44 thoughts on “‘US persons’ living outside USA are ALL a bunch of Rich Tax Evaders, regardless what Nina says!”

1. They posted my comment then they took it away!

   “There’s so much about this article that annoys me. First of all, the headline should be “IRS top cops says the agency is too hard on benign actors”. The point is, if these people being affected by these policies were guilty of tax evasion, they would deserve this kind of treatment. The US is the only nation in the world (except tinpot Eritrea) tax their citizens this way, and because the US has been so poor at it’s educational outreach program, no reasonable person could have imagined a civilized country taxing its people this way. It’s nothing less than slavery based on citizenship.

   Second of all, the people that have entered these programs are now (now that the IRS has realized its folly) opting out of the draconian penalty structured OVD programs and now having penalties abated, making the estimates of how much revenue the IRS has taken in by these programs so far a bit fudgy.

   Thirdly, the estimated 7 million US citizens living abroad is just a guess, as there’s never been a census taken. To say that every man, woman or child who’s a US citizen who make up this estimate should be filing an FBAR is ridiculous. You need $10K in your bank accounts to have to file an FBAR, and many US persons who live abroad would not meet this threshold.

   Here’s what’s really pathetic. Under their programs, the IRS offers a reduced penalty for those who didn’t know they were US citizens.

   I moved to Canada at 12 and when I found out about the US’s requirement to file US taxes, I did not attempt to “fly under the radar”. Instead, I paid a significant part of my retirement savings on tax owed to the US government on the sale of my home in Canada that I’d sold 3 years before learning about my tax filing obligations.

   I hope Americans in the US enjoy the infrastructure I helped pay for, but don’t myself enjoy! Don’t bother wasting my time pitching me on the benefits of US citizenship, I don’t want to embarrass you with my response.

   Renunciations are in record numbers, expect them to rise when America’s dirty secret – Citizenship Based Taxation – becomes more widely known. This is the end of American global migration.”

2. @Bubblebustin,

   Perhaps try again? I was pretty bitchy in my comment, and it is there.

3. Mine’s pretty bitchy too. I’ll put it here in case my comment, too, gets erased. I’m so glad I am CANADIAN!

   calgary411
   • 10 minutes ago

   With the likes of most persons commenting here, thank god I have now officially renounced the US citizenship I was warned by the US Consulate that I would be losing when I chose to become a Canadian citizen in 1975. My children were born and raised in Canada; the US says they acquired US citizens from the moment they were born in Canada because I am their mom. My daughter has renounced. My son, however, has a developmental disability and the US will not let him renounce his automatically acquired US citizenship, never registered with the US, as he does not have the ‘mental capacity’ to understand the concept of citizenship or the consequences of renouncing that citizenship. Your US law is also that a parent, a guardian or a trustee cannot renounce on behalf of such a family member, even with a court order. My son is, therefore, ENTRAPPED into a US citizenship he had no choice in. There is no way he will ever live in the US because his family and his support are in Canada, the country of his birth, and where he gets better disability benefits and healthcare than he would ever have in the US. What is his “fair share” in US taxes and penalties for never having filed a Foreign Bank Account Report or tax return for which there would be no taxed owed? Wouldn’t a person with parents that entitle him US citizenship be better to have an “opt-in” to that citizenship rather than an “opt-out”? As you can see, an “opt-out” will entrap many of the most vulnerable into the cost of having someone else prepare their US tax paperwork for them year after year after year after year, for no actual tax owed. Sounds like an IRS Ponzi scheme to me and a damn immoral one!

   I would like my son to either have a way out of the absurdity of having a US citizenship never asked for or have the US change to residence-based taxation as the rest of the world (except little Eritrea).

   Your tax evaders will be found residing within your own US borders and sending their untaxed monies offshore. The US can be proud of their more collateral damage of US tax law to many families that have chosen to live and be citizens of countries other than the US. The financial accounts we hold in our countries are not foreign — they are accounts we have in the countries we live to pay for groceries, a roof over our heads, our children’s education, our saving for retirement.

   The US is proving itself the bully of the world. There will be little benefit from us to pay down your debt. Go after your own residents using your own tax havens in states like Delaware, Nevada and, yes, even little South Dakota. What hypocrisy; what entitlement!

4. Great comment, WhiteKat. You too, bubblebustin. (Too bad it got blocked somehow.) I don’t Disqus unless they offer a guest post but this is what I would have added to yours …

   For those who cling to the misconception that all Americans who live “overseas” are rich tax cheats I would kindly suggest you try to understand the difference between citizenship-based taxation (bad system, unique to the USA and Eritrea) and residence-based taxation (good system, the international norm). Start by googling a youtube video made by ACA (American Citizens Abroad) with the title “RBT Residence-Based Taxation”. I wonder how Americans living in the USA with a citizenship connection but absolutely no financial connection to China would feel if the taxation table was turned them by the Chinese adopting the same insane tax system as the USA is using. How would it feel to have your retirement savings, entirely earned in the USA, transferred to the Chinese treasury?

5. @ calgary411
   Your comment is there and collecting up arrows already (one’s mine). Good one!

6. Thanks, Em. Don’t worry, I’ll get my comment in there, if I have to do it in sections. I’d offer to post yours, but it might get removed.

7. @ bubblebustin — Go ahead. If it’s removed it wouldn’t be the first time. (And nuts, I left out “on” in “taxation table was turned on them”.) BTW, I don’t think yours is too bitchy at all. Maybe a moderator bot mistook your “pitching” for “bitching”.

   I decided to look at the ACA video again myself and there’s a good conversation in the comments from 3 months ago between Robin and Joe which brings to light a lot of the problems of CBT and FATCA. It’s actually a good addition to the video.

8. Looked again and part of your comment is there, bubblebustin. In a reply to WhiteKat.

9. The Brockskeeters are buzzing around the IRS Top Cop article so fast I can hardly get my up arrows out of the sheath fast enough to keep up. Well done everyone!

10. @Em

    I posted yours 🙂

11. We haven’t had a good swarming for awhile.

12. Oh it’s C.N.N. lol. Their reporting is horrible and the comment section is laughable. I’m sorry but, people who read and comment there on a regular basis have zero understanding of this issue and many, many other issues as well. They do not get it, don’t want to get it. I commented but, I’m not going to hold my breath till I turn blue trying to educate them. They are special, they don’t HAVE to understand the issues and simply want to give knee jerk responses. The headline alone is extremely misleading as that is not what Ms. Olsen was complaining about at all.

13. A friend of mine from Canada spends 50 days per year in Florida living in a trailer park community. While not there he rents out his trailer home and deposits the rent in US dollars in a US bank account in Florida. He is a Canadian citizen. He files no US tax forms. Is he or will he be considered a US person? Should he be filing?

14. @Joe Zinga

    I believe the answers are: no, and yes. 50 days/year does not (and cannot?) pass the substantial presence test. But the rental income is US source and worst case (check the tax treaty here) is 30% US tax on gross receipts with no allowance for maintenance or repairs. Also FIRPTA on capital gains, if any, when the home is sold. A decent rule of thumb is that NRAs should only hold US real property through holdcos or not at all (again, check the treaty).

15. Lynnley Browning is a Democratic party hack and has been serving as the mouthpiece for DOJ’s campaign against the Swiss banks.

    Ms. Browning is guilty of “willful blindness” of the persecution of Americans living outside the homeland.

    Great comments from Brockers! She will eventually feel enough pressure and at some point be compelled to report the story correctly.

16. HA! I did some testing and I think I know why my comment was rejected. It was because I wrote: First of all, the headline should be “IRS top cops says the agency is too hard on benign actors”.

    They didn’t like me altering the headline.

17. bubblebustin and Em, LOL. And, thanks for up arrows and every Brocker comment.

    I’m going back to have another look at the comments with the ACA video.

18. @Joe Zinga
    I believe no, and no. He is not a US person (US citizen, US resident, non-US resident). Let’s say that my father, who is German, buys a house in the USA, and rents it. His income (rent) is as non-US nonresident income not taxable in the USA (maybe in Germany, I don’t know).

19. Regarding CNN and comments:
    Most of all people there don’t belong to the society with higher IQ. Don’t even bother with them. They have no clue about Americans living abroad and immigrants, and their mental capacity doesn’t allow them to think broader.

20. @Sarah,

    Unfortunately, even higher IQ people have made similar comments to other FATCA related articles over the last few years. FATCA in combination with CBT has cleverly been disguised to fool the masses regardless of individual IQs.

    If we had ignored such articles, and the imbecile comments over the last few years, we would have been contributing to the ongoing deception. It is our job not to ignore, but to set the record straight, so that those who read and comment have a chance to decipher the truth. Of course, there will always be die-hards who refuse to see beyond the nose at the end of their face, but we still have to try. We can’t make exceptions just because the article is from CNN, or we think we are smarter than most of the readers.

    Part of the reason the tide is changing is because there has been an obsessed team of Brockers and Sandboxers who have diligently crafted intelligent counter-responses to sloppy journalism, and the rampant, uneducated comments we’ve consistently seen to media reports from many sources, since FATCA raised its ugly head.

    Good job everyone! The mosquitoes are relentless, and their efforts are paying off!

21. @Sarah, Joe Zinga

    http://www.irs.gov/publications/p519/ch02.html

    “A nonresident alien usually is subject to U.S. income tax only on U.S. source income.
    …
    Your U.S. source income includes rent and royalty income received during the tax year from property located in the United States or from any interest in that property.”

22. @Watcher and Sarah. I thank you both for your comments. It would seem that NRAs are subject to tax on US earned income without deductions at a rate of 30%.

23. An NY attorney on Linkedin, had this response to the article…

    Richard LeVine, Counsel at Withers Bergman LLP

    As I predicted, as FATCA approaches we are starting to see pushback from foreign investors. Only anecdotal so far, but as more US clients become aware of FATCA, and try to explain the requirements to joint venture partners outside the US, the foreigners have reconsidered US investments. Usually we can arrange for the investment vehicle to qualify as a passive NFFE, so that the foreign entity does not have to register with the IRS. But going forward there is going to be tension as more US asset managers realize their funding source is technically a FFI, and struggle with the consequences when the funding source refuses to register for a GIIN.

    Some may think the big problem is draconian FBAR penalties. And they are a problem. But most of these cases involve 7 figure amounts or less. When you start talking institutional investment and 9 or 10 figure deals, and the IRS gets in the way of distributing the profits to the foreign investor, the manure is going to impact the rotating ventilator.

24. @Joe Zinga, U.S. law provides foreign investors the option of timely filing U.S. tax returns and electing “net basis” taxation at regular tax rates up to 39.6% and alternative minimum tax (AMT) rates up to 28%. Once the election is made, it can only be revoked for subsequent years with IRS consent, and the election applies to all of the investor’s U.S. real property rentals. In addition to “ordinary and necessary” expenses (such as mortgage interest, property tax, insurance, repairs and management fees), allowable tax deductions include straight-line depreciation computed over 27.5 years for residential property and 39 years for commercial property. The new treaty provides that making the election is subject to the procedures of U.S. domestic tax law… The Switzerland-U.S. income tax treaty overrides Swiss domestic law with the result that U.S. real estate rental income is exempt from Swiss income tax.
    http://www.itaxcpa.com/swiss_treaty_usre.htm

    Having US property does not make one a “US person” and thus doesn’t cause local banking issues.

25. @ WhiteKat
    Up arrow to that! And here’s the tough part. Not only do we have to keep at it, we may have to double our efforts because this battle is far from over. I am so tired of waiting for the FATCA anvil to fall (Wile E. Coyote and The Road Runner style) and yet still hoping Flaherty will lift his mighty Hand of Finance and push it away.