Today is October 18, 2013. Exactly two years ago today Ambassador Jacobson made his infamous Canadian Grandmas speech. I think we should pass and ask a question that Ronald Reagen might ask:
Are you better off today than you were two years ago?
What follows is one of many Ambassador Jacobson posts that appeared (November 21, 2011) on the RenounceUScitizenship blog.
What’s U.S. expat to do? Time for the IRS to generate trust!
Can the IRS be trusted?
“When I read all of this I was concerned. So last week I called the Commissioner of the United States Internal Revenue Service to see what we could do. I explained the problem to him.
The result is that both he and I are sympathetic to the concerns. We are going to work together to see if we can’t find a way to accommodate grandma — and others — here in Canada. But we have to figure out a way to do it without letting the person who is trying to evade taxes in the Cayman Islands off the hook.
My message on this one is to sit tight. We are not unreasonable. We are not unsympathetic. We are not irresponsible.”
David Jacobson – U.S. Ambassador t0 Canada – October 18, 2011
Recent events have caused expats to live in a state of confusion, panic and fear. It is impossible to get consistent and credible advice from accountants and lawyers. Ambassador Jacobson has told expats to “sit tight” – that some solution will be offered – Canada is not a tax haven like the Cayman Islands. Well, so far, no solution, no answers on what to do. A large number of U.S. citizens are planning to renounce U.S. citizenship – not because of an unwillingness to pay taxes (no person who objects to paying taxes lives in Canada) – but because of a fear of FBAR penalties and the ramifications of FATCA.
The “jackboot” attitude of the IRS has made honest, patriotic, law abiding expats reluctant to come into compliance. They simply don’t know what will happen. The participation in OVDI was low. People simply don’t trust the IRS. Lawyers do not know how to advise clients. This is not helpful to anyone. If the goal of the IRS is to bring people back into compliance, the logical course of action would to offer a real amnesty for U.S. expats.
When it comes to U.S. expats (who use bank accounts in the country they reside):
1. Very few have any intention to evade taxes; and
2. Most have every intention and desire to be tax compliant
At the present time both expats and the IRS are experiencing the worst of all possible worlds. Some of the most loyal American patriots have been deemed to be criminals by the IRS. Expats are afraid to “come in” and the IRS is not successful in bringing people into the system.
The IRS needs to clarify its objective. Does the IRS want to being expats into compliance or does the IRS want to “hunt U.S. expats” in the hopes orchestrating a massive shakedown. To put it another way: the time has come for the IRS to decide whether to bring people into compliance (which will have long term benefits for the U.S. Treasury) or behave like vicious thugs (which will discourage compliance and encourage renunciation of citizenship). So far, the evidence suggests that the latter.
I came across a poll that appeared in the Globe and Mail in September of 2011 just after the OVDI deadline. The results certainly reflect how confused people are.
This poll appeared either in conjunction with or at the same time as the infamous Margaret Wente Globe article.
Here are the poll results as of September 23, 2011:
“If you are an American citizen living in Canada, how are you planning to deal with the IRS cross-border tax crackdown?:
* I applied for the limited-time amnesty: 6% (136 votes)
* I am still working out a plan with a financial professional: 8% (160 votes)
* I am not sure what my options are: 22%
(456 votes)
* Nothing, how will they find me?: 65% (1368 votes)
Click on the link to the poll below to see where the results are today.
Someone should write Ambassador
JacksonJacobson?, who is now in Cameroon…Yes. He should be bombarded with letters. He bold faced lied. I spoke to someone who was among those who were supposed to get their money back early on and she is still waiting.
How shameful that he just took off without any statement as to his “progress” regarding the harm being done here in Canada. Perhaps the new ambassador now needs to have to answer for some of these statements. We were told to “sit tight” Well?? Still sitting! The IRS and Treasury don’t seem to have heard you telling us to “sit tight” or that you were not going after “Canadian Grandmas” From where I sit that is EXACTLY who you went after.
Maybe Ambassador Jacobson and his new counter part should check this out. I was just sent this today. No Canadian Grandma’s eh?
http://we-are-not-a-myth.tumblr.com/
Love it, atticus.
I may be way off base, but I recently made this comment:
I look forward to being proven wrong by Mr. Jacobson or Richard M. Sanders who has assumed the position of Chargé d’Affaires ad Interim at the U.S. Embassy in Ottawa, Canada, on July 25, 2013 — or Mr. Heyman if he’s still in the running or there yet. Just who is now US ambassoradoring in Canada? http://canada.usembassy.gov/ambassador.html, http://www2.macleans.ca/2013/06/20/exit-interview-with-u-s-ambassador-david-jacobson/
http://we-are-not-a-myth.tumblr.com/ Joined tumblr and added my “Canadian content” as those in Canada do not seem to be aware that Canadian impact isn’t a myth either. NikonAnimal is the handle that I’m using on Tumblr.
@Animal I copied your photo.
I love all the variety in the tumblr photos. Keep ’em coming!
I was going to include a middle-finger to the IRS, but thought that “might be a bit much”. 🙂
@Animal
love the picture and I put it on my facebook for all to see this website.
@All
I have to point out to you all that I have just become aware that there are some Americans out there who believe that FATCA is about Homelander Americans having overseas accounts like Romney. And this was told to me by a very informed and intelligent world traveled American. I told her about my situation and my friends situations. she wrote: “As I understand it, FATCA would NOT apply to people like your friend. It applies to US income that is sent to an offshore account, so Mitt Romney might have a problem”
I tried to explain to her that it involves Americans who live abroad, some for decades. her reply
“I don’t think so. This is straight from the FATCA home page: FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts. This is from KPMG: The
fundamental objective of FATCA is to identify those U.S.
persons who may be evading tax through the use of offshore
investment vehicles. This is from Deloitte: Who is impacted by FATCA?
Any entity making a payment of U.S. source income must consider whether it is subject to FATCA.”
I told her that my own Canadian accounts are considered foreign. . This shows that people really do not understand FATCA.
NorthernStar: You may want to send your friend copies of FATCA: Simple Premise Gone Terribly Wrong, FATCA: Losing Its Way and FATCA: We Are Not Myths, as well as the BBC and Financial Post articles.
@NorthernStar: Send her this: http://waysandmeans.house.gov/uploadedfiles/patricia_anderson_daddario.pdf
@northernstar
“I told her that my own Canadian accounts are considered foreign. . This shows that people really do not understand FATCA.”
It’s really because they don’t understand citizenship based taxation, just as most of us didn’t when we lived in the US.
I wonder if Jacobson called Elizabeth May up to say goodbye.
Animal,
Your Tumblr contribution is fantastic just the way it is. I like it lots. Thanks.
Would someone who has clicked on the Globe link kindly share the new poll results here? You have to vote to see the results, and my position does not agree with any of the choices offered. Hence, I do not want to vote.
Thank you.
@ BubbleBustin
I sent the Gone terribly wrong, Can’t get the Losing its way as it is archived. I sent her the We are not Myths. and also the Patrician Anderson ways and means.
Did Ways and Means answer her letter?
I guess someone can write Elizabeth May if Jacobson called or wrote her. We have to keep on them. You guys are so good and on the ball with all the information. This person I am writing to is a journalist but her beat now is Africa
@ northernshrike
I don’t agree with any of the choices either but I voted to see the numbers which are currently 5%, 9%, 41% and 45% with only 22 total votes. Now I think I’ve skewed the percentages.
http://www.theglobeandmail.com/globe-investor/personal-finance/vote-are-you-worried-about-the-us-tax-crackdown/article2174507/
Thank you, Em.
Yes, unfortunately the poll does not have “I am renouncing / have renounced my US citizenship” as one of the choices. How did they miss that one?
Citizenship based taxation is a curse, really, not just for US citizens but for the US government itself in trying to enforce it. Why do you think they pretty much ignored it for so many decades? It took FATCA being passed to bring the ugly beast into the light of day. I believe that FATCA was aimed at US residents, but now that it’s smoking expats out, they have to be dealt with us. That means that the IRS has to make sure we don’t get away with anything, to hold us to the same standard as the most heinous tax cheat, because you know you wouldn’t want someone who’s moved abroad to evade US taxes get away with it would you? Especially to Canada where you can be pretty much be assured of NOT having to pay US taxes! Or to have moved to Canada to speculate on the real estate market in the hopes that you might 40 or so years later get away with not paying capital gains taxes only owed because of changes in US tax legislation made after you left. What a diabolical tax evasion plan – move to another country where you will pay higher taxes and then pay thousands of dollars to use the provisions of that country’s bilateral tax agreement to evade paying US taxes!
Excellent chart posted at Allison Christian’s blog – the cost of a US Ambassadorship:
http://taxpol.blogspot.ca/2013/09/how-to-buy-us-ambassadorship-and-how.html
Sunday, September 29, 2013
‘How to Buy a US Ambassadorship, and How Much to Pay’
“The recent news about the newly appointed US ambassador to Canada, Bruce Heyman–described as “A veteran Goldman Sachs & Co. executive and major fundraiser” for President Obama–reminded me of a paper I read some time ago in which the authors showed that ambassadorships are bought by contributing to the political coffers of the winning presidential candidate…”…
See specific references to Bruce Heyman, new US ambassador to Canada, successor to ‘We’re not out to get Canadian Grannies’-Jacobson.
@shunrata,
At the time of that poll, almost none of us here had done that except for Petros and a few others. Most of us were still in complete shock!
I asked a genealogist hobbyist to determine, as possible, the number of USCs who had died in Switzerland in the past year. She took another approach which was to determine the number of people born in the US who had died in two cantons (states) in the past 12 months AND whose estate was listed in the canton’s official gazette with a “search for heirs” notice. There were 3 (!) USCs (or possibly ex-USCs) of the total of 42.
She then looked more closely at two of the decedents:
Decedent 1: Born in 1925 to two Swiss immigrants to the US. The father died when she was 4 and, based on no listing of the mom and child after 1929 in US census or other US records, she assumed that the mom and child returned to Switzerland in 1929/ 1930 after her husband’s death, i.e., highly likely that the child grew up in Switzerland. (The mom died in Switzerland in the 1960s and the daughter died in a senior citizens’ home in Switzerland in 2013).
Decedent 2: Born in 1923 to non-immigrants in the US, she married a Swiss at some point (not determined when), obtained Swiss citizenship and died in a senior citizens’ home in Switzerland in 2013.
Decedent 3: Born in 1962 in the US. Resident of Switzerland and USC only, according to legal notice. Did not review further.
Comments:
1) First, it would be incorrect to extrapolate that 7.1% (3/42) of people dying in Switzerland were born in the US. The “call for heirs” lists contain a high percentage of foreign-born residents of Switzerland since their family tree, maintained by their Swiss community or canton, may be sufficiently incomplete to determine “legal heirs”, i.e., heirs not necessarily named in the will.
2) Nonetheless, this quick review indicates that there are possible USCs who might be thrown under the bus at an old age when banks identify that they were born in the US and report them under FATCA.
3) It is unknown whether the US Embassy, US Citizen Services area, in Berne is wheel-chair accessible to enable elderly USCs to renounce.
4) It is unknown whether US Embassy personnel would visit a senior citizen at home or an institution to allow them to renounce, assuming that the elderly person is judged to be mentally competent.
5) Contrary to ex-Ambassador Jacobson’s statement, it can be expected that elderly USCs will be caught in the crossfire and will be put through hell by the IRS.
6) Shame on the USG!
@ innocente
I believe some senior Canadian citizens became aware of their US status and FATCA connection from the recent CBC radio Currents broadcast in November. I imagine once the banks start asking and exposing USPs, many of them and their families will be in for a shock
To find out you have potential tax liabilities to a country other than the one where you’ve accumulated a life time of savings will be catastrophic for many. This is nothing short of a disaster for many families.
@All
I know that a lot of people up my way in rural Ontario are going to be in for a shock. I have been shunned for trying to bring it out.THere are many USPs up here. I thought I would put in the ad of FACTA sheet. but not going to. It would bring the wrath onto me. When FATCA is settled I will be moving on to more friendly pastures.