"I complied with human rights-violating U.S. renunciation rules — and this leaves a bitter taste." https://t.co/H5qRkzhxxq
— Citizenship Lawyer (@ExpatriationLaw) August 24, 2016
Click on the link in the above tweet to see the complete discussion.
The bottom line is that Dr. Stephen Kish – Chair of the Alliance For The Defence of Canadian Sovereignty and plaintiff in the Bopp FATCA Lawsuit, has formally renounced U.S. citizenship. He performed this act in Iceland which is the final resting place of Robert James Fischer – one of the most famous and well known cases of U.S. citizenship relinquishment.
Certain idealists imagine that our world as it is might be better off if Hodgen chose to make his living doing something else — at least by practicing in some other area of law. Really? There should be no option for someone actively being mangled by Uncle Sham other than to fall into the clutches of the you-know-who-they-are dragons who emit little more than clouds of fear-filled smoke?
In his screeds Hodgen comes across as a hyperactive geek who can never get enough of working out expatriation tax puzzles. Snag his interest and he’ll give you a customized albeit no-guarantees exegesis. Or a quick answer, like I once got. All for free. I don’t see anybody else coming anywhere near to the volume and the personalization of what he is doing. Hodgen is a treasure.
Even a dyed-in-the-wool DIY like yours truly is going to back off some when it comes to things like removing a brain tumor or severing the disgUSting dumbilical cord. The Hodgen trove of information supported the massive DIY that preceded modest and limited use of local professionals to tie the bow on the hastalavista package. Hodgen received nothing and expected nothing.
Hodgen haters succumb to despair
And can’t see any good anywhere.
“There should be no option for someone actively being mangled by Uncle Sham other than to fall into the clutches of the you-know-who-they-are dragons who emit little more than clouds of fear-filled smoke?”
Yeah, there is an option and that’s to lift both hands up in the air, middle fingers extended and tell them “Come get me, you m’fucking SOB!” and not give a shit.
Like I said, I’m living MY life as it was pre-FATCA and to HELL with the United States.
Any other words of wisdom, TROLL?
@The_Animal1970
Yeah, there is an option and that’s to lift both hands up in the air, middle fingers extended and …
For you maybe. Perhaps for many others too. But it is not a choice that everyone can realistically make.
Have investments in the US? Have a 401k or IRA? Entitled to future US social security? Then the cost of paying someone to free you properly from the US tax system will be tiny in comparison to the likely loss from saying a big FU to the US. The latter will provide huge emotional satisfaction, but is it worth the price?
Any other words of wisdom, TROLL?
Uncalled-for and unnecessary. Underneath the circumlocutory syllogism, usxcanada is an ally. Firing on allies is not just a waste of productive energy, it is self-destructive.
“Uncalled-for and unnecessary. Underneath the circumlocutory syllogism, usxcanada is an ally. Firing on allies is not just a waste of productive energy, it is self-destructive.”
Well, he certainly doesn’t sound like one. You have your viewpoint, I have mine.
@pacifica777 says
August 31, 2016 at 7:27 am
“@ Japan T,
Re:
“If I am in truth no longer a USC but do not have a CLN, the bank’s needs not being met, I lose my account. It is not the act that is required, but “proof” of the act. In different words, the act of relinquishing is not the determining factor, presenting a CLN is.”
I agree in the banking context, if confronted with the accusation of being a US citizen, proof of loss is the determining factor.
The CLN is really efficient proof because it’s widely recognised and should be very easily understood by a bank employee, but it also looks like self-documentation of a relinquishment could be used per the Japan-US IGA.
Japan-US IGA, Annex I (II)(B)(4)(a)(3)(a) (page 16)
(3) A copy of the Account Holder’s Certificate of Loss of Nationality of the United States or a reasonable explanation of:
(a) The reason the Account Holder does not have such a certificate despite relinquishing U.S. citizenship; or
(b) The reason the Account Holder did not obtain US citizenship at birth.”
Does the IGA enumerate what constitutes a “reasonable explanation” of (a) or (b) above? If not, then it is void of meaning. Japanese banks are allowed to accept a resonable explanation, they are not required to accept a reasonable explanation.
If you were a Japanese bank, faced with the 30% noncompliance fee, would you venture to guess what the IRS considers as a reasonable explanation, or would you take the safe, “conservative” path and require a CLN and nothing else?
Remember that “reasonable cause” thing with FBAR? Was that simple, straight forward? Understandable? Acceptable?
What recourse is open if a reasonable explanation is refused by the IRS? Refused by a bank?
Without answers to what constitutes a “reasonable explanation”, this provision is meaningless.
Also of great concern, is that I have not yet found what the Japanese government will accept as proof of renunciation and complete severing of ties with the US. Without this proof of exit, I could lose my newly aquired Japanese citizenship.
Animal,
Love the badge!
@ Animal
I agree with Watcher and USXCanada, Hodgen has helped many of us infected with US citizenship with his free advice. He does however charge LARGE fees, which I found out when I asked him for a quote to do my relatively simple 8854; I eventually went to someone else. Maybe he feels sorry for the little people but makes his money from larger and more complex net wealth problems, where his expert advice is really needed minimize their exit tax and after all, someone has to do it!
“Maybe he feels sorry for the little people but makes his money from larger and more complex net wealth problems, where his expert advice is really needed minimize their exit tax and after all, someone has to do it!”
Well, my wife has no money to get clear…and I have no sympathy towards him in terms of whether he reduces risk or not. When you don’t have the money to “get clear” your only option is the “middle finger” option.
@TheAnimal1970, you write: “When you don’t have the money to “get clear” your only option is the “middle finger” option.” You are right. Not everyone has the renunciation option. I have less sympathy for those who are compliant (and thus spending annual $ to stay that way), while holding out for RBT (so they can stay US citizens) when all it would take for them is another $2,350 to end their slavery. Whereas your wife (and you) as non-compliants don’t have that choice. This is why those who have never been in the US taxpayer system should be granted an amnesty – they don’t want RBT, they just want to be free.
But there is always someone who really wants out of US citizenship, and should be allowed that freedom, but because he/she is not as pure as the ‘accidentals’ (however you define them), would be excluded from an amnesty for ‘accidentals’. Like say the guy who left USA at age 25, and just stopped filing because he thought he didn’t need to since, duh, he doesn’t live in the USA anymore. A reasonable presumption by most human beings other than those who have heard of US’s ridiculous citizenship based taxation.
Better, than an amnesty for ‘accidentals’ would be for the USA to give renunciation from US citizenship to EVERYONE WHO DOESN’T WANT TO BE AN AMERICAN. Charge them a fee and give them a CLN, no questions asked, no revealing of passive foreign income corporations (aka non-US mutual funds), no need to decide on whether or not to enter an amnesty program for delinquents, no trying to fit square pegs into round holes in a guaranteed to be error laden attempt to catch up on past years of tax and bank account reporting, no requirement to prove you lived a life outside USA in order to get a number so you can file past tax returns so you can have a life outside USA. and on and on. That way USA gets to keep it’s unique citizenship based taxation, and the only US citizens living outside USA will be the ones who agree to being US taxpayers.
I probably smoked too much while in the rabbit hole today.
@Malice
So someone can keep their options open as to whether they want to be a US citizen until such time as they renounce with no questions asked?
“I probably smoked too much while in the rabbit hole today.”
Is it any good, because considering how you stated the options that the US could have used, but didn’t; I think I’d like a toke too.
~sigh~ Why do I feel that getting out of United States citizenship is like trying to get out of a cult.
@Maliceinwonderland
With respect to @TheAnimal1970, you write:
I don’t understand his situation and I don’t really follow your logic.
If you are suggesting that tax compliance is a condition to renouncing that is simply not true. One can renounce without being tax compliant. He just becomes a “covered expatriate”. So, what does that mean in the context of his (or a similarly situated person’s) life? It could be a completely meaningless designation.
Here is what would happen if he follows the advice of the Homelander and “Just renounces”:
Let’s call this “The Underground Railroad” …
Once he renounces (what a great feeling!!) and ceases to be a U.S. person for ALL purposes …
1. He has to file an 8854. If he doesn’t then he subject to a $10,000 penalty which (because he is a Canadian citizen) Canada is not obligated to help Obama collect (as per the tax treaty).
2. Say he is pressured to disclose his finances and he files the 8854. Running the Exit Tax rules does not mean that he would actually pay any exit tax. If his capital gains are less than about $900,000 CDN (at today’s exchange rate) then he has no deemed capital gains tax payable. If he has no Canadian pension, there is nothing to tax so he may not have to pay any exit tax. (There are a few other possibilities that probably don’t apply to somebody living outside the Homeland.)
3. Okay, what about the five years of back filing? Even if they came after him he is not likely to owe any taxes. He may not be required to file any information returns anyway (Form 8938 kicks in at a threshold that he may not meet). In other words, there may be no basis for assessing penalties.
4. If he is worried about the FBAR, he just files it online.
Obviously this analysis applies to anybody in this situation. Why torture yourself? Why behave as a slave when you are really free? For many, the door to “freedom” is open. All you have to do is walk through.
As Janis Joplin used to sing:
“Freedom’s just another word for nothing left to lose.”
I don’t think that all of these people are held in Slavery at all. They are perfectly free to do what the Homelanders say:
Now perhaps the $2350 is the barrier. Come in. Just beg, borrow or steal the money. There is NO INVESTMENT in the world where you will get a better return than on renouncing U.S. citizenship.
Or perhaps, the Isaac Brock Society could take a leading rule in establishing a charity called:
“Renunciation Fund – Freeing people from the land of the free”.
Renounce and rejoice.
https://youtu.be/c7CtqwyxHM0
To do a take on a tagline of a Canadian bank:
Many of you don’t need to suffer with U.S. citizenship. “You are freer than you think!”
@Bubblebustin, I would assume that like the streamlined amnesty program, there would be some as yet, unknown, unannounced, end-date for the ‘get out of US citizenship for a flat fee’ option. Meanwhile, just keep filing.
@TheAnimal, “Is it any good?”, yes it is all good.
@USCitizenAbroad, “I don’t understand his situation and I don’t really follow your logic.”
Someone who is compliant and decides to renounce because they just cannot tolerate CBT anymore (and who could blame them), exits US citizenship without a black cloud hanging over their head for the rest of their lives. They will not worry or wonder whether or not the USA will come after them in the future due to ‘covered expatriate’ status or as in TheAnimal’s wife’s case, ‘non-compliant’ US taxpayer status.
The blackcloud that no one should worry about is really there. If it wasn’t, none of this would be happening. I am off to the rabbit hole again.
@USCitizenAbroad, OK, so some will owe exit taxes. Hopefully you get my point though. The non-compliants have more hoops to go through to get out legit than do the compliants. Many of the non-compliants (most?) are long lost ‘Americans’ at best, so why force them into compliancy first in order to get cleanly out. Just let them go.
The compliant ones – give them a choice too. If they decide to stay US citizens and put up with CBT, they can work towards fixing it as US citizens. Meanwhile the least American of the ‘US persons’ are free to leave (in my rabbit hole fantasy) the plantation.
USA (if you don’t live there anymore) is like an ex-spouse, someone for whom you gave up a long time ago on any notions that they would change.
@MaliceInWonderland
The USA is not giving any options. It’s play by their rules. The question is how to best play within the context of their rules.
The individual situations of different individuals will drive the most reasonable course of action. Some people will come into compliance and others will not.
Might be worth remembering that there are two groups of Americans abroad who have problems:
Group 1: Those Americans abroad who are NOT in U.S. tax compliance.
Group 2: Those Americans abroad who ARE in U.S. tax compliance.
You can renounce either way. It’s a question of how the U.S. rules apply to your situation.
Some Americans are more American than others. Those who are more American will find it easier to leave cleanly the US tax system should they choose to do so. How so you ask?
Those who are ‘more American’ (left USA as an adult, in the US tax system at some point, went to school in USA, etc, etc) are more likely than those who are ‘less American’ (left in diapers, never in the US tax system, never went to school there, etc) to be US tax compliant. It is easier to leave cleanly if one is US tax compliant. Thus, the ‘less American’ you are, the harder it is to leave.
I think USCitizenAbroad is trying to make a different point and one which has taken some time to come to.Nobody here originally assumed there was any way out other than the very one-sided approach, which included many assumptions. Assume you must file, assume there will be penalties. Did anyone stop and think whether all these things really applied to each and every American abroad?
It is an absolute fact that one can renounce without being tax compliant. This was likely the very first fact that was established by Brockers’ research (actually we already knew it when we were still at the expatforum). Even high-level tax compliance firms are advising to renounce and sort the tax issues out afterwards. All that happens is that the clock begins to run for those who are going to make the choice to get out according to the so-called “rules.”
If someone makes $25k per year and one of the pair is not a US citizen, it is so improbable that tax is owed it can easily be assumed. The general reality is that if tax is not owed, there are no penalties. That’s all. It couldn’t be more simple. No need to worry about all that’s been touted over the last 5 years. If one does not have enough savings/investments to report on an FBAR then why is there any fear of not having filed (when it wasn’t required in the first place?). If there’s no need for an FBAR, why any worry about 8938, 3520a, 3520, 8621 etc? There are no penalties for not filing something that doesn’t need to be filed. And with a situation like this, there is no way an exit tax can be applied. So what does being a “covered” expatriate in this situation mean? It means nothing. Absolutely nothing. The idea is ridiculous. Understanding that this is the reality would go a long way in putting this in its proper place and getting on with life. Get a CLN. You will be able to cross the border. The IRS cannot release your tax information to the border patrol, the DHS, etc. If they could, the Reed Amendment would be enforceable. It isn’t. You would have to directly say you renounced for tax purposes in order to be inadmissible to the US forever. Not only would you not be renouncing for tax purposes if you didn’t owe any, you wouldn’t even have a reason to consider it.
@Malice
I’ve been away and am unfamiliar with your situation. I became compliant and renounced nearly five years ago. I am not so sure I would do the same thing today; i.e., worry so much about filing and penalties and so on. My original fear/idea was that I would not, under any circumstances, enter an OVDI program nor would I pay one dime of penalties for not filing an FBAR. Due to the unexpected appearance of the FactStatement 2011-13, I took a chance and filed. I would still have renounced. But becoming compliant does not at all put one’s mind to rest about that “black cloud.” Nobody ever hears back from the IRS. Nobody knows if the returns are correct. Nobody knows if the IRS will at some moment, decide to re-look at returns before the SOL is over. Nobody knows if Schumer and his crowd will manage to get some hideous law passed that will apply to those who previously renounced, no matter how long ago.And the only way any of those things will happen, is if one has complied. None of that is going to happen to someone who hasn’t because the IRS won’t even know they exist. Again, I would not have been able to believe this in the beginning but watching this situation now for five years, it begins to appear very differently. The ones who tried to do the right thing and come forward, are the ones hurt the most.
This all assumes one does not want U.S. citizenship, I don’t know your feeling about this. I also don’t know your financial situation. But if you don’t live in North America, it is awfully hard to imagine the IRS having a way to knock on your door and force you to pay………………
The Canadian “exit tax” does not apply to any assets earned/owned outside of one’s time in Canada. It truly is a departure tax, not at all like the U.S. exit tax.
I cannot imagine anyone not appreciating Phil Hodgen. What he has done, for absolutely nothing, was so helpful to all of us way back when. I’ve also been fortunate enough to meet him and he is really a great guy.
I actually understand everything you’ve said usx and agree 100%
Those who are ‘less American’ are really PO’d at being continually mind-fucked, not just in media, but everywhere (Brock included), into believing that they are not really citizens of the countries they call home (and are citizens of) but that they are ‘Americans living abroad’ and as such should be supporting a move towards US RBT as the solution to all when truth is, their real issue is not with USA, but with the government of the country they call home.
@Patricia Moon
My post above was a comment on the possible implications of “Just Renouce” when there are few assets and no tax liability.
Your post includes:
This is shockingly bad advice to give without understanding somebody’s tax and financial situation. You should do NOTHING until you the tax implications of renouncing are considered. In simple cases there is probably (but not necessarily) little tax liability. But, for people who are paying “high-level” compliance firms the chances are that it’s a very different situation. Imagine renoucing and THEN finding out that your tax situation was serious (sale of a house, Subpart F income, etc.)
Look the moral of the story is:
You need to understand the complete situation before doing anything.
1. Understand that you can renounce without filing taxes.
2. Assess the tax situation in advance so that you know which course of action makes sense for you!
@USCA
Of course it is terrible advice. My bad, I should have included that. I was only trying to make the point that it is completely false that one must comply in order to renounce.
@MaliceinWonderland
I am not aware of anyone here who would tell someone they were merely “an American abiding in their other country.” We all hate that, even those of us who could have been described that way at one point. Where on Brock have you ever seen someone make such a statement? I have seen it discussed in terms of that is how we may be perceived by say, the CDN govt but I don’t recall anyone agreeing with the idea.
Thanks to those of you who corrected my misunderstanding on the excemption for born duals relinquishing. If I understand, the only financial outlay fir these people would be the relinquishing fee? Of course, with a decade and a half until my children can relinquish, this knowledge has little practical use now.
How about the following. I friend of mine is estranged from his Japanese wife. He lives in the US and his wife and children in Japan. He has a trust set up in the US for his dual children living in Japan. The children were born in Japan and have lived their entire life in that country, only visiting the US a couple of times. Their births were registered at the US Embassy and they have US and Japanese passports. They may also have accounts in their names in Japan. Would they be subject to the current exemption for duals?