Global News has the following report:
U.S. sues Vancouver dual citizen for over $1M for not reporting accounts
This is big news. And it reveals and confirms my prediction of what FATCA would be used for: To go after the bank accounts of “US persons” living in foreign countries by using FBAR fines and FATCA information. I called it the Master Plan.
A few observations on this article:
(1) Clearly this lawsuit should help the ADSC lawsuit. Here is a case of real hazard that failure to protect Canadians from IRS intrusiveness will result in.
(2) This case is not based on tax owed, and so this is purely an FBAR matter. But IRS code has no jurisdiction in this matter.
(3) The article doesn’t say where the lawsuit is taking place, but then says that the papers were deposited in Seattle in Federal court.
(4) The fine of $100,000 or 50% of account is wrong: Or did it go up from $10,000?
(5) President Donald Trump has made no difference in the persecution of so-called “Americans abroad”.
(6) This is a Canadian living in Canada. He is therefore an innocent person being sued by the government of the USA, for small money. I.e., he is a minnow, and what Nina Olsen has called a benign actor.
(7) The lawsuit shows that QI provisions are not sufficent for the USA government to seize Canadian accounts in Canada.
(8) The Justice Department is not suing this person in Canadian court. But perhaps that will come next.
U.S. government suing Canadian resident for $1.1M over bank form
This is what I’ve been saying for a while, that in Canada at least, based on my observations, financial institutions really are not trying very hard to find US persons. They’ll do the minimum necessary to stay out of trouble with the US, nothing more.
“While those rules are really unfair, they probably aren’t changing any time soon. It’s been this way for a long time.” Yeah, and women didn’t have the vote for the first 150 odd years of American history. That’s a long time and THAT changed! And slavery went on for God knows how long and THAT changed! The American colonies were an appendage of Great Britain for a very long time indeed and THAT certainly changed. I have ZERO tolerance for the idea that just because something has gone on for a “long time” there’s no hope of changing it. This is just a typical, unimaginative “condor” excuse for doing nothing. Injustices are here to stay so just suck it up and get with the program. What crap! I can’t wait until this guy and all the rest of the scare-mongering, nay-saying, condor “establishment” are out pounding the pavement. They’ve lived off people who don’t rightfully owe any money “for a long time” and it’s GOING TO CHANGE.
On the issue of reciprocity, the two women I talked to at the Competent Authority agreed with my assessment that “Canada isn’t getting anything it didn’t have without the IGA” (other an protection against conomic sanctions), however Gwen felt very optimistic that the US would pass the necessary legislation to make it reciprocal, or ‘else’ (repeal it) after I explained how the Republican Party has made repeal part of its platform. I asked her how many years will the Canadian govern wait for the US to reciprocate and she said that’s a policy question and she would have someone in that division get back to me about that.
Both also remarked that the IGA doesn’t change the fact that US persons are expected to pay US tax, to which I sharply said that Canada status as a sovereign nation does not require it to enforce another country’s laws – US law ends at the Canadian border!
For those of you with FATCA IGA questions, Gwen Mah can be reached at 613-946-6022.
@Muzzled, Perhaps someone who has more time can look into this. It seems to me that the lawsuit in Seattle just started a few days ago but that the FBAR case which assigned the fine was in May, 2016.
Analysis of this case from John Richardson:
While I generally rejoice in your all-out tendencies, the extent of your identification with FBAR-beset Pomerantz seems mightily untoward and misbegotten. You commented:
Your enthusiasm for defense of Pomerantz sent me off to refresh bad old memories with a 2009 U.S. return. There Schedule B Interest and Ordinary Dividends has a Part III which MUST be completed if you (b) had a foreign account, and next, 7a asks: At any time during 2009, did you – YES or NO – have an interest in or a signature or other authority over a financial account in a foreign country, such as a bank account, securities account, or other financial account? See instructions for exceptions and filing requirements for Form TD-F 90-22.1. And 7b goes on to specify: If “Yes,” enter the name of the foreign country.
While I share your extreme loathing of FBAR, it troubles me to see you failing to recognize that Pomerantz probably had to get flat-out fraudulent right there on the 1040. You seem to think that somehow FBAR is a special watertight separate compartment – at least prior to the implementation of Form 8938 in 2011.
All of the foregoing lest the petulant Petros become as a rolling stone that leadeth some innocent Brocky lamb over a fatal cliff into the unending turmoil of a tempestuous sea.
“The ruling means that dual citizens who do not enter the U.S. (or U.S. airspace) and have no assets in the U.S. will be shielded from these penalties.”
I’ve never heard of this before. I think this just was the author of the article’s interpretation of things. I mean really, it’s one thing to be on US soil and it’s another thing to be flying over it in transit. I’ve heard of cases where someone has been deemed inadmissible to the US because of criminal charges and they planned on flying from Canada to Mexico and there’s no trouble unless the plane touches down in the US, but they’re not arrested for flying OVER the US.
@USX, If you commit fraud on your 1040, why would that extend FBAR statute of limitations? It wouldn’t.
I don’t know if you remember, but I put Fifth Amendment on such questions.
““While those rules are really unfair, they probably aren’t changing any time soon. It’s been this way for a long time.” Yeah, and women didn’t have the vote for the first 150 odd years of American history. That’s a long time and THAT changed! And slavery went on for God knows how long and THAT changed! The American colonies were an appendage of Great Britain for a very long time indeed and THAT certainly changed. I have ZERO tolerance for the idea that just because something has gone on for a “long time” there’s no hope of changing it. This is just a typical, unimaginative “condor” excuse for doing nothing. Injustices are here to stay so just suck it up and get with the program. What crap! I can’t wait until this guy and all the rest of the scare-mongering, nay-saying, condor “establishment” are out pounding the pavement. They’ve lived off people who don’t rightfully owe any money “for a long time” and it’s GOING TO CHANGE.”
EXACTLY how I feel.
Thank you all who are continuing to author and to post and who are discussing this here and on other threads, and for trying to parse the situation and its nuances and associated issues and import.
Thank you @Bubblebustin for your pro-active and astute questioning of the CRA http://isaacbrocksociety.ca/2017/03/16/the-master-plan-fulfilled/comment-page-3/#comment-7834873 .
All part of the many many compelling reasons to have continued to follow IBS (and Maple Sandbox) all these years as well as the lawsuit and other important efforts to hold the Canadian government to account for its duty of care and fiduciary duty to Canadian citizens and residents inside its sovereign autonomous borders – despite the extortionate threats and predations of a foreign country – the US to harvest our local legal assets.
I am still following, though time and computer/internet access troubles have made it challenging to keep up as much as in the past.
Just wanted to say – I am so very gratefull to all of you, as always.
Your documentation and analysis is second to none, Badger. Thank you!
Japan T: You’re welcome! 🙂
Badger: I join Bubblebustin with my thanks! The thoroughness of your research over all these years is astounding. If you have to slow down you richly deserve to do so! Cheers!
Sorry. I don’t do FBARs. Not when it concerns my wife’s financial information.
Yes, my opinion on this matter is clearly inconsistent with retaining US citizenship, but that is pretty much my point. I can either be compliant, or I can have a conscience, just like I can either be a serf, or I can be free. All of which are mutually exclusive.
Hey! I’m not hearing the current Asshole in Chief yelling out, “Americans first!” I’m hearing, “America first!” What does that tell me? It says, Fuck the people, and the State comes first. Where do we fit in? Take one good friggin’ guess!
Refuse, and resist!
It’s easy to understand that the Condors of today, had they lived in another era would have been:
– those who tolerated slavery during the American Civil War
– those that acquiesced in the conduct of the Third Reich in Germany
– those who opposed voting rights for women
The reason is simple. By definition condors are somewhere between amoral and immoral. But, what they ALL have in common is:
The view that nothing will ever change, that tomorrow will be the same as today, that next year will be the same as this year, that the next century will be the same as this century, etc.
In a world dominated by Condors, human progress is simply not possible!
A possible consideration.
It’s interesting that his FBAR problems originated with an audit. Of course, the audit was the result of filing U.S. tax returns Assuming (although there is some evidence to the contrary) that Mr. Pomerantz had lived only in Canada:
what does this imply about the wisdom of dual citizens entering the U.S. tax system in the first place?
The audit led to the FBAR penalties. Would a possible strategy for certain people be:
Always file the FBAR (wiping out the possibility of the draconian FBAR penalties) whether one files the 1040 or not? The 1040 (and associated information returns) does not have the built in penalty problems that the. FBAR has.
“In a world dominated by Condors, human progress is simply not possible!”
They’re profiteering from being a part of the problem. Of course they’re going to say that nothing will ever change, because they have a vested interest in resisting that change. They will certainly lobby against us, (likely doing it now) and use the money that they take from us to do it, too.
Compliance is not in our interest.
mjh: “Refuse, and resist!” Hear, hear!
Can someone simultaneously oppose something they profit from, a condor’s conundrum so to speak?
@USCitizenAbroad: It appears to me from some things that Patricia Moon and Global passed on, that (1) Pomerantz filed late FBARs (2007-9) during the course of the tax audit in 2010; (2) that Pomerantz moved money around, probably in 2007 (due to the higher fine); (3) that the amount was about $500,000; (4) that he doesn’t have the money to pay the fine; (5) that he has only a small pension and no source of income that would permit him to pay it.
The audit in 2010 may have revealed that he acquired some cash in 2007–via sale of a property, a business, or an inheritence or something else; that led to questions of what happened to the money? Did it go into a bank? A foreign bank? Did you file FBAR? Where is the proof that you filed FBARs for 2007-9?
This leads me to an obvious question: Would the US government have had anything to base the fines on if he didn’t file the belated FBARs?
It seems to me that the burden of proof would be on the IRS/Justice to prove that you put x funds in a bank account. So had Pomerantz just refused to answer certain question, Justice would have had no case (pre-FATCA).
It’s very hard to figure out the events and the significance of each. I suppose that the FBAR penalty could have been based on a combination of the (1) the absence of an FBAR coupled with (2) proof of money in a non-U.S. account. In any case, this is an incredibly brutal IRS response to this guy. It is clear that he was not in the league of wealthy people who have received these kind of penalties in the past. It also seems likely that the amount of the penalty exceeds his current net worth.
Oh well, at this point (as the Janis Joplin song goes):
“Freedom is nothing left to lose.”
Finally, those of you who are still U.S. citizens – you need to understand that this is what is going to happen to every person who the U.S. can claim jurisdiction over. All you are betting on is time.
All Roads Lead To Renunciation!
@Petros & USCA
Andy05 posted link and I’ve downloaded all the court documents so we can likely clarify all these questions….or at least something to look for….
what a gorgeous day – brings back a lot of memories that song – thanks USCA!
Freedom’s just another word for nothing left to lose,