It seems a convergence is about to transpire; the IGA will soon pass, FATCA is 10 days away and the IRS’ recent “easing-up” on penalties. I started wondering just how much of that “easing-up” has to do with our efforts, and what a great PR move the IRS just made, etc. Will it really make a difference and so on…..
I think now is a good time for all of us to sit back, take a breath and look at where we were, where we are, and where we would like to be moving towards. I am particularly interested in the less-than-obvious observations Brockers and Sandboxers have about what has contributed to any one of those stages.
Someone at the IRS just made a brilliant move. As if it hasn’t been hard enough to get everyone to listen, i.e., friends, families, media, CDN govt, IRS and the Congress, it will now become a lot harder. Imagine how many times we are going to hear “What are you complaining about, no penalties to be afraid of, etc etc. Not much progress seems to have been made in putting a dent in the misconception that Americans abroad are not the same as Homelanders stashing money in tax havens. In spite of the enormous amount of time Brockers and Sandboxers have put into responding to endless articles and putting up with endless abuse from those who either do not know how to read or cannot think outside the cliché box or else just enjoy being unkind.
What about all the time and energy put into researching, trying to get questions answered without the bias of the compliance industry, govt etc. I was recently cautioned/reminded about the fact that no one should advise anyone to break the law. I still do not see anyone here doing that; we are looking at what options are there and sharing that information. Back to Expat Forum days, Ladyhawk’s amazing post Why I Will Not Renounce”. The “mass” renunciation meeting in October 2011. The horror of seeing OVDP morph into OVDI; Shulman’s refusal to acknowledge Nina Olson’s TAD. Actually renouncing. Watching Mona Lisa do a complete 180 turn as the reality of this miserable mess forced her to do what she absolutely felt was wrong for her to do……..
So much effort and participation…the protests, the Information Sessions, the We Are Not a Myth Campaign, appearances in front of FINA, the list goes on and on. I find this aspect to be truly inspiring and amazing, that we have managed to come together and hopefully, have made a difference.
I guess what I am saying/asking is:
What moments/events are the most memorable for you?
Which ones have made you the most angry?
Which have given you hope?
Do you think we have played a part in the change of IRS’ direction?
Do you think we have been able to help people?
What kind of direction should we be looking at?
and whatever other questions come up………….
Of course we will continue with the Charter Challenge. Of course we will continue to argue that Accidentals should not have to waste money to become compliant so that they can renounce. And that CBT needs to be abolished. I just wonder how all of you may be feeling/thinking before the next wave hits.
The problem is: A) I’m still angry. There is no one moment that did it for me; it’s a collection of events that has driven me to the point of incandescent rage and hatred against the United States.
B) They said no penalties but that was only for the late filing penalties. They did not say anything about alleviating the FBAR penalties which we may still be on the hook for.
C) I still think that the only hope is that Senate and Congress will come to their senses and instittute RBT, but that’s about as much hope as an ice cube has sitting in hell.
D) I think a lot of adverse press (coming from Isaac Brock as well as some receptive news blogs have helped. Whether it will continue to persist. This is only one small victory in a war that we haven’t completely won yet.
E) I think that IBS has been able to give hope to most of us because of the fact that we’ve been bound together as a group and as a kind of a “family” of sorts against the United States and what sort of injustices they would perpetrate on us.
As I said before. This is an economic war that the United States is waging against us. And we need to keep fighting lest the opponents think that we have caved in.
Can someone explain the “Mona Lisa” reference please? Thanks.
We must stay the course. Nothing has changed for expats. C.B.T. still is a violation of our human rights and a clear case of America interfering in the internal affairs of a sovereign nation. If we were to stop then we would be saying that our opposition has been all about the money and not about principle. We would have confirmed to the cynical Congress that everyone has his/her price.
There is no way to put a kind face on abuse and no one, not even the government, has a right to abuse anyone. We cannot accept the proposition that there is a difference between what is moral and what is legal. The law must be grounded in morality. There is nothing morally correct about citizenship based taxation and it is illegal because it contravenes the legal basis of taxation itself.
No one should be deceived by the U.S. propaganda campaign. They haven’t all the sudden found religion. What they fear is that their hallowed right to extraterritorial taxation may finally actually be seriously questioned by the world and rejected. The success of the Charter challenge will be the international death knell of C.B.T.
Tricia said: “Someone at the IRS just made a brilliant move.”
From what we’ve seen of the IRS with other scandals, they don’t make brilliant moves. They make defensive moves. This latest news that the IRS will not impose huge penalties for non-willful non-compliance may be designed as a defense to the Jim Bopp lawsuit in the US. If the penalties are unconstitutional then it’s not a brilliant move by the IRS to offer to not apply them against some benign actors. The penalties should not apply to ANYONE because they are unconstitutional. The rich people who paid through the nose through the OVDP should get most of their money back.
Anyone who thinks the IRS has an ounce of humanity in them does not know what we know. The whole thing is a trap for the unsuspecting accidental Americans. They will decide whose non-compliance is willful and whose is non-willful. I’ll bet if you have any kind of net worth they will decide it is willful. If you’re broke, they’ll decide it’s non-willful.
If the US Supreme Court rules that the penalties are unconstitutional and most of us in Canada would not owe any taxes in the US because of our high tax rates then their threats become pointless.
However, I believe that we definitely should move forward with our Charter Challenge. If Jim Bopp wins in the US it can only help us win our case.
Whenever the IRS seems to make a concession, we should take it as proof that they are going to lose a court challenge and keep moving forward until our enemy is destroyed.
@recalcitrantexpat,
RBT is not enough. I think this view that it solves all the problems is going to bite people.
We want to be able to fundamentally do the following:
1) Go work in another country and keep the retirement savings we have.
2) Stay in another country if they allow us forever.
3) Draw down foreign pensions in a reasonable way
4) Chose to go to another country or back to the original one
5) Use the retirement savings we have built up back in our home country if we like
For this we need I think:
1) No CBT
2) Reasonable tax treaties that include the accounts we have. 529 and HSA protected in other countries Americans may go to for example. UK ISA etc protected in the US.
3) No unreasonable foreign account taxation like PFIC
4) No unreasonable informational filling burden or informational penalties. If it smells wrong like 3520 penalties then it is wrong.
I am patiently waiting to vote out the perps!
@omgheestillanamerican
**The rich people who paid through the nose through the OVDP…**
U are falling into the same trap as the homelanders… people who were in OVDP were trying to do the right thing… but they were not all rich… some were wealthy & criminals but they are the face they put out there… not the poor to middle class caught in this trap… Immigrants will be slammed hard because after tax money was sent home to save or support… who knew that was a not allowed… And looked at the ages… I am sure they are from war torn countries just like my elder generations who put money all over because they had to leave their homelands with nothing & they don’t trust the gov’t… just like myself now… who use to make fun of them…. No matter how u dress this up… this change is another bait & switch… instead of them tracking u down… u give yourself up & hand them the knife with the lure… come on out… no biggie… watch… rules will change mid stream again
@US_Person_Foreigner, you’re right, my mistake. Lots of poor and middle class people paid higher penalties relative to the amount of tax they owed than the rich did. The IRS screwed Joe Average worse than the millionaires. They clearly have no conscience. You’re absolutely right once you give them your information they will change the rules and try to squeeze every last dollar out of you whether you are rich or poor.
People living outside the US should avoid the temptation to become compliant just so they can renounce. It’s a trap. Once they have your information you won’t be free of them until you’re bankrupt. Hell they might even ignore your bankruptcy filing because you live in another country and say that you still owe them money.
I really feel sorry for the immigrants who live in the US and are promised a 5% penalty for non-willful non-compliance. I’ll bet they’ll get screwed the worst since they can’t hide behind another country’s borders. I hope Jim Bopp wins to save these poor souls their last dollars. I wonder how many immigrants have just decided to pack up and go back home because they had no idea coming to America meant getting fleeced by their new government.
@Neill
Mona Lisa never intended to renounce. Way back at Expat Forum, she spoke often of how that was unthinkable and impossible for her to do. Slowly over time, she began to change. She paid dearly for complying. She worried so much. It was painful to read how severely this process affected her. I was sort of absent for a while and when returned, she had changed. It would be great to hear her reaction to your question. For me, she represents more than anyone else, how profoundly this mess can completely change a life (in terms of attitude and intent).
What moments/events are the most memorable for you? The horror of discovering the fbar penalty and that I had been betrayed by the country of my birth.
Which ones have made you the most angry? America is a rich country, but resident Americans don’t want to pay for their own government, so they are stealing the money from others. Anger is a rational response.
Which have given you hope? The Brock site!
Do you think we have played a part in the change of IRS’ direction? YES. Governments only respond to pressure and press is the best pressure of all.
Do you think we have been able to help people? YES, YES, YES. No one should go through cancer alone and this affliction has been so much like cancer.
What kind of direction should we be looking at? This battle is not over. The IRS has not been honest in the past and this is not likely to be an honest move either. Remember the bait and switch. Those who trusted the US government in the past by entering OVDI were cheated. Is it wise to trust them now? They have stolen $6.5 billion to date; if they were to return that money to the victims of their scam, then perhaps some level of trust would be restored.
For now, it remains impossible for non-resident Americans to live normal and free lives. That is a violation of the principles upon which America was founded. Until people are free to leave, the country that once symbolized freedom is squarely in the wrong.
@Neill – I agree with you totally.
FATCA is not so different to the tobacco companies selling cancer. It’s a bad thing, but we blur the issue and continue to sell it as a tax evasion issue.
There is one question that must always be on everyone’s mind, does the IRS receive data it’s not entitled too? Always that question.
If the battle ground needs to move to another country whose government will ‘fund’ the discrimination challenge out of public funds than the second strand of this search should begin. It’s been mentioned previously EU countries provide legal aid that may not be available elsewhere.
@Tricia Moon,
Thanks.
Maybe three years ago I realized we should have filed FBAR for our retirement accounts. I thought the FBAR was just for bank accounts and we only had big enough balances in the UK in 2000 as my wife moved here money here. For US money in the UK was a bit of a pain.
I was looking a bit worried and my wife asked me. I new how the IRS operated on tax problems for US income. You just pay the money. Some small penalty and interest and your done. I said to here that ‘The IRS just wants their money. It will be fine.’. What a mistake that was. This is how it is if you make a mistake with some local account but not for anything foreign.
As we went further things just got worse and worse. We found out our retirement accounts where not protected. Then they are subject to PFIC. Then we can’t take the tax losses in 2008. I changed a lot.
@ Neil – Mount an indivdual legal challenge, perhaps Lberty may help, EU courts will have a more open ear to send this issue straight back to Parliament for a proper debate.
I too think the IRS would show more integrity if they returned the money to the people they scammed.
That should be mandatory. And the complexity of the tax code should be revised and be on top of their priority list. I don’t get why this hasn’t been done yet- as a point of crucial importance. Companies are running to make they headquarters abroad so as to not have to repatriate funds- its all a mess. The tax laws in America need to be revised from scratch- there must be some massive lobbying going on to hinder this from happening because it is incomprehensible why nothing has been done along these lines.
I too think that speaking-out and involving the press has pointed out the many many flaws in the system. if anybody had ever felt any of this was fair, there would never have been such an outcry. I do think that the threat of a constitutional challenge in both Canada and USA has clout, because it is obvious that these things are unconstitutional on so many levels. But America has behaved unconstitutionally in many other fields as well and the NSA is one example. Just today I read that the House has voted against mass surveillance something like 260 – 198. It hasn’t been passed into law yet- but people seem to be becoming more and more aware of how far America has strayed from the constitution. They need to do that in all respects which violate this vital document. One would think that this is exactly what the supreme court was there to uphold.
But on a more sinister note- I also read that Wikileaks has divulged information on a trade treaty among 50 countries in the world- and this will include the passing on of financial information. So I`m thinking along the lines that FATCA has a totally different additional purpose – that it is the first step towards financial information swapping on a huge level, and therefore it simply cannot fail for America, or all is lost. Perhaps this is why so many other countries are agreeable.
But all in all I am left very saddened, because expats have been and still are being treated very abusively, all in all. CBT should be considered a crime. Over here in Europe, I have heard of many more still in hiding, or renouncing without paying any back taxes. Many are still adamant about not paying anything to America even with the new regulations. Sometimes I feel so bruised that I just don’t know what to think or feel about it anymore.
On thought to send the message about FATCA how about a campaign of stamping CND banknotes with US FATCA OFF as a PR campaign?
It’s all about money after all.
@Polly,
The tax code is getting much worse. For the Obamacare they enacted Net Investment Income Tax (NIIT). It’s a totally parallel tax like the AMT that sits in it’s own section. The IRS admitted it took them a year to write the guidance (50 pages!). The guidance was only available in December but all US Persons should have been withholding taxes to account for it if they are subject to it in January! In the interview they gave about it the IRS admitted it was rushed and asked practitioners to help them resolve the problems in it!
Obama wants to enact the ‘Fair Share’ tax (name taken directly from Atlas Shrugged) otherwise known as the buffet rule as another parallel tax system. Its a total sham. A tax rate of 30% to address a low dividend tax rate of 15% that’s now 23.8%. There isn’t much money here. We are phasing out 80% of their deductions.
Obama wants to tax municipal bonds. He wants to limit the deductions for retirement accounts to 28% generating a nightmare system where some 401k contributions become after tax to make the system much more complex to track.
Now we are talking. Excellent article:
http://online.wsj.com/articles/offshore-accounts-what-to-do-now-1403303712?tesla=y
@Neill
The link above is behind a pay wall. This one isn’t.
http://online.wsj.com/articles/offshore-accounts-what-to-do-now-1403303712
The fight for justice for Americans abroad must continue.
Like the “peculiar institution” of slavery, its modern version, the “peculiar institution” of citizenship-based taxation, must be brought to an end.
Being a relative “new comer”, with my dreaded enlightenment coming in 2014, all I can say is a heartfelt thank you for all that have come before me. The most memorable moment for me was finding all of you.
Things have really evolved for me in a short time, my anger and terror increase exponentially daily. Without IBS I might be actually more insane than I currently find myself. (Hard to imagine). You have given me direction for placing my energies into fighting rather than just sitting as a helpless victim. In organizing the charter challenge there is hope.
I do believe, since I first landed here and started commenting on articles, there are fewer of the yahoos giving us the party lines of “don’t let the door hit you” blah blah types. Maybe we have changed minds or at least had good enough rebuttals to keep them a bit quieter. Maybe we have changed the minds or enlightened some of the journalists. I do think Mr. Wood at Forbes at least learned a lot from us.
Those of you who have had the courage to tell your stories, giving names and faces to the affected, have done so much to show we are not the FATCATS that everyone assumes we are. So yes, I believe IBS and MS have done much to change the homeland dialogue and thus maybe influenced the IRS to soften a bit to cover their own behinds. (Just makes you feel all warm and fuzzy they are working on better PR for extorting us).
At the end of the day all I can really say is that I am TERRIFIED. With all I have learned and researched I still have no idea as to what path to follow. Thank God I have all of you so I do not feel alone in my terror.
Charl,
Up to now expats have been, and in reality still are, viewed as easy targets. But that’s starting to change.
We need to keep up the good fight. Truth and justice is on our side.
@omgheestillanamerican
Worse will be the elders in the US or not… as I recall u are also from a family of immigrants… my elders in the family split their time in many different countries a yr & they are not considered resident… since they spend less time in each country… never been a problem… pay on what u have in that country as a non-resident… no big deal… with the US doing this bs… its now complicated since family established a life in each country with a home & different investments… Not rich… extreme savers… if its not done correctly… they could lose alot of it… if u are a US person not born in the US… I would just go under the radar… hopefully u have no us taint… they were stupid… in some countries.. they had their mail sent to the states so the kids would know what was going on… biggest flipping mistake they made… never thought it was a big deal… its a frigging mess
Where do we need to be?
1.) We need for Canada (or insert Country) to establish in law that one of its Citizens resident in their mother/home country is recognized by their government as having solely that citizenship, no other citizenship for private or public purposes. Basically, the master nationality rule. This is what the United States practices in its own borders.
2.) Dual Tax Treaties should mean and I actually thought they did, was that when you file a tax return and pay tax in one country, the other country has no claim to you.
3.) The United States needs to make renouncing/relinquishing as pain free as that in Canada, the UK and most of the world. Two page form, small fee, done by post. In the absence of this Canada or INSERT, needs a local law that allows you to renounce with respect to the laws of Canada, just like the Conservative Minister stated you could do in Canada.
Lastly, the era of the expat American is over. You can be a multi-national of any combination of countries except with the USA. It does not work.
American exceptionalism has become so exceptional that people actually pay money to get rid of its citizenship.