Psychologists describe 5 stages of grief based on the Kubler-Ross model introduced by Swiss psychiatrist Elisabeth Kübler-Ross in her 1969 book, ‘On Death and Dying’. Although originally ascribed to the emotional stages experienced due to death of a loved one, the model can also be useful to understand the responses to any subjective trauma that a person may go through, for example a relationship breakup, a job loss, or a ‘OMG! I am a US taxpayer’ moment.
The key here is ‘subjective trauma’. Many ‘US persons’ know what it is like to have people roll their eyes, yawn, or wonder why we are so worked up, just because we discover we are subject to FATCA (what’s the big deal? You ARE an American!), or because we discover we are US taxpayers (if you don’t like it why don’t you renounce?). Typically, we do not get the sympathy one would get if we had a serious illness, or lost our job, or divorced our spouse.
Non-US persons for the most part, just do not ‘get’ the ‘US person’ curse, because to be FATCA’d and CBT’d is not within the realm of normal human experiences. We are unique and special in the world that way – thanks to USA’s exceptional treatment of those it deems ‘US persons’. Nevertheless it IS traumatic for those of us who have lived most or all our lives in countries other than the USA, and who have never had a clue we were US taxpayers on our non-US income, to be FATCA’d and CBT’d.
The following are the 5 stages of grief as outlined in the Kubler-Ross model. Keep in mind that these stages are not necessarily linear. One day you may feel like you are angry beyond belief, and the next day you may feel that it just is what it is. Hopefully, at some point, most of your days will fall into the latter category.
Denial.
The first reaction to hearing one has a terminal illness, or their house burned down, or they are subject to the tax laws of a foreign country, is denial. This just CANNOT be for real. It makes no sense. This has got to be wrong. How could I have lived all these years and NOT known I was a US taxpayer? There must be exceptions for people like me who don’t live in the USA. They surely cannot be referring to ME.
Anger.
Once the initial shock wears off, anger follows. We want to blame someone or something. We may be angry at the doctor who gives us a bad diagnosis, at the driver who caused the accident, or at ourselves for not doing something to prevent whatever bad thing happened. We are angry at the Canadian government for not standing up for us, at our spouse who thinks we are over reacting, at our neighbour who doesn’t want to listen to our rants, at ourselves for not figuring out years ago that we were US taxpayers, or at the American government for acting like it owns us.
Bargaining.
This is the stage where we play games with ourselves, and with others, desperately trying to ‘work it out’ or ‘fix things’, so that we can go back to the way things were before. The person whose romantic relationship is at an end may promise to change their behaviour – anything to not have the relationship end. The dying patient may promise God he/she will be a better person or take better care of himself/herself – anything to not have to die. The newly aware US taxpayer searches for a way to work out their non-compliance: streamlined program? 5 years tax compliance catch-up? – just please don’t penalize me for my ignorance.
Depression.
Reality is setting in now. There is no easy way out. We are not going to bring our loved one back. Our job is gone forever. The relationship is definitely over. No matter which route we take to solving our ‘US taxpayer status’ we are going to pay – whether that be in taxes, compliance fees, penalties, loss of privacy, loss of US citizenship, or by being forced into hiding. It sucks no matter how you look at it, and this just makes us sad. 🙁
Acceptance.
Psychologists and grief counsellors say you are lucky if you get to this point. Many people get stuck in anger or depression for years or even a lifetime – the widower who becomes a recluse when his wife passes away, the mother who mourns a lifetime for the child she lost, the aspiring athlete who never made it to the big leagues and seems forever lost in his former glory years, the ‘hidden’ US person who cannot shake the mental chains of his unwanted ‘US taxpayer status’ even if he has logistically found a way to deal with it. The luckier people at some point accept the reality of what has happened and find a place to put it so that it does not interfere in their daily lives anymore. The widower finds peacefulness alone, or maybe finds new love. The mom, whose child is gone, remembers the happy times she spent with him/her and stops dwelling on what was lost. The US person, finds a way to deal with his/her own particular situation – stays hidden, or becomes tax compliant, or renounces – and moves on with his/her life.
George,
What the US is really doing is destroying the idea of sovereignty.
Yazz, you say: “So, about Gwen and Ginny living outside of US jurisdiction, and whether they are considered US citizens or not under the 14 Amendment depends on how Canada characterizes them and not how the US characterizes them.’
My feeling is that Canadians Ginny and Gwen should be the ones to determine whether they accept the imposition, without their consent, of U.S. citizenship on them by the 14th amendment of a foreign government
A few weeks ago I argued with a U.S. attorney experienced in the constitution that, notwithstanding the 14th amendment, border babies who spent only two days in the U.S. (at a U.S. hospital) need not accept the imposition of U.S. citizenship without their consent. As expected, he disagreed with me (“there is no higher law”) but only would say that U.S. citizenship status imposed on, for example, a Canadian could be “modified” if there happened to be a treaty to this effect between Canada and the U.S.
@Stephen kish
I would disagree slightly
Whist in Canada ginny and Gwen can not accept their possible status of Usa citizenship
Dual citizenship other than commonwealth citizenship does not exist under the law of canada
I would say that Canadian law does not allow them in Canada to change their citizenship like changing clothing
Dual nationality simply does not exist in the law and actually we need to stop using the term
Stephen
The only way they could accept the imposition of us citizenship in Canada is by renouncing their Canadian citizenship
Yazz,
Perhaps the Canadian government will ascertain with ADCS-ADSC litigation. They tell us *Just renounce* and they tell us *Congress has spoken*.
I replied earlier that the US is setting very bad precedent. If US can pass any law it likes and impose citizenship upon persons without their consent for the purposes of taxation, then any other country should be able to do the same. I made the comment that this “should be good news to all these tinpot nations like Greece. It can simply pass a law making every citizen of the US and Europe a Greek citizen subject to its taxation.”
What the US is doing is destroying the idea of sovereignty and potentially creating havoc among nations if they were to follow its example. The US seems to act as if other countries do not have their own laws. FATCA is actually a hostile act against other nations, as it undermines their sovereignty and their laws with its threat of punishing their banks and other financial institutions with steep withholding penalties if they don’t knuckle under. I don’t know why other nations put up with this.
Whatever the case, and whatever bogus law they pass asserting their jurisdiction, they would have to actually prove they do, indeed, have jurisdiction. They would have to prove that they have police and enforcement power in other nations; that they can arrest, try and judge persons, seize their bank accounts and property, collect fines and imprison people……basically, act as if other countries don’t exist.
This is clearly a case of citizens of one country paying tribute to another, more powerful country. It seems to be a flagrant case of hegemony and raw imperialism. Americans should be ashamed.
The above comment at May 25, 2015 at 1:55 pm is in reply to Stephen Kish. Sorry about not addressing my interlocutor.
Yazz,
re: “I don’t know why other nations put up with this”
People (countries) are generally afraid of narcissists because they are scary. Their vindictiveness knows no bounds. The price for not cowtowing to a narcissist’s demands can be deadly.
re: “[USA] act(s) as if other countries don’t exist. ”
Narcissists see people as objects, not as real people with feelings and emotions. They exist only for the narcissist to use as he/she sees fit, so in a sense, others really don’t exist to the narcissist.
re: “Americans should be ashamed. ”
Narcissists are not ashamed of the nasty things they do. They project that feeling of shame onto their victims so they don’t have to feel it themselves. It is the US persons’ fault as they are ‘tax cheats, not paying their fair share’.
George: “Dual citizenship other than commonwealth citizenship does not exist under the law of canada.”
One would think that that would settle the matter for Gwen and Ginny, and all others in their situation.
Dual, or more, citizenship is when countries make equal citizenship claims on persons. One country is not obliged, however, to honor the claims of another, as must be the case for Canada, though a country might recognize that such a claim exists.
The problem I see for Canada (and other, similarly situated countries) is that it is being obliged to treat these persons who are claimed as citizens of the US as both Canadian citizens and not Canadian citizens at one and the same time. I don’t know. Are such blatant contradictions allowable in law? When are heads going to start exploding from the logical dissonance this creates?
Countries might rationalize this by claiming it is solely for purposes of taxation, and that it doesn’t concern other rights, protection and privileges. But taxation seems something so fundamental to citizenship that such a pretext should not stand. The ability of a country to tax its citizens is one of the defining attributes of what a country is.
Yazz re: “The ability of a country to tax its citizens is one of the defining attributes of what a country is. ”
Are you sure that is what you meant to write? To me that sounds like you are agreeing with citizenship based taxation.
Whitekat: “Are you sure that is what you meant to write? To me that sounds like you are agreeing with citizenship based taxation.”
Sorry for the confusion. The ability of a country to tax its citizens under its jurisdiction is one of the defining attributes of what a country is.
Yazz, NP, for a moment I thought you had crossed over to the dark side.
Yazz if such blatant contradictions do not exist within the law then they can not exist.
People and politicians talk about dual citizenship as if it exists in the law when it does not
But let me say that the exceptional country does make it clear that dual nationality does not exist within its borders
As I think about this more i believe a Usa court would state that Usa citizenship not only trumps but extinguishes another citizenship even in its own borders
george,
You make some very interesting points. I don’t think I can brandish my American passport here and actually have the government of the country where I am living take me seriously. They would say, no, I am a citizen of their country subject to their laws. I, also, doubt the US consulate would protect me from the local government authorities, saying that I am a citizen of that country and not under US protection. That’s how it would likely play out. It’s like you said: one cannot change citizenships like a change of clothes.
Is there anyone on Capitol Hill who is aware of these issues and implications? Since American expatriates and dual nationals do not have any representation in Congress, there is no one to defend us. This is really a very shameful situation for the US.
george: “As I think about this more i believe a Usa court would state that Usa citizenship not only trumps but extinguishes another citizenship even in its own borders”
As I said, the US seems to act as if other countries do not have their own laws, or that they even exist. The US might think that US citizenship trumps all others, but I would first want the opinions of other countries. My home country says I am one of its citizens, and not a foreigner. So who is right? The one with the bigger army?
@Yazz
and the one with the biggest economy….and the dollar.
Where countries had gone wrong was by not insisting that their citizens, whom the US claims are its citizens, be exempt from FATCA requirements as well as all the rest. FATCA and the rest would have only concerned persons who are sole citizens of the US.
I believe people should petition their elected representatives to amend any treaties and IGAs in this sense.
Can someone please respond? Cdn/US citizen, late 60s, married to Canadian, in Canada 45 yrs. Always filed taxes in US. PFIC compliance (let alone accounting fees) will gut our retirement: cat food time. I have no wish to ever enter US again and no property or family there.
Anyone else out there “considering” the strategy of civil disobedience? Please, I need to hear from those oriented toward that option… feeling like I am the only one. Please- my health is eroding.
@ Duchesse
From Martin Luther King – “Letter From a Birmingham Jail”
“One may well ask ‘How can you advocate breaking some laws and obeying others?’
The answer is found in the fact that there are two types of laws: there are just and there are unjust laws. I would agree with Saint Augustine that ‘An unjust law is no law at all.’
A just law is a man-made code that squares with the moral law or the law of God. An unjust law is a code that is out of harmony with the moral law.
To put it in the terms of Saint Thomas Aquinas, an unjust law is a human law that is not rooted in eternal and natural law.”
Thank you, Wondering. I realize I am asking for disclosure some may be reticent to make, but… is anyone else “examining” this approach? Needing some courage here. Any other strategy seems morally reprehensible and economically suicidal. I have in fact thought of suicide.
i came to canada in 1966 as a 6 year old
i received canadian citizenship in 1980
i have no family nor finical ties to amerika.
i have no need to ever travel to amerika ever again
i will not comply with a law foreign to my county of residence and citizenship
amerikan laws end at the amerikan border. full stop.
if the irs wants to mail me a brown envelope they are more than welcome to. it will end up at the bottom of the bird cage.
first and foremost i am a canadian citizen expect my canadian gov’t to protect me from an assult from a foreign entity!!!
@Duchesse, I was screwed big time by the PFIC rules, but with hindsight now suspect that the IRS doesn’t have the resources to aggressively pursue minnow expat tax returns. If you’ve declared the income on your tax return, that’s probably sufficient unless we’re talking about millions…of course, an accountant (particularly an enrolled agent) would be legally bound to determine the correct tax owed via PFIC calculations but a DIY filer would have a strong case for reasonable cause if they claimed ignorance of these remote 8621 forms, etc.
@ Duchesse
If you compare statistical reports of US “offshore” tax returns actually filed with the estimated number of so-called “US-persons” abroad (possibly 6+ million) you may draw the conclusion that at least 70% probably do not file at all.
In that the Canadian government will not assist in collecting taxes from Canadian citizens in Canada, Canadian courts will not enforce foreign tax claims, and the US has no direct power or mechanism to collect taxes in Canada, you may wish to conduct your affairs according to the very limited feasibility of collection. You certainly would not be the only one doing so.
@monalisa1776: Very sorry you lost so much. Am more a “sunfish” than a minnow, but that money is •just• enough to see us out given our mutual funds are key assets; we have no company pension(s). Grateful to you and others for your comments on strategy never dreamed I would consider.
Don’t think I can use Gosh-Shucks ignorance of forms as they have already kicked back my 2014 return asking for them, and this feels like the thin end of the wedge.
@Duchesse
If you are considering a hang-tough “see you in court” stance … this if for your consideration:
http://blogs.vancouversun.com/2011/08/24/verbatim-what-canada-says-about-collecting-irs-non-filing-penalties/
DON CAYO WROTE ON AUG 24, 2011
“Several correspondents and callers have asked me to post a link to the Canadian Department of Finance statement spelling out that the Canada Revenue Agency will not collect non-filing and non-disclosure penalties on behalf of the IRS.
If the department has posted a link to this statement, I am not aware where it is. I quoted from a statement in an email to me from an employee who asked that it be attributed to the department itself, not to any individual.
The full text of the statement, unedited, is:
• As outlined in detail below, penalties imposed under FBAR would not be collected by the Canada Revenue Agency (CRA).
• CRA does not collect taxes and penalties imposed under a foreign tax law, unless it has been agreed to do so pursuant to a reciprocal provision to that effect contained in a double taxation agreement in force between Canada and another country.
• The Canada-United States Income Tax Convention contains such a reciprocal provision, which allows for the collection by a country of taxes imposed by the other country, including civil penalties. The provision applies to all categories of taxes collected, and to contributions to social security and employment insurance premiums levied, by or on behalf of the governments of the respective parties. This means that the provision does not apply to penalties imposed pursuant to laws that impose only a reporting requirement (as opposed to those that impose taxation along with reporting requirements).
• Thus, penalties imposed under the U.S. Bank Secrecy Act for failure to file Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts, commonly known as “Foreign Bank Account Report”, or “FBAR”) are not covered by the above provision of the Canada-U.S. Income Tax Convention and would not be collected by the CRA.
• Moreover, the obligation to collect taxes imposed by the other country does not apply in cases where the individual was a citizen of the requested state at the time the tax liability arose in that other country.
• This means that the CRA would not collect the U.S. tax liability of a Canadian citizen if the individual was a Canadian citizen at the time the liability arose (whether or not the individual was also a U.S. citizen at that time).