Number of Americans who #RenounceCitizenship Surged in 2nd Quarter http://t.co/I84MIgTFbN – Will encourage #americansabroad to renounce!
— U.S. Citizen Abroad (@USCitizenAbroad) August 10, 2013
This is a rather disappointing article from an author who has written on this issue before. Why disappointing? The general tone seems to equate Americans Abroad with tax evaders and terrorists (whatever those are). That said, it’s one more article reporting the increasing numbers renouncing U.S. citizenship.
For example:
The U.S. launched the tax crackdown after the terrorist attacks of Sept. 11, 2001, and ratcheted up its efforts after 2009, amid evidence that UBS AG UBSN.VX 0.00% and other foreign institutions helped U.S. taxpayers hide assets.
Some taxpayers have applied for IRS limited-amnesty programs, in which they pay stiff penalties for past noncompliance but avoid prosecution.
Tax lawyers say the crackdown has ensnared smaller violators who weren’t intentionally evading U.S. taxes.
In addition, a law enacted in 2010, the Foreign Account Tax Compliance Act, or Fatca, requires foreign financial institutions to certify they aren’t hiding U.S. taxpayer assets, which lawyers say is leading some to reject U.S. customers.
Taxpayer penalties for failing to report assets can be severe, including up to 50% of an account balance for each year.
Although there is some suggestion that renunciations are caused by the time, expense and fear of compliance burdens, these suggestions are “too little and too late” in the article (at least that’s my interpretation). Therefore, I would suggest getting over to the comment section and offer them an “IBS Educational Seminar” on the impossibility of U.S. citizenship abroad.
Interestingly there was one rather good comment from some guy named Roger Conklin (amazing how much he seems to know). He argues, rather convincingly that a move to RBT/Territorial taxation would be good for the U.S. economy.
The US is one of the two nations of the world that belong to that very exclusive club of countries that subjects its citizens to citizenship-based taxation. The only other member nation is Eritrea, a” thriving” democracy in Africa. These two nations, in addiction to subjecting all of their residents to taxation on their world-wide income, also subject their citizens to homeland taxation if they live and work abroad, as if they never left home. Both US and Eritrean citizens living abroad are simultaneously subject to the tax laws of both their country of citizenship as well as the country where they reside. Both exert their “right” to assess and collect taxes from their citizens residing within the sovereign borders of every other nation. All other nations tax the world-wide income only of their residents, regardless of citizenship.
The UN Security Council condemned Eritrea by Resolution 2023 (2011) in December 2011 on the basis that its citizenship-based taxation violates the UN Universal Human Rights Declaration by depriving its citizens of the right to freely leave and return to any country, including their to own. They can leave, but they must continue to pay Eritrean tax no matter where they go. Heaven help them if they return home for a visit not being current in their tax obligations. Susan Rice, then US Ambassador to the UN, led the charge in securing this condemnation, thus asserting the right US to be the only nation permitted to violate the territorial taxation sovereignty of other nations with impunity.FATCA obligates all foreign banks, at their own expense, to violate the privacy laws of their countries by providing fully-detailed annual reports to the IRS on all of their accounts with any US-person ownership, including jointly owned by their foreign spouses and relatives, in English with foreign currency values converted to equivalent dollars. Prominent US citizens living abroad, having been born in the US, include the King of Thailand, the mayor of London, one dual-citizen Canadian provincial premier and 6 members of the Canadian parliament as well as the 2 adult children of recently-deposed Egyptian president Morsi, as well as all children born abroad to one US parent who speak no-English, have never been in the US or held a US passport who likely do not even know they hold US citizenship. All are subject to US taxation and FATCA. There are 16 IRS instructions for US citizens abroad with 7,332 pages, plus 667 pages of tax forms. The FATCA instruction for foreign banks has 544 pages. The middle-class US citizen abroad can expect to pay the equivalent of one month’s wages for competent professional assistance in filing his US tax return, even though foreign tax credits in very high tax countries may totally offset his US tax obligation. Citizenship based taxation is not a revenue generator for the US Treasury, but a punishment for Americans residing outside of the US.
It has become virtually impossible for the US citizen to survive living abroad, leaving them with the choice of citizenship renunciation, or abandoning their foreign spouse and family, shutting down their small business, resigning their job and relocating to the US to join the ranks of the unemployed. How this can possibly be in the best interests of the US defies explanation. No other nation punishes its citizens by criminalizing their living and working in another country.
Roger, it’s not “virtually impossible”. It’s actually impossible.
On a brighter note, the authors clearly believe that Canada is a country that is foreign to the U.S. This appears to contradict recent assumptions by the NSA which consider Canada part of the Homeland. The author’s note that compliance costs may be a factor in at least on Canadian renouncing U.S. citizenship.
The cost of complying with various rules and regulations can be steep even for people with small tax bills.
Carol Tapanila, who moved to Canada more than 40 years ago and is now retired, renounced her citizenship in November and appeared on the current list. She says her U.S. taxes amounted to about $250 last year and she didn’t take the step to avoid paying them.
Legal and accounting fees and other costs of making sure she was in compliance in recent years have added up to nearly $40,000, says Ms. Tapanila. “It is nothing but stress.”
And finally, we have the usual comments from our “friends” the cross-border professionals. Of particular interest is:
The U.S. is rare in that all income earned by citizens and permanent residents, even those living abroad, can be subject to U.S. tax, according to Bryan Skarlatos, a New York lawyer. The U.S. also confers citizenship on people who are born on American soil.
Note: the link was added by me and is NOT part of the article.
And an interesting acknowledgement from a former IRS prosecutor (could this be somebody worth reaching out to?):
The web of rules is “overly burdensome,” said Jeffrey Neiman, a former federal prosecutor who led the 2009 UBS case, which resulted in the bank’s agreeing to a $780 million settlement. He now is a lawyer in private practice in Fort Lauderdale, Fla. “You basically find yourself in this continuous nightmare.”
Note: the link was added by me and is NOT part of the article.
Your mission, if you choose to accept it, is to continue to educate these Homelanders, journalists, and U.S. based tax professionals!
http://www.forbes.com/sites/kellyphillipserb/2013/08/07/snowden-finds-new-home-fields-job-offers-but-will-he-pay-his-taxes/
@Just Me
Key language in the above is: “As long as he remains a citizen, his is subject to our laws”.
In other words, the U.S. owns its citizens and can control them whenever, wherever, and however. No doubt about it U.S. citizens are property of the state. What did Marx say:
Wasn’t it something like:
U.S. citizens abroad unite! All you have to lose are your chains!
And to top it all off, the Homelander who write the article doesn’t even know what she wrote.
The Progressive news is picking up the story….
http://www.sfgate.com/technology/businessinsider/article/Here-s-The-Law-That-s-Driving-Record-Numbers-Of-4726660.php
and comments as you would expect…
“don’t let the door hit you on the way out”
@just me
My favourite retort for that comment is now “if I had a dollar each time someone’s said that to me, it would pay my tax accountant’s annual fee of $2K for filing my US taxes abroad to owe virtually nothing in tax”. Of course, it’s an exaggeration, but you get the point.
Just saw the Huffpo link myself.
No way am I going to dignify the comments in that peanut gallery full of losers with my response. ;^)
More importantly, it is a waste of time to try and educate the willfully ignorant, and that’s another reason why I won’t bother.
@mjh
I often do it for sport as it helps hone my arguments but I’m not going to wade in on that one. Much appreciation to those who have and are using their best ninja kicks against the homelanders
I got an email today from Liam Plevin (co-author of this article) who wants to speak to me. ,
Anyhow, I am not sure how to proceed given my non-compliant status.
@WhiteKat
Yeah, he will need you to ‘out’ yourself.
@bubblebustin,
That’s what I thought.
@bubblebustin, At a recent short-lived job I had, as a registered health professional, I noticed some ‘issues’ in infection control, which I tried to bring to ‘management’s ‘attention and tried to rectify within my own work environment. A long-term co-worker there, asked me if I was trying to get myself in trouble. I guess I was, because I got let go shortly afterwards with no logical explanation.
I don’t have a good feeling about this one either.
@White Kat
Do you have grounds for a back dated relinquishment CLN?
@Tim,
I don’t think so. I was born in US to Canadian born parents, thus screwed (err…I mean dual) from birth.
Never took a US Passport though?
@WhiteKat
A lot of people have found themselves in trouble not listening to that little voice. You have trust your intuition sometimes.
@Whitecat
@All
The fact that this reporter is reaching out is a great opportunity to get the story of “U.S. Citizenship Abroad” told.
I can certainly understand your reluctance to do the interview. The problem is the same as always:
Every individual who comes forth, comes forth alone and has to endure the fear, anxiety, etc. It’s part of the “divide and conquer” problem.
Also, a problem with these “one on one” interviews is that the interviewer ultimately decides what to print. Although all indications are that this reporter is interested in understanding the story, one is still left with his/her internal bias.
So, there is a temptation and reluctance to NOT do the interview.
What I suggest is the following:
Let’s invite him to do a group interview with U.S. citizens abroad. This can talk (but doesn’t have to) take place on a thread of the Isaac Brock Society. That way the questions are public, the answers are public, whatever is written must be measured against the contents of the interview.
The interviewer can request that certain people participate and perhaps Americans Abroad suggest some people for inclusion. (I would suggest people in a variety of countries, ages, occupations, etc.) Participants will be introduced by description rather than by specific identity.
This can be be similar to the long session that was done with WhoaisSteve a long time ago. As I recall he asked a question. There was an answer with dialogue and discussion.
Furthermore, a moderator for this will be identified …
What do you think? This is too good of an opportunity to let pass by?
@USCitizenAbroad, all
I asked Liam if he would like to do this and he declined.
I can only speculate that a reporter would consider it a credibility issue. Even though I feel that fear is a big part of the story, a reporter can probably get enough information on the topic from those who are willing to talk to him candidly, rather than having to rely on unverified sources.
@Bubblebustin
Okay, why not ask him if his position would be different if he could verify the sources?
The problem is that these reporters tend to write what they want to fit their specific narrative.
We have a reporter who is willing to listen. Why not negotiate with him.
@USCitizenAbroad
It’s certainly something I’ll try to work on if I get the opportunity.
or, ask him what his article will say in the end. Or, lead him into saying something that indicates which angle he is going to write in.
I did. His answer satisfied me enough that I was willing to talk to him. But who knows, it could change over time. I would think that learning more about the truth would make him more sympathetic to USP’s abroad, though.
@Bubblebustin
This is exactly why I just left the following comment on another thread which I will put here as well.
@All
Even if you don’t want to be interviewed, it’s extremely important that you post your views on this thread. This is important because it will provide context for the interviewer to use when interviewing those who come forward.
Possible suggestions for the focus of comments:
– do you feel forced to renounce?
– how does the fact of your U.S. citizenship affect the ability of your family to save, invest, contribute to the community, etc?
– has the IRS assault affected both your physical and mental health?
– have you had any difficulties maintaining banking and brokerage accounts?
– has this affected your marriage to a non-U.S. person?
– any other thoughts you have.
It is obvious that the journalists are reading this blog.
Here are some posts that I think bear on these issues:
Fear and Trauma
http://isaacbrocksociety.ca/2013/06/15/traumatized-by-the-irs-and-us-reaching-into-canada/
How FATCA will allow the U.S. to confiscate retirement assets
http://isaacbrocksociety.ca/2012/12/17/sun-life-prepares-to-turn-clients-over-to-irs-for-processing-bitter-end-to-a-company-with-a-proud-history/
http://isaacbrocksociety.ca/2012/12/18/the-sun-life-betrayal-part-2-the-possible-consequences-of-pension-plans-being-pfics/
http://isaacbrocksociety.ca/2012/12/19/the-sun-life-betrayal-part-3-converting-the-non-willful-into-willful/
Thoughts on renouncing U.S. citizenship
https://renounceuscitizenship.wordpress.com/2012/12/13/why-people-are-renouncing-u-s-citizenship-readers-digest-version/
https://renounceuscitizenship.wordpress.com/2012/08/21/letter-of-a-canadian-businessman-to-his-dual-u-s-canada-citizen-son-on-the-occasion-of-his-high-school-graduation/
https://renounceuscitizenship.wordpress.com/2012/03/10/collective-psychotherapy-u-s-citizens-outside-u-s-not-what-they-take-from-you-its-what-they-leave-you-with/
The problems of retirement planning
https://renounceuscitizenship.wordpress.com/2011/10/29/investments-effectively-prohibited-to-canada-u-s-dual-citizens/
Marriage and family
https://renounceuscitizenship.wordpress.com/2011/11/01/marriage-and-american-citizenship/
http://hodgen.com/category/divorce-2/
How does a U.S. citizen abroad come into tax compliance?
http://isaacbrocksociety.ca/2013/05/29/irs-abuse-of-americans-abroad-the-greater-the-effort-the-greater-the-punishment/
http://isaacbrocksociety.ca/2013/03/26/what-fatca-will-do-to-canada-and-canadians-who-are-not-us-persons/
Note that all of this will have a huge effect on Canadian families – the whole country will pay a huge price for having so many U.S. persons in Canada.
Submissions of U.S. citizens abroad (including many in Canada) to the Ways and Means Committee:
http://isaacbrocksociety.ca/2013/04/17/excellent-submission-to-the-ways-and-means-committee/
If there are other specific posts that you think are important, please link to them in your comment.
This site now has so many posts, that it is hard to find things.
“In other words, the U.S. owns its citizens and can control them whenever, wherever, and however. No doubt about it U.S. citizens are property of the state.”
It’s amazing how people don’t see the tragic irony of being property of the state in the ‘land of the free’.
I sent him the link to all of the submissions made to the Committee on Ways and Means for tax reform because he was interested in reading mine (it’s out there as a matter of public record, why not?) also the NTA’s scathing report to Congress concerning OVD programs and a link to how the IRS and Shulman were misleading taxpayers into OVDI. I don’t want to barrage him with too much at once. I’m sure he’s good at finding out stuff of his own if he’s worth his salt at investigative journalism.
The Philippine Star:
BIR: Special welcome for US green card holders
” A lot of Fil-Ams and green card holders are having second thoughts about “the cost” of acquiring or maintaining their US citizenship, compounded by the fact that US economic recovery efforts seem to be on a “stop-go” mode, with some analysts describing it as “bouncing along the bottom.”
http://www.philstar.com/business/2013/08/15/1091201/bir-special-welcome-us-green-card-holders
Very good article on occupy.com:
Exposed: IRS Is Colluding With Banks To Unfairly Target U.S. Citizens Abroad
Finally the left sees the dark side of FATCA.