In my post, Our Sociopathic Society III: A cure or a coping mechanism?, I argued as follows:
Thus, complaining to a sociopath, throwing oneself at their mercy hoping for compassion, rationality or justice is a very bad idea. You cannot reform a sociopath with wise and reasonable arguments.
I then linked to a Sopranos video in which Pauli and Christopher murder a waiter who appealed to their sense of justice, comparing that to the amnesty program of the IRS, OVDP. I concluded that the best way to deal with a sociopath is to steer clear. This is particularly true if these same sociopaths control the law enforcement and justice departments of your country.
But in steering clear of the sociopaths, there are multiple strategies. What works for me may not work for someone else. I grant that. So I am going to list below, with some comments, strategies which may help and which I personally endorse:
- Do nothing. The most successful strategy that I’ve seen thus far is from my friends who weighed all their options and decided not to do anything about the IRS’s importunate demands. People who decided to do nothing in 2011 have stayed safely out of the cross-hairs of IRS–at least some in Canada have been able to lay low with no consequences. The same is not true of people in countries where their US status causes the bank to eliminate their accounts. I would point out that I was tax compliant but not FBAR compliant. So far nothing bad has happened to me.
- Renounce/Relinquish United States Citizenship or Personhood: This strategy is becoming rarer. The sociopathic fee of $2350 precludes some people from exercising their universal human right to change their nationality and the tax filing requirements to get the IRS off your back can be daunting and expensive. Furthermore, some people just can’t do it because it would frankly bankrupt them–they may have had PFICs in their retirement portfolios or took advantage of various Canadian or other foreign corporations for the purpose of tax deferment. If so, actually “coming clean”, as the sociopaths like to call IRS compliance, is just simply not a workable option.
- Strategic Lying or Omission of Truth: I have argued that it is not wrong to lie in order to prevent a crime from being committed. If a bank asks if you are a US person, why not just simply lie? The consequences of telling the truth will be that a human-rights crime will take place, as your bank will submit your account information to the CRA who will then commit extraordinary rendition in giving your private information to the IRS. There are other ways to use omission of the truth: If you are doing a US tax return, does the IRS really need to know about that spousal RRSP or TFSA or that PFIC or that personal corporation? In many cases, what the IRS doesn’t know may not hurt you unless you inform them.
- Die happy: The story of Mark Pinetree broke my heart. He really became anxious when he learnt of the requirements of the IRS and I think it shortened his life and made his final years miserable. However, my US-based lawyer sister said to me one bit of information that has always helped me in coping with the IRS sociopaths: everything in the DC system is slow–the government cogs turn very slowly. Chances are that you will die and your estate will pass to your heirs long before the understaffed IRS ever gets around to looking at your bank information, if indeed the CRA (et al.) ever does submit it to DC. I would wager that the sociopaths in the IRS will not want to work that hard–that means they will destroy the volunteers first (e.g., OVDP), and after that the wealthy whales, and only when they wrung these people dry, will they even consider going after the small fry. So die happy and do not allow the sociopaths to fill your life with fear.
- Keep yourself and your money out of the United States: The IRS has very limited powers of extradition and even less ability to collect taxes in foreign countries, and in keeping with the view that they will go after the easy money first, it is extremely unlikely that they will go after, e.g., a grandmother’s savings account in Canada. If you are worried that the US authorities are going to nab you at the border, you can avoid going there. But many of us (not me until 2018) continue to travel regularly to the USA for various reasons. Even I myself traveled to the USA to take part in the search of my father in the Alaska wilderness in summer of 2013. I was not arrested. But if you want to be sure never to fall into the hands of the IRS, then staying outside the US is a good strategy. My reason for not returning to the US is due to my fairly prominent civil disobedience.
- Civil Disobedience: I decided after Minister Flaherty’s announcement not to collect FBAR fines that I was going to stop hiding behind an alias and that I would fight the USA as Peter W. Dunn. I also declared that I would never file an FBAR. This places me into civil disobedience–I refuse to do what that the government of the USA requires and that the Trudeau government assumes I must do. I have done this openly to encourage to defy the US government; I would like to think also that my public stance also encouraged some others in Canada to take a public stance. Later of course, others have come out, such as Ginny Hillis and Gwen Deegan, with their public defiance of the IRS and the Canadian government.
- Sue the Bastards: Sociopaths sometimes find that society constrains their criminal behaviour. The ADCS lawsuit is an excellent strategy and our best hope of righting this injustice. I am however a little concerned that we are now up against a Liberal government. While it was the Tories in power, I figured the lawsuit would be an easy victory in the Canadian Supreme Court. However, now that the court has a nicer government, more aligned with the justices’ own political views, I fear that there will no longer be hostility between the government and the court. On the other hand, there is a slight chance that the Trudeau government will recognize that a Canadian is a Canadian is a Canadian–even if some Canadians happen to be tainted with US personhood.
In recent comment streams, some have called my posts paranoid rants, while others have expressed appreciation. I hope the above strategies show that I am not a paranoid ranter at all, just very realistic. If you want paranoid, go to one of our friendly compliance sociopaths that work in cross-border tax accounting or law firms, and they will urgently press you to come into compliance lest something really bad will happen to you. So far, in following this issue since 2010, I have observed that the really bad stuff happens only to those who have heeded the warnings of the sociopaths.