The number of Americans giving up their citizenship has rocketed this year – partly, it’s thought, because of a new tax law that has frustrated many ex-pats.
Goodbye, US passport.
That’s not a concept that Americans contemplate lightly. But it’s one that many of them seem to be considering – and acting on.
Victoria Ferauge, 47, is married to a Frenchman and has lived abroad for nearly 20 years, primarily in France. If her adopted country finally agrees to Fatca then she wonders what the implications will be…..
I don’t know any Americans abroad who aren’t thinking about giving it up but what I say to myself is that I will fight as long and as hard as I can.
A broken man on a Halifax pier, perhaps. But I don’t think we should count on that as a given and not be prepared. If the IGA gives the banks cover and if the banks can’t pass on the cost of compliance the logical step is to rid themselves of US customers. I will believe that we are safe from that when it doesn’t happen. Right now, it’s still a possibility because it’s happening everywhere else. We should get too comfortable with our view that “Canada is different”.
@Victoria, Blaze, Atticus:
Keep up the good fight! You are very couragous and tough ladies.
Rosa Parks would be proud!
Another BBC reporter has contacted me about a story to be run on Monday.
He is looking for people who have already renounced and are willing to talk about it on the radio. (Swisspinoy?)
Send me a note ASAP at v_ferauge@yahoo.com.
This will be long, and I apologize. However, there has been an email exchange of ideas relating to communication with Congress that arose out of discussions on this BBC story. They could have made a series of comments here, but did not.
I thought I would share it on this thread for a wider audience. I am leaving out names because I did NOT get everyone’s permission to publish them, but it really is not material to the discussion.
It started like this….
I’ve just written my member of Congress the following and suggest all overseas American get into the habit of doing the same. Even if the emails aren’t read in depth, they get tagged and counted to give members an idea of problems. The rule of thumb is every letter/email represents 20 constituents.
We know from history that after the debacle of the Tax Reform Act [sic] of 1976 that sought to eliminate the earned income exclusion, the outpouring from overseas Americans made them reverse course. It was too late for some damage to be done as Roger can personally attest to, but it still had the effect. When we lobbied Congress during the first Overseas American Week (OAW) 10 years ago (or so), staffers on the Hill still remembered.
As Americans, it is my belief that we owe it to ourselves and members of Congress to actually follow “the system” to get re-dress of our grievances and push it as far and as hard as we can and have faith that Congress will stop the nightmare that the IRS is inflicting on the rest of the world.
He then went on to share his email to his Congressman
Below is a report from BBC News about record numbers of Americans overseas giving up their passports because of the IRS’ fiscal imperialist scheme called FATCA. We spoke about this when we met in Stamford in August, and I know you are aware of the problem.
You should know, however, that Treasury’s Robert Stack, responsible for “international tax policy” especially pushing FATCA down the throats of recalcitrant governments to sign its IGA – which, by the way, Treasury doesn’t feel the Senate (or the House) has any “need” to review or give advice and consent. And now, as part of the PR mechanism to enforce FATCA, has launched what overseas Americans consider the very worst Orwellian “Newspeak” propaganda campaign they’ve ever seen out of our own government.
The article alludes to this with his “Myths” that seem only aimed at members of Congress. If you ask any overseas American they can quote you chapter and verse how his “Facts” that he counters as “myths” with are simply DEAD WRONG! (that’s the polite description).
As I mentioned when we met, I lived overseas for 28 years and have represented to Congress overseas Americans through various organizations for over 35 years. This is by far the very WORST time in all those years that overseas Americans feel simply 100% abandoned by its government, especially Congress.
It is positively PAINFUL for anyone to have to contemplate giving up their American citizenship – truly heart-wrenching. They simply feel they have no choice because of the actions of Treasury with FATCA, a law that was quite literally slipped into the HIRE Act in the middle of the night before the floor vote the next morning – and totally unrelated to the HIRE Act, and without Congressional hearings of floor amendments of discussion.
In addition, the Treasury/IRS NEVER followed the standing Executive Order that requires bills of this magnitude to have a thorough cost-benefit analysis done PRIOR to presentation to Congress – they simply stated it was “not applicable”. Well, even by their outrageous number of $100 billion, it was certainly applicable! This $100 billion figure is also fictitious, either as an annual figure or as a “Washington-speak” figure expressed over 10 years. (btw, why do you do this 10 year fantasy projection? The Russians learned the hard way that their 5-year plans always failed; few in corporate America go out more than 3-years in planning, yet for some curious reason Congress takes a 10-year view on revenues and expenditures that quickly is forgotten never happens).
The Joint Committee on Taxation scored FATCA as bringing in only $800 million a year. A pittance against our annual deficits. We have the situation now where virtually everyone overseas is weighing up the value of their US citizenship in their long term plans against the cost of FATCA’s fiscal imperialism and intrusion into their lives.
More and more Americans are learning, as the article describes, that even if an overseas American owes NO U.S. taxes (because they are all taxed by their local governments), simply to comply with these new FATCA forms and citizenship taxation will cost them $3-5,000. This is simply absurd. ACA has daily reports of overseas Americans being kicked out of their banks and losing their mortgages because the banks don’t want to be put up with this chicanery on a global scale.
What galls most Americans is reading the IRS’ own admission that they pay out over $20 billion annually in fraudulent claims inside the USA. So how, they wonder, can they actually properly administer FATCA on a global scale? FATCA is supposed to only add $800 million annually in revenue (despite the $25-30 billion it will cost global banks to apply it!). Why doesn’t the IRS come back to Congress to ask for help to clean up their own backyard first. They could ask that FATCA be modified into something that is less draconian and just applies to Homeland Americans based upon residency taxation, an “international norm”, I might add. Citizenship taxation is a relic of the past and should be abandoned! The economic harm to America is multiplied many times over by the impacts ill conceived legislation like FATCA.
In short, FATCA is a nightmare for overseas Americans and they need your help, and your colleagues, too. In the end, it will NOT even do what it purports to do because any homeland American who wants to cheat on taxes overseas will simply find any number of other ways to do it.
Make no mistake about it, FATCA’s collateral damage to American’s living around the world far out weighs the ‘good intentions’ from which stemmed. The IRS will decimate the overseas community, harass them, fine them, and treat them just the way King George III did when our forefathers made the claim “no taxation without representation” and declared their independence.
When did we become what we fought a revolution to prevent?
Sincerely, and with best wishes,
This email then generated a question
Question for you. I was writing letters and then I was counseled to stop and to instead send emails exclusively. Something to do with security and the letters being held up while they get scanned and sniffed and who knows what else.
Is that true? Should we give up on snail mail and advise others to do the same?
Follow-up question: Could we come up with some sort of consistent tag at the beginning of each email so that there is no confusion as to what we are writing about and to make it easier for the staff to count and group them?
To which he responded
In general, snail mail to Congress in DC makes a snail look like a jackrabbit. It must go through scanners for security, etc. So to hit their offices in DC, use the form that almost all members of Congress (both Houses) have on their website.
As I said the member will not read all of them at all; typically an Administrative Asst will track the comments and pick out representative quote of “trending” views. Depending on circumstances, the LA (Legal Assistant) will review to determine if there is any pending legislation that is affected. Most members will have a weekly meeting with staff to review “trending views”.
Snail mail still works when addressed to a member’s office back in his/her district and frankly I encourage this. While it will still be screened, it will go more quickly.
In every email, put a reference subject at the top, and the first paragraph should indicate that you are a constituent.
Overseas Americans, you have your “last voting address” – refer to this in your opening. It’s perfectly OK to tell them why you originally left the USA and why you remain overseas, but don’t forget to tell them that you still have ties to the district and still vote there!! This is VERY important. As I said, they calculate 20 votes for every email/contact.
Tell them what FATCA means personally to you and what the problems are with it as you see it. BE BLUNT! (It’s the only way they know your passion which affects your vote and potential support).
Finally – and VERY important – end with a call to action – what do you want him/her to do about it? Be specific as in: “Please do everything you can to stop FATCA and stop the IRS from destroying the overseas American community.”
One last thing: Ask them to join the “Overseas American Caucus” by contacting Carolyn Maloney’s office and let them know that ACA has a DC office now, and then clip-and-paste your email and send to Mary Louise Serrato (info@americansabroad.org) so she keeps track.
I may be wrong, but I have the impression that we are all more active writing each other and adding comments on articles and other blogs than we are in actually keeping a stream of complain emails going to our members of Congress.
While we have to do the former, too – if only for our own sanity – remember that only Congress can actually stop this madness, the press can’t! They will only start to move if they get a sense that this is a sustained issue that simply is not going to go away and can affect their re-election.
His comment generated this response
That really helps.
If I may take a stab at why people don’t write more letter to their Congresspersons?
This is an era of people who feel empowered by the new communication tools available to them. Of these tools, email is often the least rewarding. People don’t feel that they’ve “done something” by sending an email off into the ‘ether’ especially when they often go unanswered or get answered with a generic form letter.
It’s not satisfying and I dare to say that it may even make people angrier. How many people, I wonder, wrote letters, got zero response and then said “to hell with it” and made that appointment with the consulate?
One of the worst things about the FATCA/CBT nightmare is that people feel helpless and they hate it. What they want is to feel as though they are doing something useful in their own defense – active participants and not passive victims.
For a very long time I’ve been thinking about this. There is so much energy and emotion out there. The potential actors are split among many organizations and websites. Under those circumstances how do you transform all this into effective action?
It is one of the great ironies (and a sign of the times) that the newest and least official organization working on this cause (like IBS) is the only one that empowers people and presents many options for direct action.
To which he followed up…
This is perfectly understandable. Here’s the problem – it’s the only tool we have to get directly inside their offices, so we have to understand how it works, and how THEY use it.
Here are some of the things that are critical to understand:
If there isn’t a reference in the first paragraph that is not only personal to you AND mentions you live in their district/state, they will assume it is spam or an orchestrated nature and they generally dismiss it, or at least log it with the names, organization and how many constituents sent the same message. That, too, after all, is an indicator to a member that he at least has constituents who are willing to send the same message.
They track all comments, and they are likely now to track addresses, too, to eliminate those that are clearly false.
Personal emails are always picked up by the first paragraph. Overseas Americans are either likely or not to stand out because of the nature of the subject – they are not likely to get many overseas Americans from their district talking about a subject – FATCA – that they are probably not aware of. The more the emails start piling up on this strange subject, the more it “trends” meaning the more AA, LA and members have to learn more about it.
In a way Robert Stack has done us all a favor – he has laid out his main arguments and tactics to Congress that we can now counter. Frankly if he thought this was going to do him good, he is going to be wrong, BUT only if we use it against him!!
So everyone should use the opportunity to get as many overseas Americans as possible to start writing to members of both Houses to counter this blatant and false piece of propaganda before the “Big Lie” (The 7 myths) gets ensconced in the halls of Congress.
Final response… and the reason I am posting this…
Thank you so much for those explanations. Yes, we have to know how it works to make it work for us.
This is really important to share. It is stuff that newbies like me don’t necessarily know.
I’ll be honest and say I pretty much gave up on the letters awhile ago. I suppose getting an appointment to see them or a staffer in person when you are in the states, is effective too!
I agree, Mr Stack’s willingness to wade into the world of Myths and Facts concerning FATCA presented a rare opportunity for debate, and although we don’t like his perspective it’s better than a continuation of the complete stonewalling we’ve received from the US government so far. What would really be good is if the mainstream media picked up on his article and take it upon itself to dissect his assessment.
Thank you for the suggestions on how to breach the barriers that surround our elected officials. We need to be as strong as we can on each and every front that’s available to us.
@Joe Blow, thank you but, I would never compare myself with that fine woman. I’m at no such risk as she was for doing what she did and I would know. We lived in a small town outside of Memphis in those days and my mother was part of the civil rights movement. Ms. Parks took her very life in her hands doing what she did. I’m safe at least physically and she was not. It was vicious in those days for anyone daring to speak up or act up.
But on that note I have written to Dr. Cornell West about our protest and this issue.
@JustMe
Thanks for that…very informative. I will put writing an email to Congress on my Monday to-do list. It will be fun to list each of Stack’s truth’s and reveal them as myths.
@WhiteKat…
If you want some ideas for a good analytical point by point response, this NON IBS poster at FSI had a good one to build on or adapt…
PJM says…I looked at Mr. Stack’s comments, on behalf of Treasury regarding the alleged 7 “Myths” and noted my evaluation of his remarks for each of the 7 as follows:
Read them all here….
http://www.fsitaxposts.com/2013/09/25/myth-vs-fatca-truth-treasurys-effort-combat-offshore-tax-evasion/#comment-275
1.) FATCA was signed into law in March of 2010. The text of the law is 20 pages long. It took Treasury nearly 3 more years to issue the so called “Final Regulations” which are 543 pages long. It then took Treasury an additional 9 months to issue 36 pages of amendments to correct and clarify the so called “Final Regulations”. Somehow Treasury now interprets a few concessions in the initial search criteria to be substantial relief in compliance burdens/costs. The fact of the matter is without these changes, implementation would be incomprehensible in any time frame.
Additionally, throughout the legislative process and the subsequent 3 and a half years, neither Treasury nor any other part of the government nor anyone else has completed and published any kind of credible or otherwise cost/benefit analysis with respect to FATCA. It is therefore impossible for Treasury to make any sensible or realistic claim to achieving “…the policy objectives without imposing undue burdens or costs.”
Without the benefit of any analysis, Treasury is in no reasonable position to suggest there is some kind of “Myth” regarding cost and complexity.
2.) It is well known that US citizens, resident in a number of countries are being denied banking and investment services. While turning US account holders away might not completely enable an FFI to avoid FATCA, it will substantially reduce the compliance burdens and costs. This issue has been well documented in various articles in the media and by organizations such as American Citizens Abroad. It is therefore quite disingenuous to suggest this real problem is some “Myth”.
To assert that “FATCA is quickly becoming the global standard for automatic information exchange… ” is simply FALSE. FATCA is based on Citizenship Based Taxation (CBT), involving gathering information on US citizens and other so called ‘US Persons’ not Residency Based Taxation (RBT). There is a very considerable difference between CBT and RBT and 19 countries are NOT involved in any project to exchange information on a CBT basis. Indeed, the US and Eritrea are the only countries on earth that practice CBT. Treasury’s comments here suggest that all this new founded intergovernmental cooperation is about exchanging information on each other countries residents. If FATCA was in fact a measure to detect foreign accounts of US residents, not ‘US Persons’ resident anywhere, then most of the objections around the world would melt away.
Treasury’s comments here are again disingenuous and crafted in a way to deceive.
3.) Treasury’s assertion is absolutely FALSE. US Citizens abroad must file Form 8938 as a result of FATCA. This filing essentially requires US Citizens abroad to register their assets with the IRS unless assets are held in the US. In most cases their assets are held in the country of residence. Not only is this a new requirement imposed on US Citizens abroad, as a result of FATCA, but it is also an intrusion that Treasury and Congress should know that homeland citizens and residents would not tolerate being imposed on them for their assets in the country of residence (i.e., the U.S.).
In addition, it is well know and has been the subject of recent media coverage that there is a substantial increase in expatriations since FATCA came into existence. In 2013, the trend is accelerating.
4.) It takes an enormous stretch of the imagination to believe Treasury’s IGA approach is motivated by respect for other countries laws and customs. The truth of the matter is that Treasury and the IRS simply do not have the wherewithal, organization, capacity or budgetary resources to establish and maintain individual contractual relationships with hundreds of thousands of FFIs and to monitor and enforce compliance within those FFIs. It is also highly unlikely Congress would appropriate substantial news funds to attempt doing so. Treasury also knows that to force so many FFIs to comply without the support of their home governments would indeed force them to violate privacy and discrimination laws and/or constitutional provisions. While FATCA has yet to be proven to be implementable, it is clear that there would likely be no chance of implementation without getting agreement from and assistance from other governments. In additions the IGA approach is also a way to offload enforcement and administrative costs to the various foreign jurisdictions.
International interest in participating in FATCA is primarily motivated by the threat of 30% withholdings of USD payments, not IGAs.
In their comments here, Treasury fails to mention that their IGAs are subject to legal challenges in the US by the Texas and Florida Bankers Associations. In addition some members of Congress are openly questioning Treasury’s authority to enter into these IGAs. It should be further noted there is no mention of any such concept (IGAs) in the legislation itself.
Finally, getting 9 signed IGAs (many not yet supported by enabling legislation), at this stage, only 9 months from the latest extended implementation date is hardly a measure of success. It seems highly unlikely that the other more than 150 jurisdictions around the world will ‘sign on’, let alone pass enabling legislation or settle inevitable court challenges in the next 9 months.
5.) Canadian Finance Minister Jim Flaherty, in a letter to several publications did in fact outline the Canadian Government’s objections to FATCA and labelled its enforcement as a “…waste of resources on all sides.” He also indicated that “FATCA has far-reaching extraterritorial implications. It would turn Canadian banks into extensions of the IRS and would raise significant privacy concerns for Canadians.”
While there is support amongst many governments for information exchanges for taxation purposes, it is doubtful that Treasury can show examples of specific support for FATCA’s CBT enforcement approach by foreign governments. Rather, some governments have agreed to IGAs through and because of the coercion of 30% withholdings. Again, Treasury’s statements here are false and misleading.
6.) On September 10, 2013, subsequent to making that extension, Treasury issued another 36 pages of amendments to the ‘Final’ regulations (543 pages long) which were issued on January 17, 2013. Many FFIs which have multiple systems in multiple jurisdictions, with multiple regulators, servicing multiple types of financial products in multiple different currencies are fully justified in their complaints of unfairness.
The issue is even further exacerbated by a lack of clarity as to if and when IGAs might be applicable in which jurisdictions.
Treasury’s response here is completely misleading and disingenuous and has nothing to do with any alleged “Myth”.
7.) Treasury’s assertion is FALSE. Their own regulations clearly require FFIs to go beyond reporting, but also become withholding agents in certain cases (e.g. recalcitrant account holders, non-participating FFIs, etc.). Also, the process of screening customers to determine if they are deemed to be US taxpayers or US persons in foreign countries is indeed forcing the FFIs to be extensions of the IRS. That claim, made by Canada’s Finance Minister and many others is not by any means a “Myth” and is confirmed by the FATCA regulations.
Primarily? I think you’re being too generous. No sane country would ever negotiate such one-sided agreements without the threat of 30% withholdings of USD payments.
There are no true “partner countries”. There are no true negotiations. There is the US holding a figurative gun to the head of other countries. And these other countries can either accept FATCA and move on or have the US pull the trigger and experience some level of economic destabilization.
This was brought up quite a while ago, and I’ve still not seen it addressed: in the absence of an IGA would the 30% withholding be a NAFTA violation? This would seem to be an impoortant question to have answered since if it would be a NAFTA violation, then that’s one more reason why Canada should not have to go along with FATCA.
Here are some of the responses. Fascinating comments!
‘Why I gave up my US passport’
http://www.bbc.co.uk/news/magazine-24338387
Here is the article again, translated into Spanish and looking for spanish speakers who renounced US citizenship:
Friday, 4. Oktober 2013 ¿Por qué cada vez más estadounidenses renuncian a su ciudadanía?
http://www.bbc.co.uk/mundo/noticias/2013/10/130926_internacional_eeuu_ciudadania_pasaporte_renuncia_lav.shtml