Of particular interest is the issue of the Australian “Super.”
While all expatriates worldwide experience country-specific problems, this one is perhaps one of the worst. By law, Australians are required to contribute to their own retirement; this system is unique among government-sponsored retirement planning. Why on earth should the U.S. be able to tax these?
Online Renunciation Information Session with John Richardson – 9 Jan 2017
Presented by: John Richardson is a Toronto citizenship lawyer, the co-chairman of the Alliance for the Defence of Canadian Sovereignty as well as the Alliance for the Defeat of Citizenship Taxation. He is a member of the ACA Professional Taxation Advisory Council. He holds the degrees of B.A., LL.B., and J.D. He is a member of the Massachusetts, New York and Ontario bars. His law practice focuses on “Solving the Problems of U.S. Citizenship” including relinquishing and the “Exit Tax”. He gives programs for expats all across Canada and Europe. He writes extensively at citizenshipsolutions.ca
WHEN: Monday 9 January 2017
10:00 AM AEDT (Sydney, Melbourne);
9:00 AM AEST (Brisbane);
9:30 AM ACDT (Adelaide);
7:00 AM AWST (Perth);
UTC: Sunday 8 January 11pm. Convert to your time zone
Program will last for one hour
REGISTRATION: HERE
If you are interested, leave your email address here and in early January we will send you instructions on how to join the information session
What’s this about?
Since Australia agreed to the FATCA IGA in 2014, Australian financial institutions have been asking ALL new account holders and some existing account holders whether they are U.S. citizens. Many have no idea of the consequences of admitting to U.S. citizenship, a U.S. place of birth or being born to U.S. parents. In this one hour session, John Richardson will address the following topics:
Who is a U.S. citizen?
What about those born in Australia who
a) were registered with the consulate and have U.S. passports, but never lived in the U.S.;
b) were NOT registered with the consulate and do NOT have U.S. passports.
Look before you leap!!
- The pitfalls of entering the U.S. tax system – a brief overview of what it really means to be “U.S. tax compliant” in Australia
- Can the U.S. really tax my super?
- The ATO says tax treaties “eliminate double taxation,” so why can the U.S. tax my Australian income?
- How do I relinquish/renounce U.S. citizenship?
- Is a CLN necessary? How can I document loss of citizenship without a CLN?
- How is relinquishment different from renunciation?
- Didn’t I lose U.S. citizenship when I became an Australian citizen?
- There’s an EXIT TAX???
Other topics
- How renouncing U.S. citizenship may put your superannuation (and other savings) at risk
- How to renounce and exit the U.S. tax system cleanly and avoid being a “covered expatriate”
- I have just learned about the FATCA problem! The difference between “responding” and “reacting” – things you should NOT do!
- I thought I lived in Australia! Why do I have to follow U.S. law when I live in Australia?
- What can the U.S. do if I’m non-compliant?
- If my bank has identified me as a U.S. Person, can I satisfy the bank without entering the U.S. tax system?
THIS SESSION IS OF A GENERAL NATURE. IT IS NOT INTENDED TO AND SHOULD NOT BE UNDERSTOOD TO OFFER LEGAL ADVICE OF ANY KIND.
A much needed seminar for far flung Australia. FATCA awareness amongst expats in Aussie has been very lacking but is now growing with a dedicated FACEBOOK group over here. This certainly will help things along!
I’ve relinquished, but now fear for my US/AU children here with me. I believe they’d be better out sooner than later, but to think they have to give up their birth right is awful. My daughter is 17, son is 22. Both have lived in AU longer than they did in the US but have SS # so will need to decide. Such a sh*tty position to be put in by your own Gov’t!
@Jane, just to show how absurd things have become and more and more expats/non-pats have come to realize.
Whenever that I hear a mum has registered her non-US born children with the Consulate, deep sadness comes over me. Its as if I feel their pain having done something harmful to the children they love and did not realize it.
It literally reminds me of around fifteen years ago there was a vaccine for infants to prevent some form of viral bowel problem and friends of ours did it and the child had a critical side effect. Note, the vaccine was removed from sale in the USA shortly thereafter….
Our kids were born in the USA but it would have been easy for them to have not been born in the USA!!! This puts birth tourism on its head.
Did your AUSTRALIAN son register for US selective service (they need to call it the draft)? Would your AUSTRALIAN daughter register?
Just a note, I do think its wise for everyone to take a temporary deep breath and see if the GOP platform is fullfilled. Yes, some have doubts but this is the best position we have ever been in. Also, even though your kids have been numbered they could simply forget about it and fade into the woodwork.
Typo…..Would your AUSTRALIAN daughter register if Congress/Courts require them to register?
@Brockers……is anybody a “member” of Democrats Abroad which could only include a so called “dual?”
Could someone start asking them “Will you work on holding the Republicans in Congress to account for their pledge to repeal FATCA and CBT?”
OK, I can partly answer my comment above but someone needs to write.
But…..I found a wikileaks memo on FATCA from DA to John Podesta.
This could be helpful in banging the drums for the GOP to repeal and for banging the drum with Dems to support the GOP “because they lost votes over it.”
https://wikileaks.org/podesta-emails/emailid/30694
Jane: don’t worry!!
Here’s how I see things (I have 2 boys born in the EU with dual citizenship):
– US born children:
If you are in a country where one cannot open a bank account without showing id with birthplace (my case, for instance), then your children are stuck with FATCA. BUT, you/they can keep their banking simple, taking FATCA into account — be proactive. Also, tax filing requirements should be looked into. Someone earning nothing need not file, I believe. And perhaps the “super annuation” or whatever the Australian retirement system is can be opened purely as an Australian, without being labelled a US person, and if so it should be kept under the radar. By being pro-active someone can remain “compliant” in a simple manner. Notice the quotes. What the US wants is properly filled-out paperwork. You’ll be unfairly punished if you volunteer too many complex nuances about your situation.
The children have time to then decide for themselves whether this is worth continuing and renounce easily, or keep the US passport. If they decide to have a complex (normal) financial life out of the US might as well renounce. The cost of renunciation is just something to live with. Some people get sick, some lose money for whatever reason, and some kids have $2350 to pay for no good reason.
– non-US born dual-citizenship children, such as mine.
They can live normally. They can bank, have a financial life, like any human being. They must NEVER reveal their US citizenship outside the US. They must NOT get into FBARs and such nonsense. And, frankly, I don’t see why, when they grow up, they should start filing. There is no realistic way they will be found out and investigated (even while holding a valid US passport). When I moved back to the US at age 28 (ok, simpler times, 20+ years ago) I just started filing income taxes there. I had never filed before (left as a child). Never had an inquiry. But all I would have had to do was state that until then I was a student and never earned more than $10K a year and thus was not obligated to file. Frankly, I don’t see the IRS spending scarce ressources investigating millions of people just to confirm that indeed they owe no tax.
Anyway, at one point these children may decide to go study or live in the US, in which case their passport is a huge asset (they’ll be THANKFUL to you). They should of course, contrary to the sad example of Dr Pinetree (read this: http://isaacbrocksociety.ca/2015/08/18/another-brock-warrior-down-in-memory-of-marcio-v-pinheiro/) NEVER get into the FATCA mess. In the situation of a non-US born US person (so to speak), one should keep what is non-US away from any compliance condor, advisor, lawyer, FBAR, etc. One must lead a double life. It is truly a question of survival.
And finally:
– This will raise howls on this site, but having a US passport remains a really cool thing for any young person. It just opens a world of opportunity. Unfortunately these days having one is no free lunch (a good life lesson, right?) Educate your kids on how to stay out of IRS/FATCA trouble and then leave it to them. If you can, you can even help with the renunciation fee when the time comes. But don’t feel guilty!!
– Time will go by, things may get better. If you’re depressed with the election of Trump, full power to the GOP may have an incredibly bright silver lining: maybe FATCA will be dumped, maybe even CBT… Stranger things have happened! Even Democrats Abroad have thought of some simplification and are against CBT.
@George: the selective service registration is an interesting subject. What would you do? Personally I don’t think it’s essential, since the penalties for not registering are things like not being able to take a government job. On the other hand it seems harmless. I did it when I was 18.
@Fred, in regards to Selective Service the teeny tiny problem is non-registration is a felony;
“Failing to register or comply with the Military Selective Service Act is a felony punishable by a fine of up to $250,000 or a prison term of up to five years, or a combination of both. Also, a person who knowingly counsels, aids, or abets another to fail to comply with the Act is subject to the same penalties.”
Yes, they have not been prosecuting people BUT what if some a__hole decided to go after someone and added that to the list to have a list of offenses?
In regards to registering or not…..and in light of the above warning….I would say a person needs to examine their conscience and then reach an appropriate decision based on all the facts and circumstances concerning equity and proportionality.
Remember when you registered, there were no hot wars!! IMO, I think we are down a notch for war because of Trump but selective service is simply a polite name for DRAFT.
When you write; ” They must NEVER reveal their US citizenship outside the US.” Doesn’t that just make you sick? It makes me sick and I am singing from the same sheet of music. It sounds like a “safe sex” discussion with a young teen.
Hey, since you are a blue book carrier and a Democrat could you hit up DA to hold the GOP to account for their platform?
This wikileaks email has an interesting FATCA attachment that shows how condescending the clinton campaign was;
https://wikileaks.org/podesta-emails/emailid/5310
@Fred – keeping that US passport will become more difficult now that one MUST include a social security number on all passport renewal applications. In the not so distant future a passport application/renewal will prompt a query from the IRS for expats who have not been filing.
Re the born outside the USA issue again …
I continue to make the point that:
https://renounceuscitizenship.wordpress.com/2016/01/16/born-abroad-to-us-citizen-parents-in-a-cookvtait-world-are-you-a-us-citizen-or-do-have-a-right-to-us-citizenship/
Position should be that: Some carbon life forms born outside the USA have the right to obtain U.S. citizenship, but have no obligation to accept U.S. citizenship (unless of course they have already accepted it).
@Fred – “They (non-US-born children) can live normally. They can bank, have a financial life, like any human being. They must NEVER reveal their US citizenship outside the US. They must NOT get into FBARs and such nonsense. And, frankly, I don’t see why, when they grow up, they should start filing. There is no realistic way they will be found out and investigated (even while holding a valid US passport).”
That’s been the case for my non-US-born children (now grown). Their births were registered at the US Embassy, they travelled on US passports through their teenage years, then gradually tended to use their “real” passports as they grew older. A natural change, long before any of us had ever heard of CBT or FATCA. When a young person is going on holiday with their friends, they don’t want to have to go through a different line at the airport and get scrutinized grimly by an American, while their friends stroll casually through the multi-lane “normal” line.
As a result, when FATCA came along, it had a big impact on me (US birthplace) but didn’t affect my children at all, and it never troubled their minds either. They don’t feel they’re “hiding”, and in fact they’re not. No one’s looking for them. “Under the radar” does not apply. There is no radar targeting indicia-less children of USPs/former USPs.
“Frankly, I don’t see the IRS spending scarce ressources investigating millions of people just to confirm that indeed they owe no tax.”
I agree. Especially given the inherent difficulties of actually collecting.
@USCitizenAbroad – “Those who were born abroad to U.S. citizen parents should NOT accept that they are automatically U.S. citizens by birth.”
Is anyone trying to make them accept it? From my experience, and from what others have reported, it seems no one cares as long as they don’t “act like a US citizen” by filing, voting, or obtaining/renewing a US passport etc.
@Iota, “Is anyone trying to make them accept it?”
The problem is that the way the law is worded there is “no acceptance” rather it is automatic and retroactive application of law.
IMO, the State Dept needs to adopt an “administrative presumption” that a person is not to be considered a USC unless and until they apply for it!!
@George – Yes, that’s what the US law says, but a person who
* doesn’t live in America,
* doesn’t “act like a US citizen” and
* doesn’t regard herself as a US citizen,
would presumably not regard US law as applying to her. My children don’t.
@Iota….well yes…….that is indeed the Pound Sand Principle (PSP). 🙂
@IOTA
You write:
There is lots of confusion. What happens is that they get advice from tax/legal professionals that they ARE U.S. citizens. So, the answer is YES, there are people trying to make them accept U.S. citizenship status.
What is the Pound Sand Principle?
What I mean is that, in practice, the US can’t require a person lto file, or register for Selective Service, etc, unless they can prove the person is a US citizen. The person doesn’t have to “accept” citizenship, and no one is trying to force them to do so.
USCitizenAbroad – I see what you mean.
No one official is trying to make them accept US citizenship, but tax advisors might, if they were so unwise as to seek advice on their citizenship status from an IRS-registered agent.
US Citizen: the way I see it is to make my kids US citizens (yeah, yeah … before FATCA — 2003) I had to file proof of the number of years I had stayed in the US, etc. And, missing about a week of US presence, actually went (before the birth) to Florida for a week. To be sure I met the requirements, with proof. So it was quite an active pursuit. And they could’ve refused it. Therefore, working in reverse, had I not done this, to deliver a US passport “forcibly”, the US Gov would have to prove that the child is eligible for it. And there is no possible way to do that in cases like mine, where the only USC parent has been abroad a long time, and before IT allowed close tracking at the borders. Now I could imagine the part where the compliance professional says “put them down as US anyway” but that sounds like a stretch.
Karen: my foreign born kids have a SS number and active passports. This gives the IRS no information. As far as the US is concerned, maybe the only account one has is in the US, or worth under $10K.
And as I said above, “Frankly, I don’t see the IRS spending scarce ressources investigating millions of people just to confirm that indeed they owe no tax.” They just can’t. Imagine that you apply for a passport, and the IRS gets a signal and finds that you haven’t been filing. They could send you a letter saying why aren’t you filing. You could answer “because I don’t have to”. So what can they do? Launch an international investigation to prove that you make enough money to file? Get foreign courts to force you to turn over information. Would take years per case. Most times they’d find nothing. Huge waste of time and ressources that they don’t have to begin with.
@iota, re; “No one official is trying to make them accept US citizenship, but tax advisors might, if they were so unwise as to seek advice on their citizenship status from an IRS-registered agent..”
and
@Fred, re; “….Now I could imagine the part where the compliance professional says “put them down as US anyway” but that sounds like a stretch…”
Nope, not a stretch at all.
I experienced something along those lines.
I did NOT seek any US citizenship/immigration advice, but yet the US tax lawyer compliancer I consulted in my quest to surgically remove my US extraterritorial CBT burden – though not professionally qualified to pronounce on US citizenship law, appeared to really really proactively want my Canadian born Canadian resident child to qualify as a US citizen via parentage – based on my US birthplace – and disapprovingly and firmly stated (in the context of a discussion of identifying my FBAR reportable ‘foreign accounts’ and overall US CBT compliance burden) that I was “skating close to the line” when I unequivocably stated that I had thoroughly researched the applicable rules for US parental transmission of citizenship at the time – and the rules that would have applied to the time period in question for myself and my descendant/s – and that I was certain that I did not have the sufficient period of US residence. Nevertheless, despite my attestation, he then ad hoc dangled the imaginary potential ‘benefits’ of my Canadian born child being able to access future US streets paved with gold in order to persuade.
As firstly this was not germane to the US tax discussion as I had already said that I was NOT a co/signatory on my Canadian citizen child’s RESP or any other of their savings (luckily set up and funded entirely by a Canadian-only grandparent and Canadian-only parent), the US tax compliancer’s preoccupation with my descendents citizenship status was not at all germane to the consultation at hand about MY personal US CBT compliance burden.
And, as only I as the sole US born parent could certify or prove how long I had actually resided in the US (we left the US when I was very very young) and thus am the only person living who could actually testify to it (no living US grandparents either) I was certain that my Canadian child did not qualify to inherit the US burden – and thus we were spared at least that one small portion of the US extraterritorial incursion into our local Canadian family savings and wellbeing. The US tax law compliancer also knew very very well that IF my Canadian child had qualified, then their Canadian RESP would have been FBAR reportable (and according to most, but not all advice – subject to 3520/3520A) and therefore also at risk as FBAR non-compliant and considered a ‘taxable foreign trust’ by the IRS. I refused to alter my position – or alter the truth, and stated that I was entirely prepared to swear out an affidavit to the effect that I did not have sufficient months/years of US residence to have transmitted US citizenship to my descendent if it came to that. The silence that followed was very disapproving, but he could not force me to attest to something that (a) wasn’t true, and (b) would have posed an extraterritorial threat to my child and family and was not in the best interest of any of us.
My conclusion was that the US tax compliancer (who exported himself to Canada to tap into the great US tax compliance gold rush of 2011) was personally and ideologically driven to try and construe that my child was a US citizen – despite the facts only I could know, and despite the adverse logical and immediate consequences that would have followed – of making a child into yet another victim of US Treasury extraterritorial grasping across borders, incurring their own FBAR jeopardy despite being a minor, and also threatening the only family funds available to ensure they could afford college/university.
At this point, I don’t think it will be necessary, but I still might swear out such an affadavit and keep it in a safety deposit box for them, so that after my death, if it ever comes to it, Canadian banks, and the the US cannot question or try to make them a victim of US extraterritorial CBT or FATCA them based on my US birthplace.
USCitizen Abroad is entirely correct when saying;
“..So, the answer is YES, there are people trying to make them accept U.S. citizenship status.”
And @George, the “Pound sand principle” is exactly what I would advise people ‘abroad’ who do not want to be deemed US subjects, with no US birthplace, and no registration of US citizens birth abroad and no US passport to apply to the US EVEN IF they qualified via parentage.
I recall hearing a Canadian citizen child of US citizen parents who stood up to tell a DA US tax seminar in Toronto of her experience with the 2011 OVDI – it was an object lesson to the audience in why it was healthier to stay out of the spiderweb if possible. The person said they came forward against the advice of their parents because they thought it was the ‘right thing to do’ and that if they explained about living (and being born?) in Canada, paying Canadian taxes, having only local Canadian accounts, etc. that the US IRS would be fair, logical, etc. I don’t know what the final outcome was, but at that point, early on in the process (which we know in hindsight would have taken years to resolve – even if no US tax could possibly be assessed), she said that even at that early stage, the IRS had been ” not nice at all”.
Well done, @badger!
What is the Pound Sand Principle?