(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.
I have met many a lawyer or accountant who have told me that FATCA is a bad law while helping to enforce it. That is the crux isn’t it? Why don`t lawyers use their abilities to change the law? Instead- they spend their time making money off of a bad law.
What is so hair-raising are all the people who say expats are being tormented and keeping things basically unchanged except for minor adjustments. It is like laws are made in stone and cannot be changed. Laws are man-made vehicles. The worse the laws, the worse the people are who made them.
Polly,
That is one of my pet peeves too! Why aren’t lawyers and accountants using their education and training to help their fellow Americans fight this instead of making money off us?
I’d guess “water follows the path of least resistance” might answer as might the fact that there is money to be made fleecing their fellow Americans and little in fighting for us.
And then they wonder why we have such a low opinion of them. Small wonder.
@Polly & JapanT
I was once criticized online by a compliance person for saying it wasn’t my responsibility to figure out what should be done should the CDN IGA suit win. I pointed out I had no legal or tax experience; IOW, it was way beyond my ability to figure that out. But that the compliance community certainly could. Imagine the difference if they had, instead of focusing on all the income to be made, they would have consulted with Finance about how to work around FATCA (or at least more carve outs). I also pointed out that the expat community had turned into a very active one; i.e., we were not just sitting around on our tushies complaining. Nobody was listening….
One issue (and John Richardson has been making this point for years) is that a lot of what is passed off as the law is not necessarily the law. The industry says what they think the interpretation of the law is and it gets reinforced over and over and eventually people just think it is the law. Even though there is nothing in a statute nor an IRS ruling. And why should the IRS change it? The industry gets money and they get money.There are lots of things the IRS has never ruled on. Take the issue of foreign trusts. In Canada, we have a type of government registered tax-deferred account called a TFSA. Pretty similar to a U.S. Roth IRA. Canada Revenue Agency calls them trusts and voila! The compliance community just jumps to the conclusion they are foreign trusts. I am sure some are but also sure there are likely many that are not. One has to look at the characteristics of the account to see if it really is a trust. At the very least it should be a situation where a trustee has a fiduciary responsibility for it. My TFSA was simply an account with a credit union where the money was put into a GIC (US: CD) with a fixed rate and a fixed term. There is no way on God’s green earth that that matches the definition of a trust. I had just filed my first set of FBARs and tax returns. I had seen the 3520 was due but had not been aware until about four days before the March 15 deadline that there was this 3520A thing. I called my accountant to see if she could do it and she said she could not bc she was not familiar with the form and was too busy to learn it. So I had to sit down and figure it out. Terrifying with the $10k penalty over my head plus worrying about an accuracy penalty and all of it. This would have been in 2012. If I had known then what I know now I would not have filed it. Instead I would have put the interest down on Schedule B even though it was undistributed. Reasonable I think bc obviously not trying to hide the account, they would not get cheated in any way and I could have been spared the incredible anxiety and time it took me to figure it out. And why was all of that? Because the scaremongering of the bloody compliance industry who failed to point out there could be exceptions. And they don’t charge you a $100 for a form like that. I’ve been told start at $500 and up from there. The IRS has not ruled on whether or not CDN mutual funds are PFICs (perhaps the scariest word on earth). Who says they are? The compliance community. Then there comes the immigration issues. Tax lawyers telling us what the law is outside of their area. If I hear one more compliance person bring up the Reed Amendment I will strangle them. I just did a detailed look at that again. There is no way it can apply unless one tells them they are renouncing for tax purposes. DHS responded to a request from Sen Reed himself in Nov. 2015. Maybe I’ll put it up tomorrow but even DHS says there are no regulations and conflicting statutes.
Anyone have a comment on what this kind of behaviour should be called?
This kind of behaviour is called “common”.
I have posted earlier about what the law says being largely irrelevant as no one knows the actual law. Everyone acts according to what they believe the law to be.
I have seen this with Navy regs, University rules, employment practices, and it often comes up in the news with policing. When a question on the law comes up, a rookie asks a veteran who answers based upon what he was told when he asked the same question. No one asks a lawyer, they take time and cost too much, they just try to figure it out and over time their interpretation becomes the practice of their organization then their industry then commonly accepted as law.
Nobody checks, and if one does and finds out that what the organization has been doing for however long is NOT supported by the “regs”, they are not treated very well. I know this from experience.
I recently found the Isaac Broke society and this website saved my life or what was left of my life.
I am a US citizen that moved to the UK as a college student, and lived my whole adult life in the UK. I am now a dual UK/US citizen. I found out about the requirements of expats early this year through a Fatca letter. I contacted a compliance condor for help and they made an absolute mess of my life, not to mention the fees and the scaremongering. The over complication of the rules and explaining very little and doing extra forms to be on the safe side. And in the end, no tax was due.
This whole experience had a bad affect on my health, my work, my relationship with my husband due to the fbar and with my relation with my family at home. I have decided to renounce and I am renouncing in a few weeks time. I simply can’t live under life control. If I could go back in time and know what I know today, maybe I would have done things differently. Certainly not use a compliance condor and certainly not over complicate matters and definitely follow the advise given here. I felt the accountants were asking questions with glee hoping even for answers that would mean more fees or complications.
My family in the USA (which consists of some siblings) have not been supportive of my decision to renounce. I have received shock and condemnation from them and it feels not only like I lost my freedom in this process but my US family as well. They lecture me constantly about it’s the law and everyone has to follow the law, the benefits of US citizenship and how people would kill for US citizenship. All this may be true from their view point but it is also true that US citizenship is the only citizenship I know that has people dying to get in and people dying to get out. And there are life altering rules on their expat community.
I am also pleased to know that there are some brave people fighting these rules which may make things better for all of us. Even if I am no longer a US citizenship in a few weeks, I still would like the laws changed for other expats. and I am grateful for the education i received here at Broke.
One other thing. These people made their livings without us when we did not know about CBT.
Think of the amount of volunteer effort that goes into what we are doing.
Why couldn’t the compliance industry commit to a minimum number of hours per week or month doing things to help fix these problems?
Why would it be any different from any other kind of volunteering?
What would happen if we asked them to?
Yes, but it is hard to turn down a 9,000,000 person strong market increase.
Would’t hurt to ask. Maybe I can use the IRS methodand give a couple an offer they can’t refuse. Fix my compliance problem for free er ah a contribution to the community or I turn you in for operating as an agent of a foreign government without the required diplomatic approval.
@Devon, Ann
Let us review Jay’s first comment at Isaac Brock:
So let’s sum up what he has said:
(1) Lying to your bank or the IRS et al. is illegal.
(2) Lying to your bank or the IRS et al. is unwise.
(3) Lying to your bank or the IRS et al. is unethical.
On (1), I have not argued that lying is legal. But I am not a lawyer. I do not have to tell you to obey the law. And I have heard also that a Canadian lawyer is not required to tell you to obey USA law (while you live in Canada)–and may advise you to ignore it. So Jay’s advice seems to presuppose a USA-centric point of view.
On (2), wisdom is a course of action that leads to the most beneficial results–i.e., it is knowledge put into practice. In the USA international tax invasion the best that one can hope for is the least bad result. For those not in the system, staying out of the system is the wisest course. But experience has taught us that compliance with the help of a compliance condor usually leads to the worst results–and that is precisely why I put together Petros Principles, to summarize my experience, and to the degree that I know it, the collective experience of Brockers. Certainly wisdom has not taught us that filing “good faith” reports to the IRS and never lying to a bank which asks us to make a self-declaration about USA indicia are actions that lead to the best results. Indeed, saying less, and ignoring expectations, even omitting the truth or outright lying may lead to much better results and that with little risk. Take for example lying to the bank about place of birth: if I put Winnipeg instead of Chicago on a question that the Canadian bank is not really allowed to ask, what are the chances that I will be prosecuted? It seems if we misrepresent ourselves on a bank form, the bank just will not open the account for us. But are they really going to have a us prosecuted for saying we were born in Canada when national origin discrimination is a violation of human rights codes in Canada? I think the banks would wish to avoid human rights law altercations.
(3) Unethical: Well, Jay offers no argument at all for this–not even one over the course of this very long thread. I do not know what the basis of his ethics are. But it certainly seems to be a presupposition on his part. And that is why, ultimately, I think he must have an association with the compliance industry. Ethical behaviour in the compliance industry is filing “good faith” forms to the IRS. I have argued that the basis of ethics is not positive law but natural law. Jay refuses to argue the main tenor of my work for the last 5 years.
Jay’s definition of “unethical” would in fact be the compliance condor definition–even if he is himself not a condor.
Finally, I would note that Jay has attacked me by suggesting that my responses have been emotional rather than rational. He has played the victim by even invoking a Eastern European Jewish background–and trying to make me look antisemitic to boot. This is very manipulative.
Now, I would like to say that I consider Jay’s comment an attack of the very core of Petros Principles. So it seems to me to respond in kind is only appropriate. I am not telling people that they should wipe their noses when they sneeze. Petros Principles are indeed controversial and I expect push back. But to all detractors and naysayers, I am ready to argue vigorously and rationally, and I hope that you will do better than Jay has done.
@UK Rose
Welcome to Brock. Very sorry to hear of your situation, esp the family issues. It seems quite a mixed bag when it comes to this. I am lucky. All my family “at home” and friends are extremely supportive of me. They think CBT is wrong. I think many of us have had the experience of our non-US spouses not really being able to understand this. All in all a difficult experience to go through. Please feel free to vent here, ask questions, whatever.
I don’t know if you are near London but this Sunday there is a meeting about FATCA, CBT etc. It would give the chance to meet and talk with others are dealing with this.
It’s a bit unfair that everyone is going after Jay. Taking his word that he is a businessman with multiple businesses and multiple citizenships, it seems safe to take for granted that he not only takes advantage of legal and accounting services but has the means to do so. If he is required to file in the US for business reasons, perhaps the additional requirements of being a US citizen are a relatively marginal burden. If he does have business contact with the US, his citizenship there might even be advantageous. If any of the above is true, he has multiple options, so for him lying would be unnecessary and unethical. He is also correct that it is bad legal advice.
He also seems very focused on CBT. For me, FBAR and FATCA were the major threats. I was “lucky” enough to have student debt that kept me from acquiring reportable assets before I renounced, but I could not live in constant fear that my likely meager pension and future assets would be seized or that I would be toxic to future employers and potential business partners. I also experienced how administration of US investments can eat up the entirety of their value (i.e. traveling to the US to have documents signed). I could see professional accounting help easily costing me a month’s take home pay even without any tax liability, and I could not even have been certain it would have been done correctly. I would still have lived in constant fear. If I were to have needed to seek legal counsel, I would not even have known where to turn. Were I to have had my assets seized, I would have had no way to afford such services. For others in my position (and in even more compromised situations) with no good options, I can understand why lying would be ethical. I was lucky not to have to lie myself and recognize that I was not forced to.
When Jay wrote about how he valued his US citizenship and would never do anything to endanger it, I took it to suggest that those of us who have renounced did not value our citizenship. I have no reason to believe, however, that he meant anything other than what he wrote. We need to remember that we are emotionally involved in the subject and justifiably touchy. It saddens me to see debate replaced by squabbling. I hope we all can try to show empathy and understanding for others on here, as many of us do not even find that from our own families.
Bad legal advice? That is a question of perspective. Certainly a USA-centric perspective would say that. But my Canadian lawyer had other views. He said my chances of extradition to USA are virutally null. Jim Flaherty said that FBAR penalties would not be collected, and US taxes on Canadian citizens would not be collected.
Some people feel the need to escape the clutches of the IRS by completing filing requirements. I was one such person. I filed, but if I omitted certain items, I would argue I did nothing unethical.
This is not “squabbling” but about establishing core values.
@Oscar
Jay says that it is unethical to violate US law with out acknowledging that following US law can cause us to violate local laws or, in the case of accidentals, violate the laws of their own nation to follow the laws of a foreign land. If he truely is an international businessman, he surely lacks a hell of a lot of understanding for those of us trapped by this. Perhaps, being an international businessman he is one of those very few who can actually afford the legal and accounting professionals needed to navigate these rocks and shoals and has no understanding of those who can not.
I do not know, but his comments show very little understanding. As one who has decended from those targeted by the Nazi’s he should know better than to so strongly advise me to tell the truth and turn over my nonUS family members to a foreign, less than friendly government.
He deserves every bit of critisism and more in my view.
In truth, I do not buy his story. Either he is not as he represented himself or he is willfully deaf and blind as to the realities many face.
Yes I am in London so will see if I can attend the meeting of Fatca
I think with my family it is not that they support the CBT taxation but view US citizenship as such an asset that it is worth all the legal requirements and rules and obligations that come with it. If they had to put up with the same from a foreign government in the USA, i doubt any of them would put up with it. They thought i should wait to see if rules improve but I have no faith in improvement and don’t want to wait in case the rules even worsen. There are so many mine fields to go through in this process.
I only feel contempt for homelanders that preach about CBT, Fatca being laws that should be blindly accepted. Just because something is a law doesn’t make it right. things that are not right are not right whether there is a law or not. if someone is in a position to benefit from US citizenship, that’s great for them but they shouldn’t be preaching this benefit to me with different circumstances. I thought when I came into compliance I would feel relief, instead throughout the process I felt increasing anger, betrayal and violation of my rights.
@Petros
I often agree with your advice and I really appreciate your posts. I only wanted to point out that even when we share values, we will always view the situation from different angles. Most of us here have experienced how difficult it is to convince friends and family that these laws violate our civil rights, even though it should be obvious. The problem is often varying perspectives, not divergent values.
The question of it being bad legal advice highlights how relative everything is to everyone’s individual situation. I wouldn’t risk lying about my place of birth to a bank because it’s registered with the local tax authority.
@Jay
It is not unethical to lie in answer to questions it is unethical/and or illegal to ask.
Let’s try it out in the real world. What bank do you bank with? What is your account number? What was the highest balance in 2015? Who do you love with? What are their bank accounts?
If you do not want to share that information with us here, then on what grounds do you call my refusal to give this information on my spouse, a nonUSC, to the US for them to share with anyone they wish unethical?
@Oscar, If you say it is about relative risk, I understand your point. As for lying about birth place, that may have more legal ramifications in some countries than others. If in Canada someone lies about their birthplace, well it would seem to me that the bank isn’t really authorized to require that information in the first place.
See this–the pieces of ID required do not presuppose place of birth (e.g., a driver’s license and a credit card).
http://www.cba.ca/en/research-and-advocacy/50-backgrounders-on-banking-issues/83-opening-a-bank-account
@Japan T
His arguments certainly deserve the criticism, but our anger and frustration won’t help anything.
That’s at least what I was feeling myself and I noticed that some of the posts here have been more heated than usual. There have certainly been more responses than usual.
I think anybody who wants to remain american should abide by american law. Jay is an international businessman? Then it is to his great advantage to remain a US citizen. Anyone who intends to return America should abide by american laws. I think everyone who is being encouraged to lie here by Petros is not trying to be an american citizen. Isn that a whole different set of circumstances? If Jay was in a totally different situation- say he was a pharmacist with a pharmacy in Lyon- might he not speak and think differently?
@UK Rose
American citizenship is highly prized by anyone from a country where the economy is failing. But if you ask an Australian or a Japanese or a German or a Brit- they more often than not are uninterested in acquiring US citizenship. Especially not now.
I spoke to a doctor here whose daughter was born in America while he was there for a short training stint. I told him she should be paying her US taxes. He was shocked- knew nothing about it. Next time I saw him, he said that his daughter didn’t want to give up her second passport in case she also wanted to train in America one day. I said “All the more reason then for her to pay up her US taxes if she plans to GO there for work in the future.”
So much confusion. So much chaos. I am hearing about more and more people who just hide. Or get a CLN to show the bank and don`t pay their taxes. If there are about 9 Million expats in this world and america only has about maybe 300000 tax returns from abroad- what IS going on?
“I think anybody who wants to remain american should abide by american law.”
I know not a few people who renounced their citizenship that felt that the IRS was forcing them to renounce. US Citizenship is a birthright. It is a fundamental and universal human right. One of the reasons that IRS is violating humans rights is this forcible destruction of the right to return by making it taxable and contingent upon waiving our other human rights.
And how is anyone supposed to “abide” by American law? No one can know the law in its vastness much less abide by it. And that is true of the Homeland. How much more so when living abroad?
I must slightly disagree with you on this Polly. I do wish I could keep my American citizenship but must shed it to continue living with my family. Unfortunately, I can not shed it. Still looking for a way to do so hough I do not want to.
But the US is violating US law by asking me for this information and giving this information endangers my nonUSC family members and myself. The Federal Register states very clearly that I must provide this information even if it causes me to violate Japanese law. That fact alone makes this requiment unethical and in violation of law.
What you say about the value of US citizenship may be true in Germany and other places but not so here in Japan. My in-laws are shocked and upset that their grand children are not registered as foreign births with the US embassy. My spouse is very disappointed. VERY.
Besides my own family, my students and their families are also still very much interested in having their children or grandchildren born in the US. Not all mind you and perhaps even a bit less than in the past, perhaps due to my downtalking the idea.
My female college students are shocked when I advise then not to date Americans unless they want to marry Uncle Sam. Many have hopes of coming American or at least living there for extended periods of time and starting a family while there.
“The industry says what they think the interpretation of the law is and it gets reinforced over and over and eventually people just think it is the law. ”
If you ask Price Waterhouse to do your taxes, they have a form they require. That form asks if anyone in your family is a US citizen. They go on to state the form is mandatory, the insinuation being that CRA requires it. Out and out misinformation designed to scare up more fees.
Yes, PWC the company used by my spouse’s company in Japan to do their US taxes had the following questions on a form they said was mandatory.
Under the heading, “Tell us about your family” they asked for the following information, spouse’s SSN, employment, income, filing status and many more I did not have time to write down.
They asked for the “actual time assigned in the U.S. and out”
“Do you own any real property?”
“Do you own your primary residence?”
These questions were asked by PWC as they prepared the tax return for my spouse, a Japanese citizen by birth, after a 3 month secondment to the US. These questions were not asked after my spouse’s first secondment a decade ago.
So Jay, unethical to lie or refuse to answer these questions?
@Oscar
For me, it was not his original statement that ticked me off but his repeated statements to the effect that we must all abide what the US says are its laws.
If one were to follow his statements to their logical conclusion, then we all must beg the Queen for forgiveness for our parting company with her great, great, however many, grand dad and pay our back taxes owed her.
Does no one today know how and why the US is no longer part of the British Empire? (Question not directed at you Oscar)
To me, that is what we are fighting, this mindless ignorance. The repeated, tired, blantantly false statements on what is required of whom and why, citing laws that don’t exist in the US as proof of the same.
Plato vs Socrates?
“Natural law theorist Plato believed strongly in the notion that “it is just to disobey an unjust law.” This attitude differs greatly from his mentor, Socrates, who believed that citizens had a duty to convince the state of injustices of the law, but ultimately had to obey the law if attempts to change it failed.”
http://everything2.com/title/the+morality+of+breaking+immoral+laws
@UK Rose,
Homelanders like your family could do more. If they really cared about the value of US citizenship they would make an effort to change the laws. The understanding that Americans are renouncing to avoid US taxes needs to be replaced by the understanding that to many Americans, it’s the only legal choice the US makes available to them that would allow them to remain in the country where they live without being tax delinquent in the US.
The US would rather have taxpayers than citizens.
@BB, Jay is not Socrates.