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.”
Jack thinks because there was only 347 submissions there is no crisis? Perhaps ex-pats don’t have any faith or believe the US Congress is their solution, but foreign courts to reinstate their citizenship rights.
Awareness IMO is still at an early stage. However as FFIs continue to send out FATCA letters and search of the elusive ‘US Person’ awareness will continue to grow.
Once more ex-pats begin to feel chronic FATCA pain they will raise up in greater numbers demanding relief. Chronic is the right word because FATCA is not like acute pain. There’s no single cure like popping a single tablet.
Relief? How does one get relief from losing the right to employment. Is the US going to send me Yen to the blue sheet, Japanese for tarp, that my family and will be living under once we lose our accounts? Call me a skeptic if you must, but somehow I don’t think so.
Well said, Tricia! Thank goodness for all of you Brockers who saw me through my panic and anger, the process of renunciation, and the final taxation saga. I don’t think it will ever be completely over, because I have retirement income from the U.S. and family there I might want someday to visit (visa now required-will they give me one?), but the worst is done. I can’t tell you how grateful I am for your help.
Regarding the ‘numbers game…not all are adults…not all speak/write English…not all are aware of what’s going on (low-information voters?)’, I would like to add that most of them are likely former immigrants from Asian and Spanish-speaking Catholic countries who did not practise birth control and therefore have far more children than average. This further brings down the base of potential submissions from 7.6 million to perhaps 2 million, using an average no. of 2 children per family.
With Fatca/Fbar/CBT, the US is turning its ambassadors of goodwill into ambassadors of ill will for a measly $1 billion a year. Is this Peace Corps in reverse?
Thank you.
Another big help would be if the world’s nations and their respective FFI’s would finally get off their asses and collectively start pushing back. It is clear that there is no genuine support for FATCA around the world, only sullen resignation and capitulation, the way lesser mobsters genuflected to Don Corleone:
http://www.cayman27.com.ky/2015/07/09/tax-information-agreements-burdensome-to-financial-industry
http://m.sknvibes.com/news/newsdetails.cfm/92557
Thankfully, it’s “see you in court[s]”.
Thank you Trish for your well aimed words, and Calgary for bring them to our attention. In the words of Sir Isaac Brock, and repeated so often here by EmBee:
SURGITE!
Thank you Tricia. Well said! (My reply is in moderation.)
Thank you!!!
But instead of ““See you in court.”
See you in Canadian Court.
See you in French Court.
See you in EU Court.
See you in Mexican Court.
I will continue to say, there is no basis for the USA to exercise extraterritorial jurisdiction over a Citizen of X, resident in X. To say otherwise is ludicrous.
BRAVO TRICIA!!!
: )
Tricia – Excellent Post. Today on Twitter I nominated you “Mini US Ambassador of The Year” among Americans overseas. Yes I know you are no longer a USC – that is the provocative point of how the USG policies are turning US persons overseas against the US. The USG may just think that those US persons overseas who are no longer US persons will just go away. Wrong! & Worse for USG because as time passes you are getting to be a better “Mini US Ambassador.”
(John Richardson and Stephen Kish should also receive nominations, yet perhaps more appropriate after the suspected secret business gets made official.)
While you may no longer be a USP the principles you strive to bring front and centre with US government policy makers may very much be considered American – such as “taxation without representation.”
As you point out 75% of the 347 submissions to the International Senate Finance Committee work group are in regards to international personal taxation. These numbers actually belittle the submissions of some such as ADCS-ADSC whose 7 part multimedia presentation may in itself number more contributors than the entire number of submissions. Then there are some submissions by representative groups such as Americans Abroad and Republicans Abroad that no doubt combine input and are representative of thousands of US persons overseas. All now officially ignored by the US Senate Finance Committee. That is why I would like to see a more formal Declaration of Grievances and Resolves – modeled on the American original, to highlight that yes there is crisis and this is serious – by perhaps the new entity who will lead the lawsuit against CBT. Yes onward legal action yet there are gains to be had attracting more to the cause, attracting more fund raising attention, and further attempting to sway policymakers, journalists, and public opinion.
In regards to the US taxation of overseas personal residence example: I suggest using language from Allison Christians “Tax Treaty Gaps” where double taxation flows through without offsetting tax credit (to show serious flaws with the tax treaties and highlight unfairness and guaranteed double taxation). And one may point out differences in tax regimes and that a reason why Canada and other nations do not have taxation on principal residence or estate tax (especially harsh on nonUS person spouses) IS that Canada and other countries have much higher other taxes such as on earnings, VAT, sales tax etc.
Great comment!
Thank you Tricia!!! You speak for me. I am one of those too scared to put my nAme to anything yet until this horrifically long process of compliance is done for me and my kids. So stressful, soul destroying, lonely , time consuming, frightening and very expensive. Daily I wonder if I will have anything to show for my 35 years of hard work and struggle as an expat single parent when it is a done. The commitment and bravery of you and others leading this fight inspires me and fills me with gratitude.
The IBS lawsuit will act as a blueprint cross the world’s legal systems I’m convinced of that especially in common law countries.
Thank you Tricia.
Interesting story in the WSJ about FATCA swing voters.
http://blogs.wsj.com/expat/2015/07/03/opinion-u-s-expats-could-make-a-difference-in-2016-presidential-race/
@Tricia, thank you.
The US government could care less about the American Diaspora
According to Encyclopedia of Diasporas an American diaspora DOES NOT EXIST …
Understand this if you understand nothing else: the United States of America is exceptional in absolutely every respect.
Sauve qui peut.
Thank you Trisha.
@USXCanada, “According to Encyclopedia of Diasporas an American diaspora DOES NOT EXIST …Understand this if you understand nothing else: the United States of America is exceptional in absolutely every respect.”
B I N G O
I have had that mindset for awhile, as an example Ginny and Gwen the plaintiffs are in fact American Citizens Abroad, they are NOT Canadian Citizens in Canada…well thats what the Exceptional States of America thinks.
Americans NEVER EVER emigrate from the USA, any leave is TEMPORARY.
Hence, there will never be relief coming from the USA, case in point the footnote on the bipartisan report last week.
I remain of the conviction that Non-USA Courts will need to issue rulings that certain persons are Irish Citizens, Canadian Citizens, EU Citizens in order to protect persons in their respective country.
Should I apply for a Canadian Passport, which i am eligible for and then enter Canada on said passport I am within Canada solely and absolutely a Canadian Citizen. But regardless if I enter on my EU Passport, I am solely an EU Citizen.
Trisha Moon:
This @USCitizenAbroad thanks you on behalf of all US Citizens (or those accused of being) Abroad.
Wow, Tricia!!! You’ve said it all. Thank you!!
Although Jack Townsend has not yet responded directly to Tricia’s comment he has responded to Mr. A who asked that he carefully read her comment. Basically, he seems to think that unless somebody with clout (that’s not us, it’s corporations) does the lobbying, Congress will not perceive a crisis and take action. So 260 SFC submissions boil down to Mr. Stack’s myths, having no significance, writing “anecdotal complaints”.
Jack Townsend wrote:
Unfortunately, most of those corporations big enough to have any political clout probably have their US employees on cushy expat packages, probably even do their employees’ taxes for them, so those employees are the least likely to feel the burden of the Kafkaesque rules the rest of us have to worry about.