Karen, on her fixthetaxtreaty.org blog, just posted the sad stories of Australians Shaun and Mary, who did their best to be tax compliant with a foreign country (United States) and then ended the relationship by renunciation of U.S. tax citizenship.
The emotional and financial damage done to these Australians was a direct result of their decision to enter or maintain tax compliance, to the best of their ability, with a foreign state.
We have heard similar stories before, but are there any lessons to learned regarding, for example, whether citizens-permanent residents of countries outside the U.S should ever enter into “IRS tax compliance”?
If Shaun and Mary could go back in time, would they still have entered into the IRS tax system? Is $50k plus emotional distress (post-traumatic stress; stress exceeding that of chemotherapy) a reasonable tradeoff for the renunciation of, divorce from, US tax-citizenship?
What would they now recommend Australians to do in the same situation?
For those persons abroad who do want to become IRS compliant, how could they ever find a trustworthy tax compliance expert? Can tax compliance persons purporting to be cross-border experts be taken to task for their incorrect advice? Does this ever happen?
Is it really possible for any human living outside the U.S. to become IRS tax compliant?
Is it ever ethical (e.g., in this post) to advise the unknowing of their tax “obligations” to a foreign state and by doing so cause them harm?
USCitizenAbroad comments: “It is painfully obvious that Shaun would have been far better if he had NEVER entered the U.S. tax system. This is hindsight. He could never have understood where this was going…” and “…this story is a sad sad reminder that those who have been most hurt by the predatory and immoral practice of U.S. “place of birth taxation” are the ones who tried hardest to comply…”
Karen says: “…the majority of the people profiled on the Our Stories page have already renounced/relinquished. Those that haven’t yet renounced likely will, eventually.* From all the people I’ve spoken to here – including some who are not comfortable sharing their story (even anonymously) – the ones who suffered the most were the ones who tried hardest to comply…”
I have lived solely in Australia for 3 decades. I kept my US Citizenship thinking that there was no drawback from doing so. I was told I had to continue to file US Tax returns and I would just send the US based CPA my Australian Tax Return & they would send me a huge document saying “No Tax Due” & I would sign it. It was incomprehensible to me how the Australian Tax return was converted to the IRS Tax return. I just thought I would never owe anything due to the tax paid in Australia.
This went on for many years until one year the USA Accountant said I had a huge Tax bill. I couldn’t understand this as all of my US Returns never owed a cent, but it seems that they had been preparing my returns incorrectly and all my deductions in Australia were not deductions in the USA. This was the start of my long intense problem that lasted from for several years
I was never told by the USA CPA that my Self-Managed Superannuation account here in Australia was not considered by the IRS as SUPER, it was considered a Foreign Trust and hence had been reported incorrectly; so all of my Super Savings here & interest income in it was treated by the USA as STRAIGHT INCOME and taxed as such going back 8 years. I lost all the benefit of my Super Savings. Then because the US CPA didn’t fill out the single page Foreign Trust Form the IRS Penalised me 30% of the total amount of my Super Balance. I had hired very good tax lawyers in the USA to handle all my dealings with the IRS & instead of getting me a fair result they were predatory in their billing & let things drag on & on.
The other large issue was all of the money I gave to Charities in Australia over the 8 years were not allowed my US Tax returns because “They were not recognised as USA Approved Charities”. This is another issue that the US CPA never advised me about. So between losing my SUPER & my Charitable deductions I owed a huge sum to the IRS, then add on USA Tax Lawyers & Australian Tax Lawyers fees.
I was so distraught ( I was also being treated for a blood cancer at this time ) I decided to give up my USA Citizenship & all the hassles that entailed. The day I had to give that final statement I was in tears at the counter at the US consulate in Sydney, I felt I had been betrayed & abused by the US. Then I had to file the final IRS form 8854 which again looks at all your assets as Capital Gains at the value the day you gave up your citizenship.
This whole situation was like having a second full time job, the lawyers who were supposed to help & protect you become part of the problem. If I could have chosen between Chemotherapy & dealing with this legal situation, I would have chosen Chemotherapy because at least you would know when the end would happen & the worst thing would be that you could die. With the legal matters months turn to years & I felt totally helpless that it would be resolved before I died.
I made one mistake & was willing to take responsibility for that & I did but all the above things I mentioned were so unfair that I couldn’t cope with it.
So I feel a huge responsibility to help publicise this situation so that other people don’t suffer as I had to for nearly 5 years. Australia is supposed to be the USAs’ best friend; how can best friends treat each other like this?
– Shaun”
“I came to Australia over 45 years ago, and have also been an Australian citizen for more than 25 years. I only found out I should have been filing tax returns to the US three years ago. Since then my life has become a nightmare of uncertainty, fear, marital stress, financial paralysis, and a mixture of threatening and sloppy treatment from the IRS. Previously I saw myself as a strong, capable and competent person, but as a result of this experience I have become hypervigilant and fearful. I ruminate and strategise at night which affects my sleep and mood, and I have been told by a Clinical Psychologist that I have PTSD. I have developed two auto-immune conditions that are considered to be possibly stress-related.
It all started with some innocent internet searching on an unrelated subject, which threw up the need to be US tax compliant. When I approached my local accountant, he said he knew nothing about US taxation requirements, and referred me to a big city accountancy firm. After six months of dealing with them, it became evident that they really had no knowledge of US/Expat tax compliance, and the “overseas affiliate” company they used did not know much either. Six months later, they were still unable to tell me even basic things like what entities I had to file returns for (e.g., personal, small business, self-managed super fund). When I asked them whose assets were at risk (eg., just mine or those of my Australia spouse) they helpfully told me that only my assets were at risk, “unless it became a bankruptcy situation”! Imagine our shock – the thought of being moved from a situation where we owned all our assets and were on the cusp of retirement, to the suggestion that I could be driven bankrupt to become US tax compliant!
In the meantime I investigated how I could come into compliance using one of the amnesty programs available. At that time entry to the Streamline program was very restrictive and I think I was ineligible. During the six months I was dealing with the abovementioned firm, the Streamline program was amended to become more inclusive, although the accountancy firm did not advise me of this and I had to find it out myself. And during that time I also read many horrific stories about how others had fared under the OVDP, and of massive penalties that the IRS could impose for even inadvertent failure to file FBAR.
All of this uncertainty and threat put my marriage under extreme stress and my spouse, fearing a major loss of assets, started coming up with ‘shoot from the hip’ suggestions which, had I followed them, would have changed me from being someone who accidentally failed to lodge US returns into someone who was committing intentional tax fraud. I did not take up these suggestions, but it put a great deal of pressure on life at home.
Eventually I found a US-based firm dealing with Expat Tax Returns, sacked the Australian big-city accountancy firm, and lodged under Streamline. And I found that much of the financial advice we had been given over the years by Australian financial planners was exactly the wrong advice for a US/Australian citizen – in particular the ownership of real estate and superannuation which could easily have been arranged differently if I had received the right advice. This has proved very costly, and in the case of self-managed superannuation it is like opening up Pandora’s box.
Then I started to learn what it is like to deal with the IRS. Initially I tried to get some confirmation that my Streamline submission has been received and accepted. Nothing doing. In the end I traced the cheques through our bank and got confirmation they had been cleared.
Shortly thereafter I started getting letters saying I owed a large amount of money, when I believed I had paid everything that was due. It was difficult to obtain transcripts, but I eventually did, and found that the IRS had allocated one large payment to the wrong year, even though the year had been written on the back of the cheque as instructed. And while they were very quick to tell me I owed them money and make threatening statements as to what they could do if I did not pay it, they did not bother to tell me that I had a large credit in a different year due to their misallocation of the money. And every time they sent any correspondence it took about six weeks from the date of their letter until I received it in Australia, and the envelopes showed they had been routed via Royal Mail (UK-???). If my family sends me a card from the USA it gets here in around ten days.
During the time I was trying to find out whether my submission had been received, I sent the IRS a fax asking that question. Seven months later I received a response via a Form letter, stating that they’d had no record of my submission, even though I had transcripts showing that my returns had been processed. The letter included a laundry list of possible reasons why it was not accepted – and many of those letters related to a Form that was not in existence at the time my submission was put in. I think they were supposed to delete the lines with reasons that were not relevant, but they had left every one in. I had to chase the IRS on several occasions to get to the bottom of this, and in the end I managed to find the department dealing with it – Large Business & International! So this is who deals with Expat tax returns – I believe the trigger is if you have five or more overseas bank accounts. Pretty hard not to with personal banking, a business and a self-managed super fund. I believe this is now sorted out, although the IRS will not tell you your submission has been ‘Accepted’.
Because the six-week delay in receiving any IRS correspondence was happening every time, meaning that any time they sent something with a response deadline, it arrived already overdue, I had to go to the additional expense of setting up a virtual mailing address in the USA.
Over and above my Australian taxes, in a three-year period I have now spent over $50K to be US compliant, about ⅓ of this being on professional fees. The tax owing relates to investment property income, super fund earnings, and changes in value in the superannuation fund (you are taxed on the exchange-rate gain from year to year even if not a cent was earned. But if it makes a loss – like during sharemarket setbacks – you can only claim $1500 of the loss in any one year, even if the loss is much greater). Although there is a generous non-taxable allowance for earnings such as salary, this does not apply to investment or superannuation income which is treated differently. and taxed from the first dollar.
Now, every time I receive any correspondence from the IRS, or from the people who handle my tax paperwork, my heart starts racing and all the ruminations and sleeplessness start up again, even though I believe I have done everything right. And I am continually reminded that the US owns me – FBAR deadline, extension requests so that I can get my Australian financial-year end statements and convert everything into US calendar years, then the actual filing, quarterly payment of estimated taxes – I can never flush it from my mind.
In the end I decided the only way to end this nightmare was to renounce my US citizenship – not because of the actual tax I have to pay, but because of the ongoing compliance headaches and the continual stress and uncertainty at a time in my life when I really need to make my affairs more simple.
I liken the decision to renounce US citizenship to that of finding myself in an abusive relationship:
I used to love the US and valued our relationship;
I was willing to accept some things I did not like – to take the good with the bad;
Due to the way I believe I have been mistreated, I came to feel angry, frightened, uncertain, harassed and betrayed.
In the end the mental stress, threatening behaviour and just plain incompetence got so bad, that a decision had to be made: do I keep taking it and learn to live with the abuse for the rest of my life, or do I divorce the bastard? I decided on the divorce.
All I want is to have the security I thought I had before all this started – as an Australian citizen complying with the Australian law, organising my finances and retirement security like any other citizen of this country.
– Mary”
The stories of Australians Shaun and Mary.
These true stories give me a huge knot in my stomach. It has become very hard to read anymore of them.
Damn incompetent and predatory condors and damn the IRS for being so barbarous to people who are actually trying to comply. The lesson here is: don’t unless you are prepared to give and give everything for the sake of an immoral law. Renounce early and often.
All my support to you Karen for what you are doing.
I agree with you, Ginny, it is so, so hard to read these same stories of real people with different names than before but still taking place years after the start of Brock and other sites. We have made a dent in providing needed awareness. But, as long as the irresponsible media and our irresponsible governments bow to the US citizenship-based taxation law, warnings to those US-deemed US Persons so criminalized by not knowing and STILL NOT KNOWING, never having been educated on the consequences of US CBT, do not get to those and their families who have moved their homes to other countries around this world. How different it could / should be.
Much respect to Karen and others in their country who are educating the US-tainted they can reach in Australia.
Here’s one lesson: don’t write the US a cheque if it has no way to collect money it thinks you owe it.
“It was difficult to obtain transcripts, but I eventually did, and found that the IRS had allocated one large payment to the wrong year, even though the year had been written on the back of the cheque as instructed. And while they were very quick to tell me I owed them money and make threatening statements as to what they could do if I did not pay it, they did not bother to tell me that I had a large credit in a different year due to their misallocation of the money.”
I think you can make a claim under 26 USC section 7433. It is difficult to win such a claim (I’m still trying) but I think you have a clear-cut case.
If the moderators have contact with Mary and can give her my e-mail address, I can give a bit of information I’ve found about how to make an administrative claim. 6 months after the IRS ignores the administrative claim, the place to file suit is US District Court for the District of Columbia, because Mary was a US citizen residing outside of the US during those tax years.
I filed suit in the wrong district court when I didn’t yet know about the definition that treated me as a resident of the District of Columbia. I wonder why the US didn’t file a motion to move my suit to the correct district court. But they did move to dismiss, which I’m appealing.
“And every time they sent any correspondence it took about six weeks from the date of their letter until I received it in Australia, and the envelopes showed they had been routed via Royal Mail (UK-???).”
Notice there are no dates in the postal meters they use when mailing from the UK. We don’t know how many weeks passed between the time they dated the letter and the time they actually mailed it.
Many of the letters I’ve received are like that. Many others were mailed by International Surface Air Lift from the US, also mostly without dates on the envelopes. SAL (ISAL) requests one segment by air at low priority, which for example could be Guam to Okinawa, with the rest of its transit by sea. A few letters were actually mailed from the US with dates in the postal meters, often with dates different from the dates in the letters, and often with insufficient postage.[*]
In one particularly lucky case, the IRS sent a letter by registered mail, with the postal meter dated more than a month after the date printed in the letter.
[* The IRS publicizes its position that the post office will not deliver mail without proper postage, and here’s the IRS acting in a manner reasonably calculated to prevent delivery of its letters, along with defrauding USPS. Well the IRS is in good company. The US Department of Justice does the same, and so do US courts all the way up to and including US Supreme Court.]
“During the time I was trying to find out whether my submission had been received, I sent the IRS a fax asking that question. Seven months later I received a response via a Form letter, stating that they’d had no record of my submission, even though I had transcripts showing that my returns had been processed.”
Here I’m lucky in another way too. The IRS has sent me enough transcripts, unwittingly, to provide proof straight from the horse’s mouth[**] that the IRS continues to make corrupt alterations to their administrative records. Courts give credence to transcripts, making one presumption that the IRS did what it said it did and making a second, more outrageous, presumption that the IRS did those things legally.
[** or other orifice]
“and in the end I managed to find the department dealing with it – Large Business & International! So this is who deals with Expat tax returns – I believe the trigger is if you have five or more overseas bank accounts.”
Oh, lucky you. They assigned me someone in Small Business/Self Employed, which made me think the lawyer was a small business or self employed on contract to the IRS, and I learned too late that SB/SE is part of the IRS and the lawyer was an IRS employee. I should have been able to ask him questions under oath, but I learned too late. Anyway, this explains his lack of familiarity with instructions that IRS publications tell non-residents to do. Maybe International will at least know their own instructions, maybe.
“Now, every time I receive any correspondence from the IRS, or from the people who handle my tax paperwork, my heart starts racing and all the ruminations and sleeplessness start up again, even though I believe I have done everything right. And I am continually reminded that the US owns me”
Yup. Did it damage your heart valves yet? Do you need surgery yet? I did. They’re sending me towards a relapse too.
“I liken the decision to renounce US citizenship to that of finding myself in an abusive relationship”
That’s not fair. You were already in the abusive relationship even before you decided to renounce. Just like the rest of us here.
And another lesson: stay off the bloody radar.
I am just about speechless. Reading about this abuse makes me actually happy that I have chosen exile over compliance. My heart goes out to both these dear people.
If Shaun and Mary don’t mind I would like to include their stories in the document that I intend to send to the United Nations this fall if nothing has been done about FATCA/CBT in Congress &/or if the UN has not taken up consideration of our Human Rights Complaint.
@MuzzledNoMore
Why speechless? This is what happens when blend the toxic mix of “U.S. based tax professionals” with the IRS. It’s what happens when people imagine that “they” have somehow made a mistake and then “try to do the right thing”. It’s also what happens when people simply attempt to fix problems without understanding whey they are doing it. Compliance with the U.S. tax laws is necessarily the first step toward renunciation. Therefore, all compliance activities must be done with that understanding.
The evidence has been and continues to be overwhelming. For Americans abroad the U.S. tax system is a “fiscal prison” that will destroy your life and your sense of self worth. Those who have avoided this nightmare are in a far better position.
At a bare minimum, the penalties should have been abated. After all, he was relying on “professional advice”.
What is the title of that song? “Silence is golden” or something like that?
@MuzzledNoMore – Shaun and Mary have given their permission to post their stories on the fixthetaxtreaty.org website. As long as any citations of their story include a link to the original source (as Stephen has done in this post), the stories can be used. The whole point of sharing was that both Shaun and Mary (and the other generous people who have shared their story on our webpage) want to help ensure that this type of abuse does not continue.
Most of these horror stories are about people who have been living abroad for over 30 years. I think we have an idealistic view of what America USED to be. It just doesn’t seem to be the same country of my youth. Maybe that helps with the tears when “divorcing” from it.
“I think we have an idealistic view of what America USED to be. It just doesn’t seem to be the same country of my youth.”
Now I know your skin colour!
Those of us who have an idealistic view of what the US used to be do in fact have an idealistic view. If our skin were darker we wouldn’t have had such an idealistic view in our youth either. I used to find it hard to believe stories some friends were telling each other (they were telling each other not telling me), but now I sure do.
@NormanDiamond
Yeah- I can remember the gas stations had 3 bathrooms: ladies, men and coloured.
The funny thing is, it isn’t even just Americans. If you ask the older generation- those germans around 60- they all still see America as so good. It is like the second world war has given America a halo that has lasted for decades. America is seen as still protecting Europe from all sorts of evils. It is still the trend setter of the world with its movies and music, arts and fashions. No matter how many black people are shot and killed, no matter how many cops use civil forfeiture to enrich themselves, no matter how many people are tortured, no matter how many countries are ravaged – America is the “saviour”. Maybe it is? Maybe America`s power and influence has prohibited a global WW3? But Trump is about to change all that. He doesn’t want America to police the world anymore, and maybe America doesn’t have the money to do so anymore. We shall see what happens. But this picture of America is changing, isn’t it? Just not for the homelanders.
There is a middle ground for compliance. It follows the spirit of the law and takes into account the fact that attempting true compliance is madness, as shown repeatedly. When one decides to become compliant for whatever reason, such as preparation for clean renunciation or continuation of banking in the EU (both debatable points, granted), one can choose a tax preparer and feed that tax preparer carefully selected data. Such as income, local tax paid on that income, and perhaps professional expenses (forget charitable donations, mortgages, bla bla). In many cases local tax, used as the foreign tax credit, will offset handily any US tax. Keep it that simple. And if you haven’t filed before, just start filing with no explanation. I filed 3 years at once 3 years ago. Just feeding the form monster nice forms that it likes. No complications. I list mutual funds as savings accounts because I don’t understand the difference. Etc. It is highly unlikely I’ll ever be audited. If I am, I’ll feed them all the original paperwork, nothing to hide. And in a couple of years I’ll be fully “compliant” and renunciation will be easy (unless they hike the fee). The big mistake in the reported cases was letting the usual accountants translate the local return into a US return. It is so complex and obviously perilous that it is just asking for trouble. Professionals feed their families with this stuff. And they are afraid of malpractice. Recipe for disaster. One needs to retain control of what is fed to the professionals. In my opinion only high net worth people benefit from truly good and tailored advice (or at least as long as they are high net worth they are somewhat shielded and won’t be hurt by the price of these professionals).
@Fred
You make some very good points. Would suggest that any person who BOTH wants to retain U.S. citizenship AND wants to be U.S. tax compliant should learn how to prepare the returns on his/her own. This will allow people to avoid the “tax professionals” completely.
The mistake is to allow tax professionals to “define your life” through the “perverted prism of the Internal Revenue Code”.
Also, “long term” residents of various countries should understand where the professional/ethical obligations of “tax preparers” actually lie. Is their duty to YOU or is it somewhere else? There are some parts of the world that are clearly more dangerous than others.
Bottom line: To characterize the information is to determine the content of the return.
@Polly
An observation based on your suggestion that many Americans abroad assume that America is presumptively good.
Long term Americans abroad are always familiar with their local tax system and (if they have never filed) unfamiliar with the U.S. tax system. All people (until educated otherwise) seem to assume that the U.S. tax system follows the basic principles/assumptions of their local tax system. Nothing could be further from the truth.
The U.S. tax system is very different from every other tax system in the world for reasons that are both objective (what does the tax code actually say) and philosophical (what are the assumptions that it is based on?) It’s actually the second category that is more problematic for Americans abroad.
Philosophical underpinnings of the U.S. Tax System …
The U.S. tax system assumes that everybody is a criminal and is somehow trying to cheat the government. It generally assumes that all “entities” (corporations/trusts, etc.) exist for the sole purpose of tax evasion or tax deferral. Note that for residents of other countries it is very common to use these “entities”.
The U.S. tax system also assumes that anything that cannot be controlled and tracked (think foreign) needs to be subject to special reporting and punishment (hence the reporting requirements that few would believe exist).
Objective underpinnings of the U.S. tax system ….
The United States imposes taxation on every accretion of wealth (no matter how defined) and on every transaction. The former is the Income Tax System and the latter is the Transfer tax system.
It creates the perfect storm for people NOT living in the USA. But, when you take into account that those living outside the USA are subject to a separate tax system where they live, compliance becomes simply impossible. This is the message that needs to be understood so that people:
NEVER: Go to a U.S. tax preparer and say:
Here is my stuff, please bring me into U.S. tax compliance.
For Americans abroad, entering the U.S. tax system, is one of the most significant events of their life. It should be undertaken only after educating oneself! Your life will NEVER be the same again.
Put it this way: By entering the U.S. tax system you are voluntarily entering a fiscal prison from which the only key to escape is renunciation! (For this reason, those who wish to retain U.S. citizenship may be better off avoiding the system.)
But, (regrettably) only those who are in the U.S. tax system will understand this point …
@Fred(B) – I like the way you think.
@USCA – “Also, “long term” residents of various countries should understand where the professional/ethical obligations of “tax preparers” actually lie.”
Exactly – the professional obligations of tax preparers do not imply legally minimising tax due – but making sure that their professional liability insurance is never used.
@ Karen
Precisely, my cousin who is an accountant in the UK bemoaned the fact that his duty was no longer to his client but had shifted to the Gov because of liability laws.
@Karen @Heidi
It’s almost certainly true that those who use professional tax preparers are subjected to the worst punishment. Most professional tax preparers will resolve any ambiguity against you in favour of the Government (whether IRS or other government). In fact, I would say that there is now such a thing as:
“A Professional Tax Preparer Penalty – PTPP” that will pay (directly or indirectly) by using them.
For Americans abroad one of the most difficult jobs is to characterize foreign investments/accounts, etc. This involves deciding what form/s is/are required. Because the tax preparers rarely understand the purpose of the form and the statute that compels the form, they have a tendency to include forms that are not required. The problem is that it is very difficult to stop filing a certain kind of form once you begin filing that form. If there is doubt about whether a form is required, it should NOT be filed.
Furthermore, no matter what people imagine when they start filing, they will soon realize that filing taxes is the the first step to renunciation. Renunciation requires full asset disclosures. Those assets can be tracked based on previous information returns.
Seriously, Americans abroad need to very careful about:
1. Whether to enter the U.S. tax system; and if so
2. How to enter the U.S. tax system!
Finally a small but (I think significant) point. You should know that EAs (Enrolled Agents) are tax professionals that are specifically licensed by the IRS. They are subject to very specific rules of conduct (example Circular 230).
On the one hand, EAs know the tax code very well. On the other hand they have TOTAL loyalty to the IRS!
Google IRS Enrolled Agent to learn more. Please understand, I am not attacking them personally. I am just making it clear they work within a specific regulatory framework!
@USCitizenabroad
I was referring to the tears shed at renunciation- people who have lived in another country for 30 or more years, and still cry at giving up their US passport. ( I got a bit choked up too- but also felt such relief. I still feel relief when I see how complicated it all is.) I think if one could see America as it is today, instead of as it used to be – then maybe renunciation would be easier and less emotional.
As for the US tax code- even AMERICAN tax accountants cannot wrap their heads around 7000 pages!
I have been on this for many years
Great to see the “chatter”
I believe that the more people are aware the better our chances.
Unfortunately have not heard one comment from “The Don”
(on this subject)
@Polly, I recently learned at a meeting I attended by John Richardson that some other longterm expats had been hit with even worse tax preparation fees and PFIC taxation than I had been. And to learn of Shaun’s and Mary’s calamaties makes me realize I got off relatively lightly.
I also am ever more convinced that I made a wise decision to renounce and get cleanly out. I’m still surprised though how harsh the IRS was towards Shaun’s Super. To be hit with a fine of 30% of the capital value of a locally-built-up pension fund, plus huge legal/tax preparation fees seems unconstitutional to me. And all over an obscure 3520/3520a foreign grantor trust form.
They probably also suffered from PFIC taxation and all the expense of having the 8621s calculated. There should at least have been penalty abatement based on reasonable cause for not being aware of PFIC and/or foreign trust issues with locally-owned pension funds.
@Monalisa
Shaun’s U.S. professional advisors are almost certainly subject to some liability here. Their behaviour both individually and collectively is an obscene combination of negligence and callous disregard for Shaun’s situation. Simply extraordinary!
In addition to “Professional Tax Preparers”, Financial Planners (all highly trained in the intricacies of the IRS tax code?) provide advice on taxation, often to those about to enter retirement.
Here, in the weekend edition of Canada’s National Post, a Financial Planner makes retirement planning suggestions to a Canadian husband and wife living in British Columbia province — the wife (“Susan”) is a United States tax-citizen. [Note that Susan made the decision not to have ANY investments in the Canadian Tax Free Savings Account (TFSA), a standard retirement vehicle “…because the U.S. does not exempt earnings within TFSA from tax.”]
Financial Planner says: ” The soaring B.C. property market gives their house a value of $1.7 million. It is their largest asset representing 65 per cent of their total wealth. It has a tax-free capital gain over the few hundred thousand of price plus major repairs, none of it taxable.”
He is correct that Canada does not impose capital gains tax on sale of principal residence, but is the above statement accurate as applied to U.S. Person Susan?
Also, how can a U.S. tax citizen living in Canada really plan for retirement and anticipate future changes in the IRS tax code, subject to the usual penalties, and possibility of costly mistakes made in good faith IRS compliance?
Does the Financial Planner have the professional obligation to suggest the option of renunciation of U.S. tax citizenship to presumably IRS compliant Susan — to help her move into retirement with some financial security and less fear of the future?
The online version of the print article:
http://business.financialpost.com/personal-finance/overweight-real-estate-and-underweight-income-couple-needs-to-diversify-before-retirement-hits
It’s not worth trying to comply, any more than it’s worth listening to amoral people, preaching to you about morality.
Here I sit with power of attorney paperwork. The Mrs. is on a waitlist to be placed in a long term care facility, and I have over $1,400 saved to effect my renunciation. Meanwhile, Trump won’t save my anymore than Obama did, so, what can I get for my honesty, aside from being punished?
Fuck ’em! Don’t even bother trying to stick your neck out, because the straightest tree is always cut first. Think about it, as I have for years, while watching her decline because of her MS, and while I shut myself out from the world, because of the stresses in my life.