially and roping in people whose only US connection is that they married an American and now have joint accounts. I wonder how Carl Levin would react to this kind of story.
I really hope these two can work it out, but the wife has some serious decisions to make. The status quo is no longer an option.
Todundsteuer, http://isaacbrocksociety.ca/2012/02/03/citizenship-renunciations-soar-under-obama-renoucing-u-s-citizenship-as-an-act-of-self-defense/comment-page-2/#comment-216897
Remember this story: http://www.reuters.com/article/2012/04/16/us-usa-citizen-renounce-idUSBRE83F0UF20120416
and the reports by the ACA; ….”American women and men married to foreigners have to choose between their families and their U.S. citizenship as their foreign spouses refuse to have their joint bank accounts reported to the IRS and Treasury Department.” from ‘ACA comments on the proposed Treasury Regulations concerning FATCA’, dated February 8, 2012 and attachments ‘Testimonials covering banking access problems related to FATCA and the PATRIOT ACT. Up through March, 2012 – Compiled by American Citizens Abroad (ACA)
What marriage vows included – ‘to love and to cherish – even with US citizenship-based extraterritorial crossborder taxation obligations and FBAR jeopardy’ till death do us part? The marriage was not founded or developed with an understanding of what we face now. The husband did not agree to report to the IRS. The wife did not know that she would be forced to choose between getting her husband’s consent to disclose their joint accounts and ‘willfully’ breaking US BSA FBAR laws. We know how large the penalties can be, and we also know how large the legal and accounting fees can be.
As a non-US person, the husband would not face the legal consequences of not reporting the joint accounts on the FBAR, unless his wife’s debt via any subsequent IRS imposed penalty was shouldered also by him. She could not become compliant without disclosing the joint accounts. Yet, she didn’t feel that she could face willful non-compliance either. Or filing a false FBAR, or potentially perjury.
This situation was created by the US – and the IRS explicitly says that the responsibility to report even joint or non-personal accounts, or accounts with no ownership or financial interest even, is not suspended even if it is forbidden or illegal – in conflict with the laws of our home country. Similar to the Catch-22 problem that Roger Conklin has described where the US tax had to be paid in US dollars, but those living abroad, in countries where they could not legally obtain US dollars, had the choice to break US tax law, or the laws where they lived.
The husband and the wife will still face significant US generated problems with or without any change in her marriage status – via separation, divorce, widowhood, because no matter what, every life event has an IRS taxable result or jeopardy attached. Staying married with joint or even separate accounts entails US taxable and ‘foreign’ account problems. Separating and getting divorced also has US taxable and reporting problems.
Even in Canada, with one common citizenship it can be challenging to work out and disentangle finances on separation and divorce.
Counselling will not change their financial relationship vis a vis the IRS imposed obligations. And they are not minor legal and financial repercussions. A counsellor is also unlikely to understand the size and all pervasive jeopardy the wife faces (retroactively and prospectively), and the insanity of the US extraterritorial tax system, and FATCA and FBAR laws in application to her and her household in Canada – nor the mess of complex factors or difficult choices.
I think @the Animal’s visceral reaction to extraterritorial taxation kind of nails how many non US’s spouses may react to the reality of the situation.
@badger,
Re
I very much agree that a counsellor, unless a USP as well with full understanding of all of IRS, FATCA, FBAR ramifications, will not be able to fathom the wife’s decision to disclose, without the husband’s knowledge, their joint bank accounts to the IRS. The wife may have naively weighed the consequences of massive US penalties for not filing Foreign Bank Account information against what she thought would be the consequences of complying with this obscene US FBAR law without her husband’s knowledge. The husband, of course, has every right to vehemently object to any of his personal financial information going to the US.
So again, the purpose of this site. A counsellor, unless a USP, I don’t think would believe (get his or her head around) the absurdity of the ramifications threatened by the IRS for not 100% complying to their obscene tactics and the wife’s resultant decision for submitting all her (thus their) private financial information to the US. I think that a counsellor, unless a USP, will not be able to effectively help this couple. Sadly, it seems rather than a win/win, it is a lose/lose situation and a prime example of what are likely many similar conversations for “mixed” US / Canadian (or any other country) marriages — and the children borne of those marriages. It is all obscene.
I certainly have considered counselling for myself to help with the deep anger I have for the US and what it has done to control and ruin my life and that of my family — and the lives of so many law-abiding persons. I have not sought counselling. It is my reasoning that it would be one more person who is incapable of comprehending what we are going through. This site has been my counselling. I am satisfied that I have done as much as possible to get my life back on track, into the final lap of filing for 2012 and submitting the 8854. The cost, financially and emotionally, has been significant and I will never understand or forgive the injustice that I cannot renounce on behalf of my developmentally delayed son — never able to let go of my anger for the absurdity of that fact. I am at peace, after I have tried all avenues of being able to do make this happen, concluding with legal advice from an immigration / nationality lawyer in DC, that I will not turn any of his information or submit back US returns to the US. I am unable to protect my son’s best interests, but I hope that the Government of Canada will.
@calgary411;
It is only with knowing that one has done all that is realistically possible for ourselves and our children that we can live with this. You have gone as far as is possible now to secure your son’s future. We were and are up against a powerful and apparently amoral adversary – who has apparently, no scruples about taxing and penalizing away the legal Canadian generated funds of children, those with intellectual disabilities and other vulnerable people. It stops us from saving for their education and care, and accessing our own home country’s benefits – which we should be able to enjoy like any other Canadian taxpayer.
I felt guilty for being the cause of ill afforded compliance expenses to my non-US household – merely for being born a US person, and thus bringing the IRS into my Canadian household. I could never justify doing that ad infinitum. I am relieved that I was unable to pass on the US status as a parent. I felt alone in the growing horrible understanding of just how bad this situation was. Who would believe the entire Kafka-esque and Orwellian truth?
But through reading here and elsewhere, I realized what the actual tortured history of all this is, and saw that I had no crystal ball. Who could have known that the US would have lost its mind and any remaining scruples, to this extent re those living abroad?
Only time will tell if we had any other viable options than the ones we exercised, but even then – much of the information isn’t going to be made available to us. This is an adversarial situation – and witholding information is one of the tactics being used against us.
IBS provided a similar outlet and service for me. The information and support shared here has been a life saver. Thanks to you, Petros and the other Brockers and readers. IBS proved I wasn’t crazy, or paranoid.
I too remain angry, and resentful about what has happened, but am determined to successfully rid myself and my Canadian household of this unwanted and arrogant US intrusion, no matter what. And I’m determined not to let this issue slide even afterwards.
Along with the coerced ‘compliance’, and the unaffordable legal and accounting fees, and the negative effects on our family and our wellbeing, the US has sowed itself a healthy crop of lingering hostility and opposition abroad – while harvesting very little in terms of any actual tax assessed or collected. May they choke on the results.
@bubblebustin,
Yes, an entirely appropriate reaction in the circumstances. Only afraid that in some families, it would fuel hostility and blame directed at the US person member.
I suspect that there are households where the choice is a very stark one – between appeasing the US government, or appeasing a hostile and angry spouse. Or laying low in order not to be penalized, or to waste money proving that yet again, no US tax is owed. It is already stark in terms of spending hard earned post-tax family savings on US compliance that should rightly have been used on our family’s wellbeing.
The husband is being entirely unreasonable, perhaps he should review his marriage vows because he certainly doesn’t have unconditional love for his spouse. Although it is not anything out of the ordinary, Canada has a national cultural vacuum, and that space is then filled with irrational anti-American sentiment, which serves to fulfill at least for some of creating a semi-culture. It’s like if we’re not Americans at least we’re something, right. Unfortunately for her, her husband seems to be one of the clueless that believes he has a culture which is entirely made up of showing how he hates America, it’s a shame really.
@marie
Not entirely so, no. http://www.state.gov/documents/organization/153156.pdf
The fact is that citizenship can be claimed at any time whatsoever. It’s only up until the age of 18 that a birth can be reported to claim the consular report certificate. Beyond that, it’s still entirely possible to make a claim as long as there is evidence to back it.
The mentality to remember here is that the US has an “inclusive” rather than “exclusive” stance on citizenship. You may have a German last name and look very German, but the German embassy isn’t going to pressure you under the assumption that you probably have claim to a German passport. Contrasting this, take for example, China. You may have an entirely legitimate claim to citizenship, but you have to jump through hoops to claim it. China’s got enough people already, it doesn’t feel a need to claim even more.
The status is automatic. Baby pops out overseas to a USC-NRA couple and the USC has met residency requirements. *poof* the kid is a USC automatically. However a claim still is required to be filed to prove that status before the US will recognize it. Therefore, the official policy is to look at revealed evidence of a possible claim and then press for pursuing it as if the holder obviously should want it. Unless the paperwork staring at them says “yep, 100% citizen”, the policy is to proceed as if it is a normal non-immigrant case while urging the applicant to resolve the potential claim. As it has been mentioned, place of birth can kinda screw the pooch, as the US assumes everyone born in the US is a citizen until proven otherwise.
Canada is open to leaving out place of birth http://www.pptc.gc.ca/form/pdfs/pptc077-eng.pdf
However some claim that it raises a red flag and only causes it to be questioned. In which case, my advice is, if questioned, to simply claim that you were born in Israel when parents were on vacation and you have it omitted for your own safety abroad. Or for when dealing with the US, just pick some state that the US doesn’t like and claim you had it removed because you were embarrassed by it or whatever. Israel works quite well when dealing with the US, because they will do the same exact thing for US passports which would otherwise show the information. Dealing with any other country that questions it, just tell them the truth that the US is a bitch and offer to show an expired/cancelled passport in addition.
The couple might very well need counseling in the wake of what she did b/c it has caused her husband to draw lines in the sand, but it sounds as though they are still considering a joint business and that divorce is just one of several options going forward if the financial stuff can’t be sorted out to his satisfaction.
What she did – the disclosure – was wrong. Period.
It’s funny b/c the US tells its expats that they are subject to the laws of the lands they live in regarding all things EXCEPT this one thing – reporting on joint accounts. That the US insists must be done even if it violates the laws of the land where you live. It’s seriously mercenary and I am sure they know it. They just don’t care. Hypocrisy comes easily to the USG.
As far as her moving back to the US if she and her husband were to divorce, can I ask how the hell she would manage that? She’s fifty something and unemployed. If she can’t find work in Canada, how would she find a job down there? Without a job, you have no health insurance. You can’t just pick up and go “home” when you’ve got nothing to go “home” to. And who picks up and leaves their children? Going back would require laying a lot of groundwork and having a cash reserve to see you through and maybe all the way to retirement even.
There is likely way more going on here than we know but I don’t see how hanging onto to her US citizenship is a good long term plan. There is no reason to believe she won’t still be able to visit relatives down there but there is every reason to believe that compliance filing will only become more onerous, expensive and punitive and that the USG will not give up its efforts to try and rope foreign spouses into their reporting/taxing net. All the marriage counseling in the world isn’t going to alter that fact.
Hello, Steve.
You seem to not have a clue. Please see comments just above: http://isaacbrocksociety.ca/2013/03/06/us-citizenship-is-a-problem-to-be-solved-but-how-to-do-it-in-this-case/comment-page-2/#comment-217267
And seriously, just think out of the box here. The IRS is not some god. Who the hell cares if they are pissy at you when you have no assets in the US, no connection to the US and do not care about the US? If you’re horribly worried about future repercussions, just have a name change and be done with it and don’t report it to the US. Or, alternatively, get all assets out of your name, bullshit them on their hilarious tax forms and then renounce after 5 years. The cost for the IRS to audit a foreign resident is massive and unless they have solid backing that more will be recovered than the cost to audit, they won’t even bother. Over here, that # is at around $250k. Owing anything under that, they won’t give a shit even if they suspect it but can’t prove it. And even if they tried, they can’t do shit to me over here anyways.
if questioned, to simply claim that you were born in Israel when parents were on vacation and you have it omitted for your own safety abroad.
NOT A GOOD IDEA, PERJURY, AND THEN THEY CAN REALLY LOCK YOU UP.
Who It’s Steve,
I don’t see how you think that the husband’s reaction is unfounded. No other citizens have to consider whether a foreign government (the US) is going to intrude into their non-US accounts. The husband is not even a US person. They don’t live in the US, or have US property or income. the only connection is the wife’s citizenship. So why would he think it acceptable to have HIS Canadian assets and joint Canadian account reportable to the tax agency of a foreign country – the US?
As an exercise, imagine you are living with your Canadian spouse in the US. Suddenly one day, Canada’s tax agency demands that you, Whoa, an American, must turn over all your joint account information, and fouls up any possible plans for starting a small business in the US. Wouldn’t you and any other American say – wait, how can they do that, we’re in America?
Wouldn’t American citizens around you inside the US resent it if any other country started to tax them from abroad? And demand information on their US bank accounts – filled with US source only income? Would you welcome reporting to the US AND to another ‘foreign’ tax agency? Can you imagine that anyone around you would accept that based on their parent’s place of birth only?
As I said, our marriage vows did not ask us or our spouses to agree to welcome the IRS into our Canadian households.
Our Canadian laws give the Canadian husband rights over his Canadian owned and earned assets and accounts. The US arrogantly states that US law trumps Canadian law over Canadian assets on Canadian soil.
Opposition to that isn’t a lack of love or commitment, or anti-American. It is entirely logical and rational.
@Joe Smith
You really really really worry way too much. Oh no, you committed perjury in a foreign country where you are not resident. ffff, please, it’s an absolute joke. We’re sitting on assets well into the 7-figures and a combined income which would make most blush. We pay our taxes here, and as far as the US will ever know, I’ve been destitute for the past 10 years with failed investment after failed investment, being forced to pay taxes which would never be levied by the IRS, and it’s just net loss time and time again. Hell, I use a slum address for my contact on the forms and they know absolute jack shit about my marriage. Assets are not kept in my name just as a precaution though.
I don’t care, because dealing with the US is just really not a big part of my life at all. They can go ahead and cry and throw a fit all they want, it has zero impact on my life.
You are right, Fred, the IRS isn’t a god, but when you live in a country that actively collaborates with the US – bends over whenever, you are never really safe, are you?
If this were 30 years ago when everyone and his dog wasn’t being scooped up by every database from Google to the govt, hiding and lying would have been a good option. Unless you’ve taken steps to erase yourself and cover you tracks, you can’t be sure that you won’t ever be found out as a USC.
And not all expats are free of the US. If you left the US after having had a long career, you might be stuck with US bound pension/retirement vehicles and if you have parents who have accumulated a bit or a lot, there is that matter of inheritance. While I am perfectly fine with walking away from whatever if it comes to it – not everyone is.
You live in China, right? Hiding is probably a feasible option given that China doesn’t take much crap from the US, but in Europe, the UK and Canada? Not quite the same.
Steve, I am pretty sure that nowhere in any marriage vows does it say that if your spouse betrays your trust that you have to simply smile and suck it up. I don’t think I could respect a man who was such a doormat.