reposted from MapleSandbox
by Lynne Swanson
#FATCA Americans overseas: Do NOT allow US tax pros scare u into entering US tax system. Many have no business entering!
— Keith REDMOND (@kredmond_global) January 19, 2017
Backing up the above tweet, Keith Redmond posted the following on Facebook:
Dear Members: I just had a lengthy, robust call with an individual who spent 25 years in upper management with the Department of Treasury IRS Criminal Investigation. He confirmed what I thought about the IRS. There is more bark than bite. He stated that there are many, many Americans overseas ho have no business in entering the US tax system and that Accidental Americans UNDER NO CIRCUMSTANCES should enter the US tax system. He confirmed that there are MANY US tax pros who prey on Americans overseas and Accidental Americans through fear and falsehoods. (e.g. you will get arrested, etc.). Any US tax professional who pushes and scaremongers these individuals to comply are not professionals and should not be used! He confirmed that the IRS is NOT going to go after you in your country of residence (most especially if you are a citizen of that country) and the IRS is NOT going to arrest you at the US border. The IRS does not have the resources to do this plus they go after those who have committed a crime not the average American overseas. He stated that Americans overseas need to not succumb to the fear. Excellent conversation and I am glad my views have been validated.
This reflects what I have long believed. Unfortunately, there is still the nightmare of FATCA to deal with. In some countries, anyone born in the US cannot even get bank accounts. We are treated as criminals just for banking where we live.
I asked Keith how his contact explains and justifies this.
Keith replied:
He can’t. He finds the whole situation abhorent…
Red Cabbage: We’re all painfully aware of the problems concerning the UN. Nonetheless, it seemed that it would be unfair to everyone affected by our issue if we did not pursue EVERY avenue available to us no matter how slim our chance of success. To miss the opportunity to register a formal human rights complaint with the foremost human rights organization on the planet (regardless of how ineffectual it may be) would be negligent on our part. It hasn’t done us any harm and it may yet bear fruit.
“But I am unsure what action, apart from being born in Japan of a Japanese national, they could take.”
They can act to declare which citizenship they choose to keep. I don’t know if Japan sets a minimum age for them to make that declaration. I’ve read that the US denies relinquishments for that kind of action, but your kids could try anyway. Moreover, your kids could try calling that a self-relinquishment instead of paying a fee to the unaccepted master.
I’ve read that the US imposes a minimum age of 18 for renunciation, but don’t recall what happens with other kinds of relinquishments. I think that an action taken before age 18 isn’t considered potentially expatriating, but I don’t know what happens if at age 18 they say that their earlier action had been made with informed intention to relinquish.
“My wife has no idea as she was not required to take any action, she being born in Japan, also of a Japanese national.”
Renho was born Japanese, in Japan, to a Japanese national, and still is Japanese. She got in trouble because she was also born Chinese (ROC not PRC) in Japan to an ROC national, and I think at age 17 she declared her choice to be Japanese, but she didn’t know that she still had ROC citizenship because she had failed to perform some procedure at the non-embassy non-consulate of the ROC to relinquish.
Renho’s not likely to become prime minister because her party isn’t popular. (Japanese voters don’t understand how lucky they are that the DPJ was in power at the time of the Fukushima meltdown, so they returned to the LDP to create another disaster just like it.)
Anyway, in view of Renho’s situation, you haven’t given enough information to figure out if your wife has to take any action or not.
(“my kids are not murderous leaders of foreign nations who just happen to have a name of Japanese origin”
Fujimori was born in Japan to Japanese parents, not just happening to have a name of Japanese origin. If he hadn’t murdered enough Peruvians, he would have lost his Japanese citizenship when he naturalized in Peru.)
“But, if my children can not renounce USCship by age 22, what happens?”
Hmm. If they become Japanese politicians they get a second chance to renounce foreign citizenships late, but if they don’t become Japanese politicians then who knows, maybe they get deported to a country whose language they don’t even speak.
@RC
It’s not so much that I can’t apply for JCship, more as a covered expat the cost and time required to be free and clear, which seems a neccesity to maintain banking privledges, is prohibitive.
However, as I did not come to Japan expecting to stay and certainly not to naturalize, I am far, far, far from meeting the requirements to gain JCship. Language is a huge roadblock. I use English and English only at work. Some employers even bar us from using any Japanese a work. What language ability I had twenty years ago when I returned is ironically all but gone. Another barrier are my finances, rather general lack thereof.
Still, compared to what I would need to do to get in the free and clear from Uncle Sam, a cake walk.
But I still wonder, what happens to dual accidentals in countries where dual citizenship is not allowed who can not free themselves of USPersonhood.
@ND
Renho and Fujimori are of class that few others can claim membership to, certainly very few here. What happen to them is of very little consequence to us.
Both of my wife’s parents are Japanese and she was born in Japan. Her birth was registered in the family registery so need for any sction on her part. Same as our children except one parent is a USC. To everyone except the US, my children are Japanese and Japanese only.
@Red Cabbage
You can have your birthplace removed from your passport but the U.S. will not allow anyone to enter without that information. I believe there are other countries who also require this info.
“You can have your birthplace removed from your passport but the U.S. will not allow anyone to enter without that information. I believe there are other countries who also require this info.”
Presumably this would aid in avoiding disclosure of birthplace if FIs started asking to see passports for opening accounts?
@JT
It could but it is rather uncommon so unless you were in the presence of a willing bank employee, he/she might ask you………nothing seems to be failsafe………
@PM
Nothing ever is failsafe. But I wonder about accidentals living niether in the US nor the country of their other nationality. Not common for an alien to be asked for a passport when opening up an account, especially in today’s climate?
@Japan T
I’m not a lawyer but I stumbled across a somewhat older (2002) document on the DoJ website that made me think of your kids:
http://www.justice.gov/sites/default/files/olc/opinions/2002/06/31/op-olc-v026-p0056.pdf
On page 66 (document starts on page 56), there seems to the possiblity that even though they were born Japanese, they can still relinquish at 22, if they sign an oath to Japan which specially renounces their US citizenship. With intent, should be enough to get a CLN if they push.
Unfortunately, Germany did not make my son (he gets to keep both) decide so he couldn’t take the option.
Maybe enough of a self-documented relinquishment for a bank
Japan is not big into “self” anything. But who knows.
@Unforgiven
Thanks.
In my email box this morning from AccountingToday.
“Ten things you need to know about passport restrictions on delinquent taxpayers
By Jim Buttonow
Published January 31 2017, 9:02am EST
In late 2015, Congress passed the Fixing America’s Surface Transportation Act, a law that, among other things, helps the IRS collect larger tax debts. Included in the FAST Act is Section 7345 of the Internal Revenue Code, which requires the IRS to provide information to the U.S. State Department about people who owe “seriously delinquent tax debt.” Then, the State Department can deny, revoke or limit the ability of these individuals to use their passports – until they are back in good standing with the IRS.
The law was effective on the day Congress passed it, but given the complexity of implementing it, the IRS needed time to work out the details. Now, the IRS is ready to start the program in late March.
For most people, the passport restrictions remain a mystery, largely because Treasury regulations haven’t been published that explain how the IRS will conduct the program. Recently, the IRS provided some early indications of how it will administer the program. The IRS hasn’t updated its Internal Revenue Manual, and the State Department hasn’t provided any information on specific passport rules. The IRS promises more information in the next few months.
Here are the 10 most pressing questions and answers about the upcoming passport restrictions.
1. What is the new passport-restriction program (IRC Section 7345)?
IRC Section 7345 requires the IRS to identify and “certify” individuals who have “seriously delinquent tax debt,” and provide this certification to the State Department. In turn, the State Department can deny, revoke, or limit use of the individuals’ passports until they get into good standing with the IRS.
2. Why did Congress create passport restrictions?
In 2011, the Government Accountability Office issued a report that examined the potential for using passports to increase tax-debt collection. The report found that 224,000 people who owed collectively more $5.8 billion in unpaid federal taxes received passports in 2008.
The report recommended that Congress enable a more coordinated effort between the IRS and State Department to go after these unpaid taxes, using passports as leverage. The report received a lot of national press, and the link between federal tax debt collection and passports became law in 2015.
3. Who is affected?
The passport restriction will affect people who travel internationally and owe seriously delinquent tax debt. This includes people with passports and those applying for or renewing passports.
Who is an individual with seriously delinquent tax debt? Section 7345 defines this person as owing a legally enforceable tax liability of more than $50,000 (unpaid taxes, penalties and interest combined), with:
A lien filed, and all administrative remedies for lien relief have lapsed or been denied; or,
A levy issued.
There are certain exceptions. The IRS won’t consider people in the following situations to be individuals with seriously delinquent tax debt, because these people are in good standing with the IRS:
· People who are in an IRS installment agreement to pay their taxes. Based on IRS data, most taxpayers affected by passport restrictions will avoid or release the restrictions by establishing installment agreements with the IRS to pay their tax bills. In 2015, taxpayers established almost 3 million installment agreements.
Right now, it’s unclear whether the IRS will allow other types of agreements to release taxpayers from passport restrictions. Two other arrangements the IRS could allow include deferred payment because of economic hardship (called currently not collectible, or CNC, status), or partial-pay installment agreements
But it’s unclear whether the IRS will count people in these agreements as being in good standing, because the agreements don’t cover the entire tax bill. It’s also unclear whether the IRS will allow taxpayers to get back into good standing with extension-to-pay agreements, which give taxpayers 60 or 120 days to pay their tax bills in full. If the IRS does allow extensions-to-pay to release taxpayers from seriously delinquent tax debt status, this could mean a simple fix to passport restrictions.
Remember that Section 7345 and the IRS have not specifically stated whether CNC status, partial-pay installment agreements, or extensions to pay count as exceptions for taxpayers who would otherwise be considered individuals with seriously delinquent tax debt. We should expect more clarity about these options in the near future.
· People who have settled their debt through an offer in compromise or Justice Department agreement. Taxpayers who may qualify and can pay an offer in compromise settlement should consider applying now to get the process started before passport restrictions start in March. However, this won’t be a common exception; in 2015, taxpayers submitted about 67,000 offers in compromise, and the IRS approved only 27,417.
· People who appeal a levy through an IRS collection due process hearing. Congress wants to allow taxpayers to finish appealing their cases before the government imposes passport restrictions. As such, taxpayers who are arguing a levy action through a CDP hearing won’t be certified as individuals with seriously delinquent tax debt until their hearings are completed.
Levies are normally triggered after taxpayers receive a final notice of intent to levy (usually, IRS letter LT11 or L1058). Taxpayers must file for a CDP hearing within 30 days of receiving this notice. CDP hearings are an effective last step for taxpayers who want to get in good standing with the IRS by establishing a payment agreement or contesting the taxes and penalties.
· People who request innocent spouse relief (Form 8857). This won’t be a common exception. The most recent IRS data from 2003 to 2006 shows that taxpayers file only a few thousand Forms 8857 annually, to get relief from a joint tax debt.
Based on this list of exceptions, the way to avoid being certified by the IRS as an individual with seriously delinquent tax debt is to get into an agreement with the IRS to pay the balance.
4. What will happen to the person who owes seriously delinquent tax debt?
Starting in late March, the IRS will send Letter 508C, Notice of certification of your seriously delinquent federal tax debt to the State Department, to the taxpayer’s last-known address to notify the taxpayer that they are certified as owing seriously delinquent tax debt. At that time, the IRS will also send the certification to the State Department.
The State Department then has the authority to deny issuance or renewal of a passport, or fully restrict or limit its use. The State Department will notify the taxpayer in a separate letter about the passport restrictions.
Before the State Department revokes a passport, the State Department may limit the passport so that the individual can only travel back to the United States. It’s unclear how the State Department will use its discretion on limiting and revoking passports.
However, when taxpayers are applying for or renewing a passport, the FAST Act requires the State Department to deny the passport to any individual with seriously delinquent tax debt. Per the IRS Web site, before denying the issuance of a passport, the State Department will hold the passport application for 90 days to allow the taxpayer to:
Resolve any erroneous certification issues;
Pay the tax debt in full; or,
Establish a payment alternative with the IRS
Taxpayers won’t get a similar grace period for resolving the debt before the State Department revokes a passport.
5. How can taxpayers get their passport restrictions lifted?
To get out of the passport restriction, individuals must get back into good standing with the IRS. For most taxpayers, that will mean paying the entire tax bill or, more likely, setting up an installment agreement with the IRS.
After taxpayers get into good standing, the IRS will send the decertification list to the State Department, which then lifts the passport restrictions. The IRS will also reverse the certification within 30 days.
6. Can taxpayers just pay the balance to under $50,000 to remove the certification and passport restrictions?
The short answer from the IRS is no. Just reducing the amount under $50,000 will not decertify the taxpayer. The key is to get into good standing – that is, individuals certified as having seriously delinquent tax debt must either pay the entire balance or set up a payment agreement with the IRS.
Two quick collection alternatives come to mind. First, the quickest way to remove passport restrictions could be paying the balance to under $50,000 and setting up a streamlined installment agreement for the rest (payment terms up to 72 months).
Second, taxpayers who owe between $50,000 and $100,000 can use the new IRS expedited installment agreement process to quickly get in good standing with the IRS. Taxpayers who owe more than $100,000 can pay the balance down to under that amount to get into this special 84-month payment plan. Otherwise, taxpayers who owe more than $100,000 or need terms longer than 84 months must file detailed collection information statements (Form 433 series) with the IRS and wait for the IRS to approve their installment agreement. This process can take months, which will also mean extended passport restrictions until the IRS approves the agreement and decertifies the taxpayer.
7. Can taxpayers appeal their seriously delinquent tax debt certification?
Under Section 7345(e), taxpayers can appeal their status in federal district court or U.S. Tax Court. But the taxpayers’ passports will remain restricted while they appeal.
Expect further legislative and administrative remedies to allow taxpayers to contest their status at the same time they learn about passport restrictions. One reason we should see these additional remedies is the uncertainty of international mail. Many taxpayers may not be receiving IRS letters about their unpaid taxes. In fact, they may first find out about their passport restrictions when they try to travel to another country or return to the United States. A 2015 Treasury Inspector General for Tax Administration study reported that the IRS had no idea whether U.S. taxpayers living abroad had received the 855,000 notices it sent.
For taxpayers who are surprised by their passport restrictions when they try to travel, the best way to expedite travel is to obtain a quick installment agreement.
8. What if taxpayers don’t think they owe the tax?
Here, taxpayers are in a pickle, because time is of the essence. For example, if the IRS assessed tax on an unfiled return (that is, the IRS filed a return for the taxpayer, called a substitute for return), or through a completed audit or underreporter inquiry, there’s not much the taxpayer can do to quickly contest the tax assessment and remove the seriously delinquent tax debt certification. Filing an original return or contesting the tax through IRS administrative options or courts may take a long time.
To get immediate relief, the only quick option is for taxpayers to pay the balance, or more likely, set up an installment agreement, and contest the tax later with the IRS.
Again, recent IRS changes to installment agreements for people who owe between $50,000 and $100,000 may also help. These rules streamline the process to set up an installment agreement and would help cut down on the wait time to get passport restrictions lifted.
9. Is there an expedited process to remove passport restrictions?
Right now, there’s no provision to expedite removal of passport restrictions after a taxpayer gets in good standing with the IRS. After the service removes an individual’s certification, the IRS must notify the State Department within 30 days to release passport restrictions. If the tax debt is determined to be erroneous, the IRS has an undefined “reasonable time” to notify the State Department. As the law is implemented, look for the IRS and the State Department to develop expedited procedures to relieve taxpayer burden.
10. What can a seriously delinquent tax debtor do to avoid passport restrictions?
Basically, taxpayers can avoid passport restrictions by meeting an exception outlined above – all of which mean getting into good standing with the IRS.
@Patricia Moon,
“You can have your birthplace removed from your passport but the U.S. will not allow anyone to enter without that information. I believe there are other countries who also require this info.”
Does anyone know which countries besides the US won’t let you in without place of birth? If they are countries a person doesn’t want to visit, it seems like it would be very worth doing, as it could only help with the banks, though might not be enough help.
@JapanT,
How is it you are a “covered expat”? I thought you had to have millions to be considered “covered.”
Did you know that you don’t need a second citizenship to renounce US personhood? You can become stateless. Japan signed the UN Protocol relating to the Status of Refugees. I think that MIGHT mean that if you become stateless in Japan, they might have to let you stay, and provide you with a UN passport. It’s worth looking into.
https://treaties.un.org/pages/ShowMTDSGDetails.aspx?src=UNTSONLINE&tabid=2&mtdsg_no=V-5&chapter=5&lang=en#Participants
But I see that they didn’t sign the 1954 Convention relating to the Status of Stateless Persons
https://en.wikipedia.org/wiki/Convention_relating_to_the_Status_of_Stateless_Persons#State_parties
still, it seems like it might be worth looking into. Maybe you can go to one of the countries that DID sign it, renounce, get your UN passport and go back to Japan.
Relating to the issue of the US revoking your passport, have a look at this:
“A 1954 Convention travel document is a travel document, unlike a Stateless travel document (stateless person by a signatory to the 1954 Convention Relating to the Status of Stateless Persons), issued to a person in circumstances of any difficulties in gaining a travel document from country of birth.[1] ”
https://en.wikipedia.org/wiki/1954_Convention_travel_document
@RedCabbage
I have not been able to find a clear list….if you google it, there are some particular places listed on different sites. According to the info below (bit old…), US estimates 30% of countries will require more forms of ID if one does not have place of birth on passport.
http://archive.gao.gov/d29t5/133797.pdf
The State Department position:
In a second study conducted in
1986. the Bureau did not take a position, but concluded that if the birthplace
were eliminated from U.S. passports,over 30 percent of the Americans
traveling abroad would not be able to use their passports without
other documents to reach their final destinabions.
‘In my email box this morning from AccountingToday.
“Ten things you need to know about passport restrictions on delinquent taxpayers”‘
OK, I’ll also duplicate my posting from the other thread. Here are a few things you need to know about passport restrictions on non-delinquent taxpayers who get falsely labelled as delinquent.
..
“Who is an individual with seriously delinquent tax debt? Section 7345 defines this person as owing a legally enforceable tax liability of more than $50,000 (unpaid taxes, penalties and interest combined), with:
A lien filed, and all administrative remedies for lien relief have lapsed or been denied; or,
A levy issued.”
In other words, even when the lien is entirely fraudulent, and when the IRS has administratively denied admitting that the individual doesn’t owe the penalty, there is no relief.
“Taxpayers won’t get a similar grace period for resolving the debt before the State Department revokes a passport.”
Right. The passport is revoked while the person lives in their country of residence, and the US can even prevent the person from going to the US in time for calendar call in Tax Court.
“Under Section 7345(e), taxpayers can appeal their status in federal district court or U.S. Tax Court. But the taxpayers’ passports will remain restricted while they appeal. ”
Right. So even if the IRS had the idea of admitting AFTER calendar call in Tax Court that the person doesn’t owe any penalty, AFTER the person had to pay for plane tickets and take absence from work etc., well, the US already prevented the person from appearing for calendar call so the person forfeited and the IRS doesn’t have to admit a thing.
They’ve sure got that wrapped up.
Anyone who still thinks you don’t have to renounce before things get worse, you’d better think again.
P.S.
“Starting in late March, the IRS will send Letter 508C, Notice of certification of your seriously delinquent federal tax debt to the State Department, to the taxpayer’s last-known address to notify the taxpayer that they are certified as owing seriously delinquent tax debt.”
No they don’t send it to the taxpayer’s last-known address, except by accident. I moved on 2016-01-07, mailed a Form 8821 change of address notice to the IRS on 2016-01-12, and reminded them numerous times in letters, but they still kept addressing letters to my old address. That building has been torn down. The post office has stopped forwarding. If the Japanese post office has to try to guess where to return an undeliverable letter to, the return address often ends in the international standard abbreviation for Panama (PA) so that’s where the post office should guess to return the letter.
When I tried to file evidence in Tax Court about the IRS’s malfeasance in addressing letters and the fact that a letter wasn’t returned doesn’t prove that the letter was delivered, the IRS persuaded Tax Court to block the filing of my evidence.
Well, if I were still a US citizen, they could even block me from appearing in Tax Court. Luckily I’m not.
‘How is it you are a “covered expat”? I thought you had to have millions to be considered “covered.”’
There are three ways to be a “covered expat” and any one of them is enough to do the damage. You cited one. Another is to have the actual amount of US taxes (even when promptly, properly paid and accepted) above some other threshhold. And the biggest disaster for minnows, failing to certify under penalty of perjury that the expat has complied with all form filing and payment obligations for the preceding 5 years.
“Did you know that you don’t need a second citizenship to renounce US personhood? You can become stateless.”
Yes but would Japan let him keep his present status of residence or would they convert his status to something akin to barely tolerated refugee with no permission to work.
I did once see a person holding a stateless person’s document talking with an official at the immigration department, but don’t know anything about whether it was for renewal of status (approved or rejected) or re-entry permit (approved or rejected) or permission to work (approved or rejected) or anything else.
@RC
Yes, ND gave how I am a covered expat. It has been over ten years since I have been able to file. Always a concern but once it became clear that I would not be moving back, earned well below the amount where I would owe taxes and given documentation requirements that were just simply impossible to fullfill, it had been a long time since I even gave it any thought.
Yes, one can earn less than thirty thousand a year while living in one of the most expensive cities for expats, have a bank balance of less than ten dollars and still be a covered expat.
As far as becoming stateless, actually seems nice as citizenship has become merely a means to certify to which nation the citizen owes duty towards and certainly not which country has a duty to protect, but as I understand it, the US will not let you go untill a new citizenship has been granted. There do seem to be exceptions but I could not find any that I could use.
But as ND points out, Japan may not extend my employment privileges to a stateless document. Japan is not very friendly to refugees or stateless persons. Besides, not sure my employers would allow me to continue working for them.
Additionally, eventually I would need a CLN to prevent bank lock out.
I can not see anyway to keep my family together. My accidental children are going to have to navigate this mostly on their own, unless I can find a way out for myself.
Forge a CLN, show it to your bank. Medium-grade Photoshop skills would do it.
As Nononymous just said:
I couldn’t agree more. Are US born people slaves, or are you free people?
(I’m referring to my wife)
Don’t overthink this.
Figure out how to keep the banks happy (lie, cheat, forge documents, put everything in wife’s name, whatever) and forget about the IRS. Problem solved.
If the kids don’t have a US birthplace then they can ignore the whole mess – as mine will.
Do the police stop you to check your residence status? Illegal, it is said, for them to do so, yet they Yes, I have stopped and “asked” to show my papers and a second time to have my bag searched.
Ya don’t know the situation in Japan. I bet there are other countries that it also is not possible to do what you suggest. I think some said that it was Belgium that has all the info we would like to keep under our hats on the IC chip embedded in the ID they must present for banking etc. So that is even a western nation that makes it damned difficult to do as you suggest.
My own residence card and drivers license has all this info on the IC chips embedded in them.
My kids’ US connection by birth is known to all to whom we must present our family register to, which is every entity will have to deal with, from the bank, to the insurance company, to the credit card company, to the hospital, to the clinic, to the dentist to their preschool and probably a few others besides.
Apart from murdering a vagrant, burning my house down and living out my days in the wilds of the mountains, I have yet to find a way out.
Hell, learning that the IRS has sent just shy of a half a million notifications on pending passport revokations, I may already be an illegal alien in Japan. Who knows. Only ways to find out is to get the letter or getting stopped by the police. Avoiding those, I guess I’ll find out when I have to renew my residence card in a couple of years. Fun fun.
Perhaps a little enlightenment for our non Japan residing fellows is in order.
All non Japanese are required by law to have their Alien Registration Card or the new Residence Card on their person at ALL TIMES. There have been people picked up,at the beach for not having it on their person.
Failure to produce the card when stopped by police can result in immediate detention followed by deportation. Those I have known who forgot their card and were stopped did not go through this, however. Instead they were escorted straight home by the police. Instead of politely waiting outside as the card is retrieved, the police entered their home and give it thorough search.
Like I said, no flying under the radar in Japan.