The IRS and its inadequate ‘amnesty’
Sunday, June 22, 2014
The U.S. Internal Revenue Service’s announcement last week that it is extending its tax amnesty program for American citizens living abroad is more a reminder of the unfairness of U.S. tax laws than it is a welcome relief. As many as a million Canadians – not to mention millions more people around the world with dormant U.S. citizenship – are liable for taxes and penalties that are patently unjust.
The U.S., unlike other countries, demands that its citizens file income taxes and make annual declarations of holdings in foreign banks, regardless of circumstances. Even a Canadian who was born in Florida 50 years ago while his or her parents were on an ill-timed one-week vacation, and who has never since lived or worked in the U.S., is as obliged to report to the IRS every April.
Many millions of people around the globe are U.S. tax delinquents, even if they don’t owe a penny in back taxes, thanks to fair and sensible international tax treaties. They have never paid U.S. income tax, either because they were unaware they should, or because the IRS simply didn’t seem to care.
For more see article here.
The IRS ‘new and improved’ program illustrates how dysfunctional and out of touch the US government is and how it has no collective concept of fairness. The IRS should be lobbying Congress to fix the obvious – CBT should be changed to RBT for individuals as it already is for US corporations. Companies get away with murder but the IRS chases the last non US earned cent from individuals.
I don’t really know where to put this, but i had a talk with a few people yesterday all of whom have friends or relatives in America. And each and every one told me that the people there have NO CLUE about FATCA and what is going on either in the rest of the world or America itself. They continue to lead their lives as if nothing has happened- even with the news about Detroit going bankrupt. These are fairly well-to-do people who continue to play golf, eat out, and go to the movies and seemingly have no problem sending their kid to college. They have absolutely no idea about any of these things that are discussed here.
And they become angry if one tries to open their eyes and/or argue with them. For them – everything is fine and the same as ever. And they trust their government to behave in a way that benefits America.
This means that all the blogs, papers, articles I have read – the whole occupy wall street movement and everything else its just a fata morgana for these people, a blip on the screen. For them, everything is fine with America. So I don’t know if it is a question of being informed or not – or just not caring at all because life goes on as it always did.
I also have personally heard of quite a few people who have renounced, and are doing nothing in the aftermath- even if they have heard about the new IRS “amnesty”. They say “I`m out of the loop” and don’t care about any of the rest. They present their banks with the CLN, and thats it. I have no idea what will become of them either.
@Polly, I know what you mean. My brother is taking my niece around to visit various East Coast colleges and has recently photographed her in front of the Capitol but building and also in front of statues of Ben Franklin and Thomas Jefferson… it’s as if it’s never even occurred to any of them how we’ve been unfairly hit with extraterritorial double taxation without any effective representation!
Of course, as a retired naval captain at merely 50, they’re enjoying the good life. At best, they feel that I’d been neglectful in meeting my US tax compliance responsibilities; even after all my efforts to explain what’s happened and why I made the irrevocable decision to renounce, they STILL don’t question the system.
It’s only really my mother and her aunt seem to understand, and even they merely regarded my heartbreaking decision as an act of necessary practicality. It still doesn’t occur to others that I feel betrayed by ‘my’ country. America is almost like a cult.
I’m sure more than this person agrees with you, monalisa. I do.
We have no control over our relatives’ and friends’ judgements of our expatriations, but we do have control over what decisions we have to make to best protect ourselves and our families. Our feelings of betrayal will continue to be poorly understood. I just have to accept that and draw my own conclusions on why.
One’s thoughts on American Exceptionality: It seems clear to me that the creed of American exceptionality represents the victory, on a national scale, of the CULT of self-esteem.
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I am still on this bus with you all, holding my new CLN. I am not getting off until the journey is done. I have been quiet the last few weeks as I have been traveling and also because the cement block heavy on me feeling I had. It is hard to describe. Perhaps the thought of not being American hit me without realizing it. There was much I loved in that country and I think it was the after shock of getting the CLN last month. I am angry with the Canadian government and the Canadian government I am stil speaking out to people , even the ones who continue to “golf” . I know those American persons who are just Canadian residents and they are “praying to the lord”. Most Canadians are just going on with their lives and don’t care at all for their fellow Canadians who are going through this. It is tough. It was tough in the 30s, It was tough in the 50s and 60s but there were some who carried on in the face of injustice and adversity. We will overcome.
We won’t back down. We are all on this boat/bus together..
I hold my CLN dearly too. The rest is all some how insanity out there. How does a democracy work when nobody knows or cares.
Like you others, I have found that friends and family don’t really understand the situation we are in, or if they do, they don’t know what to say or do about it. I suggested to a relative in the US contacting their members of Congress about CBT and Fatca, but they didn’t.
Anyway, I am a proud holder of a CLN and thereby a member of a very exclusive (and potentially excluded? 🙂 ) club. And traveling in Europe as I am now, I see US exceptionalism as it is seen from afar: an anachronistic annoyance bordering on irrelevance.