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…
GTOR: where can I find the reference concerning the fact that no penalty is due for unfiled taxes if no tax was due? In this matter apparently there is no statute of limitations for unfiled returns, meaning if they found that income was not declared in 1999 they could go after the person not having filed whereas they could not go after the person having filed a false return.
Patricia — I just want to say here again how much help you guys are and how much I appreciate this site. I especially appreciate being able to take a step back from compliance sermons and look at things rationally.
@Iota, “American extraterritorial fiscal/financial laws aren’t enforced in Britain, to the best of my knowledge.”
I THINK what @Duality meant was that the UK under the Coalition Government jumped high and fast to sign an IGA with the USA which made certain British Citizens less than equal to other British Citizens.
I agree with @Duality and I am unable to tie the string because bowing the USA on an IGA is the opposite of not wanting to bow to the EU. But…..the Coalition Leadership was in love with the EU so that may partly explain things.
Also in the UK the Government did have the debate on equal marriage. How could the Government on the one hand state the Civil Partnerships were not equal to Marriage when they made certain British Citizens less equal to other British Citizens under the IGA?
The IGA is just what the name says: an intergovernmental agreement. It’s not an enforcement of US law but an agreement to exchange information, like the Common Reporting Standard and CDOT. The UK didn’t just move fast to sign the IGA, the UK along with the other G5 countries proposed the IGA and negotiated it with the US. Without it, I seriously don’t think I’d have access to a bank account by now.
The UK not only helped to draw up the IGA, but drew up its own mini-FATCA (CDOT) and refused to allow the Crown Dependencies and Overseas Territories to sign up to FATCA/IGA until they agreed to sign up to CDOT. Thus piggybacking on US power over the banks to make inroads on solving some of its own tax evasion problems.
Personally I consider the UK acted in the interests of the UK economy, and therefore in my interests, in helping to negotiate the IGA. I’m far more concerned about my situation as a UK resident and citizen than the residual consequences to me of having been born in America. It’s quite clear to me that the UK has no obligation, and no power, to protect dual citizens from the consequences of their other citizenship.
My 2 pence.
@iota
“to enforce” in my mother tongue can mean “to make applicable”. So a statutory instrument in the UK makes an American law (Fatca) applicable across all UK financial institutions for the purpose of information (pseudo-)exchange.
This is probably what I meant.
“It’s quite clear to me that the UK has no obligation, and no power, to protect dual citizens from the consequences of their other citizenship.”
A British citizen is a British citizen, regardless of place of birth or dual nationality. The Master Nationality Rule was ratified by the UK Parliament so should have legal effect there. Has any affected individual taken legal action in the UK to contest Fatca?
The Master Nationality Rule applies to dual citizens outside the UK.
” Article 4 of the Hague Convention on Certain Questions relating to the Conflict of Nationality Laws, 1930 provides that “a State may not afford diplomatic protection to one of its nationals against a state whose nationality such person also possesses”.
In other words, US/UK dual citizens in the US shouldn’t expect any UK diplomatic protection if they get arrested.
“Has any affected individual taken legal action in the UK to contest Fatca?”
FATCA is a US law. Legal action against it would have to be taken in the US courts.
Personally, I’d be glad to see the end of FATCA. It would be far more sensible for the US to sign up to CRS instead. I’m not optimistic though.
@iota
“Personally, I’d be glad to see the end of FATCA. It would be far more sensible for the US to sign up to CRS instead. I’m not optimistic though.”
Agreed. Can we be hopeful now with Trump in power? He might just rebuild the entire tax regime in the States. It’s now or never…
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/267945/dualnationality.pdf
“Can we be hopeful now with Trump in power?”
No idea. He’s appointed half of Goldman Sachs to his cabinet. They’d probably like to see the back of FATCA.
There are no cases where the IRS has gone after Americans overseas in their respective countries of residence or have taken them to court in their respective countries of residence. This goes for Accidental Americans. There are no cases where the Department of Treasury has gone after Americans overseas in their respective countries of residence or have taken them to court in their respective countries of residence for not reporting their local bank accounts. This goes for Accidental Americans. There are ZERO cases. The US State Department is not going to work with the IRS to revoke passports on Americans overseas. It is not going to happen. These are serious situations for the affected populations vis-à-vis the over the top scaremongering from the US government and from the US tax compliance industry. The reality on the ground is different. IMO it is best to not add to the drama with what if this, what if that, and succumb to the scaremongering. That is what ‘they’ want you to do. One has to be pragmatic, practical, and rational vis-à-vis the decisions he/she needs to make for himself/herself and his/her families.
Should you find any cases (I as well as a few attorneys with whom I work have done extensive research) regarding Americans overseas and/or Accidental Americans, please provide the details, link, et al, Please note we do not care about homeland Americans but Americans overseas and/or Accidental Americans.
Duality: “It’s quite clear to me that the UK has no obligation, and no power, to protect dual citizens from the consequences of their other citizenship.”
This is true, but ONLY if those dual citizens are physically present in the country of their other citizenship. While in Britain, the dual citizen has the right to expect the full protection of the UK. Period. FATCA wreaks total havoc with this long-held principal of international relations (the Master Nationality Rule). It is one of the things we have be TRYING to get human rights attention to through our UN Complaint. No luck so far.
I confess. I am getting old and I would like to visit my native land again to see family and friends, as was my regular, life-long habit until six years ago. Keith’s conversation with the IRS agent *may* indicate that I am safe in Canada but I dare not go to the USA as long as US tax law makes me a criminal in that country. That’s why I want CBT at the bottom of history’s trash pile, like NOW.
@Keith Redmond – “IMO it is best to not add to the drama with what if this, what if that, and succumb to the scaremongering. That is what ‘they’ want you to do. One has to be pragmatic, practical, and rational vis-à-vis the decisions he/she needs to make for himself/herself and his/her families.”
Hear hear
I said:
“It’s quite clear to me that the UK has no obligation, and no power, to protect dual citizens from the consequences of their other citizenship.”
MuzzledNoMore replied:
“This is true, but ONLY if those dual citizens are physically present in the country of their other citizenship. While in Britain, the dual citizen has the right to expect the full protection of the UK. Period. FATCA wreaks total havoc with this long-held principal of international relations (the Master Nationality Rule).”
Article 4 of the Hague Convention on Certain Questions relating to the Conflict of Nationality Laws (the “Master National Rule”) says nothing at all about dual citizens in Country A having a right to be protected by Country A from obligations imposed by Country B. Article 4 says, in its entirety:
http://eudo-citizenship.eu/InternationalDB/docs/Convention%20on%20certain%20questions%20relating%20to%20the%20conflict%20of%20nationality%20laws%20FULL%20TEXT.pdf
@Muzzled
I would only have concerns about entering the US if there is already some sort of IRS judgement against you. Non-compliance is not a barrier. That sort of tax information is not shared with customs. Not sure which passport you use but only once have I had a polite talking-to for using a Canadian passport with US birthplace, instead of the US passport that, technically, one is legally obliged to show.
@Keith
I agree, people really need to dial the paranoia down a notch. It doesn’t help the situation. Obviously there are a few folks on the forum who’ve had bad experiences, either due to their having unwisely become compliant (due to bad professional advice) or some even more convoluted history with the IRS.
Assuming of course no US financial ties, follow one basic piece of advice: ignore the IRS, the IRS will ignore you. FATCA is easy to circumvent in Canada – banks don’t follow up to confirm that your answers are truthful – and in any case, dual citizens are protected from any form of collection. Until such time as the rules change, I feel no sense of urgency to “resolve” my situation.
Finally, I hope you kept a screencap of that Nightingale dipshit’s threatening comments. His employer deserves a look.
@Iota
Maybe, (but it’s not quite clear) …
Does the UK have an obligation and power to protect UK citizens from the USA retroactively conferring U.S. citizenship on those who clearly relinquished U.S. citizenship years ago?
One of (many) the problems here is that there are large numbers of people living in the UK who do NOT believe that they are U.S. citizens AND are NOT U.S. citizens under the nationality laws. Example: Having relinquished U.S. citizenship years ago by having naturalized as a UK citizen.
The UK U.S. IGA recognizes “renunciation” as the sole relinquishing ground – a position that is completely inconsistent with U.S. nationality law.
I think the question is this:
Does the UK have the obligation to protect its citizens from the forcible imposition of U.S. citizenship on UK citizens and residents?
I think that the answer is:
The UK surely does have such an obligation.
@Iota
The USA cannot sigh the CRS because the U.S. Federal Government does not yet (the issue has not been decided) have the right to force the U.S. State banks to share information. They are working on it.
The reason the USA will continue with FATCA is because FATCA is a “bullying tool” (It doesn’t matter what the USA does, the USA is going to force the turnover of information). The bully is taking on the smaller kids one at a time in the school yard. He is forcing them to do what he himself is NOT capable of doing. The problem with CRS is that the USA would have to admit that it is simply not up to the task that everybody is capable of.
FATCA = The tool of the incapable.
@USCAbroad:
The IGA doesn’t make people US citizens. The IGA sets out for UK FFIs exactly what due diligence they’re allowed to perform, and which accounts they can treat as reportable, without coming up against the Data Protection Act. As with the other AEOI regimes, beginning with the European Savings Directive, the FATCA/IGA regime applies to accountholders who are tax-resident in another jurisdiction. The UK has absolutely no power to make the rules on who is tax-resident in the US, or any other country, for AEOI purposes.
“Does the UK have the obligation to protect its citizens from the forcible imposition of U.S. citizenship on UK citizens and residents?
I think that the answer is:
The UK surely does have such an obligation.”
If you find any evidence to support that view, I would be interested to hear.
@Iota, “It’s quite clear to me that the UK has no obligation, and no power, to protect dual citizens from the consequences of their other citizenship.”
I have to fully disagree with you in respect to a British Citizen resident in the United Kingdom.
A British Citizen resident in the United Kingdom can not be anything other than a British Citizen (or an EU Citizen).
Lets look at the opposite that being a person traveling to the USA. Why does the USA insist on such so called duals to enter the USA on a USA passport? It is to establish firmly they are US Citizens.
When you read the Home Office guidance they quite clearly state that they are unable to help you in a country of your other nationality. Why is that? Because your British Citizenship has no bearing in the other country that is why. Example; “For example, if you hold both British and Chinese citizenship you can’t get diplomatic help from the UK when you’re in China.”
In the United Kingdom my children can NOT obtain the help of the US Embassy if they are in a jam.
The United Kingdom has an obligation to protect ALL of its Citizens resident in the United Kingdom and to protect all of them equally.
“The USA cannot sigh the CRS because the U.S. Federal Government does not yet (the issue has not been decided) have the right to force the U.S. State banks to share information. They are working on it.”
Yes, I agree. I agree also that the US probably isn’t going to let go of FATCA.
@Iota, riddle me this.
I have a young boy and when he is 18 he would need to register for US Selective Service under US law. My son is a British Citizen by descent and carries a British Passport.
Does the United Kingdom have an obligation or will it aid the US Government and force my son to be registered for what is in effect a military draft of a foreign power?
My son has every right to demand the full protection of HM Government to ensure that the US Government does nothing to him whilst he is resident in the United Kingdom living his life as a British Citizen. It matters not what some foreign government decides on who shall serve in their military.
IF as you say HM Government has no obligation to protect my son a British Citizen from what at its core is involuntary conscription by a foreign power than HM Government should collapse into the Thames.
@George – also with respect – it doesn’t really matter what you or I or any of us think, when push comes to shove. What matters is what’s decided in Parliament or the Courts, or, for another couple of years, the EU. If you find anything that supports your view of what the UK ought to be required to do, I’d be interested to hear.
@iota
The IGA forces the banks in certain circumstances to treat people as U.S. citizens when they are not. Have a look at the due diligence provisions in Annex 1 of the U.K. U.S. IGA. Look specifically at the “self certification” provisions which allow for a “self certification” of non-U.S. citizenship ONLY in cases where one has renounced. So, the IGA does force the banks to treat people as U.S. citizens who may have ceased to be U.S. citizens (through relinquishments under than through renunciation) under the nationality laws of the USA. Therefore, although the IGA may not technically make somebody a “U.S. citizen” (for example they couldn’t still couldn’t enter the USA as a U.S. citizen or vote in a U.S. election), but the IGA does impose liabilities/consequences on them as though they were a U.S. citizen. As a result, the UK has agreed to allow the USA to forcibly impose (at least) the obligations of U.S. citizens on U.K. citizens).
Test it this way: It’s because of the FATCA IGAs that people are getting letters accusing them of U.S. citizenship, putting the burden of proof of non-US citizenship on them, and not allowing evidence of loss of citizenship to prove that they are not U.S. citizens.
Does the U.K have the obligation to protect its own citizens from this? The fundamental “bargain of citizenship” (as opposed to slavery) is that in exchange for the loyalty of the citizen, the state agrees to protect the citizen. So. the answer is yes.
@George – Safest thing for your son would surely be to keep well clear of the US. They can,t put him in a uniform if they can’t get hold of him.
“Look specifically at the “self certification” provisions which allow for a “self certification” of non-U.S. citizenship ONLY in cases where one has renounced. ”
Naked FATCA – what we’d have if we didn’t have the IGA – requires that. The IGA allows for a “reasonable explanation” as to why the person doesn’t have a CLN.
@George
If your son was not born in the US, just keep him off the radar. Ideally you won’t have registered the birth at the consulate but it’s not the end of the world if you did. Do not acquire or renew his US passport, or have his name associated in any way with yours on financial accounts – encourage him to use a different bank. With a few simple precautions he can easily live FATCA-free and utterly ignore any obligations of US citizenship.
Selective service registration wasn’t a big deal. You need to prove that you’ve done it to accomplish certain bureaucratic tasks, but they don’t exactly hunt you down if you haven’t. I didn’t register until I was 25 – with less than a year of eligibility left – when I went to grad school in the US and used my citizenship to apply for a government student loan. Nobody cared that I didn’t do it when I was 18. I just shrugged and said “I’m Canadian, I had no idea.”
Family travel to the US is potentially an issue. If one parent has a US passport but the child does not, an especially alert custom officer might take note and ask if the child has US citizenship, or assume that the child does and then ask why he or she doesn’t have a US passport. Unlikely but possible. When I’ve entered the US with my daughter I’ve always used my Canadian passport with US birthplace, and she her Canadian passport with German birthplace, and they’ve never asked questions.
If the kid was born in the USA, it’s a different calculation.