I am taking the liberty of cross-posting here at Brock this current post from MapleSandbox: http://maplesandbox.ca/2015/no-crisis-see-you-in-court/. Lynne Swanson’s post of Tricia Moon’s reply on the Jack Townsend blog needs to be read far and wide…
No Crisis? “See You In Court.”
Tricia Moon has responded on Jack Townsend’s blog where he suggested U.S. Senate did not listen to submissions on citizenship-based taxation because they “are not yet willing to say there is a crisis.”
Tricia’s words are powerful. I post them here with her permission.
I came to know of the situation involving expats in late 2011. At that time, this blog was one of the only places to come for reliable information. I was much too frightened to be anything more than a lurker. I had never been one to participate online or engage in any sort of “cause.”
I renounced in 2012. The only way for many of us to deal with the anger and feeling of betrayal was to fight back. A completely American trait. I have lived in Canada more than 33 years and came due to marriage. I am an original “Brocker” and am the
Secretary-Treasurer for the Alliance for the Defence of Canadian Sovereignty.ADCS-ADSC put together a massive submission to the Senate Finance Committee; a total of 7 separate parts. See: (https://app.box.com/s/yn25x1gk….
The comments and stories of American expatriates is nearly 200 pages, demonstrating real-life circumstances of people affected by the U.S. hunt for ”tax cheats.” See:
(https://app.box.com/s/yn25x1gk…
& videos: https://vimeo.com/citizenshipt… ).Needless to say, the lack of any real, substantial indication of change for American expatriates is deeply disturbing. As I understand it, there was a total of 347 submissions to the International Working Group. Seventy-five percent of the submissions are from individuals. On top of the dismay created by the SFC’s insignificant “nod” to the plight of expats, now we hear that those 260 submissions (compared to the estimated 7.6 million expats abroad), indicate this is not a crisis and therefore, it’s perfectly reasonable for the U.S. government to sit on this until they recognize one.
Surely, one can understand that this is much more than a “numbers” game. Not all of those 7.6 million are adults. Not all of those people speak/write English well enough to feel comfortable making a submission. Not all of those 7.6 million know they are about to be
exposed by FATCA. And many are probably still too frightened to say anything with their name attached to it. It must be understood that the number of submissions speak for thousands more. In no way can the number of submissions be a sole factor in determining the depth of the problem.As to whether there is a “crisis”, I ask that the following be considered:
Ø more bank accounts being closed; France is now the focal point
Ø cancellation of mortgages continues
Ø U.S. taxation of tax-deferred accounts (in countries of residence)
(in Canada two types of accounts are matching grants by the Canadian government; this amounts to a tax directly on the Canadian people)Ø capital gains taxation on principal residences in countries where no capital gains tax is imposed (and no interest for mortgages is deductible as it is in the U.S.)
Ø unwarranted insistence that accidental Americans with no meaningful ties to the U.S. other than birth are liable for exactly the same tax and information reporting requirements as Americans who lived in the U.S. for decades
Ø inability of parents/guardians/trustees to renounce for those unable to form intent
Ø disproportionate cost involved in tax compliance (compared to Homeland Americans)
Ø disproportionate information reporting requirements (compared to Homeland Americans)
Ø the undeniable psychological effects including:
§ destroyed marriages
§ people with serious stress, anger and depression, some are suicidal
§ people terrified they will never be able to cross the border to care for elderly parents, etc.
§ people humiliated by the requirement to report their legitimate financial accounts to FIN CEN
§ people labeled as “traitors” etc for trying to protect their “alien” families by renouncing/ relinquishing
I would like these committees to ask the people who HAVE been affected, “Was this a crisis for you and your family?” Or would they say to such people, “I’m sorry but unless there are thousands upon thousands of you writing to the Committee, your misery doesn’t matter.”
They have, in fact, just said exactly that.
There have been endless letters, emails, visits to Washington, forums, information sessions, media coverage, a large presence in cyberspace etc etc etc. It is abundantly clear:
The US government could care less about the American Diaspora and as far as they are concerned, it is perfectly acceptable to simply let this continue.
This situation is incomprehensible. The long, long history of no enforcement of these requirements, nor due diligence of any kind.
The misapplication of FBAR, designed to be applied to resident Americans with foreign accounts. The hideous situation of OVDP 2009 and FAQ#35.The horrible penalties that were inflicted on those who tried to come forward and “do the right thing.” Ratio of penalty for tax owed: 10th percentile (“minnows”) -129%;
90th percentile (“whales”)- 4.17%.Douglas Shulman’s endless threats and humiliating manner. Douglas Shulman’s arrogant attitude that he need not respond to a TAD.
The outrageous extra-territorial behavior of the US requiring all other countries of the world to pass laws to break their own privacy laws or else a 30% sanction applied.
The absolute myth that expats have any real representation in Congress with the reality that this is indeed “taxation without representation.”
And then there is Mr. Schumer: “Nearly 10,000 people in the last 10 years have renounced their citizenship. Not a single one has been penalized. They will be.”
It must be remembered (and matters very much), that the majority of expats are law-abiding and tax-compliant where they live. Where is the need for all this demeaning treatment? Did it ever occur to someone in Treasury, the IRS, anywhere, that they might just let us
know and ask first? There would always have been time later for all the punishing.This seems endless and is nearly the last nail in the coffin. For those retired or close to it, there is virtually no chance of change in their lifetime. Wait another 30 years? Even 20 will not cover it.
And many more will look at this and say “It’s time to get out.” There really are no options for these people.
In Cook v Tait, the standard (and very tired) justification for citizenship-based taxation, Justice McKenna writes:
“In other words, the principle was declared that the government, by its very nature, benefits the citizen and his property wherever found and, therefore, has the power to make the benefit complete.”
I don’t see it. I just don’t see it.
And our answer to the U.S. Government, as stated many times after the release of this report is:
“See you in court.”
One more mention of Nina Olson’s latest: http://www.bna.com/irs-taxpayer-advocate-n17179933591/
“The IRS national taxpayer advocate told lawmakers she will keep up the pressure to lighten the compliance and implementation burdens of the Foreign Account Tax Compliance Act.”
Pressure? Surely lawmakers won’t even notice there’s pressure there, just like they haven’t noticed for the past 5 years.
Do lawmakers send the Taxpayer Advocate the same kind of form letter they send to the public, or do they not bother?
Jack Townsend “.. suggested U.S. Senate did not listen to submissions on citizenship-based taxation because they “are not yet willing to say there is a crisis.””
Yet;
“…each year since 2008 in her
annual report to Congress, the National Taxpayer Advocate has ranked
problems facing international taxpayers as among the “most serious”
problems facing U.S. taxpayers. 26…”
from
Mason, Ruth, Citizenship Taxation (May 15, 2015). Southern California Law Review, Vol. 89, Forthcoming; Virginia Law and Economics Research Paper No. 2015-07. Available at SSRN: http://ssrn.com/abstract=2606744
@Norman, who knows if Congress is even awake to hear what she says, but in any case, there is no actual political or other penalty for ignoring fairness or justice, and so they merrily continue their willful blindness ways, so from their point of view, who cares? Moral suasion has had no effect. Only legal remedies accompanied by negative PR will. Legally forcing them to release the actual numbers renouncing AND relinquishing might also – though the State Department continues to pretend that they don’t either compile or have those numbers to proffer.
This is the kind of IRS we’re up against, if they’ll do this stuff to residents, why would they care about those ‘abroad’?;
“…Ambitious law-enforcers often target these innocents because catching the guilty is so much harder….”
http://www.wsj.com/articles/the-irss-ill-gotten-gains-1437001667
Too bad the Institute for Justice, in Virginia is unlikely to take on the “treaty gaps”, US extraterritorial CBT, FBAR, FATCA, etc.
http://www.ij.org/irs-forfeiture-petitions
Or would they consider the plight of minor children being required to file their own FBARs, and those deemed legally incompetent having their disability benefits and disability savings taxed? How about the denial of renunciations for those two groups, and the refusal to let a parent or guardian do it on their behalf? http://www.ij.org/about
A search shows me that the Institute for Justice was previously mentioned on IBS a few times over the last few years here.
Propaganda has been used effectively by the Obama Treasury Department to promote Fatca and in its crusade against Americans abroad. A case in point is the Letter to the Editor that Mark Mazur, Asst Treasury Secretary, wrote to The Economist last summer in which he said: “Sir – In response to your broadside against the Foreign Account Tax Compliance Act (FATCA), I would like to point out that the American Treasury has tailored the rules to minimise burdens and costs and has considered hundreds of comments from financial institutions and foreign governments. ” Robert Stack’s “Myth vs Fatca” was also a well-written piece of propaganda.
In this vein, an interesting use of propaganda resulted from the decision by Adolf Hitler to abandon the Gothic/ Fraktur style of print, which he reportedly detested, and change to a more Latin style called Antiqua. A circular was written by Martin Bormann in 1941 calling Gothic typeface the “Jewish letters of Schwabach” and ordered that it be replaced by Antiqua. The change was pushed through and Gothic/ Fraktur typeface was largely discontinued in Germany. As Wikipedia notes, however, “There is no evidence of any actual connection between Jews and the Schwabacher typeface.”
https://en.wikipedia.org/wiki/Schwabacher
Bormann’s circular letter is in Antiqua, of course, although the NSDPD letterhead is surprisingly in Gothic/ Fraktur:
http://www.ligaturix.de/bormann.htm
@innocente, when they deliberately ratcheted up the FATCA propaganda machine, those in the IRS and Treasury already knew this:
“…According to the IRS’s tax gap map for 2006, underreporting of individual business income was much larger in scale than was the underreporting, underpayment, or nonfiling of any other category for which data was included in the study, at $122 billion. That suggests that FATCA’s focus on offshore accounts is a “misallocation of effort,” Matthews said.
“If you look at tax compliance as a dike and there are little holes in it and you’re trying to patch those holes, the gusher is small business taxpayers,” Matthews said. But there’s never been a hearing on small business tax evasion, he said, adding that for political reasons, small business owners are unlikely to become a target”
from
Worldwide Tax Daily Quotes Mark Matthews on FATCA: Swatting Flies With Atom Bombs
April 2, 2015, Worldwide Tax Daily
http://www.capdale.com/worldwide-tax-daily-quotes-mark-matthews-on-fatca-swatting-flies-with-atom-bombs
I have put that quote in several threads here at IBS recently because it shows that what they chose to do to expats was deliberate. They knew according to their own reporting that the so-called ‘tax gap’ had little to do with those ‘abroad’. But we are a convenient scapegoat – and politically, fair game because we are outside the US, and many cannot vote.
The author of the quote has significant background in the IRS:
“………He also served as IRS Deputy Commissioner from October 2003 through December 2006, overseeing a period of unprecedented growth in enforcement activity. He was responsible for the IRS’s four civil operating divisions, the Criminal Investigation Division, and the Office of Professional Responsibility, which regulates tax practitioner ethics.”