124 thoughts on “Time for Reflection”

1. Another look at this from someone else…..http://www.forbes.com/sites/stephenharner/2014/06/09/letter-from-phnom-penh-3-fatca-turning-local-banks-into-irs-enforcers/

2. Nothing has changed. Keep accounts under $50,000. Avoid border. Period.

3. I was once proud to be an American. I am now proud to be an ex-American. Times sure have changed.

4. Since people seem to be reflecting on these laws, etc, in a general sense let me give my own general high level views:

   I am a dual American-Canadian citizen and am proud of both citizenships. I am certainly NOT here to bash any and all things American. In fact, when ANY political protest degenerates into bashing all things about group X, I generally find that that is time to excuse myself, because rarely if ever does a specific group of people deserve to be bashed in an unqualified across the board manner.

   Rather, I am here to oppose a specific law–FATCA–and its implementing law in Canada–C-31–because I feel those laws are bad for both countries. Nothing more. Nothing less.

   This particular apparent softening of IRS policy does little to change the fundamental nature of FATCA or C-31 and therefore should not result in a significant change in direction.

5. Her dog ate Lois Learners emails.

   http://nation.foxnews.com/2014/06/20/fireworks-erupt-between-paul-ryan-and-irs-commissioner-lost-lois-lerner-emails-i-dont

   My dog ate my FBARs.

6. Hmmm — my thoughts on your questions:

   What moments/events are the most memorable for you?

   Memories are so many – from being banished from ExpatForum.com to see the start of Isaac Brock Society to all the corresponding with government representatives and communicating, day by day, with all who come to Isaac Brock, online and sometimes offline.

   My one-woman FATCA protest one day and ‘Outraged Canadian’ and my two-woman protest the next day outside the Calgary Stampede Grounds where Conservatives were sheltered from all at the Convention was something I won’t soon forget.
   Having a CBC cameraman come into my home, hook me up with a microphone so I could be interviewed by James Fitz-Morris was memorable as I ‘came out of the shadows’ with my name and my family’s / my son’s ‘US Person’ story. Pretty scary, but something I had to do and I am glad that I took that step.

   And, a few more so special, to finally meet some Brockers in person – people I had been corresponding with on and off the blog since before the start of the Isaac Brock site, including the man I admire for holding this site together – Peter Dunn. The hospitality of Stephen Kish and his wife was very special and the experience of being at the first Toronto information session given by John Richardson quite an emotional experience. How else could I have gotten from Point A to Point B? I, of course, met you hard workers in the background, Tricia – and that indomitable GwEvil as well. That weekend I saw what I had to do to organize an information session for Calgary, another memorable experience to meet others like me in the city in which I live. Thanks to those who helped me do that and those in Calgary and area I’ve been able to meet. Having “recalcitrantexpat” and his son share a spaghetti meal with my husband and I after his renunciation was another highlight — we had so much in common!

   Which ones have made you the most angry?

   From one of my comments:
   To have watched / listened to the Credit Suisse hearings, Part 1 and Part 2, on Wednesday was more than I could bear to know we are all lumped in with those who really are out for US fraud and tax evasion. I don’t consider myself or my son or most of the whatever 7 million figure of US expats around the world are those persons. We are painted with the same exceptional US brush. To now see Finance Minister Flaherty’s words, makes me finally realize that my Canadian born son (as all other ‘US Persons’ in Canada) is now deemed second class to any other Canadian no matter where they are from or their parents’ “national origin” and not to be protected by the country of his birth. Two-tiered Canadian citizenship:

   Our Government fully understands the separate, but important, issue of U.S. citizenship-based taxation on dual Canada-U.S. citizens. The U.S. government’s system of citizenship-based taxation is different from the residence-based approach generally followed most of the rest of the world.

   This creates unique challenges for U.S. citizens who reside in other countries – especially Canada. However, as these are U.S. laws that apply to U.S. citizens, they can only be addressed by the U.S. government – not Canada. In that regard, I would encourage U.S. citizens in Canada to share their concerns with the U.S. government.

   That the Government of Canada has signed an IGA with the US to allow our local CANADIAN “foreign financial institutions” to turn confidential financial information for persons identified as US Persons over to the CRA for them to then be able to turn the information over to the IRS and now the Finance Minister of that government makes that statement gives me no peace. I am no longer a US citizen and my son, being born and lived all his life in Canada and never registered with the US, would have no US representative to share his concerns with if he were able to do that.

   Which have given you hope?
   The continued support I’ve received from so many has given me hope in my down times. Right now, the Challenge going forward gives me hope. We are doing what has to be done. We just have to somehow get enough donors to stand up for ALL Canadians and the country we live in.

   Do you think we have played a part in the change of IRS’ direction?

   I absolutely think so.

   Do you think we have been able to help people?

   I absolutely know so.

   What kind of direction should we be looking at?

   We need to keep on keeping on as there will be many out there, still, who will need support as they have their OMG moments.

   And, you’re right, Tricia, we don’t advise people to break the law. We provide here the information people need, because they can get it nowhere else than here, at Maple Sandbox and at the many citizenshipsolutions.ca information sessions, to give persons tools to then be able to make their own decisions. I know that compliance professionals and tax authorities and our government representatives may not understand it, but it is just not possible for some to afford those fees some of us have paid.

7. Dash1729,

   I am sorry if I offended your Americaness. I once felt like you.

   But after being forced to renounce my American “nationality,” which to me means something much more than citizenship, I decided to embrace my new status of being an “ex-American” rather than be ashamed of it.

   In case you didn’t know, it is not possible to renounce or relinquish only your US citizenship. They make you renounce or relinquish your entire American “nationality.” That is what they are doing to us and that is why it is such an emotional issue for people who were once proud to be Americans.

   Hence all the sour grapes and bitterness.

8. The American For Fair taxation, the parent group should be shown everything youpublish and visa versa. You have a common cause and if it passes, your race has been won.

9. @wilton Jere Tidwell,

   I would obviously love to get some kind of flat tax with low rates in the US. I think the chances of that are slim to none. We elected Obama on raising taxes on the rich. We could well elect Hillary with similar goals. Even many on IBS would be quite happy to have things like FBAR and FATCA stand so long as the account balances are large as to let ordinary people out. Pickety is a rock star?!?!
   We have companies clamoring to get out of the country via inversions and the only thing being talked about is making the walls around the US higher to stop them getting out.
   Lets stick with trying to fix tax treaties, PFIC, CBT, alternate savings accounts etc.

10. @neill
    What you write about the changes in taxes is very daunting.
    Then hearing Ryan take Koskinen on and lamblast him for lying is just another kick in the gut. Because the worst thing about all of this is the fact that we are at the mercy of untrustworthy powers. And all the secrecy involved with TISA, signing in laws that are hidden from view and all the rest makes victims of us all. America is broke and America is broken. I have no idea how they want to continue to pay out pensions and social welfare for the masses, how to fund medicare for the elderly. And my heart bleeds for those. But I don’t think expats nor the rest of the world should be given the bill. I don’t think the world owes America- but this is what America seems to think. Tomy Ungerer drew a poster in the 1960s called “Give”. It is the drawing of a bomber airplane over Vietnam throwing out bombs and presents at the same time. This depicts America for me- it is so true then and it continues to be true- that America thinks it is giving presents while throwing bombs. And I just feel deeply saddened by all of this- even the new guidelines that should be helpful feel wrong, because the law of CBT is flawed at its core.

11. Tricia, All good points. My own feelings about this have vacillated so many times between hope and despair. This new program looks good but read Mopsick’s latest….

    Do you think we have played a part in the change of IRS’ direction?

    Definitely as did the efforts of ACA, AARO and FAWCO.

    But the hero of the hour? THE person who finally made something happen?

    Nina Olson.

    At the Overseas American Week briefing with the Taxpayer Advocate Service, she said (it’s in my notes) that a new IRS commissioner was in town and this was her chance to convince him that something had to be done. OVDI/OVDP and even the old streamlined program just didn’t cut it for many Americans abroad. She was hopeful that something would come out of that meeting.

    And it did.

    What I’m saying is that two stars came into alignment – a new commissioner who was finding his feet and willing to listen and a champion (Nina Olson and co.) who could explain the buzz (media reports, efforts here and through other organizations) and negotiate a solution.

    Where should Brock go next?

    This is just my opinion but I here are the things that are important to me:

    1. What I would like to see is that we continue to back efforts for RBT. I’ve said before that I don’t think it will happen now or even in the near future. But that doesn’t mean it can’t happen and I think most of here agree that this would be the ideal solution. So let’s keep shooting for it.

    2. Education about CBT. I assume that the new program will bring in a lot of first-time filers BUT communication on the part of the US government about these filing obligations is still pathetic. I am still meeting US Persons in Paris who have no idea about FBARs and the like. I have not found any agency in the US government who is willing to own this problem and take responsibility for informing US persons of their filing obligations. There is even one population for which I think their silence is deliberate: immigrants to the US. How many of those highly sought after STEM migrants (AKA “highly-qualified” migrants) would take on Green Cards or US citizenship knowing that the US practices CBT? Hell, my spouse (a guy with STEM degree(s) who really likes the US and could get a Green Card through me) won’t take that deal.

    If the US gov is so damn attached their unique and special system of citizenship-based taxation, then I think we should help them spread the word about to every country, to every aspiring migrant, to every Accidental American and to as many people on this planet as possible. And then kick back and see what happens…. 🙂

12. @Victoria, I share your belief that Nina Olsen has indeed played a large part in creating more favourable terms for minnows trying to come back into compliance. Though it’s never explicitly stated, I suspect that the IRS had its hands tied under Douglas Shulman regarding the one size fits all approach back in the dark ages under OVDI 2011.

    I’d even suggest that the biggest threat to ordinary minnow Expats are some of scaremongering tax attorneys who obviously wish to use fear tactics to frighten Expats and immigrants into complying.

    I also suspect that the IRS has limited resources so is essentially going to focus on selective enforcement by offering this gentler streamlined for the average Expat and the harsher new 50% version of OVDP to really hammer the whale tax evaders.

    I’d like to think so, anyway. What I find intriguing is that even back in early 2011, I found an enrolled agent accountant who essentially followed almost exactly what this new programme is requiring: three back years plus the current year, six years of FBARs, plus a lengthy letter pleading abatement of penalties based on reasonable cause, similar to NotThatLisa’s letter.

    If they had wanted to make a poster child of me I could have been the test case because I’d held close to 50 PFICs (small holdings each) and a personal pension that could have been arguably a foreign granter trust. I would have been bankrupted by the FBAR penalties up to possibly 2.5 million due to holding large numbers of ‘foreign financial accounts (even including Oyster travel cards and pre-paid cell phone Sims. I would have been wiped out and probably even left in debt by OVDI.

    Anyhow, she put me in a ‘loud’ quiet disclosure of amended returns. I’d had quite a large amount of unrecorded passive income because had misunderstood the tax treaties to mean that I would only be taxed where I lived…plus the bulk of my investments were in tax-advantaged vehicles which were fully compliant with the British HMRC, and didn’t even have to be declared on their tax return….so I naturally assumed I didn’t need to worry about declaring it on the US tax return.

    Anyhow, I still have another couple years to run before the statutes of limitations finally close for this quiet disclosure, but as it has now been three years, I would have though that they would have audited me by now concerning these amended returns. In other words, had they really wanted to make an example of me, I believe I would have been a test case.

    This newer version of streamlined would have benefited me because I was already in the system so could not hide. I concluded that I would have to clean up the mess. So far, things seem to have gone smoothly though realize I’m still not technically out of the woods. But am suggesting that they were seemingly merciful with me even though it was a harsher climate back then. I’m suggesting that there is still hope.

13. @Victoria:
    As you rightly have done, an article in GenevaLunch also gives credit to Nina Olsen and overseas American organizations for their efforts to get the IRS’ attention that “25%-300% penalties might not be appropriate for the crime of committing personal finance while living abroad?” (Roth CPA blog). A new IRS Commissioner was also essential – it could not have happened under Shulman:

    http://genevalunch.com/2014/06/20/irs-lifts-us-tax-fines-many-americans-abroad/

    Although the US seems to ignore this, there is global competition to attract highly-qualified migrant workers. As an example, the German state of Bavaria runs its own program to attract such workers called “Work in Bavaria”.
    – Interestingly, a sub-program is aimed at Bavarians and Germans abroad called “Return to Bavaria”. Can’t imagine the US offering highly-qualified Americans abroad incentives to return to live and work there:

    http://www.work-in-bavaria.de/en/employees/work/return-to-bavaria/

    As another example, Austria attracts highly-skilled workers through its Red-White-Red Card initiative:

    http://www.migration.gv.at/en/types-of-immigration/permanent-immigration-red-white-red-card.html

    – Americans are reportedly the third highest recipients of the Austrian Red-White-Red Card (after Bosnians and Russians). I wonder what that shows.

    Having competing countries shine light on America’s CBT could give them a leg up and drive another nail in CBT’s coffin.

14. @monalisa
    Maybe they just haven’t gotten around to you yet in a long line of folders. I don’t know if I would attribute this to benevolence.

15. @ Tricia

    Thank you for this posting.

    The IRS: besides the efforts mentioned by Victoria, I believe that our representations to Canadian legislators and bureaucrats led to a least some contact with U.S. officials over the plight of supposed U.S. persons in Canada. The discussions that took place behind closed doors may have had some effect on the slight softening of the IRS amnesty program.

    The Harper government: I don’t think we should feel exceptionally bad about the how our concerns about the IGA were treated by the Conservatives. Harper and Co. have little regard for the Charter and have chosen to ignore suggestions and expert testimony in many areas. We just joined a large crowd. Look at how many lawsuits are now planned because of recent legislation. We’re not alone in our disgust.

    Brock and Sandbox; I appreciate all the efforts that have gone into creating and maintaining these blogs and the contributions by so many to the ongoing discussion. It has helped us find out about what it means to be considered a U.S. person and how to get out from under that burden. It certainly has helped me.

    The Canadian media; my biggest disappointment is the lack of intelligent coverage in the media on the topics discussed here. I would have suspected that there would have been much more press. Part of the problem has been that so few of us have been willing to out ourselves. I’m among the many that chose to remain anonymous. But there are many issues that are extremely important to a segment of the population that receive little or no attention. FATCA and CBT are just another of the too numerous to count, unreported or under-reported stories.

16. Without a switch to RBT, every day offers fewer incentives to stay. This latest initiative offered by the new commissioner is just another stick thinly veiled as a carrot.

    There’s no upside large enough to overcome the downsides of having US citizenship if one chooses to live their life outside the US, IMO. If one is content to live their life as a second class citizen being stalked by both the US and the country they live in, then power to them.

    As much as Nina Olson has done to try to lighten the burden of US persons abroad, she’s still a part of the problem, not the solution. Her efforts are to find a way for CBT to work, and as long as she appears to be succeeding, we will never see an end to CBT.

17. @Tricia, You ask:

    “What kind of direction should we be looking at?”

    My answer is:

    Litigate. Litigate. Litigate.

    —Take the complicit Canadian government to court for helping U.S. impose the bad FATCA law on us. Take the United States government to court over components of the bad citizenship-based tax rules also imposed on innocent Canadians.

    Those people who feel that a litigation approach (which I admit may well fail) might possibly have the edge over all other actions should donate even more to:

    http://www.adcs-adsc.ca

18. Actually, Stephen Mopsick (he’s actually doing something for us expat Americans after all by informing us of the pitfalls) stated that there is a major pitfall in the new streamlined OVDP in that this time you have to pay the FBAR penalties upfront as opposed to waiting for the penalties to be assigned to you for FBAR. So they still end up smacking you with penalties. As I said before they may have eliminated the penalties for late-filing but still want the penalties for FBAR which I still think is an absolute outrage due to the fact that until recently none of us had ever heard of the FBAR form. Under the Fair Business Act in Canada, that would be considered a bait and switch, but according to the United States; it’s Standard Operating Procedure.

19. @Stephen Kish,

    I think the continued threat of litigation from middle class expats will eventually light a fire under the IRS and the White House because they will risk losing all the FATCATs along with the middle class if we are successful. So far they’ve made it an all or nothing proposition. All they’ve done is created a groundswell of support against FATCA.

    Just like the Obama administration did with Obamacare, they will start making last minute carve outs for the majority of expats in the middle class. That way they can still go after the rich without the negative publicity of driving Canadian Grandmas and Grandpas into bankruptcy. However, by the time they come to that conclusion it may be too late for them to go after FATCATs separately.

20. Why is my comment awaiting moderation? There’s no stop words in it.

21. @OMG

    The spam filter is a little slow sometimes, that’s all.

22. @omgheestillanamerican

    Your comments require the US to be sensible & caring… they don’t have any logic at all… if they did… a brake would have been put on this… they don’t give a rat’s butt about us… expat who don’t vote or their vote won’t help them… non-citizens caught in their trap have no vote whatsoever in the US… Basically they are wiping the drool off their chops in thinking of all that money they will be getting… they are not getting tax money… its all the fines that is being slapped on.. I read a person who decided to do the right thing.. had an account he forgot about… under 5K… no fbar fine but he was fined over 15K for not putting it on his taxes… it wiped out the account then to put salt in the wound… he still had to pay more… he was an immigrant…. he didn’t know what to do… no one helped… plus on top of that… he had to pay legal fees

    MB has been crazy last few days… maybe the bad word u used… *freedom* was censored by NSA… lol..

23. Great comments from so many of you and I “ditto” a lot of them. But, regardless of the great work that we all know has been done and the progress we have seen in some areas (such as the huge support that Canadians in our position have received from the opposition parties) we are still in much the same place as we were three years ago. FATCA and CBT are missiles still aimed on our heads and the “button” is due to be pushed in 10 days’ time.

    In Canada we have a Charter Challenge in the works to try to defend ourselves, but, as has been stated elsewhere, it may be years before it gets to court. Who will be sacrificed in the intervening time? The root cause of all this misery needs to be attacked forthwith. Since the United States does not appear willing to deal with CBT on its own I believe, and have for a very long time, that a formal complaint to the United Nations against the United States’ practice of CBT needs to be pursued. I have read that such a complaint needs to be made by people who sign their own names to the complaint therefore there are many of us here who would not wish to be signatory to such a document. Is there a group of us here who *would* feel comfortable doing this? Is the time ripe for this action? I’d love to hear everyone’s thoughts on this.

24. @Victoria,

    Thank you so much for pointing out the fact that Nina Olson had met with Koskinen- I was unaware of that. As others have said, that could NEVER have occured when Shulman was Comm. If someone had told me back in late 2011, that this would happen, I probably would have said “yeah, when pigs fly.” A reminder that changes do happen and one should never give up.

    Also agree with your idea about educating all those that have to deal with this outrageous form of compliance control. Will give some thought to a way to approach that! Ironically, as I remember, the origin of the fracas that caused us to be banned from Expat Forum, was the action of one newer member going over to the opposite forum for immigrants to the US and posting endlessly long rants about CBT etc. He was a bit overboard to be sure but once the moderators started with the comments and pulling posts, it just exploded into the mess it became. What would be a good way to reach out to immigrants in the US to warn them?

25. @Neill,

    “Even many on IBS would be quite happy to have things like FBAR and FATCA stand so long as the account balances are large as to let ordinary people out.”

    I don’t think I would be able to concur on this. I certainly think those who are truly evading should pay but the US needs to deal with their own problems without stomping on the rest of the world to do so. The compliance statistics for the US are high,in spite of the astronomical figures they put forth as what they lose to tax evasion.To me, anyone living for example, in Canada, who just happens to have more money than I do, would not deserve to have their privacy rights infringed upon any more than I do. In fact, we will need the help of such people in the form of donations, to move forward with the Charter Challenge!