Posted on October 30, 2014 by Petros Posted in Issues regarding US persons abroad 67 Comments Canada AM: US tax backlash Share this:TwitterFacebookEmailLike this:Like Loading...
Wow Trish! Better than the Giants!! The snowball is growing fast!!!
Trish, you are amazing! Thank you so much for doing this spot on Canada AM!
“They realised they could make money off of it.”
I particularly liked that comment in public.
But Tricia- I dont get one thing- did you pay back taxes and 80000$ or 455000$ as you mentioned? Or did you just renounce and not do anything? Because you said “That put a stop to it” and that you had filed papers. Did you pay up as well?
heartfelt thanks from Poodle Central for this spot Trisha.
Well done! Very calm and accurate presentation on the quite irritating subject of FATCA. Keeping one’s balance is the best approach when dealing with the US/IRS. Fear is their biggest weapon.
Very articulate. Thank you. You are a natural in front of the cameras. You mentioned the “go to” website for expats, but I do not not recall you mentioning Isaac Brock Society by name.
Trish said she would have owed no U.S. taxes. She would, though, have owed those horrendous amounts of money in penalties for the accounts she had not previously reported in a Foreign Bank Account Report (FBAR, now FINCEN 114 – United States Department of the Treasury Financial Crimes Enforcement Network). For that, there would have been a $10,000 per acount per year penalty for not filing. Unless one can claim a relinquishment before 2004, one *usually* would back-file all of US tax and FBAR reporting forms with a Reasonable Cause Statement for not having filed (thereby generally relieved of those penalties — which Canada would not, at present, help U.S. Treasury collect BTW), then wraps up the whole ball of wax the year after renunciation by filing further required IRS Form 8854 to ascertain the U.S. cannot deem that person a “Covered Expatriate”.
@Calgary Thx. I didn’t understand how she avoided those penalties. She must be relieved.
Trish, You did a Wonderful Job!! Thank You!!
Thank u for doing this… btw.. Petros was correct… u look great…. U were calm and collected… got your point across…
Great interview Tricia!
Wow! Amazing interview! So poised, eloquent and concise. Thanks for carrying the ball for those of us who are not as courageous as you! You are “standing on guard” and rallying the troops, filling the void left by our spineless government.
It is good to know that there is depth in the ADCS team with Tricia, John, and Stephen (not just one person). Tricia is the star of the day. Tricia, thanks for the mention of the international supporters.
Tricia’s story is quite intriguing. $455,000 in potential fines, with the highest income no more than a small fraction of this and after having paid all Canadian taxes. Quite clear: a violation of the US Constitution Excessive Fines, not to mention violation of other US “inalienable rights” & the US chased her away after some extortion.
Many others have stories but are terrorised by the US to come out with them as they are still US Persons, and there is vagueness and complexity to the US laws and the future direction they may take.
@Wondering points out that ADCS site is ranking well for the word: Canadian Sovereignty . Let’s go after Wikipedia. Change ADCS to ADCS | Alliance for the Defence of Canadian Sovereignty Potential result: up ranking + could attract a few more clicks.
Tricia does mention the website. In article comments I mention ADCS but tend to mention Isaac Brock Society more as there are message boards and very clear links over to ADCS.
December 13, 2012
Nobledreamer’s comment to this article about renouncing U.S. citizenship is worth a post and that is exactly what this post is. One of best descriptions of the problem I have seen. It’s in language and a format that anybody can understand it. Thanks!
“Thank you for outlining the main points of tax requirements involved in expatriation.
I feel it is extremely important to make a clear distinction between those who live in the US and decide to expatriate and renounce/relinquish their citizenship and those who already live abroad and decide to renounce/relinquish their US citizenship. I do not know anyone who has left the US for tax reasons and then renounced their citizenship. So I cannot speak to any aspect of that particular situation.
As to Americans living abroad who decide to renounce/relinquish their citizenship, the issue primarily, is not one of taxation but rather, of onerous penalization for not filing the Foreign Bank Account Report (FBAR). FBAR is part of the Bank Secrecy Act (1970), designed to track money of US Homelanders who have foreign accounts to money launder, support terrorism etc. It was not enforced for 40 years. Virtually no one living abroad had ever heard of it. Once the IRS achieved success with breaking the bank secrecy laws in Switzerland, in 2009, this little-known form was added into the pot of the US government’s misleading campaign against tax evasion.
Americans living in foreign countries pay taxes to the governments of those countries. Along with FBAR, most were unaware they were required to file/pay US taxes as well. This is in no way, equivalent to Homelanders who purposely seek out places “offshore” to avoid tax. However, IRS has gone after honest Americans abroad who had no knowledge of their obligations. Instead of encouraging them to come forward in a reasonable way, the IRS has engaged in a vicious cycle of fines, penalties, interest and whatever else they can think of to persecute those who are simply presumed to be guilty.The stories of those who have tried to comply by entering the Offshore Voluntary Disclosure Initiative are truly horrifying, many enduring 2 years of confusion, being threatened with penalties equivalent to their entire retirements. These are people who by and large, owe no tax to the US.
Some of the reporting requirements defy any level of reasonable logic. A US citizen, stay-at-home mother for instance, who likely has no income and is signed onto her non-US citizen husband’s accounts, is required to report HIS bank account numbers, balances and so on. I doubt any US Homelander would be willing to do the same if living in the US, married to a foreigner with a government who demanded the same, or else be prepared to lose a considerable portion of savings, retirement plans, etc.
Now FATCA promises to be even more punishing. Financial institutions across the globe will be required to report their American clients’ personal banking information. The US government will coerce this reporting by withholding 30% of an institution’s entire US holdings if they do not comply. Banks in Switzerland have begun to close those client’s accounts without notice, including the renewal of mortgages. Congress and the IRS are fully aware of this and do nothing to mitigate this truly destructive practice. There is no excuse whatsoever, for this gross misapplication of power. A recent article pointed out that terrorists will be able to pinpoint identification and location of Americans living abroad, thus putting them in harm’s way. I cannot imagine any American, abroad or not, feeling that this is the way a government should act toward it’s own citizens.
The numbers of Americans abroad renouncing is higher than the government will admit. The “Name-and-Shame List’ published in the Federal Register is hardly an accurate representation of how many are doing just that. Look to the long waits at European embassies and consulates, the number of expatriates banding together in Canada and Switzerland trying to get their message out via online forums and you’ll get a much better sense of how widespread this “trend” is.
Not about tax, nor political discontent, the larger issue is the complete betrayal by one’s country in an attempt to gauge for money to make up for the horrific debt the US has. Add the cliches of “tax cheat,” “traitor,” and the guaranteed reaction such labels produce, and those who expatriated for reasons such as marriage, education or employment can count on being treated in the same manner as those who may leave the US for tax purposes.
It is high time that Americans learn that the country they grew up in, no longer exists. The “American exceptionalism” that we were taught to believe in, needs to be seen for what it has become, an excuse for the government to do whatever it wants with no concern for the consequences. ALL Americans lose in this process.”
Great interview Tricia – thank you.
Thanks again, Trish, and for your summary of just what it is, betrayal. Betrayal by the U.S. Betrayal by Canada and other countries in going along with the “scheme”. Betrayal!
Thanks, Tricia! Very impressive!
It would have been nice if Canada AM had not used the caption “American living in Canada renounces citizenship to avoid IRS”… to a casual observer who is scanning headlines it may leave the impression that she is simply trying to avoid paying her taxes. This misconception exists with many people, and plays into the hand of the US Government and IRS.
Thank you all so much again, I really appreciate all your kindness and support.
Polly, I think you have been around a long time and might understand this…3 years ago, things were really different. I don’t know anyone who didn’t spend 99% of their time petrified of FBAR, exponentially so much more than anything else. That figure is simply a calculation of the number of bank accounts we had over 8 years (it seems to me that 2011 OVDI required 8 years of reporting). It didn’t occur to me until this morning that it was possible there could have been more but as I recall now, I didn’t have any RRSPs or TFSA’s at that point so no need for 8891s or the charming 3520 series….
I simply got very, very lucky. In very early December 2011, the IRS issued Fact Statement 2011-13. It was basically, an invitation to do a quiet disclosure. FBARs were to be accompanied by a letter outlining “reasonable cause.” I was terrified but had pretty much figured I wouldn’t be able to live much longer with that level of anxiety so I sent them in mid-December and renounced about 3 weeks later. I would never have been able to renounce so quickly if it weren’t for Brock and Petros, Pacifica, calgary 411, USCitizenAbroad and many others. Now I am so glad I did because shortly thereafter, they opened the 2012 OVDI and I don’t think it has ever been that easy to become compliant since. As “safe” as Streamlined sounds, I still think there are potential difficulties. It is interesting that in spite of the fact IRS pushes all their programs, that Fact Statement remains on the IRS site and was updated last February. I read that as meaning it is still possible to file that way.
Thx for the information. There are many expats who dont have a government who will protect them from the penalties and also, there are many expats who are not duals. We really need these lawsuits against the unconstitutionality of these excessive fines.
I just really worry sometimes that when the viewers here “Oh I just renounced and now everything is fine”- they fail to understand that the american government still has claims on a person and might try to come after them for those excessive fines.
I understand your point. However I don’t think many feel they are necessarily “safe” just bc they did the process. In my own case, I could not take any more anxiety. I had to learn I had done all there was to do and for the sake of sanity, to leave it at that. It does help a lot to have an outlet which continuing with expat work provides.
There is no end to this game. You can never leave. Because the statute of limitation rules make it impossible to do so. But you may be able to satisfy the current understaffed IRS. Believe me when I say Congress decision to reduce funding growth to our nemesis the IRS is probably our best friend.
I filed my last tax return in 2012. One more year, June 2015, and I will achieve the expiry period for an audit, unless they decide for some reason I fraudulently left something out, or they never received my returns which were sent regular mail–and they don’t let you know if they received it unless there is a tax return cheque or reassessment.
FBAR statute of limitations seem a little clearer: provided you are not under indictment and a fugitive from FBAR (in)justice, it is six years. So I estimate (Does anyone really know what time it is? [Chicago]) that I will be free from charges against me for failure to file FBAR as early as June 2017 or 2018. I don’t know which. Well now that my dad is gone (lost in the Alaska wilderness last summer), I have no compelling reason to visit the USA.
Somehow the edit I did on my phone didn’t take. i wanted to add to the idea of the perception that Canadians are somehow more “safe” than other expats, Peter addressed SOL. MonaLisa has many detailed comments on this.
A dangerous precedent has been set. The government of Canada has chosen to pass a law to break a law. We lose privacy rights in the process. Add the US government. I don’t doubt for a nanosecond that they would have gone to all this trouble without some idea of how they intend to collect the money. They may not have a set method in mind, however, I expect the next step will be collection of taxes, fines and penalties via confiscation of funds. The idea that CDNs are protected by the Treaty is to me, laughable. The govt purports that what they have done is acceptable because we already exchange information, the current move is simply an extension of that. This is “spin’ pure and simple. Professor Cockfield speaks to that in the FINA meeting of May 13, 2014. No one is listening. Previously, due to PIPEDA, the banks could not report information to the CRA. Now they can report more. I don’t find it particularly comforting that US police will be operating here along with their statement they want to apply US law while here. I am not trying to promote fear. I simply see these as obvious possibilities matched with the consistent actions of the Harper government to erode our Constitutionally/Charter-protected rights. They are being sued by two other groups with regard to voting and citizenship rights.I believe it would be naive not to expect, think and prepare with these possibilities in mind.
Some of this would not be possible were we not the direct physical neighbor of the US. At least Europe and Asia, et al, are protected by those rather large “ponds.” LOL
@Tricia: Yes, well done on the interview! You are clear, articulate and passionate. I suspect these appearances are very significant in this battle, especially over the long term. I’ve done a couple of telephone interviews with reporters over the last year or so, but appearing on live television! A million times more difficult.
It`s hard because it is so frightening. Add all the insults to that.
I think the IRS and the likes of Levin and cohorts are all sadists. They have foam at the mouth and are out for blood. They want it to appear like this is a noble cause.
Where oh where is the constitution of our forefathers?
At any rate- thanks for being so brave to go public. I can’t wait for the law suits to begin. That is when the debate will really become public, and the scrutiny of these laws will put these issues all under the microscope.
The Canadian government is supposed to respond by today? Oh, goody!