JC has spotted this. Allison Christians welcomes comments on her work in progress.
Bubblebustin says:
Allison supports incremental changes, as she’s convinced that the US is incapable of going right to RBT. I believe that if US legislators are capable of seeing how it should make it easy for people like Tina to exit the system, it will realize that there’s something really wrong in preferring taxpayers over citizens.
Monday, January 18, 2016
Uncle Sam Wants…Who? At UBC Law This Week
This week I will be in Vancouver to present a paper at the UBC Allard School of Law. The paper, “Uncle Sam Wants…Who? A Global Perspective on Citizenship Taxation,” is now available in draft form on SSRN. Here is the abstract:Across the globe, banks are flagging accounts with indicia indicating their owners may be “US Persons,” making it possible for the United States to enforce its taxation of nonresident citizens extraterritorially for the first time in history. The indicia method constitutes a mining expedition for US citizens carried out by foreign banks and governments. Establishing a tax jurisdiction in this manner is unprecedented and has significant practical and normative consequences. In the case of so-called “accidental Americans,” it violates one of the most fundamental and universally- acknowledged tenets of taxpayer rights, namely, the right to be informed about what the law requires. Third party indicia-searching should be universally rejected as a means of identifying a taxpayer population. Instead, the United States itself is responsible for cataloguing, informing, and educating its global population of taxpayers. Those who don’t belong in the system should be allowed to opt out without cost.
I welcome comments on this work in progress.
Excellent analysis, well written, exposing each category and proxy issue. Am following all these developments as it may well affect my life shortly upon returning to Montréal.
FATCA compliance is a life changing event and nothing short of it. It is Tyrannical by the nature of discovery of us persons and implementation of reporting according to the IGA model that governs the governments processes of the witch-hunt under threat of 30% sanctioning of us sourced monies to all financial entities. Where is the fiduciary duty in all of this from the financial institutions and the Canadian government in the case of Canadian born dual citizens?
This is a very interesting, well researched and (in my opinion) significant paper. It focuses less on what FATCA actually does and more on the theory behind the rules in the FATCA IGA and how (people are deemed to be “U.S. persons”). Professor Christians makes the point that:
1. Although there are a number of ways that one could be a “U.S. person” under U.S. law, that the “identification” rules in the FATCA IGAs focus on U.S. “place of birth” as the primary (and actually ONLY indicia of U.S personess.
As all Brockers know, a U.S place of birth does NOT necessarily mean that one is a U.S. citizen (relinquishment anyone?) Interestingly U.S. law would define certain persons “Born Abroad” and Green Card Holders to be “U.S. persons”. Nevertheless, the “search identification rules” under the FATCA IGAs do NOT easily allow for the identification of Green Card Holders and those born in Canada to U.S. parents.
What this means is that the USA is really trying to enforce taxation on whose who were born in the United States. This confirms that, for all practical purposes, that the USA is NOT practising “citizenship taxation”. Rather it is practising “place of birth taxation”. Furthermore, the USA and the USA alone defines who while “Born In The USA” has met the requirements for relinquishment.
To put it simply, US citizenship is actually a “property interest” that the USA maintains in those who were
“Born In The USA” – that is until those unfortunate souls are able to “buy their freedom”. Does this not draw a parallel to an earlier period in the United States what led to the 14th Amendment?
In any case, it would be very interesting for comments on this post (and on Professor Christians’s blog) to focus on two things:
1. What kind of “U.S. persons” will be uncovered by the indicia in the FATCA IGA? and
2. What kind of “U.S. persons” will never be uncovered by the indicia in the FATCA IGA?
By entering into FATCA IGAs, countries have agreed to “turn over” a subset of their citizens to the United States. This reminds me of the premise in the book: “The Hunger Games”. I urge you to see the recent two movies based on the book (MockingJay, etc.)
At the end of the day, the non-US courts are going to have to decide not on CBT, but does allowing the US collect FATCA data on 100% of ‘US Persons” who are citizens of their local country constitute discrimination / harms?
Hey..the US Congress can pass a law saying the US has full ownership of the moon, but I don’t think the BRICs would agree to that. Obviously these countries are towing the line until the post WWII dollar system breaks down with a Yuan alternative. This infrastructure is now being build with the AIIB, and Chinese based commodity trading in gold and oil, but it will take time.
Pundits in the US think this will take decades like pound sterling was phased out. I’m not so sure, things happen much more quickly in today’s world than in 1906. The internet is the best distribution system the world has ever known and ideas get passed around much more quickly impacting on people’s behaviour.
Until that day comes, we must seek re-dress from foreign courts to rule against FATCA/IGAs and also don’t forget about the banks that have changed their T&Cs making people sign away with their Data Protection rights so in the event an IGA is ruled illegal, the banks can send the data directly to the IRS with IGA involvement. This base needs to be covered as well.
Many steps in the right direction put forth in this document if the US could drop false pride with its *exceptionalism* to act instead on common sense to implement these types of solutions as some of us may never see the day that CBT is ousted for the more fair form of taxation – the actual residence of the taxpayer, where one receives benefits. This would enable us to come out from the shadows of fear we live in, afraid to come out with our names and circumstances. We could get on with our lives. We who are affected could live by CHOICE, not to be deemed *willful tax evaders* once our ignorance is erased and we now know what US CBT really means. We do have lives to live without this being the main focus of every step we now make.
This analysis highlights the importance of our own countries wrongly agreeing that *Congress has (or had) spoken*. It highlights the critical importance of the ADCS-ADSC lawsuit and others like ours. Let’s make this happen (http://www.adcs-adsc.ca/) because as Allison Christians points out …
http://isaacbrocksociety.ca/media-and-blog-articles-open-for-comments-part-3-of-3/comment-page-9/#comment-7095677
@Calgary411
Completely agree. Recently an ad for an expat tax firm appeared on my Facebook page (main section, not off on the side) and the really sad thing was how many people responding seemed to have absolutely no idea about CBT/FATCA. I am guessing the firm targeted people with U.S. hometowns living abroad (they couldn’t have done it by birthplace), but the ignorance of some people was breathtaking.
This is an excellent piece. She carefully builds the case for abandoning CBT. The problem is to convince Congress of this. By the way, what would it take to get rid of CBT? What kind of rule/law/regulation is it? It is something Congress could (theoretically at least…) abolish?
Allison Christians not only builds the case for abandoning CBT — for, realistically, just how long would that actually take? She also suggests a logical, common sense solution / a bridge to give those now affected by US CBT a CHOICE in their future, a way to come out from the shadows that we should not have to live in once we know what US CBT REALLY MEANS.
The last time history recorded a system like OURS, (I am a non expat who thinks my government has lost it’s mind), was the Roman Empire which sent tax collectors to all of the known world to collect taxes on the local population.
We all know how that ended. Not well, but do you think our dumbed down politicians have a clue what builds nations and what tears them down. When the citizens loose respect for their government they have an obligation to tear down that system and build a new order. I think I just paraphrased Jefferson. He would be proud that there are citizens who want to re establish Jeffersonian government.
We must start by destroying the Marxist Tax system and its collection mechanism, the world wide tax collectors, the banks that are participating in the collection system.
As for the “physical presence” test, counting days is also ambiguous. If you pre-clear in Toronto Monday to board a U.S.A.-bound flight, did you “enter” the U.S.A. at that time? What if the flight is delayed and you cannot even board until after midnight? Did you “enter” the U.S.A. on Tuesday? Or do you not “enter” until the flight lands in Boston? Or when it reaches the gate?
“FATCA’s mechanism for identifying tax subjects allows the United States to impose claims on some people that it never knew to exist, let alone to be its subjects.”
I’ve been hanging around this board for quite a while, but once in a while I still stumble across a new understanding of the situation. The United States at this point in time doesn’t really have citizens anymore. Effectively, present US law means it now has subjects. Homelanders simply can’t understand this because they aren’t exposed to the ugly side of it themselves.
The US government has totally forgotten that the people once fought a revolutionary war over the right to move to another country and not be claimed as subjects by the Crown.
@tom a
I also ran into similar problems trying to figure out physical presence issues in terms of conveying US status to my Canadian born kids. I left the US when is was in my early 20s, which makes the physical presence requirement of 10 years after age 14 a real squeaker for my first born (1981). What does physical presence mean? Is it actual residence? Does it include a sabbatical in the US? Does it include a visit with relatives? The whole thing is ridiculously unworkable, laughable if it weren’t so tragically real.
WOW! Allison Christians for President AND Prime Minister! Her recent paper is a stunning analysis of all that is wrong with citizenship-based taxation. It also provides common-sense solutions that could be implemented by the US government tomorrow in advance of the day when that intransigent organization actually dumps CBT in the dustbin. I urge everyone who is engaged in writing letters to politicians and journalists to provide a link to Allison’s paper.
Did everybody notice Allison’s reference to our UN Human Rights Complaint in footnote 80 on page 29?!!!
What of the quintessential accidental American born abroad, unregistered but unsure of her status? An honest “I don’t know” response when asked to certify they aren’t a US person is tantamount to “yes”, because the process by which one would need to go through to determine a negative exists (a trip to the consulate) would only grant our hapless accidental a US passport. Just ask WhiteKat about her trip to the consulte just to find out whether or not she’s a US citizen resulted in.
Self-certification for these people is really entrapment for those who might have stayed out of the system otherwise.
@Bubblebustin,
My experience of 30 years ago is not really a meaningful comparison. Firstly, I was operating from the perspective of the ‘lucky dual’ where I was not aware of potential dangers of US citizenship (unlike the person in your scenario whose bank forces them to prove a negative). Secondly, the process of acquiring a US passport has changed over the years. For example, now you need a SSN, something I never acquired. It is highly unlikely that today anyone is going to end up with a US passport as easily as I did decades ago.
@BB, actually, its not just highly unlikely, it would be impossible.
@WhiteKat
Sorry, it slipped my mind that you aren’t what Prof Christians refers to as the quintessential accidental American, as you have a US birthplace.
Would being denied a passport for lack of SSN be enough proof that someone isn’t a US citizen for the bank? I think I might have found another false negative here. If that’s the case, every person entitled to a US passport who doesn’t have a SSN should apply for a US passport and show their bank the rejection letter. That’s if you have the nerve to go on the IRS’s radar.
@BB, in reality I am a “fraud” – your word used to describe me in public at Brock some time ago, after I made the mistake of telling you offline (i.e. NOT at Brock) about my long ago acquired, unused US passport. Thanks for continuing to remind me to this day of my “indiscretion” (also from your words, but more recently).
Also, thanks for keeping in mind that WhiteKat is not exactly anonymous as I have published my name here at Brock on more than one occasion.
Loves and Kisses….WhiteKat
oooops….that would be HUGS and kisses, not LOVE and kisses.
Good grief, WhiteKat. I’m using Prof Christian’s words to describe quintessential accidental Americans who weren’t born in the US. Her words, not mine. It was not meant as a slight. As for calling you a fraud in public – I did not. I wrote it in a private email to you and you chose to put it on Brock – not me.
@ BB our recollection of events differs. If I cared to prove it (I don’t), I could find the quote at Brock where you called me a “fraud”. The email you sent me in private was to tell me to shut up because one of our ‘debates’ was not going well for you at that time.
In any event, it concerns me not WHERE you called me a fraud (nor that you called me one). My main point is that it was YOU not ME that brought up my US passport issue at Brock which was told to you in confidence. It was NOT YOUR BUSINESS TO DIVULGE MY PRIVATE INFORMATION, particularly knowing that WK was not just an anonymous alias at Brock.
I don’t care what ad hominids you use to describe me or where, just do not talk about my US passport situation at Brock in future. Got it?
@WhiteKat
True, you had told me about your experience at the consulate in a private email, but you chose to put my private email where I accused you of being a fraud and a reference to your passport on Brock. Not me.
I object to you accusing me of putting your confidential information on Brock when you did it yourself. That’s a hell of a thing to accuse someone of.
It’s you who chose to put my CONFIDENTIAL email on Brock, yet somehow YOU’RE offended that it contained confidential information about you? That’s pretty ripe.
“I object to you accusing me of putting your confidential information on Brock when you did it yourself.”
I would object also if what you claim is the truth. Please find the reference where I outed myself regarding my US passport situation which as you know, I have always felt could be information that might be used against me. Strange I would do this to myself. But I will apologize profusely if this is indeed what happened!!
However, please keep in mind that even if I did reveal at Brock personal information that I told you in confidence, you really have no business to keep bringing it up. So don’t.
Don’t send me private emails telling me “pipe down missy” and they won’t get published at Brock.
ooops…I think your exact words in that email were, “You’d better pipe down missy.” Not sure what you were planning to do if I didn’t, but you sounded pretty angry, I believe it was because I was for allowing accidentals (however one defines this group) to go free re: Obama proposal or some variation of, but you were afraid that letting these people free would somehow negatively affect your chances at getting CBT. Remember?