(10) Lying to prevent a crime is a virtue.
Commentary: USA citizenship-based taxation is a crime when applied to people living outside the USA jurisdiction. It is theft at multiple levels: (1) It is territorial theft of another country’s tax base. (2) It is theft to tax a person without representation. (3) It is theft to tax a person for the benefit of others. Furthermore, many of the reporting requirements of FATCA and FBAR cause crimes to be committed. The government of Canada, e.g., has committed a crime by sending the bank account information of Canadian residents and ciitzens to the IRS–it is national origin discrimination which is forbidden in the charter of rights, and it is a violation of their right to privacy.
It may be necessary to lie to prevent the IRS and one’s own local government from committing crimes. One may have to lie to a bank about where one was born. One may have to omit details when filling out forms.
While lying to prevent a crime is a virtue, lying to cover up a crime is politics as usual.
Previous Discussion:
Rahab’s renunciation of citizenship–Was she a harlot, liar, traitor and tax cheat or a heroine of faith?
California genocide and the Indian Tax Revolt of 1851
Fair tax, unfair tax: or When is it paying my fair share?
Is it taxation without representation if you can vote? Damn right!
Previous Petros Principles:
(1) What the IRS can’t know unless you tell them can’t hurt you.
(2) Fear makes the IRS more dangerous than it really is.
(3) Haste is the devil.
(4) Those most hurt by the IRS’s persecution of expats have engaged the services of cross-border compliance condors.
(5) Those least hurt have done nothing.
(6) Home is where you live.
(7) An unjust law is no law.
(8) Don’t feed the beast.
(9) Do the minimum in trying to achieve the least bad outcome.
(10) Lying to prevent a crime is a virtue.
(11) Cynical derision of Homelanders is healthy.
About: Petros is the alias of the founding administrator of the Isaac Brock Society. Petros Principles are guidelines that have helped him and others deal with the United States’ world-wide tax invasion.
they could borrow it through the penalties for not filing FBARS. Who is to say that FBARS disappear coincident with the end of CBT should such a miracle (ie the end of CBT) ever take place?
“Iota, I’m thinking that you may have a different understanding of the meaning of the word ‘enable’ than I do”
When I say CBT enables FATCA, I mean that CBT makes all USCs US-tax-resident. Without CBT, FATCA would merely have an effect similar to CRS, and FIs would have no reason to refuse USC applicants just for being USCs.
Iota, I’m no lawyer so I can’t say with any degree of confidence that by eliminating CBT we don’t still have an FBAR/FATCA problem and to the best of my knowledge no one has been able to argue with any degree of certainty that RBT will automatically eliminate FATCA reporting of US owned persons living outside USA.
“Knowing a USC exists and has a bank account does not inform the IRS whether they owe taxes and does not form the basis of a prosecution, even in the US courts. The IRS can’t revoke passports without showing that tax is owed.”
True BUT the IRS WILL know that the USC has not been filing which is crime number one to the form people.
Also, at least two Supreme Court Cases have held that anything owed to the government is a tax, including fines and fees. At least one blog for accountants has stated that fines would be used against the $50,000 threashold for passport revocation.
Yes, Canadians are protected from tax collection (at present) but not data collection. Many seem not at all bothered by data collection but that is an even bigger issue than tax collection. Just imagine what the Nazi’s would have done with FATCA. Now imagine what Russia, China, Iran, Isis WILL do with FATCA.
CRS could not have happened were it not for the trail blazing FATCA. I have no doubt that many countries wanted CRS for a long time but lacked the initiative or bargining power to go at it alone. Now that the world has caved to FATCA, CRS is stupid simple to do. Not so before FATCA.
“FATCA does not give CBT teeth. CBT is hard for the IRS to enforce because (a) the IRS doesn’t get spoonfed with information about overseas USCs financial affairs the way it does for domestic USCs; and (b) the IRS can’t seize assets or put liens on property when the assets and property are in other countries; and (c) most countries won’t collect tax for the US.”
Thus FATCA is the teeth of CBT because the IRS had nothing to sink into without it. Now it does.
FATCA forces compliance of nondual USCs by threat of passport revocation. Even though I can easily see a day where banks do collect for the IRS, I do think other things will happen before then, mainly closing accounts. But back to your question on how can FATCA force compliance with filing just by making it more difficult to open and maintain bank accounts? By making it difficult to open and maintain bank accounts. Many have reported that they have been unable to open or keep their bank accounts because they can neither prove compliance to US tax filing requirements or produce a CLN. So I have two options when that day comes, prove I am in compliance with US tax law or produce a CLN. Therefore FATCA forces me to comply with filing obligations either to retain my accounts as a USC or to get CLN and be able to visit family back in the US so that I can keep my accounts. Either way, I must comply.
The passport revocation law does not require any legal proceedings, merely administrative action. Which is one of the reasons it violates the US constitution. No due process. If I want to keep my passport, I must comply with tax and information returns obligations. Tax collection does not enter into it as I owe none.
It is not a tax issue for me at all. It is a paperwork and loss of passport issue only, for me. Well that and having every thug, terrorist, petty criminal and anti foreginor having easy access to all information pertaining to my family.
“they could borrow it through the penalties for not filing FBARS. Who is to say that FBARS disappear coincident with the end of CBT should such a miracle (ie the end of CBT) ever take place?”
Ah, good point.
We don’t know if the IRS will pursue non-residents based on the information it receives through FATCA. If past behaviour is any prediction of future, they won’t.
@BB
But isn’t that the threat they used to get people into the various “amnesty” progams?
What other purpose would it have other than aid the IRS in finding targets? As pointed out by myself and others, there are 9 million USCs overseasand yet only 300,000 to 500,000 tax returns received from this group. Penalties alone would make this a ripe target.
And the data on all those people a riper target still.
@iota
So if any Americans abroad at this point pay any US tax through the implementation of FATCA, they do so voluntarily? You may have a point there. As far as I know, the IRS hasn’t pursued any non-residents through the information they’ve recieved through FATCA. No guarantee they won’t, however.
FATCA has been effective at shaking the trees without actually doing anything.
@BB
Is it voluntary when done under threat?
Another point to consider. The law allowing passport revocation also allows the IRS to hire private debt collection companies to collect tax debt. The IRS gets its funding from Congress. Debt collection agencies are paid from the debts they collect, thus they can be counted on to do a lot more digging and thus finding more “hiden” USCs. Private companies being handed sensitive personal data just adds many more avenues for our private data to become completely public.
@JapanT – ““Knowing a USC exists and has a bank account does not inform the IRS whether they owe taxes and does not form the basis of a prosecution, even in the US courts. The IRS can’t revoke passports without showing that tax is owed.”
True BUT the IRS WILL know that the USC has not been filing which which is crime number one to the form people.
Also, at least two Supreme Court Cases have held that anything owed to the government is a tax, including fines and fees. At least one blog for accountants has stated that fines would be used against the $50,000 threashold for passport revocation.”
Passport revocation is much more vulnerable to arbitrary American whim than the collection of taxes, I agree, because it is about a US asset. The US doesn’t have to depend on another nation’s assistance or co-operation, it can do whatever it pleases.
“But back to your question on how can FATCA force compliance with filing just by making it more difficult to open and maintain bank accounts? By making it difficult to open and maintain bank accounts. Many have reported that they have been unable to open or keep their bank accounts because they can neither prove compliance to US tax filing requirements or produce a CLN.”
People get denied bank accounts because of FATCA, yes, and it’s horrible, but filing doesn’t necessarily solve that problem.
“Yes, Canadians are protected from tax collection (at present) but not data collection. Many seem not at all bothered by data collection but that is an even bigger issue than tax collection. Just imagine what the Nazi’s would have done with FATCA. Now imagine what Russia, China, Iran, Isis WILL do with FATCA.”
I agree that there are serious concerns about FATCA’s discriminatory identification of USCs, but that’s a separate question from the question of CBT enforcement.
“CRS could not have happened were it not for the trail blazing FATCA. I have no doubt that many countries wanted CRS for a long time but lacked the initiative or bargining power to go at it alone. Now that the world has caved to FATCA, CRS is stupid simple to do. Not so before FATCA.”
I agree, and have often said, that many countries saw FATCA immediately as an opportunity not a “caving in”. Other countries couldn’t have done it, not because of “lack of initiative” but because other countries lack the power to threaten banks with destruction. It’s called being a superpower. It doesn’t have anything to do with the enforcement of CBT.
“Thus FATCA is the teeth of CBT because the IRS had nothing to sink into without it. Now it does.”
In what way? How does FATCA supply CBT with teeth? How does FATCA help the IRS enforce CBT?
The answer is that it doesn’t. As I said at the start of this saga, a FATCA report can help the IRS prosecute a person in a US court but it doesn’t in itself provide proof of wrongdoing, even in a US court, and it does nothing to assist collection.
@Bubblebustin – “So if any Americans abroad at this point pay any US tax through the implementation of FATCA, they do so voluntarily?”
No, I wouldn’t say that at all. Some people may pay in order to “exit cleanly” and gain peace of mind. Some may pay out of fear, some because circumstances mean that for them, not paying could be worse than paying. I’m only saying that FATCA reports alone don’t enable collection of CBT taxes.
“You may have a point there. As far as I know, the IRS hasn’t pursued any non-residents through the information they’ve recieved through FATCA. No guarantee they won’t, however.”
Could they? I don’t see how but I’m open to persuasion.
“FATCA has been effective at shaking the trees without actually doing anything.”
Definitely.
““Thus FATCA is the teeth of CBT because the IRS had nothing to sink into without it. Now it does.”
In what way? How does FATCA supply CBT with teeth? How does FATCA help the IRS enforce CBT?”
Because, without FATCA, CBT is virtually unenforceable outside the borders of the US.
“People get denied bank accounts because of FATCA, yes, and it’s horrible, but filing doesn’t necessarily solve that problem. ”
True. What is actually needed is proof of compliance. Thus one must either be in compliance AND have proof of the fact OR have a CLN. Filing and having proof or having a CLN still may not prevent account closures, but the only path open to the individual to protect their accounts is to be in compliance.
“Passport revocation is much more vulnerable to arbitrary American whim than the collection of taxes, I agree, because it is about a US asset. The US doesn’t have to depend on another nation’s assistance or co-operation, it can do whatever it pleases.”
Again, the only way to protect against this is compliance.
“I agree that there are serious concerns about FATCA’s discriminatory identification of USCs, but that’s a separate question from the question of CBT enforcement.”
How so? The only way it could be is if we focus on tax colletion and ignore all other aspects.
“I agree, and have often said, that many countries saw FATCA immediately as an opportunity not a “caving in”. Other countries couldn’t have done it, not because of “lack of initiative” but because other countries lack the power to threaten banks with destruction. It’s called being a superpower. It doesn’t have anything to do with the enforcement of CBT.”
Thus, CBT did not change the world, FATCA did. Remember, CBT has been with us for over a century and a half, yet none of its associated issues existed until FATCA. 150 years of CBT without CRS, bank account closures and all the rest. Without FATCA, these still would not be. I agree that it was not due to a lack of initiative, I was being diplomatic. I know that before FATCA, if Japan asked GB to report the accounts held by their citizens resident in Japan that GB would tell Japan to take a hike. FATCA made all this possible.
Thinking about our disagreement, I wonder if the source may be the perception that I feel that repealing FATCA ends all this once and for all. I do not. The ultimate goal is to repeal FATCA and end CBT. But as CBT was toothless for 150 years with out FATCA, I belive the first step is to kick its teeth in. Repeal FATCA then end CBT.
“In what way? How does FATCA supply CBT with teeth? How does FATCA help the IRS enforce CBT?”
Again, look at its history. For one and a half centuries it could do nothing. Now, with FATCA as its weapon, it does damage.
“As I said at the start of this saga, a FATCA report can help the IRS prosecute a person in a US court but it doesn’t in itself provide proof of wrongdoing, even in a US court, and it does nothing to assist collection.”
Debt collection is by no means the only concern. It is not mine at all. FATCA provides the bully with targets to harrass with threats of revoking one’s passport unless one complies with any and all their demands.
See, I like many have no money so the treat of debt collection means nothing. Can not squeeze blood from a stone. But bank account closures means my death. NOT an exaggeration for how does one eat when one can no longer receive wages? Revoking my passport is similar. I would then be back in the States jobless, homeless and penniless. Never a good position to be in but with 94 million able bodied unemployed…
CBT did not bring this about for it was in effect for well over a century before I left the States. FATCA enables CBT to do this, thus FATCA is the teeth of CBT.
Japan T – I think this thread has become circular, not to say recursive. 🙂 In the end, we each have to weigh up our own circumstances, figure out where we’re vulnerable, and try to protect ourselves. Let’s hope everyone succeeds.
Wow I can’t believe you two are still debating whether or not FATCA enables CBT or CBT enables FATCA.
Iota , enable means to give someone or something the means to do something. FATCA gives the US the means to impose their CBT rules beyond their borders. With FATCA they US has effectively put a gun to the heads of US owned persons and the countries they live in, to round up and identify those who have not been complying with FBARS and by extension CBT. If that is not enabling then I dont’ know what is.
CBT on the other hand does not enable FATCA. FATCA is the data collection process from which all evil is enabled.
There is a reason that those who fight for privacy of information get all up in arms over what some just think of us data collection. personal financial information is not just harmless bits of data. it enables those who have it to do much harm whether that be FBAR fines or threatening letters sent to a non-filing US owned person or bank account closure of a US owned person or god forbidden in future actual theft from non US accounts facilitated by no US countries. It is really obvious that FATCA is the enabler not CBT. I will shut up now….maybe.
Oops …lots of typos from my ipad
I guess in the end both CBT and FATCA must fall for us to be free. Which came first, the chicken or the egg really doesn’t matter, does it?
Yes, let’s hope that all find their way clear.
I am having a lot more problems than usual with typing on my iPad. You too?
JapanT which is worse depends on who you are. CBT ain’t my battle. I’m not American
“JapanT which is worse depends on who you are. CBT ain’t my battle. I’m not American”
True.
@Japan T
Here’s a new thought for this thread. Have you thought about whether you are entitled to some other citizenship by descent or blood? For example I am entitled to Italian citizenship through my paternal side. I may even take it up now that we voted Brexit.
When problem solving, it’s always go to research and consider every possibility
@JapanT
I’d like to guess that after hearing about his tax filing obligations, BoJo was told by his accountant that he incurred a tax liability when he had sold his house years before – just like what happened to me in Canada. When becoming tax compliant, the sale would have been easily discoverable by the IRS.
It’s an absolute crime that the IRS has been so negligent in telling US persons about their tax filing obligations. I certainly would have found some legal way to avoid paying the US tax had I known before selling my home. No reasonable person would know about CBT!
Concerning the rights of non-citizens and PR’s, in Canada the BC government has just imposed a foreign purchaser’s tax on Vancouver properties – effectively making it retroactive as pending sales were not exempt from the tax. The tax is also levied against people living in Canada under work permits. Citizenship is king! For the US, it’s unfortunately also executioner.
@iota
Wouldn’t FATCA provide enough information for the IRS to create a substitute tax return for non-residents?
@UK Rose
Here’s what the State Department says about SSN’s (or lack thereof) on US passport applications:
Do I have to provide my Social Security Number on my passport application?
Yes. The FAST Act (Public Law 114-94) requires you to provide your Social Security Number (SSN), if you have one, when you apply for a U.S. passport or renewal of a U.S. passport. If you do not have a SSN, enter zeros in box #5 of your passport form. The Social Security Administration can issue you a SSN for future use.
If you fail to provide the information, you will encounter a delay in processing and/or denial of your passport application. You will also be subject to a $500 penalty enforced by the IRS pursuant to Section 6039E of the Internal Revenue Code (26 U.S.C. 6039E). All questions on this matter should be directed to the nearest IRS office.
@Bubblebustin – without details of the accountholder’s income, the IRS can’t know whether the person is obliged to file. They could request detailed information from the local tax authority, but when you look through the IRS manual and the international training modules, it’s very clear that submitting such requests is very tightly controlled and done only by the higher-paid staff, so is probably not resorted to unless they have good reason to think monkey business is going on and they have a good chance of bringing a successful and profitable prosecution.
At which point, it seems to me, they still have the problem of how to enforce collection.
@Bubblebustin – “I’d like to guess that after hearing about his tax filing obligations, BoJo was told by his accountant that he incurred a tax liability when he had sold his house years before – just like what happened to me in Canada. When becoming tax compliant, the sale would have been easily discoverable by the IRS.”
It’s not clear to me that Johnson was ever in the dark about his CBT filing obligations. His taxes would presumably be handled by an accountant, who certainly would have known Johnson’s country of birth. Perhaps he filed every year but didn’t actually owe any US tax, or not a significant amount, until the property sale, and that’s why he was so shocked. Understandably.