If u want 2 renounce ur US citizenship DO NOT believe those who say u can be refused entry ever again-IT IS NOT TRUE https://t.co/I7K58J2jzd
— Patricia Moon (@nobledreamer16) June 2, 2016
I have become very tired and once again, extremely irritated at claims “if you renounce for tax reasons, you can be refused entry into the United States-ever again.” This is simply not true. It is late and am finally sleepy so am just going to copy/paste from set of tweets created after seeing a volley of tweets between Keith and 2 other individuals. I hope it makes sense. Please, please, please, make sure you become familiar with this information in an accurate way and pass it on every time the issue comes up.This is the only way to offset the way this information is aggressively used to frighten people. There is no excuse for it. I hope someday, someone who fell for it realizes the deceit and sues the damned compliance person who is responsible for it
MYTHS ABOUT THE REED AMENDMENT & THE ExPATRIOT ACT
No would-be US renunciant/relinquisher should ever believe an advisor 2 making claims about Reed Amendment preventing ability to enter the U.S.1/11
Willard Yates on why the Reed Amendment is unworkable. “There was a little problem from the outset. It’s called section 6103 of the IRC.” http://bit.ly/1ud93xP 2/11
S 6103 prohibits disclosure of “return information,” by the IRS, subject to criminal prosecution under Title 18 of the U.S. Code” http://bit.ly/1ud93xP 3/11
How was the IRS going to tell INS that a taxpayer’s expatriation was tax motivated? Ruling procedure eliminated in 2004. http://bit.ly/1ud93xP 4/11
Whole idea of the mark-to-market tax section 877A was 2 eliminate “motive” element of prior version of S 877 http://bit.ly/1ud93xP 5/11
IRS does not make rulings on whether or not expatriation was tax motivated. In 2002, authority switched to DHS. http://bit.ly/1ud93xP\ 6/11
DHS has never issued regs bc unless former citizen admits given up due to tax, no way to enforce. From 2002-2015 -only 2 refused entry. http://bit.ly/2850Le8 7/11
Implementation of section 212(a)(10)(E) of the Act has been hindered by numerous policy, operational, and legal complexities and challenges. http://bit.ly/2850Le8 8/11
Confidentiality laws prevent disclosure of tax information to DHS or DOS absent a voluntarily signed disclosure from the renunciant. http://bit.ly/2850Le8 9/11
Congress since amended the tax code to eliminate a direct connection between expatriate tax liability and a renunciant’s intent. http://bit.ly/2850Le8 10/11
There is no law called the ExPatriot Act. Claims in 2015 that it would pass since attached to immigration bill incorrect. Has failed twice to be passed into law. 11/11
To recap, the Reed Amendment, passed in 1996 has to date, twenty years later, resulted in only two people being refused entry into the United States. And only because they chose to explain that they renounced for tax purposes. NO ONE has been stopped at the border and refused entry because a CBP agent suspected they renounced “for tax purposes.” There is NO CONNECTION between an expatriate’s tax liability and a renunciant’s intent. NONE!
But do you get it now?
I get lots of “its”. Which it are you referring to exactly?
Putting my money where my mouth is? Yeah I think I got that one a long time ago.
Being Tainted also affects your partner’s information being sent to a foreign country. And we’ve had reports that employees who have signing authority on company accounts have run into problems. I cannot imagine how a person who was not born in the USA and has never been there handles the thought of having to be compliant because they are considered tax cheats.
And of course only in the land of glory is citizenship tied into obligation to pay taxes. So getting a CLN w/o being compliant may be sufficient for many.
White Kat brings up a point I hadn’t considered: there would be relief to be treated as a full citizen. I am tired of the backlash associated with being a” dual less than”.
I thought that we have a Charter that’s supposed to prevent us from being treated as anything other than full citizens. That’s putting the power in the hands of the US should we need a CLN for that!
“I get lots of “its”. Which it are you referring to exactly?”
I was referring to your apparent not understanding why people would bother to renounce without being or becoming tax compliant.
Calgary, regarding your comment on mentioning the Reed to the public (especially scared people) but only as a P.S.:
I just re-read with increasing anger a Bloomberg article below about Senator Chuck Schumer, likely the next Leader of the Democrats in the U.S. Senate, on implementing the Reed/variation (the topic of this post) against these unpleasant “un-American” tax “avoiders”.
— So, should the public (scared or not) know as education what’s on the mind of powerful U.S. politicians like Chuck Schumer? Mention the Reed attempts only as a tiny P.S. or as something more?
How about the Reed attempts and Reed thoughts of very powerful supporters Senators Schumer Democrat and Hatch Republican — as absolutely essential reading — that nicely shows what they really want to happen to us? Should the public know this?
http://www.bloomberg.com/news/articles/2012-05-17/schumer-proposes-tax-on-people-like-facebook-s-severin
A couple of thoughts about renouncing without compliance…My husband and I had pondered that scenario when I had my OMG moment; it was actually his idea. I hadn’t thought of it. #1 the bank will except the CLN; but it still doesn’t prove compliance. I worried about having to lie if that question was asked. I can’t lie. Also, I worried about my employer’s accounts. #2 With the new measures regarding passports, if enforced, they will know if you are/were compliant. Will they make an example out of you? #3 I was asked about compliance at my appointment to renounce. And then there’s the Form 8854. At the end of the day, I was motivated by fear, but relieved to be finished with the US.
@Whitekat
I can accept your POV as to why someone would choose not to become tax compliant while obtaining a CLN. I just don’t think those reasons are prevalent among renunciants. Why don’t you do it then? A lot of people are going to be reluctant to put intentionally themselves in the IRS’s crosshairs.
I’d like to be pleasantly surprised, though.
“At the end of the day, I was motivated by fear, but relieved to be finished with the US.”
No matter how many hoops a person jumps through, if you have a US birthplace there is no guarantee you will ever be finished with the US (or to be more precise, if they will ever be finished with you). The IRS will never close out your account and delete you from their system. If Senator Schumer and his vindictive pals ever get their way, Congress could easily pass retroactive legislation to somehow reclaim or punish those who now think they are in the clear. I’m not saying this is likely, but it always remains a possibility.
The good news is that the US government is so dysfunctional that even if they did pass some sort of nasty retroactive legislation they would have trouble implementing it. My thinking has gone full circle on this and I now believe that those who have never filed anything (and are therefore not in the system) may be in the safest position of all.
@ maz57 Still confident that I did do the right thing; if they bar me from entry that’s ok. I haven’t visited since 1999 and if I should ever have any money to travel, other countries are happy for me to stimulated their economy. If they try to recapture those who have renounced properly, then I guess they will be top on the list for human rights violations.
There are two kinds of of people who were “Born In The USA” living outside the USA who have problems.
Group 1: Those who have never filed U.S. taxes.
Group 2: Those who have and are filing U.S. taxes.
It’s having been “Born In The USA” that is the problem.
Those who believe they will solve their problems by entering the US tax system don’t understand the problems that being in the US tax system causes.
https://youtu.be/lZD4ezDbbu4
To renounce without compliance or to become compliant to renounce, that is the question.
Whether tis better to live with:
1.”Renounce without compliance” – the certainty of NO further U.S. tax obligations after renunciation and the uncertainty of unresolved past U.S. tax problems; or
2. “Becoming compliant to renounce” – the certainty of NO further U.S. tax obligations after renunciation coupled with the certain uncertainty of problems faced by entering the U.S. tax system to resolve past tax problems.
There are only three certainties in life:
1. Death
2. Taxes
3. The value of not being a U.S. citizen and the necessity of relinquishment or renunciation of U.S. citizenship.
@Bubbles re: “Why don’t you do it then?
As I said in a previous comment, I may end up doing it eventually. There are several reasons why I have not yet. Still in wait and see mode. I’d like to see our Canadian government be forced through the ACDC lawsuit to tell USA it cannot hand over its US born Canadian citizens Canadian financial records.
In case was not clear, by ‘doing it’, I’m referring to renouncing without complying. I will never comply. I may renounce. For one reason, among others, it is way too complicated and thus expensive for me personally to comply.
Bubbles, if the current renunciation fee was more reasonable, for example a couple hundred bucks, that would push me more towards the renunciation (minus compliance) pathway.
Even among people who have seemingly similar situations, there are numerous nuances and variations, not to mention differing value systems, family members to consider, etc. In addition, no one has a crystal ball with regard to lawsuit outcomes, government reactions, etc. For many, it becomes a wicked ride down a raging river with unpredictable twists and turns, where you grab the oars, start rowing, and hope you survive.
Bubblebustin said:
“I thought that we have a Charter that’s supposed to prevent us from being treated as anything other than full citizens. That’s putting the power in the hands of the US should we need a CLN for that!”
What would you want to see Canada do, in concrete terms, to ensure treatment of all Canadian citizens as full citizens? Do you hope to see the IGA modified, or repealed altogether?
However Canadian courts decide in protecting our a Charter rights will be good enough for me, iota.
I personally would like to see the FATCA IGA repealed, as I don’t believe that any nation should threaten sanctions against other nations they consider its allies – especially its largest trading partner – unless it’s prepared to follow through on those threats.
Some say that sending the private banking data on ALL bank account holders would be fair, but I assume that would involve modifying the IGA.
A repeal would force Canada to do what it’s spineless leaders should have done in the first place, which was to call the US’ bluff. At the very minimum, they should have insisted on more than just a ‘promise’ of reciprocity, instead of caving into the demands of our so-called Canadian banks. Responding with that and threats of our own economic sanctions would have suited me just fine, instead of the cowering we witnessed.
I might feel differently if I believed that Canada in its signing of the IGA somehow was playing a long game where they knew that FATCA was going to eventually be repealed by the US, and where the Canadian government had a plan to work behind the scenes to help facilitate that, but that’s not the case apparently as they seem intent to continue fighting us in court. With so many countries still not signed up and the US not even close to reciprocating, it’s pretty obvious that protecting “Canadian” banks far outweighed the repercussions of throwing a few Canadians under the bus. They went down without any kind of fight, and for that they should be held accountable.
Thanks for your thoughtful reply, Bubblebustin. I’m thinking about this, and what kind of outcomes might be workable.
I worry that without the IGAs, America would just go ahead with its original maniacal plan to force the banks to not just report but actually withhold on “US Person” accounts. The US does have the power to enforce this on the banks, because virtually all of the banks everywhere have transactions going through the US, which could easily be confiscated by the US to punish any bank that tried to resist.
The Joint Statement that was published by the five IGA-negotiating countries jointly with the US, states that it was as a result of the IGA negotiations, that the US agreed to drop the withholding requirement and make certain other concessions. If Canada or any other country rejected the IGA terms, I fear the US might just revert to its original totally ruthless threats to the banks, and the banks would comply out of sheer terror. Do you think that Canada would be able to prevent the US from doing this, by threatening Canadians sanctions against the US?
That depends on just how “maniacal” the US really is.
The war of words alone might have been enough to get FATCA repealed in the US. I believe that Jim Flaerty was on the right track before our “Canadian” banks called the dogs off and neutered him.
OK, thanks for your comments. I puzzle on.
@iota
Bubblebustin’s last two sentences above are so true.
I agree that ideally FATCA should be repealed, which would be taking a principled stand against its despicable extortionate nature. However I can understand the practical concerns of the government regarding the Canadian banks’ vulnerability in this scenario (they would be caught in a no-win situation between breaking Canadian privacy laws or suffering the 30% penalties if the US made good on its threat). Ordinary “US Person” Canadians are at the mercy of Canada’s dependency on its banks’ financial well-being.
A simple compromising solution (discussed often on Brock) would be for the Canadian government to amend the C-31 IGA law to exclude any Canadian citizen or PR who is resident in Canada from the FATCA IGA definition of a “US Person”. This would preserve the Charter and privacy rights of all Canadians living in Canada. Canadian citizens living in the USA would still be exposed to FATCA reporting (which brings up the interesting question of whether living in another country should negate Canadian Charter rights). US citizens living in the USA with Canadian accounts would also of course be reported and I don’t think anyone would object to that!
However two successive Canadian governments have now plainly demonstrated that our Charter of Rights and Freedoms is a meaningless charade for Canadian citizens who are designated by the US as “US Persons”. The Conservative gov. created an unconstitutional law and the new Liberal gov. is fighting to uphold it.
Mr A. – I agree that would be a good change, but I wonder if the US would ever be likely to agree to it. Have any politicians expressed support for this approach?
Thanks for asking, iota.
@Mr A
The funny part is that the way the IGA is written now any TFSA’s, RDSP’s and RESP’s held in Canadians banks by Canadians living in the US are NOT reported!
@iota
No, the US would probably not like such an amendment, which is why the Conservatives voted it down when it was proposed and voted for by the opposition NDP and Liberals in 2014.
But it would be a good way for the Canadian gov. to stand up for all its citizens’ rights against US FATCA injustice. Then we would see if the US would blink or a nasty trade war would start, which could hurt Canada in many ways. Of course almost any Canadian gov. is too afraid to risk this course of events, so we now have the hypocritical Liberals opposing FATCA when in opposition and defending it when in power.
@Bb
Yes, makes no sense! And the gov. trumpets those exemptions like we should be grateful!
I just received my Bill Morneau reply email a few days ago. I am going to send him a reply pointing out all the falsehoods of the gov.’s standard party line.