The US Department of Justice has issued a 57-page response to the filing of a Motion for a Preliminary Injunction by the James Bopp FATCA repeal legal team. The DOJ’s argument begins as follows:
Plaintiffs seek an extraordinary order that would halt enforcement of several duly enacted statutory provisions, along with associated regulations and implementing international agreements, aimed at curbing offshore tax evasion. The challenged laws are essential to tax enforcement, and the injuries that plaintiffs allege they have suffered as a result of such laws are self-inflicted, speculative, or even illusory. Plaintiffs’ claims for relief fail for lack of Article III standing, are jurisdictionally barred by the Anti-Injunction Act, and are meritless as a matter of well-established constitutional law. The preliminary injunction should be denied because plaintiffs have no likelihood of success on the merits and have no irreparable injury—certainly none to outweigh the great harm that the Government, and public interest in general, would suffer if enforcement of these laws were enjoined.
Republicans Overseas and others are reacting strongly to DOJ’s victim blaming tactics. Here are links to the original story at Republicans Overseas and to John Richardson’s comments at ADCS.
Here, again, is the complete DOJ document: DEFENDANT’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
It is obvious that victim blaming is, and will continue to be, a central tactic of this Administration, as it is finally put on the defensive and forced to justify its outrageously discriminatory and immoral FATCA campaign. Now may be a good time to remind ourselves of the essential characteristics and dynamics of victim blaming, which easily scale from the most primal one-on-one bullying to the systematic targeting and abuse of entire groups by the state. Here are a couple of good references to start with:
http://digitalcommons.uri.edu/cgi/viewcontent.cgi?article=1032&context=glbtc
Victim-blaming is a phenomenon that has been happening since at least the beginning of recorded history but has only recently been identified as a dynamic used to empower the criminal and maintain the status quo. Victim-blaming occurs when the victim of a crime or abuse is held partly or entirely responsible for the actions committed against them. In other words, the victims are held accountable for the maltreatment they have been subjected to. Perpetrators of crimes for which they blame the victim commonly enjoy a privileged social status opposite the victim, and their blame typically involves use of stereotypical negative words. The phenomenon of victim blaming is thus common in hate crimes, discrimination, rape and bullying. The main motivation for people to victim-blame is to justify abuse or social injustice. However, it is not only the perpetrator who engages in the victim-blaming. Perpetrators, bystanders and society and even the victims themselves practice and enforce victim-blaming. Each group of people who blames the victim does so for different reasons based on their power or lack thereof, self-defense and desire to find logical reasons for abuse or social injustice.
William Ryan coined the phrase “blaming the victim” in his book Blaming the Victim in 1971, as a response to years of oppression and the civil rights movement. He describes victim- blaming as a way to preserve the interest of the privileged group in power (Zur). Since then, advocates for crime victims, particularly those of rape, have adopted the phrase. Although Ryan coined the phrase, the phenomenon is well developed in psychology and history. As previously stated, victim-blaming has been happening at least since the beginning of recorded history. There are many examples of victim-blaming in the Old Testament regarding tragedies justified by blaming the victims as sinners (Robinson 141). Unfortunately, victim-blaming is still rampant today and has only recently been identified as problematic.
https://www.psychologytoday.com/blog/in-love-and-war/201311/why-do-we-blame-victims
Victim blaming is not just about avoiding culpability—it’s also about avoiding vulnerability. The more innocent a victim, the more threatening they are. Victims threaten our sense that the world is a safe and moral place, where good things happen to good people and bad things happen to bad people. When bad things happen to good people, it implies that no one is safe, that no matter how good we are, we too could be vulnerable. The idea that misfortune can be random, striking anyone at any time, is a terrifying thought, and yet we are faced every day with evidence that it may be true.
In the 1960s, social psychologist Dr. Melvin Lerner conducted a famous serious of studies in which he found that when participants observed another person receiving electric shocks and were unable to intervene, they began to derogate the victims. The more unfair and severe the suffering appeared to be, the greater the derogation. Follow up studies found that a similar phenomenon occurs when people evaluate victims of car accidents, rape, domestic violence, illness, and poverty. Research conducted by Dr. Ronnie Janoff-Bulman suggests that victims sometimes even derogate themselves, locating the cause of their suffering in their own behavior, but not in their enduring characteristics, in an effort to make negative events seem more controllable and therefore more avoidable in the future.Lerner theorized that these victim blaming tendencies are rooted in the belief in a just world, a world where actions have predictable consequences and people can control what happens to them. It is captured in common phrases like “what goes around comes around” and “you reap what you sow.” We want to believe that justice will come to wrongdoers, whereas good, honest people who follow the rules will be rewarded. Research has found, not surprisingly, that people who believe that the world is a just place are happier and less depressed.
But this happiness may come at a cost—it may reduce our empathy for those who are suffering, and we may even contribute to their suffering by increasing stigmatization. So is the only alternative to belief in a just world a sense of helplessness and depression? Not at all. People can believe that the world is full of injustice but also believe that they are capable of making the world a more just place through their own actions. One way to help make the world a better place to fight the impulse to rationalize others’ suffering, and to recognize that it could have just as soon been us in their shoes. This recognition can be unsettling, but it may also be the only way that we can truly open our hearts to others’ suffering and help them feel supported and less alone. What the world may lack in justice we can at least try to make up for in compassion.
DOI even quoted the Father of FATCA, Carl Levin: “the federal treasury an estimated $100 billion in lost tax revenues annually.”
Uncle Carl, can you please tell us how you came up with that figure? Please don’t say that you just pulled it out of your bunghole.
DOI wrote: “All four IGAs, in their preambulatory clauses, recognize the partner governments’ mutual “desire to conclude an agreement to improve international tax compliance”
DOI just forgot about the threat of a 30% penalty on all USD payments. Nothing like “mutual desire” at the barrel of a gun.
More DOJ BS — “The Willful FBAR Penalty Does Not Facially Violate the Eighth Amendment. The willful FBAR penalty is constitutional because Congress, in fixing the statutory maximum, cited its vital importance in tax administration and in investigating money laundering and terrorism.”
FBARs were originally designed for combating money laundering and terrorism. It was some ambitious DOI lawyers (now in private practice) who creatively invented the use of FBAR penalties against their OVDP victims.
I hope the judge looks at this website and not just the law.
Judge basically the US expects expats to be liable as a min tax, tax us on gaps btwn the two systems, and ignore the pay higher social insurance and comsumption taxes. Like the Boston Tea it’s not going to happen.
DOI = Department of Injustice
I was wondering if someone that has the skills and knowledge(that I do not have ) could write a very good petition regarding all of this and post it to change.org, have it sent to all Canadian ,PM, MPs MLAs as well as USA.
I have received many by email and the results for some are in the millions. There are tens of thousand of people here and USA that have never been informed about what is going on.
It would seem that with fed elections coming up in both countries it would be a great time to draw attention to this matter.
Maybe Donald Trump would get some media attention!!
I wrote:
‘THEREFORE: On one particular Form 1040, I wrote “SSN: Applied For / ITIN: Rejected”. AND: The DOJ complained to a court that I wrote “SSN: Applied For / ITIN: Rejected” instead of reporting her SSN. AND: The court agreed, ruled that I did not display a genuine endeavor to comply with the law, and overturned the IRS’s acceptance of that return.’
Jefferson D. Tomas asked:
‘@Normon Diamond: what if you just write “none, application pending” for the SSN?’
Well, I can only conjecture, because I only saw what they did when I wrote “SSN: Applied For / ITIN: Rejected.” So here’s my conjecture:
The DOJ would complain to a court that I wrote “none, application pending” for the SSN” instead of reporting her SSN. AND: The court would agree, rule that I did not display a genuine endeavor to comply with the law, and overturn the IRS’s acceptance of that return.
(Except maybe the DOJ would additionally claim that we hadn’t applied for ITINs, even though we had and the IRS had rejected the ITIN applications.)
DOJ clowns were quoted: “Bank records are owned by third-party banks, and plaintiffs have no reasonable expectation of privacy in such records.”
That is, except in countries that have bank privacy laws. Here are two examples:
Canada prohibits banks from revealing things like balances except with the consent of the account holder or by court order. The Canadian government had to violate Canadian law to find the amounts of deposits that were regularly made to my wife’s bank account, because a Canadian consul told me that was how they determined that no amount of money in my wife’s hands would be enough to overcome the first (of three) reason for rejecting her tourist visa application.
The US prohibits banks from revealing things like balances except with the consent of the account holder or by court order. For example when a person deposits money to another person’s account, they should get a receipt for the amount of deposit, but they shouldn’t get information about the account’s balance. I had a bank violate that law. Later I asked them about it, and they said they had corrected their procedures. Later they violated the same law. That bank no longer exists, but I don’t think that was the reason.
The US Supreme Court has ruled that non-resident aliens have no Fourth Amendment rights because non-resident aliens aren’t part of The People, as opposed to having Fifth Amendment rights[*] because a non-resident alien is a Person. However, illegal immigrants into the US had Fourth Amendment rights[**], and US citizens in other countries also had Fourth Amendment rights[**]. So I wondered, if a non-resident alien wants to obtain Fourth Amendment rights, can they illegally immigrate to the US to obtain those rights, and then return to their home countries just like US citizens in those countries? Even a lawyer who has argued in US Supreme Court couldn’t answer.
[* That was a long time ago, when the Fifth Amendment even existed.]
[** That was a long time ago, when the Fourth Amendment even existed.]
Anyway, circuit courts have already overturned the Fourth Amendment, and Supreme Court has allowed them to do so, so DOJ clowns will win on this.
“Uncle Carl, can you please tell us how you came up with that figure?”
He meant lost penalty revenue not lost tax revenue. That’s an easy mistake to make because the letters are right next to each other on the keyboard.
Here is an interesting one. Business owners in the US have been targeted for suspicious cash transactions and have had money from them seized.
http://www.foxnews.com/politics/2015/08/14/dairy-farmer-fighting-feds-after-irs-milks-him-for-30000/?intcmp=hplnws
Rep. Charlie Rangel, D-N.Y., and others on the House Ways and Means Committee agreed during the hearing that something was wrong with a law that made Sowers and others’ above-board transactions illegal. “That law to me is unconstitutional, unreasonable and stupid,” Rangel said. !!!! [It would be nice if he would say that about FATCA]
IRS Commissioner John Koskinen has pledged they are changing their procedures, saying, “we’re simply saying that we’re not going to go after an asset seizure if there is no indication of illegal activity.” !!! [So we see here a case of “the law is the law” going to be ignored based on reasonableness and if no indication of illegal activity (of course up to them to determine this definition)]
Kiwis on to some real protest here and have Uncle Sam in a box!
https://twitter.com/chrisyong/status/632390069572079616
Relevant: “justice is just a check somebody else has to write.”
http://www.theatlantic.com/magazine/archive/2015/09/how-wall-streets-bankers-stayed-out-of-jail/399368
If US citizenship “benefits” US citizens wherever US citizens go, could it also be argued that it disadvantages us too? If Cook v Tait turned citizenship on it’s head, perhaps it possible to do the same to Cook v Tait.
DOJ: Department of Orwellian Justice.
Dear Americans Abroad, especially you Accidental Americans,
Of course you are responsible for your tax and FATCA troubles. If only you had been good citizens, filed all your paperwork on time, and paid whatever taxes the wonderful U.S. of A. assessed against you, you would be fine. The facts that you may not have been informed of those obligations and may never have lived in the U.S. are irrelevant, as is the fact that the second-rate country where you live taxes you already. Perhaps you should have chosen different parents or should have chosen to live in the Land of Freedom to Carry Firearms.
I do appreciate all the taxes, penalties, and renunciation fees that you have been contributing to help US try to balance our budget, and I’m sure you will find ways to cope without local banking wherever you may have chosen to live outside the glorious U.S. of A.
Much love and have a nice day.
Your kindly and beloved
Uncle Sam
@bubblebustin, re;
“If US citizenship “benefits” US citizens wherever US citizens go, could it also be argued that it disadvantages us too? If Cook v Tait turned citizenship on it’s head, perhaps it possible to do the same to Cook v Tait.”
Very good point. If the former, then why not the latter?
Discrimination can be in differential OUTCOME, impact and effect – not just in application. Makes NO MATTER if it was “UNINTENDED” either.
For example;
https://en.wikipedia.org/wiki/Disparate_impact
“……..disproportionate “adverse impact” on persons in a protected class. Although the protected classes vary by statute, most federal civil rights laws protect based on race, color, religion, national origin, and gender as protected traits, and some laws include disability status and other traits as well.”…..
http://www.ohrc.on.ca/en/iii-principles-and-concepts/2-what-discrimination
“…Many people wrongly think that discrimination does not exist if the impact was not intended, or if there were other factors that could explain a particular situation. In fact, discrimination often takes place without any intent to do harm. And in most cases, there are overlaps between discrimination and other legitimate factors….”…
……….”…f) Systemic discrimination
One of the more complex forms of discrimination is systemic or institutional discrimination. Systemic discrimination refers to policies or practices that appear to be neutral on their surface but that may have discriminatory effects on individuals based on one or more Code grounds…”…..
FATCA IGAs assist the US in extending its grasp outside of its borders and jurisdiction. In the EU, FATCA can impede the free movement of EU citizens claimed by the US because it burdens them with two tax and penalty regimes and demands of them financial, personal and banking information that is not demanded equally from EU citizens without a US parent/birthplace. Therefore, the FATCA IGAs assist the US in extending discrimination to classes of EU and Canadian and other citizens living in countries outside the US – a discrimination which EU, Canadian and other IGA signatories have agreed to implement and enforce – elevating foreign US law in application to those with a US birthplace or parent above all other domestic laws in case of conflict – but does so specifically against only a subset of their own citizens and residents.
That the US DOJ claims that the FBAR APPLIES to ALL US citizens and “US taxable persons” “equally” does not mean that there is no discrimination if the EFFECT in reality is discriminatory – even if the US DOJ (and Canadian Con lapdogs) claim that any “mythical” or “illusory” negative impact is “unintended”.
Citizenship when disadvantaged by CBT does result in discrimination, yet DOJ says that the US has no control over how third parties, like banks, might respond to us. I’d say the same argument DOJ uses to deny any direct impact FATCA on us could somehow be used to undermine the “benefits” argument as it does seem to contradict it – as any benefits we derive from US citizenship too are “mythical”, “illusory” and “unintended”, while living outside the US.
@Bubblebustin I like the disadvantage argument to US citizenship abroad. Then a case of disadvantage outweighing benefits – especially if one does not take up the “benefits” and move to the US but remains living on a permanent basis outside of the US.
However, what you are suggesting is contra to the US patriotism religion that suggests only benefit to US citizenship – and that benefits do exist – and may not fathom disadvantage and dismisses any disadvantage. This angle would then need to pursued: causes and creates disadvantage, not just that disadvantages exist.
As we learned here recently in a letter from Sen Chuck Grassley that if you live overseas you get a “credit” to avoid double taxation. So everything all ok, to them. In reality US citizenship is a Sinkhole not a Credit; a Sinkhole not a Loophole.
Among other obvious comments:
1. The 30% FATCA “tax” is on CAPITAL not income – go find its equivalent anywhere on earth. But I guess it’s not a penalty if they choose not to call it one. Then again, they might call hanging a chiropractic neck adjustment and I suppose we’d have to accept their label.
2. Given that bank accounts these days are paying about 1-2% interest (let’s say 2%), and given 30% tax rate, the 30% tax is equivalent to about 38 years worth of “undeclared income” on average. Must be a reasonable substitute for the tax otherwise collectible.
3. if they are going to refer to Congressional committee “evidence”, they might as well add the committee reports that admit they never even thought of expats in their deliberations.
4. If the tax were on people of darker complexion or with the wrong colour hair, the debate would be a short one. That the tax should be on people born abroad, who married abroad or whose parents moved them abroad when they were children (between the three categories are to be found the great bulk of the 8 million expats caught up in the mess created by Levin et al) makes it no less arbitrary or discriminatory.
5. No Homeland American is excluded from employment in the financial sector for fear that his employer’s financial accounts should become reportable to a foreign government. No homeland Amercan must report anything at all regarding his normal, everyday bank accounts and the tax laws treat all investments that consumer protection laws where he lives allow him to purchase on an even footing. Those three simple issues – all by themselves – account for the great brunt of the brutally repressive force of American law on people they decide to call “expats” (personally, I don’t accept the tag, but DOJ may disagree with me for all I know). Tax gaps, double tax and the like are, compared to these, minor annoyances. If the DOJ is unable to see the discrimination in that – laws of no consequence to the every day lives of Americans of the “favoured sort” (those who don’t spell “favour” with a “u” and live south of the 49th parallel) and crushing threats to the everyday well being of those who don’t, well, there is little to be done to help them.
@AnonAnon
I pity people like you, the stupid ones.
The reason why we live in our “second-rate” countries is due to America being a truly second-rate country herself. After my visit there, I was appalled by the extensive poverty and rampant crime that I had witnessed. Instead of squandering billions on fighting illegal wars in Iraq, your Government could have invested the money to modernise your schools, reinvigorate your societies and rebuild your infrastructure. Your national budget is a mess because your Government mismanaged it. Hunting down accidental Americans in far away lands (who may not even speak a word of English) will not solve your problems.
Since FATCA was passed into law some years ago, I have been boycotting all American goods ever since. All expat Americans ought to be doing the same.
As for local banking, roundabout ways have sorted that out.
I only pay taxes once where I am resident, which makes perfect sense in all countries but yours and Eritrea (a second-rate dictatorship). Perhaps your Government could fix that, too.
So good luck to you and your has-been nation. And please build your Berlin Wall as high as possible, so that I don’t piss on Uncle Sam…
@Duality
AnonAnon’s letter was from Uncle Sam.
@Bubblebustin @AnonAnon
Deepest apologies for any misunderstandings; I do not know everyone on this site.
My comment still stands for Uncle Sam.
‘That the US DOJ claims that the FBAR APPLIES to ALL US citizens and “US taxable persons” “equally” does not mean that there is no discrimination if the EFFECT in reality is discriminatory’
No problem :-I
The FBAR applies to all US citizens and “US taxable persons” “SEPARATELY BUT EQUALLY.”
(Smiley :-I added for Irony, in hopes of avoiding another misunderstanding.)
‘1. The 30% FATCA “tax” is on CAPITAL not income – go find its equivalent anywhere on earth.’
Oddly enough, property taxes resemble a tax on capital. FATCA’s problem is different.
‘2. Given that bank accounts these days are paying about 1-2% interest (let’s say 2%), and given 30% tax rate, the 30% tax is equivalent to about 38 years worth of “undeclared income” on average.’
For people who declared the income, with $0.00 of undeclared income, the penalty is infinity years worth of undeclared income.
There was a complication one year when we had to estimate the amount of interest in one of my wife’s accounts. That was exceptional, equivalent to a few hundred dollars, because my wife was building a house. But no one could find the records. My wife (a non-resident alien of the US) declared her estimate and I was expecting to file an amended return someday. Later the passbook was found in the bank because they hadn’t returned it when the account was closed. An amended return would still have $0.00 in US tax and a potential reduction in future years’ US taxes because there would be an increased carryover from Form 1116. But meanwhile, the IRS decided our return was frivolous and refused to say why.
It turns out it’s illegal to call an estimate an estimate. You have to declare that you believe the amount to be true and correct even when you don’t believe it to be true and correct. But the IRS and Tax Court didn’t complain about that; the DOJ and Court of Federal Claims complained about it because the DOJ didn’t even consult the IRS.
Well meanwhile, when the IRS was refusing to say what they considered frivolous about our return, my wife told me her guess. She thought it was frivolous that I DID track down and declare interest income from non-US sources including ordinary bank accounts with a few dozen yen of interest (less than US$10.00 and sometimes less than US$1.00).
Of course now I know that the reason for considering us frivolous was that I declared the amounts of US withholding that were reported on Form 1099, when I didn’t know that Monica Hernandez had altered the IRS’s records of Forms 1099. I didn’t know it then. And it doesn’t affect the fact that penalties can be infinity times the amount of undeclared income.
‘4. If the tax were on people of darker complexion or with the wrong colour hair, the debate would be a short one.’
It’s not that simple actually. The 14th amendment gives US citizenship to blacks and whites but not to persons of intermediate colour. Someone recently posted a link to John Oliver’s episode on American Samoa. Congress passed a law granting US citizenship to Puerto Ricans but not to other parts of US territory. I don’t know how residents of Saipan obtained US citizenship. Anyway, the debate would not be a short one. 114 years and counting.
Re: No expectation of privacy with a third party.
Let’s see.
There’s you. That’s one.
There’s the bank. That’s two.
Who is the third party that deprives you of your expectation of privacy?
Is it me or these DOJ guys who can’t count?