According to a post on the Democrats’ Senate Floor Twitter feed, 78 Senators voted in favour of Orrin Hatch’s Trade Facilitation and Trade Enforcement Act (S. 1269), which includes the passport revocation provisions discussed yesterday: to revoke passports from people with US$50,000 of unpaid taxes & fines, or people who never obtained or do not provide a Social Security number.
In November 2014, American Citizens Abroad issued a position paper explaining why passport revocation is an inappropriate and dangerous means of tax enforcement. Patrick Weil, in a Yale Law Journal article, has detailed the long history of abuse of the administrative power to revoke passports. And, as stated here previously:
Due to the U.S.’ sharply harsher penalty structure on under-reporting of similar assets & items of income simply because they’re located in another country, it’s likely that a disproportionate number of victims of this bill would be U.S. citizens in other countries. Hatch is the chairman of the Senate Finance Committee and the most prominent Republican supporter of Chuck Schumer (D-NY)’s Ex-PATRIOT Act, another well-known emigrant harassment proposal.
The roll call on this “trade facilitation” bill (showing the votes of each Senator) was posted after I first wrote this; it shows that all 44 Democrats, 32 Republicans, and both the independents voted for the bill, while 20 Republicans voted against and 2 Republicans did not vote. The “yea” voters include not just traditional enemies of the diaspora like Chuck Grassley, Chuck Schumer, Jack Reed, and Harry Reid, but FATCA opponent Rand Paul as well.
Similar passport revocation provisions passed the Senate once before three years ago (in a highway funding bill) but got shot down by a competing House highway funding bill which coincidentally did not include any passport confiscation provisions. On the bright side, The Hill has predicted that this “trade facilitation” bill, too, will get nowhere in the House — though again, not due to any concern for the diaspora, but rather because of the bill’s controversial anti-currency-manipulation provisions (Title VII).
The twisted procedural history
The Atlantic describes the decision to bring S. 1269 up for a vote as a concession to Senate Democrats, as they support its anti-currency manipulation provisions. In total, four separate trade-related bills were brought up for votes. According to reports in The Hill, Harry Reid (D-NV, another long-time supporter of passport confiscation) had been pushing for all four bills to be combined. However, due to a split between Senate Democrats and President Obama, the four-in-one deal broke up and instead the “trade facilitation & trade enforcement” bill was scheduled for a separate vote.
Or, more precisely, H.R. 644 (originally a bill providing for charitable deductions for donations of food inventory, which passed the house in April) was scheduled for a Senate vote. Then, they replaced its contents with the text of S. 1269 — the Trade Facilitation and Trade Enforcement Act, which includes the passport revocation provisions discussed yesterday — and voted to pass that. Now, in order for this to become law, the totally different versions of the bill passed by the two chambers still have to be reconciled in conference, and the bill signed by President Obama.
Hatch was very proud of himself for all the procedural manoeuvring in which he was willing to engage to get passport confiscation to the floor, as you can see from his press release.
While we could not – and still cannot – guarantee that all four bills will become law, we certainly want to see the custom and preferences bills pass the Senate.
I’m a co-author of both of those bills. They are high priorities for me. It was never my intention to let them wither on the legislative calendar. I was always going to do everything in my power to help move them forward.
S. 1269, which contains the passport confiscation provisions, is what Hatch refers to as the “customs and enforcement bill”; “Trade Promotion Authority” is S. 995, “Trade Adjustment Assistance” is S. 1268, and “trade preferences” is S. 1267.
Reactions to the trade bills
The Asian Trade Centre, a Singapore-based organisation, criticised the efforts to hitch this awful “trade facilitation” bill to the bigger wagon of the trade preferences bill:
But insisting on including this set of rules alongside the TPA debate just illustrates the nature of the debate in Washington. It is not about creating helpful rules to guide trade in the next five years. It is about following narrow, domestic partisan interests and using flawed arguments.
In the end, it also shows the rest of the world that the United States cannot be viewed as a trusted partner because—no matter how much you bend to accommodate the Americans in a negotiation—they will always add one more bitter pill and insist that you swallow it. Even then, passage of the final deal is never assured.
Bernie Sanders, for his part, is opposed to all these trade bills because of working conditions in other countries whose exports to the U.S. may increase under the bill. In particular, he doesn’t like it when groups of foreign blackmailers confiscate migrants’ passports and hold them hostage in order to extract money from them; as he stated in a speech on the Senate floor in opposition to one of the trade bills (161 Cong. Rec. S2783):
32 percent of the [electronics] industry’s nearly 200,000 migrant workers in Malaysia were employed in forced situations because their passports had been taken away or because they were straining to pay back illegally high recruitment fees. In other words, American workers are going to be forced to compete against people in Malaysia–immigrant workers there whose passports have been taken away and who can’t leave the country and who are working under forced labor situations.
Yet he has nothing to say when domestic blackmailers threaten to do the same thing.
The midnight knock on the door
The first inkling we had of these passport confiscation provisions was on Monday, and the earliest news of this deal to get the “trade facilitation” bill to the floor was not even a day in advance, when it got posted on the Republican Senate “Floor Monitor” Twitter feed, while I was still sleeping. I found out about it during my lunch break when I saw Mark Twain’s comment pointing to Hatch’s speech, and the Senate Republican Policy Committee posted details of the vote.
At 10:30 a.m. on Thursday, May 14, 2015, the Senate is scheduled to begin consideration of H.R. 1295 and H.R. 644. An amendment containing S. 1269 (Customs Enforcement) will be offered to H.R. 644. At noon on Thursday, May 14, 2015, the Senate is expected to proceed to a roll call vote on H.R. 644, as amended with S. 1269, at a 60-vote threshold. This will be the second in a series of two votes at noon.
Do you really want to keep waking up for the rest of your life in fear that 535 demagogues in a distant city have decided — in the dead of night while you were sleeping — that omelettes are on the Homelanders’ breakfast menu and you are the egg who is going to be broken?
Externalising the costs and internalising the benefits
The Senate Republican Policy Committee’s summary of S. 1269 failed to mention anything at all about the passport confiscation provisions of the bill; they simply stated it would “decrease deficits” without explaining exactly on whose backs they planned to balance the budget. Specifically, the Congressional Budget Office claims that passport confiscation will raise US$231 million of revenue in the next four years, and US$398 million by the end of 2025. This is barely more than half of the US$743 million the JCT claimed this provision would raise the last time around, back in 2012.
As discussed in S. Rept. 114-45 (see Senate Finance Committee PDF if the congress.gov link isn’t up yet), all major items of spending in this bill are for the benefit of Homelanders: $179 million in reductions of customs duties collected due to an increase in the de minimis threshold below which no duties are collected; $200 million in increased payments to domestic manufacturers under the Continued Dumping and Subsidy Offset Act, et cetera. But rather than sufficiently increasing customs user fees to pay for all the additional spending, Hatch and his gang decided to hide the costs elsewhere — just like how FATCA got into the HIRE Act.
The absurd speed at which the Senate managed to get this law for revocation of passports to the floor — while dragging their feet on concessions to the concerns of emigrants — clearly demonstrates the precarious position of those who choose to retain their U.S. citizenship while living outside of the United States, in particular those who have no other citizenship. Congress has no reason to care about your concerns; your votes are diluted among all fifty states, and you don’t even have a non-voting representative like the Puerto Ricans or the American Samoans.
Perhaps Orrin Hatch needs to practice what he preaches and come live overseas for several years and live like a “by default” criminal expatriate as well as a national living, working and already paying taxes over here. He would then need to file pointless documents to the Financial “Crimes” Enforcement Network (whatever…). He would then need to file countless documents to have my already-reported income taxed twice by America (whatever…). And now no more American passport (whatever…). As I have said, the Muppet needs to be in all our shoes and practice what he preaches. Then, (I hope), he will have realised his absurdity and redeem himself.
I`m guessing everybody with this passport problem – those who dont have many years left on theirs- will report their passports stolen and gets new one QUICK. This then lasts 10 years, in which time they can possibly get a new passport to use and are able to give up the old one. A difficult option for those in hiding for lack of funds.
But all in all, let us remember that this bill is not likely to pass the next round of voting.
I am just so appalled by America`s loss of integrity and adherence to the constitution. And it seems to me even the judges are in on it because their rulings are so wishy washy as to be interpreted any which way they want or feel pressured to decide.
@Polly, “those who dont have many years left on theirs- will report their passports stolen and gets new one QUICK.”
The Hatch language inculdes REVOKING US Passports that are in force!!
http://m.scmp.com/news/hong-kong/health-environment/article/1799498/american-mother-hong-kong-hospital-bill-row
if you don’t pay your bills, you won’t get a passport for your baby!
On June 16th, the US government will have a good case against Gwen and Ginny for wilful tax evasion. July 1st, for non-filing of FBARs. Both have stuck their neck out in support of Canadian sovereignty. Their courage is immeasurable.
Bubbles I too commend their courage
But I think they have reached a zone of personal comfort
First they have Canada as their recognized dominant nationality and do not recovnize any gifts of any other nationality
The claims you mention that could be made against them would be made on foreign soil by a foreign government
They have likely determined they can no longer visit or transit the usa
Years ago in my other employment the us govt warned me not to step foot info the Warsaw pact as I would have been deemed a citizen and a traitor. I took the warning and never lost sleep
@George
Its inhumane!
Gwen is on my facebook and she sometimes plays scrabble. I know she is a forceful person and will enjoy this fight. She is also an excellent scrabble player. I have donoted much $ to the fight against the Canadian government too.
@Neill,
Don’t see a problem with this!?!?!?!?
Just drop a huge check!?!
I live in Japan with my Japanese spouse and child. I have 4,615 Japanese yen (approx. $40. USD) in my pocket and even less in my various banks accounts. I have multiple bank accounts because Japanese employers tell their employees which bank the company will deposit the employees wages into. I have five employers and they don’t all use the same bank. My only asset is my pay which is roughly ¥30-40,000 a year. Yet, I am required to report my accounts nonetheless as I had a joint account with my spouse which did exceed the reporting threshold. The money in this account is my spouses earnings with a very small amount from me.
I have never reported these bank accounts to Treasury as I did not know I needed to nor had any way to learn of the requirement. Further one of the bank accounts was a joint account with my spouse. It is they who is the bread winner of our family. When I learned of the FBAR, the only way to fix the problem was to pay a minimum of $10,000 per unreported account for six years. I had five accounts at that time. Do the math. The minimum fine for that alone is close to ten years of my gross earnings. My spouse is none too keen on having their personal financial information sent to a foreign government nor will I allow it any more than I would allow any other thief to steal from my family. From where would the $300,000 for the large payment to the IRS come from? Would you ask your spouse for that amount to send to a foreign government? I will not.
If my passport is revoked, I lose the following; all my positions with my current five employers, all sources of income, my permanent residence visa, car, home, two adorable cats, friends, spouse and child. Not because I am a true criminal, but because of not complying with reporting required by effectively secret, legally dubious laws that are so complex and time consuming to comply with as to be impossible for most. I lose these because I will not spy on my spouses finances for the IRS. I lose these because I will not violate the laws of the land I live in to satisfy the laws of the land of my birth.
I am glad for you that all you had to do was send a huge check to the IRS to solve your problems, but you are wrong to assume that that solution for you works for all of us.
@JapanT
They say in the end, it wont be passed. Just to calm your nerves.
I know everything is nerve-racking. I`ve been on antacids for a long time.
Pingback: The Isaac Brock Society | U.S. passport applicants without Social Security numbers
@Japan T
If your desired goal is to become compliant (perhaps as a prelude to renouncing), it is very unlikely that you will be dinged even a penny by the IRS or Treasury.
Your annual income is well below $10K USD and you’ve lived out of the US for the last 6 years, is that right?
If so, you can get compliant by filing 6 years of FBARs and using the PDF form drop-down list explanation of “Didn’t know I had to file” (not exact wording, but close enough).
AFAIK there are no reports of any innocents getting hit with penalties.
As far as the joint account goes, you can’t really escape filing information on the account. You *may* be able to not list your spouse’s name (not sure about this; anyone?).
Phil Hodgen makes a case for filing nil returns even when below the filing threshold, so if you go that route you file 3 years of 1040s in either the Streamlined program or as a “quiet disclosure”. If you are getting compliant in order to renounce you’ll probably want to file an additional year or 2 for the 8854 form “certification test”.
I’ve omitted a bunch of details above for the sake of brevity, as my main point being that if you’ve lived outside of the US for the last 6 years and have had a low annual income during that time, you almost certainly won’t need to drop a cheque, huge or small.
JapanT. If your income was less than $10,000. per year, you didn’t have to file tax returns. You are not the target of this nonsense.
@tdott @Duke of Devon – JapanT states that he earns 30,000-40,000 yen per year. I suspect that he made a mistake with the yen sign and actually meant US dollars (based on the fact that he states that $300,000 in fines would be 10 years of his gross pay)
@Hard Pressed
Makes sense. In that case, JapanT would have to file 1040s to get compliant. But, the gist remains the same, no FBAR penalties and thus no need to drop a large cheque due to said penalties. Other things may come into play, PFICs, sale of principal residence, “foreign” trusts, etc. But that’s a different kettle of fish.
Thanks and sorry to all who offered advice, I did I fact use the wrong currency, same key on my iPad, oops. I average 30-40,000 USD each year.
There is no way for me to become compliant. To do so requires time I do not have and or money I do not have. We all know people who say they are too busy for this or that yet still seem to have time for less important thing, so permit me to illustrate what .i mean by not having time. 3 hours- total about of time I have watched TV thus far in 2015. Did so at the insistence of my spouse who wanted to watch a movie on TV together. 12= total number of hours spent watching TV for the entire year of 2014. 8=the number of those 12 spent trying to fight a three week bout of insomnia. Previous years had similar amounts spent watching TV prompting me to keep track of how much time I actually spend watching TV.
2-4 = number of hours of sleep per weekday for a number of years before our first child. 3-5= Current number of hours of sleep per night if uninterrupted by same child.
14= total hours spent commuting each week. 23=number of hours in the classroom per week.
My previous post shows that I have not the finances to pay anyone to do my yearly filing for me. Compliance is not an option for me.
Relinquishing is not an option as I do not meet the requirements to become a Japanese citizen and can not for at least two years, and then only if I can make the time to study the language again while not giving up employment needed to pay for such schooling. Another concern is my child who despite not being registered at the Embassy is still a U.S. Citizen and when “caught” by the U.S. will suffer horribly. In theory at least, I should be more able to protect him from the U.S. Government as a U.S. Citizen than as a former U.S. Citizen, so I am not sure that relinquishing is the best route for my family.
I have been working on another post in response to Polly that I hope to finish on the train to work that will explain more, I think.
Again, thanks for the advice.
Thanks. Although I agree that it most likely will not pass the house, there is little comfort in that knowledge. This is not the first attempt nor will it be the last. Clearly, they will keep trying until they get it.
All it takes, is for it to be slipped in at the last moment of a thousand plus paged bill that is submitted just a couple of days before the vote with a name that implies ideals so lofty it would be political suicide to not vote for it and we’re done. Or, they could just insert it in during the conciliation phase, after a bill with out it has passed the house.
No comfort in knowing that my future rests purely on the political whims of a nation that sees its expats as nothing more than cash cows to be milked, completely unprotected by the rule of law.
I, we all are, just waiting for whichever life ending event will strike first. Bank accounts closed because we are US persons or getting “caught” and fined to financial oblivion by the IRS or having our passports revoked. Which one and when? There is no if. Even if there was an “if” about any of this happening, that is unacceptable. Our laws are to protect us from having to worry about “if” in respect to our government’s actions and against the certainty of it too.
I have looked into divorce to protect my family. As our joint account was in my name, it is my understanding that regardless of whose money is in it or our current relationship, it will still be reported via FATCA and my spouse ensnared wether we are still married or not. And we have a child that the US will claim once enough information is put into electronic media for the U.S. to discover my child’s existence.
I am looking into relinquishing but would be hit with an exit tax based upon the assets shared with my spouse. Assets purchased almost solely with my spouses funds. Despite the monetary and reporting nightmares associated, my biggest hang up is my belief that a naturalized citizen should assimilate into their new society. As much as I love Japan, I have no desire to assimilate. There are too many aspects of the group think mentality that I could never abide, in fact, this group think is a lot of what we are fighting against when we deal with homelanders. Further, I fear doing so would be akin to jumping ship and leaving my infant child aboard. How can I defend him if I have absolutely no say in the U.S.?
What we need and should demand is nothing less than the protection of the rule of law guaranteed by the constitution. Given that our government is violating the law in its relentless pursuit of all of us living overseas, the fact that it failed this time offers no peace.
@Eric
More the reason to hang onto old and expired passports. If you have a long established presence in your host country and suddenly are hit with that bullshit. Being able to demonstrate that your passport is neither lost, nor stolen and you can demonstrate this factually might be the first solid step into a very public asylum request as you are suffering from political persecution and harassment.
Bad news: The Hill said last Tuesday that “customs enforcement” (i.e. passport confiscation) will go to conference once the House passes their own version of such a bill.
http://thehill.com/blogs/blog-briefing-room/news-legislation-trade-and-agriculture/242598-obama-promises-strong-customs
See also http://thehill.com/business-a-lobbying/242451-lawmakers-reach-deal-on-customs-bill
The House version of the customs enforcement bill is H.R. 1907 (it doesn’t have passport confiscation provisions)
https://www.congress.gov/bill/114th-congress/house-bill/1907
https://www.congress.gov/congressional-report/114th-congress/house-report/114/1
To read and think about in conjunction with http://isaacbrocksociety.ca/2015/05/19/u-s-passport-applicants-without-social-security-numbers/comment-page-1/#comment-6126702, especially parts:
How Many U.S. Citizens Become Canadian Citizens?
Air Takeoff from Canada
Someone please refresh my memory.
What happens if the passport confiscation portion survives conference? Is the revised bill sent back to the house for approval before going to the Pres.? My memory from high school lessons says yes but it seems to not always be the case.
Moody Gartner’s blog post regarding the passport / SSN issue: http://www.moodysgartner.com/no-social-security-number-goodbye-passport/
More inside baseball
http://www.politico.com/story/2015/06/obama-trade-push-118566.html
http://www.jdsupra.com/legalnews/us-china-trade-war-tpa-passes-senate-29880/
Apparently nothing new with the House version of the bill, still just sitting there on the calendar.
House voted to pass H.R. 644
http://clerk.house.gov/evs/2015/roll363.xml
“concurring in Senate amendments with amendment” — I cannot tell from this whether passport revocation is in there or not. Any help?
Okay figured it out. The House substituted the Senate’s H.R. 644 with their own version which does not include passport revocation. Will post all the gory details on the front page, but in short, read House Report 114-146.