If you look on Tax Analysts there is currently a pay walled article with this title under the Today’s News/International Tab. It is no joke.
If this is what I think it is it means WAR.
See also Jack Townsend, IRS CI Is Looking at Renunciations of Citizenship Just in Case (3/1/13)
So they are basically saying… for US Persons.. Damned if do… damned if u don’t?
If a person has no clue about this law… gets a letter or a kicked in door (I am just kidding… I am paranoid… but not that much yet) or end up on the *List* via the bank… u are guilty even though u had no clue u were breaking the law? Again I say…. this is fair… how? This is the main reason people are scared out of their minds… This fricking hammer approach & our own gov’t just tosses us under the bus… Doh… u know… this is not our business… yet u make it easier for them to pursue us by *helping* them without understanding it all. That’s right… have another sip of the american kool-aid
@yomama:
“i think it’s the the govt trying to lock the fire exits and scare everyone from escaping.”
My thoughts exactly. They know expressly prohibiting expatriations would be a legal quagmire, so what better way to stanch the bleeding than put the implied threat of an IRS investigation on all potential expats.
Twenty-five years after the fall of the USSR, and the USSA is erecting its very own Iron Curtain.
@yomama: “ya think Russia’s going to be signing on to FATCA anytime soon?”
IBS has been following US-Russia FATCA news at this recent thread (and in other prior threads):
http://isaacbrocksociety.ca/2014/01/07/why-russias-oligarchy-supports-fatca/#comments
According to Banki.ru on Feb 26, 2014, US and Russian negotiators reached a draft IGA and it is now waiting for approval by the Kremlin (and possibly Russian parliament):
http://www.banki.ru/news/engnews/?id=6264506
Comments:
1) There has been an apparent tug-of-war between the Russian Finance Ministry and Foreign Ministry, with Finance being more pro-FATCA and the Foreign Ministry against FATCA. Reports from the Finance Ministry should not necessarily be considered to be the view of the Russian government.
2) Russia is still a superpower and, unlike weaker and “friendly” countries, will not be coerced into signing an IGA unless it also benefits Russia. This would mean full reciprocity, which the US negotiating team cannot agree to.
@Don… Thanks for posting that Citizenship Warning video. I had seen it previously, but good reminder. I guess it will have to be updated now that the FBAR form is changing!
@innocente good analysis. for my money (perhaps literally), I think given the week’s events, not a chance in hell Russia will capitulate like the cowardly Canadians.
Forward Soviet!!
It could be a good thing for them to try to determine if FATCA is causing a rise in renunciations. We know it is. However, doing it this way won’t get them the information they are seeking. People aren’t going to enter as their reason for renouncing “FATCA” It wouldn’t be a valid acceptable thing to write on your application. They also aren’t going to write “My spouse isn’t going to go along with FATCA” that could mean someone else pushing you to renounce. They also aren’t going to write “My family can’t afford FATCA rules”
They are taking other citizenships and claiming themselves primarily of that citizenship. Before they do an investigation they need to know how to ask the right questions.
In one way I”m glad they are concerned about this and in another I hope they are looking for the right things. FATCA is mostly data collection. It’s not going to collect very much in taxes owed for the vast majority of those renouncing. It’s curious they don’t seem to realize how complicated something like that is if you have foreign family thrown into the mix, how complicated it is for people who didn’t even realize they were “American” or beholden to American requirements due to not having lived there for decades.
Perhaps they could see that the majority of these renunciants are not the uber wealthy. Perhaps they could see that many of them could not bank where they live over FATCA. People have been trying to say that for two years. Accounts are being closed. Spouses DO come into the mix if they object to sharing their “data” and especially if the foreign person makes ALL the income.
I still don’t see how they can’t just amend FATCA to not include long term expats with no U.S. holdings. Or why they can’t redefine “off shore” to mean an account you hold where you do not live. It’ quite simple and it would still catch those tax cheats this whole thing was implemented for in the first place. Renunciations would drop like a rock because the main objection to FATCA is the fall out and unintended consequences for those who do not live in the United States at all.
Thanks for this `RIGHT-ON`comment, atticus.
For one thing, we cannot answer the way we would want because of what we are warned by US tax lawyers not to say because of the “Reed Amendment”. It, then, seems designed to get the “politically correct” and not true answers, which the US will further use against us in their MYTHS.
atticus is right on, but i think there are more sinister motives for the IRS CI to be looking.
my guess is they go after someone famous like Tina Turner or the Facebook guy. of course these two did nothing wrong but they will find something anyway so they can make a bunch of news and scare everyone. that’s how they roll.
Just like with Ike, Tina could be in for some serious bitch-slapping and anal-rapin’ from Barry O. (“C’mon sista, give me some mo’ of your money. i need you baby.”)
Ditto on Russia and FATCA:Putin Adviser Urges Dumping US Bonds In Reaction to Sanctions
http://en.ria.ru/business/20140304/188081405/Putin-Adviser-Urges-Dumping-US-Bonds-In-Reaction-to-Sanctions.html
Well, maybe they’ll look and retort “Not one of these people sited FATCA as their reason to renounce”
Of course that is a very cynical way to look at their actions. They’ve had hundreds upon hundreds of submissions to House Ways and Means about these problems. Nina Olsen has already told them in 2011 that some of these issues are so onerous and complicated that people will end up having to give up their citizenship. There’s no need for an investigation. The proof is already there.
I’m still perplexed though given that we know FATCA is mostly about data collection, not taxes and that there are these consequences for those who do not live in the U.S. at all and who do not owe any taxes, why the stubborn insistence to not amend in any way? What possible harm could come from doing the right thing?
I don’t think anyone here would have any objection to FATCA or what the U.S. stated goal is if the response to the problems clearly pointed out by ACA and Nina Olsen had been addressed apporpriately. It really doesn’t look good to keep attacking your expats who have been formerly supportive of you. The backlash over FATCA is mostly about the lack of an appropriate and reasonable response to the collateral damages. Why not just respond to those, admit there are some problems, amend and move forward. It seems so simple and yet the U.S. keeps on insisting on investigations into matters that are not clear as to why they are need to investigate. If I thought they were investigating to clear up the problems I’d be happy about that.
atticus–you are right, but i am not cynical at all. think about it: of all the various departments at the IRS and Treasury that can look into the reasons for renunciations, why use CI? if they want to do a research project, there are so many other departments at Treasury that could do it. They are using CI to scare you.
@Atticus. I do have a problem with FATCA even if the US adopts RBT and smooths out the renunciation wrinkles. The concept of Governments getting too much information about people all over the world is just not right. As has been said before, Hitler would have loved to have the information on all the banking arrangements of the Jews in the years leading up to WWII. Governments cannot be trusted NOT to persecute individuals or classes or categories of people … consider the Christians in Egypt presently. People need the ability to plan for escape from persecution. No one can know when persecution might commence in a given place … vide Ukraine last week … do you think that non Russian ethnic people are safe in the Crimea this week? People need privacy. Governments need to be transparent.
@Yomama and @Atticus, I would like to think they’re Houghton investigate in order to help solve our problems but am not optimistic. In fact, I wouldn’t even put it past CI to also go after a few poorer renunciants just to put the fear of God into Expats. I have said before that there is a particularly American view of citizenship as allegiance and to choose to renounce is viewed by many as apostasy. I am afraid they could be out for blood. I wouldn’t be at all surprised if we don’t hear about some really nasty audits (inquisitions) within the next two or three years, especially once they start getting all the FATCA data reported to them….
I suspect they’ll focus on wealthy covered expats but also a small number of expats worth far less who failed to certify five years full tax compliance, etc. God, I hope I’m wrong and that Atticus is right, especially as Nina Olson has expressed dismay about our plight.
Relocate Magazine: “Goodbye Uncle Sam “
@Just Me
“Maybe renouncing because of FATCA is a crime now?”
First they’d have to admit that people are renouncing due to FATCA. IRSCompliantForever made a good point. If FATCA is forcing us to renounce, then we are renouncing under duress created by Congress and therefore not eligible to renounce US citizenship. That would be a good way to keep us on the plantation.
“The IRS Criminal Investigation division is looking into the reasons behind some recent renunciations of U.S. citizenship, according to Jeffrey Cooper, the deputy director of the division’s international operations.”
“Speaking at the Federal Bar Association’s Section on Taxation meeting in Washington on February 28, Cooper said that the IRS’s objective is to determine why people are making that choice and whether it is related to any particular laws.”
Duh? Related to any particular laws? FATCA, FuBAR, CBT, Exit Tax, Reed Amend etc. You name it, they all suck, you dumbfuck.
It doesn’t take a rocket scientist to figure out that the more laws made for screwing expats, the more expats will be burning their passports.
@Joe Blow, exactly. They don’t need to waste time and money on this. Simply read the reports from ACA, look at various newspaper articles relating to FATCA and they’ll have the answer in no time.
Here IRS CI, save your self the cost of investigation, and just read open source media..
Americans abroad find citizenship too taxing to keep
The USA Today article was picked up by http://xrepublic.tv/node/7819 too. Drip, drip, drip — the message is getting out there. The dirty little secret of CBT is being revealed.
@Em – do look at the tags near the bottom of that web page http://xrepublic.tv/node/7819 :
Category:
Dictatorship
Laws & Rights
@ nervousinvestor
I hadn’t spotted that. After I posted my comment I thought it might be too strong for American sensitivities but later I thought, what the heck, maybe it’s time to do some bubble bustin’. Americans are not the biggest problem. Increasing numbers of them are currently being forced to focus on simply surviving. However, I do fault them for their empty entertainment addiction and general lack of curiosity. (Canadians too, for that matter.) IMHO, the biggest problem is that a corporate dictatorship fungus (aka fascism) has managed to sprout, virtually unobserved and unchallenged, beneath the American Eagle’s wings and this keeps it from soaring to the heights it once seemed destined to reach.
Then:
…”….MR. SEEGER: I am not going to answer any questions as to my association, my philosophical or religious beliefs or my political beliefs, or how I voted in any election, or any of these private affairs. I think these are very improper questions for any American to be asked, especially under such compulsion as this. I would be very glad to tell you my life if you want to hear of it…….” http://www.mediaite.com/online/heres-the-amazing-transcript-of-pete-seeger-pissing-off-the-house-un-american-activities-committee/
Now:
IRS Criminal Investigation Unit to Expat:
Are you or have you ever been a US taxable person/citizen/serf? Are you currently a US citizen/serf?
If no, why or why not? Provide details and rationale.
Each answer we deem insufficiently fulsome and cooperative is worth > 100% penalty based on the highest balance of all of your non-US accounts on any one day in your life. Even in the absence of any US tax assessed or any US taxable status.
I saw this comment on line today and it’s the primary reason I feel FATCA is a losing battle and renouncing/relinquishing is the only viable option. Ignorance of this magnitude really burns me up, but we don’t seem to have anyone on our side but ourselves.
“FATCA is a godsend.
Given the epidemic of tax evasion that has swept across the globe, this law is just what the doctor ordered. It’s important to only give the great benefits of citizenship in the United States to people who are paying taxes here. If you doubt the problem of offshore tax evasion, I point you to Nicholas Shaxton’s awesome book: “Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens”.
You and people like you are whining because the sweet having-your-cake-and-eating-it-too deal you’ve had is going away. You and others like you have only yourselves to blame. By your greed and desire to benefit from US Citizenship without paying for it, you’ve brought this upon yourself.”
@pukekonz,
So sick of hearing about those mythical ‘benefits’.
That tired and threadbare old canard – as in;
“………..”the principle was declared that the government, by its very nature, benefits the citizen and his property wherever found, and therefore has the power to make the benefit complete. ………..”
Cook v. Tait – 265 U.S. 47 (1924)
http://supreme.justia.com/cases/federal/us/265/47/case.html
Seems an absurd rationalization to me, but apparently it works for those with a vested interest to just repeat ad nauseam. And the power to forcefeed it to us.
Funny, though I haven’t noticed any ‘benefit’ deficit since my expatriation. Quite the opposite.