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…
@ JC
“There is a box on there do you own your home.
Really? Is that something new (since 2014) or was it always there and, son-of-a-gun, that’s something else we missed.
BTW, had Boris been properly advised, he could have easily received a back-dated CLN, but methinks he had his reasons for clinging to that Americaness in him. However, as a Foreign Secretary supposedly representing the best interests of the UK, I think the honourable thing to do would be to give it up. You cannot serve, nor properly represent, two masters.
http://heatst.com/world/boris-johnson-remains-an-american-citizen/
@ Keith REDMOND
As a DO NOTHING myself, I applaud you. Please note that I am not a USC, just tangentially a USP by their rules, not mine.
@Keith. Thank you thank you thank you
How would someone get in touch
@Keith, please allow me to take the liberty and expand on what the IRS Agent conveyed to you as this may be of worth to you later in your path.
MOST ex-pats and deemed-pats because of foreign tax credits for foreign tax actually paid would not owe the USA anything.
The penalty for NOT filing a return is a percentage of the tax owed. But if you owe no tax the penalty is ZERO, NIL, NADA.
The IRS has a very finite amount of resources available to them. They DO understand most folks overseas do NOT owe any tax ergo there would be no failure to file penalty!!
The Compliance Industry, who I now loathe as much as the military industrial complex, is the ONLY party that is making any money on all this!!! They are getting paid to file returns for folks who owe NOTHING and if they did not file were facing penalties of ZERO!!!
The IRS is NOT going to expend resources simply to get people to file returns that attract no tax and no penalty. That is a business model for bankruptcy.
Is it worthwhile for any ex-pat or deemed-pat to do a rough calculation on scrap paper to see if they owe the USA anything? YES
IF an ex-pat or deemed-pat owes roughly no US tax does it then make sense to spend a Thousand Dollars to have a return prepared that shows zero tax? NO
ERGO, it is FOOLISH for any ex-pat or deemed pat in Canada or Europe to file a US tax return as it is a waste of precious IRS resources and SOLELY enriches the compliance industry.
I hope and pray the above is useful to you.
@Keith….one more way to look at this….I think you live in France.
IF an expat living in France, working for a French firm and paying French taxes neglects to file a US tax return for many years, what is his exposure with the USA?
The answer is there is no exposure because of taxes paid to France.
@PierreD, this was travel SOLELY to the USA. In this case the medical bills were around $500 and the excess was $300.
I did ask if the denial would affect any other country and was told NO.
The insurer stated that they do not provide Affordible Care Act compliant policies to US Citizens and in their T&C there is convoluted wording that gave them wiggle room.
I was told that had travel been to lets say New Zealand there would have been no problem.
@EmBee, your comments brighten my day too….thank you!!!
The crew of the SS Brock is a motley bunch and that is why we shall win.
I do hope when this is all over we can have a Brock get together in maybe Ontario.
Politically we are ALL different but on this cause we have largely come together very unified.
ATTENTION MODERATORS: Please remove my comment above. I think the previous comments are sufficient and mine does not add any value to the exchange. Thank you in advance for doing so.
@Keith
Done
@JC
We don’t really know, but my sense is that Boris Johnson wasn’t “pursued” as such. He somehow learned that he owed the US a sizeable sum for capital gains on the sale of his London house. Being Boris, he shot off his mouth about it, so the IRS was obliged to respond. (He may have been preparing to renounce for political reasons and his accountants were attempting to get his US taxes in order, which presumably he’d never filed. Or a FATCA letter from his bank started the ball rolling.) I believe he did say that he’d renounced, but it’s not clear what he paid. He also had an interest in keeping the IRS happy given that he earned book royalties and speaking fees (at least prior to becoming foreign minister) in the US.
Nightingale sang a song of defence of Harper and the FATCA IGA on his blog, entitled;
‘FATCA is not your enemy’. There were comments rebutting his claim, but they were deleted. He replied to some of the criticisms, not only defending the IGA, but also specifically criticisms of Harper and the CONs.
On an important archival note, please use the Internet Archive Wayback machine https://archive.org/web/ (see bottom right ‘Save Page Now’ box to enter URLs of webpages you want saved for posterity, and try to save copies of articles and other items of interest in some other form – such as a datastick or external drive. Some important and very significant webpages and the fulltexts of articles are no longer available (although some can be retrieved if someone using the Wayback machine saved them).
As time passes, some resources have been taken down, or altered (like the comments on Nightingale’s blog posts about FATCA).
The same compliance songbird also sang ; ‘FATCA is Good Law in Canada’, and (no surprise) sat at the head table to hear Harper speak at;
The Empire Club of Canada Addresses (Toronto, Canada), 8 Nov 2005, p. 113-123 joint meeting of The Empire Club of Canada and The Canadian Club of Toronto
The Hon. Stephen Harper
Leader, Conservative Party of Canada
Ending the Culture of Entitlement
Chairman: William G. Whittaker
President, The Empire Club of Canada
Head Table Guests
Kevyn Nightingale, Partner, International Tax Services Group LLP, and Treasurer, The Empire Club of Canada; Justin Shoemaker, Grade 12 Student, North Toronto Collegiate Institute; Rev. Canon Kimberley Beard, Senior Pastor, St. Paul’s On-the-Hill Anglican Church, and Director, The Empire Club of Canada; Howard Sokolowski, CEO, Tribute Communities Inc. Toronto, and Owner, Argonauts Football Club; Dev Mundi, President and CEO, Mundi Holdings Ltd.; Ken Whyte, Publisher and Editor-in-Chief, Maclean’s Magazine; Peter MacKay, MP, Deputy Leader, Conservative Party of Canada; Robert MacIsaac, Mayor, City of Burlington; Robert J. Dechert, Partner, Gowling Lafleur Henderson LLP, and Past President, The Empire Club of Canada; Linda Frum, Author and Journalist; The Hon. Senator Hugh Segal, Senate of Canada; William J. Fox, Executive Vice-President, BCE Inc.; and Rod Phillips, President and CEO, Warren Shepell Consultants Corp., and President, The Canadian Club of Toronto
http://speeches.empireclub.org/62912/data
Very recent song of FATCA IGA supporter in the compliance industry – praising Harper;
“I think that Stephen Harper was one of the best PMs Canada ever had………”
https://www.quora.com/Why-is-Stephen-Harper-still-the-Prime-Minister-of-Canada-after-doing-so-many-horrible-things-like-screwing-up-Canada-like-the-last-US-President-screwing-up-the-US
So, his position supporting the FATCA IGA and in praise of FATCAnization of Canada is political and partisan. No wonder he didn’t like criticisms of Harper, the CONS and the FATCA IG in comments on his blog, went out of his way to belittle the ADCS lawsuit, and tries to scare Canadians into US compliance.
In the same melody, the nightingale sings;
“I have a personal knowledge of the Right Honourable Stephen Joseph Harper. I’ll tell you up front that I really like him, not just as a politician, but as a person. And the closer you are to him, the more you like him…..”
https://www.quora.com/Why-do-so-many-people-dislike-Stephen-Harper-former-prime-minister-of-Canada
Keith Redmond said, on his Facebook page, IIRC, that he had not heard about any case of the IRS going after an expat for FATCA-related issues. And I think it was Ginny who said, on another thread, that she had a big target pasted on her and yet nothing had happened to her.
I think they are making unwarranted assumptions. Does Keith know every expat in the world? No, only the ones who post to his blog most likely. And that is a tiny fraction of the 8 million expats worldwide. Even if he knew every expat in the world, does that mean they would want to publicize what had happened to them on his blog? No it doesn’t.
Ginny, our heroine, seems to assume that the fact that IRS has not gone after her means that they won’t go after anyone. Not so. They might realize that to go after her would only strengthen the ADCS case, as it would be more evidence of persecution. So they leave her alone, until AFTER the case concludes.
As for the government lacking the manpower to go after minnows, remember that we are entering our FBARs in digital form, so they go right into their computer databases without needing painstaking transcription from paper. Computer matching them to FATCA data could conceivably allow them to send out computer-generated penalty notices without needing much if any manpower.
Sending out unenforceable computer-generated penalty notices would be pointless.
It appears from the cases that get prosecuted that the IRS pursues foreign account cases where
(a) there’s a lot of money; and
(b) they have or can obtain evidence to the necessary standard; and
(c) there’s a clear path to collection – i.e., the pursued person
(i) lives in the US (as most do), or
(ii) lives in a country with a US extradition treaty, and can be shown to have committed a felony (such as perjury; hence the jurat).
Every foreign accountbcase I’ve seen reported has fallen within these parameters.
There are no cases where the American overseas or the Accidental American was sought after by the IRS through the courts, full stop. There are no cases where the American overseas or the Accidental American was fined penalties for not filing an FBAR on their local accounts, full stop. All of this compliance is based on scaremongering, full stop.
There were cases arising from the Swiss bank todo-ment. Some of those whose data was turned over to the IRS were Americans living overseas, if I recall correctly.
@Keith..let me reflect on @Iota’s comment “Sending out unenforceable computer-generated penalty notices would be pointless.”
My comments that follow are from back in the day so they are and may be antiquated or as my children sometime say and infer that I sound like I was around in the Roman Empire.
When the IGAs came out and I studied them, I could sense that they had multiple authorship and a collaborative effort that exposed seasoned scriveners and unseasoned scriveners.
The person that you spoke to in Treasury was no doubt a very seasoned person with much real life experience.
With the IGA I guess the “reasonable explanation” clause was from someone seasoned whilst the “place of birth indica” clause was a young unseasoned person.
The “problem” is that at some point a young programmer could decide to write some code that goes through the data sets and starts generating substitute tax returns on millions of expats. This would be supported by a spreadsheet that “proves” expats have swindled the homeland out of gazzilions of taxes. Politically that would be used like a metal baseball bat against us.
I do believe that most analysts and examiners at Treasury are very reasonable and do not want to waste anyones time. The problem is the newly hired who may want to make a name for themselves.
I also believe that the compliance jackals are the ones committing unethical acts against their clients by generating years and years of tax returns that show zero tax due to the USA or the tax owed is less than the fee to prepare the return.
IMO there is an ethics violation of the practitioner against their clients interest.
I have taken your stance a step further as I have been running across very panicked OAPs who do not have a lot of money but in theory had a filing obligation. I am literally helping them create a turbotax return so they can see they owe no money and when they see they owe no money I show them what the penalty is for not filing and they then decide what they want to do. In all cases they did nothing.
Why have I done that outreach? I have now met several OAPs who openly talked about suicide about this and/or attempted suicide. In the suicide attempts it involved overdose of prescriptions. These are all accidentals and have no links to the USA since birth not even an accent.
The purpose of FATCA, just like the DTT saving clause, is simply to encourage US Persons, particularly entities, to invest their money in the US rather than in any other country. The US is not interested in those who have little to invest
@ George et al
“I do believe that most analysts and examiners at Treasury are very reasonable and do not want to waste anyones time. The problem is the newly hired who may want to make a name for themselves”
A question I have often asked but never had a clear answer is, are the folks at the IRS on any kind of commission or bonus related to money they collect from so called ‘delinquent taxpayers’.
From my experience dealing with both the IRS and SSA, I am often amazed at the incompetence and laissez faire attitude of the US social security who job it is to pay out compared to the aggressive nature of the IRS who’s job it is to collect. This can’t be just due to bureau temperament.
REPEATING REQUEST FOR CANADIAN WITNESS FOR FATCA IGA LAWSUIT:
Are you a Canadian citizen and resident and have you renounced U.S. citizenship and have paid or are subject to the U.S. Exit Tax (IRS 877A)? [No, I do not mean the $2350 fee.]
If so, we ask you to consider being a Witness in our Canadian FATCA IGA lawsuit.
You might have renounced U.S, citizenship but own, for example, a now valuable house (i.e., Canadian-made IRS asset eagerly waiting to be confiscated) in Toronto/Vancouver/London etc. and have (because interest rates are now very low) a very valuable IRS-asset-company pension (IRS wants percentage of cashed out total value of your CANADIAN pension)— and had/have to pay a U.S. exit tax.
— The value in U.S. dollars of your CANADIAN house, plus CANADIAN company pension, plus a few CANADIAN investments, might put you into “covered” territory where you, a CANADIAN, will be be punished for your success.
Information on the exit tax and examples of the exit tax can be found at the citizenshipsolutions.ca site.
If interested, and perhaps a little bit feisty like our Plaintiffs and Witnesses, email me at: Stephen.Kish.Chair@adcs-adsc.ca Your name and situation will be made public in a submission to the Federal Court of Canada.
The incomprehensibility of the US tax code gives IRS agents the potential power to punish, so perhaps it tends to attract employees who enjoy exercising that power.
US SS law is more black and white, and perhaps less likely to attract the would-be prey-seekers.
Not that I’ve ever met or spoken to an IRS agent. I daresay most are just following instructions and don’t care whether the forms they process result in good or evil for the taxpayers who’ve sent them in.
@Heidi, “A question I have often asked but never had a clear answer is, are the folks at the IRS on any kind of commission or bonus related to money they collect from so called ‘delinquent taxpayers’.”
I can only speak in government general terms not specifically for Treasury.
The employees at Treasury will be subject to annual evaluations. They will need to “get work done” and files moving off the desk.
An employee making it her mission to harass John and Jane Expat living in France and paying loads of tax in France is going to waste a lot of time for that employee.
I disagree with Keith in that I have to think there must be an Expat somewhere that has been bothered and owed no US tax. The numbers have to indicate that someone got noticed. Note that I think Boris had likely entered the system and THEN got burned by his advisors.