320 thoughts on “This is Fantastic! Don’t Think We Have Ever Had Support Like this!”

1. I really can’t decide whether yesterday’s shit-show is good or bad on the FATCA/CBT front. If it wasn’t already obvious last year, it should be clear by now that the US has elected a president of world-historical uselessness and the Republicans are no saner now than before. (The Democrats are irrelevant thus need not be commented on.)

   Negative outlook – Trump and the GOP Congress couldn’t organize a banquet, let alone successfully pass a major piece of legislation such as tax reform.* With no reason to suspect they will suddenly acquire competence, expect continued paralysis and zero change to tax policy insofar as non-residents are concerned. The spreading stink of the Russia investigations won’t help matters. As others have pointed out here, domestic voters have no idea what FATCA is, and when you tell them, they think it’s a great idea. (Don’t expect that by persuading a few folks on message boards to move their personal needle a few degrees that we’re accomplishing anything terribly useful. It’s a fun hobby, nothing more.)

   Positive outlook – At some point very soon, Trump will need to do something to appear successful after an epic string of strikeouts. Travel ban – dead. Healthcare – dead. Border wall – won’t happen. So maybe, just maybe, he’ll start striking down executive orders and regulations so that he’ll have a few easy wins to puff up on Twitter. If he change the law, then at least he can scrap the IGAs and hobble FATCA. That’s good enough for me.

   * They quite literally couldn’t organize a banquet – some idiot plagiarized Obama’s cake for the inauguration ball!

2. Long term US expat non-filers won’t give a hoot if the US government revokes their passport. Can you spell G-O-N-E? People like that left years ago, are by now fully participating citizens, residents, and taxpayers of their chosen countries, and probably allowed that US passport to expire unused if they ever had one in the first place. (Mine sits expired and gathering mold somewhere down in my basement storage area buried under decades of old hydro bills. When I self-relinquished I contacted the nearest US consulate and offered to send it to them but they told me no, they would just send it back. Want to revoke it? Go ahead, make my day!)

   Even with FATCA reporting the IRS isn’t going waste time and scant resources going to court to get a judgement against a long time expat who will never pay a penny, just so they can revoke a passport that that person hasn’t used for years.

   As for tax reform and repeal of FATCA…..I’ll be totally surprised if they make any more headway on that than they just did with health care. Successive Congresses (under both Republican and Democratic control) have been talking about tax reform since the 80’s and have made exactly zero progress. The US government is so politically gridlocked and bogged down with bureaucracy that it is essentially dysfunctional. It has really become a cruel and ridiculous joke but unfortunately can be very dangerous if one happens to be sideswiped by the thrashing beast. That’s why total non-filers continue to find themselves in the best position.

3. @Japan T

   I already have Canadian citizenship. I just need another $850 USD, so that I can make the renunciation appointment.

   What I don’t need, is false hope.

4. @Nononymous

   I’d say the outlook is negative.

   You said it yourself. The Democrats are currently irrelevant, and the GOP can’t agree on anything. Ironically, I think the GOP will be what makes the Democrats relevant again in the near future, which only reinforces my negative outlook.

5. That’s why I said people in my situation.

   I am a born in the USA USC without a second nor new citizenship. I stop filing when the difficulty doing so became impossible to over come whopile simultaneously the fines for simple errors become unpayable. Not much of a gamble,mas I realky had no choice when I was hit by these.

   Hope and prayervis all I got.

6. @maz57

   As ever, we agree. I probably won’t renew my US passport when it expires (and the current one I only obtained because I could do it from a “safe” temporary address abroad) as I really don’t need the thing – I’ve not used it once. I’m more convinced than ever that continued non-compliance is my best approach. I’m a Canadian citizen from birth, living in Canada with no US ties or assets. My risk level is exceedingly low.

   @JapanT

   It’s hard to know what to advise. To be blunt, you’ve put yourself in a bad situation: some sort of past history with the IRS such that they know who you are, possibly know where you are, and may think that you owe them money (I don’t know the details, nor do I need to); residence in a country where you have little chance of gaining citizenship and which is by all accounts not terribly friendly to resident foreigners; a family and, by your own admission, rather limited financial means. Not a good place to be, but it’s the place you’re in. So be it.

   However, I think you can still dial the paranoia down a notch as far as the US is concerned. With the caveat that I don’t know what your past history with the IRS means here, I think you worry too much about what happens when FATCA data is shipped back to the US. They see some bank balances, nothing more. (Would yours even be high enough to trigger reporting?) This tells them nothing about your income, about whether you even meet the minimum threshold to file. They’d need to make a hell of a lot of inferences to conclude from a bank balance that you owe them income tax, especially at current interest rates. Sure, there’s potential FBAR fines for non-reported accounts, if they are able to cross-reference and determined that nothing was filed. Unless your Japanese accounts are in the many millions (of dollars) then I doubt you’d be worth pursuing, they simply don’t have the resources.

   Furthermore, the bar for passport revocation is pretty high: a tax lien of $50k or more. First, you’d need to get to the point where the IRS actually determined that you owed that sum of money (easy if they include a bunch of FBAR fines, but they’d need to do that) and had taken steps to collect. Second, the State Department would actually have to agree to revoke the passport (no love lost between State and IRS, as we know). Is it possible? Yes. Is it probable? I don’t think so.

7. Apparently Obamacare repeal and tax reform are intertwined. I don’t know to what extent the GOP’s inability to make more aggressive tax cuts could directly affect FATCA repeal though:

   …”Trump and Ryan agreed during the transition process to tackle health care first, partly for procedural reasons: With both health care and tax reform, Republicans planned to use a legislative tactic known as “budget reconciliation” that prevents Senate Democrats from blocking measures with a filibuster.

   The budget resolution for the current fiscal year dictates that any reconciliation measure must reduce the deficit, which the GOP’s Obamacare repeal was designed to do. Republicans then could draft a new budget resolution for the upcoming fiscal year with easier deficit targets, allowing for more aggressive tax cuts.

   Technically, tax reform passed through reconciliation still can’t add to the deficit. But there are ways for lawmakers to sidestep that rule, for instance by adopting alternative baselines.”

   http://www.npr.org/2017/03/25/521448581/what-failure-on-obamacare-repeal-means-for-tax-reform

8. Haven’t read all your comment, it is late here.

   No, I do not have enough to trigger FBAR nor FATCA reporting. BUT the joint account I had with my spouse did. I learned of all this too late to close out the account in time to prevent it from being reported. 99% of the money in the account was my spouses, not mine.

   What are the fines and penalties for not paying taxes, a very small amount if FEIE is disallowed, for close to 20 years? Every single fine I have ever seen for Federal offenses has been $10,000. Wouldn’t take long to add up to $50,000 in penalties.

   The other concern I have is bank lock out. Repealing FATCA would solve that problem.

   Which one

9. @JapanT

   You know, if you have two US-citizen kids and relatively low income, you could be filing and claiming refundable tax credits to the tune of several thousand dollars each year. It was being worked as a big scam in Israel apparently, which lead to some audits in that country. But if you’re legit it’s easy money.

10. @JapanT

    So for one year, one year only, a joint account was reported, presumably not vast in size. That’s all? Go back to sleep.

11. @Japan T

    Even if obtaining citizenship where you’re at is very difficult, it may end up being the only solution for you, long term. If it happens that your US passport were to be revoked in the future, then without a second citizenship, you would be in a position of defacto statelessness, despite having US citizenship. I’m not sure how the US government can revoke a passport, but in this age of chip readers, MRZs, and global connectedness, I doubt it would be all that difficult. I personally wouldn’t count on governmental dysfunction between the many segments of the US government to keep you safe. It is, after all, the same government that came up with FATCA, citizenship based taxation, FBARs, etc…..

    In the end, your best protection is having a foreign citizenship. There’s simply no two ways around it.

    Additionally, though it’s too late to speak of this now, given the issues of FATCA and FBARs, plus with my so-called ‘foreign’ spouse, made it clear to me right away to get out of any and all joint accounts. However, her severe disability has placed me in a position to where I have no choice but to be her power of attorney, which ultimately complicates my situation. But, as long as I keep my big mouth shut on that, there is nothing for her bank to report. I have no intention on doing an FBAR on any of her stuff anyway, even if it were to be necessary in the future, so to hell with it. 🙂

12. @JapanT

    I don’t have time to track down the name again but there is (or was if he’s dead now) an American in New Zealand who renounced his US citizenship and became stateless. New Zealand could not deport him because the US would not take him back, so there he remained. (I think there was a complication with his Canadian wife but the details escape me.)

13. I think this may be it….

14. http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10877269

15. @mjh49783 & Nononymous: yep, Harmon Wilfred. Renounced back in 2005 after he couldn’t get a business visa renewed. NZ still haven’t deported him, but his wife left voluntarily to go back to Canada in 2015, and NZ aren’t letting her back into be with her husband.
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11640335

    And from Reuters on Friday: “With healthcare bill dead, Republicans turn to taxes”
    http://www.reuters.com/article/us-usa-congress-taxation-idUSKBN16V2S0

16. I wouldn’t say that I “put” myself in this situation, but after my last dealings with the IRS, I do not want any more contct with them. I have not claimed the “refund” ( forget its name but it was called some kind of refund and was for those of very low income. Not really a refund, however, as it was greater than the amount paid.) that I am/was eligible for and have told my parents to write my out of their wills. The amount of paperwork under threat of punishment for incomplete or inaccurate informtion is not worth what ever amount I could receive for my dependent children. If my parents had enough to leave me to make the time and money needed to receive it, on, the other or both governments would take so much that the effort is not worth what would be left.

    FBAR requirements being triggered by the joint account, I am required to report all assets. Having the deposit and disbursement data from the joint account would raise suspicion of other assets not reported. I do not think it is a cut and dry simple as portrayed here.

    As per Obamacare.

    The democrats worked on this for decades just waiting for the chance provided by them holding both houses and the presidency. They crafted in such a way as to make it as close to impossible to repaeal as can be. The actual legislation empowers the Secretary of Health and Human Services great power to set policy and implement programs. The phrase, “as the Sec. directs” is very common through out the enabling legislation. Simply repealing the law would remove this power from the Sec. thus deny him the ability to remove any of the programs thus implemented. They being implemented at the discretion of the Sec. they are not legislative, thus not easly changed by the legislature. FATCA is not as cancerous a disease, so hopefully it is a lot less difficult to remove.

17. @MJH

    Passport revocation is easy. Bobby Fischer was caught trying to fly out of Japan. I would survive no longer than the next Gaijin Card renewal at the longest.

    The problem with getting Japanese Citizenship is that I do not have the funds to renounce “cleanly”. If I can not actually renounce “cleanly” or otherwise within two years of obtaining JCship then it can be revoked. If I renounce “uncleanly” then I am at risk of bank lock out. Being unable to receive earnings legally and not allowed to live outside Japan would be a fatal situation. Or, I could join the yakuza, I guess.

    As soon as I learned of FBAR requiring me to report my spouse’s finances, it was I that said we have to close it. Being Japan, this is made as difficult as the human mind can conjure. As all our house hold bills are paid via automatic disbursements, as is common in Japan, it took three months to get all bills paid through the new account under my spouse’s name only.

    Like you, I will not be sending FBARs in for other people’s money. If I can go a few more years undetected, FBARs will no longer be an issue…although, now that I think of it, it seems that 6 year SoL may not apply?

18. “Clearly, a USC who has had a US Federal tax lien filed against them, and has exhausted available remedies etc,”

    That should say “and has exhausted available ADMINISTRATIVE remedies.” This is very important. When administrative remedies are exhausted, the victim gets an opportunity to go to court, but even while the victim goes to court the IRS already gets to DOS the victim’s passport. The IRS could trump up a million penalties against a victim, file a lien, and DOS the victim’s passport even though the IRS knows the court will overturn the penalties. (Besides which, some courts allow the IRS to collect penalties even after US Tax Court has overturned the penalties.)

    “There’s no reason to suppose the IRS could or would want to suddenly start trying to issue liens extraterritorially against millions of non-filing USCs who don’t live in America. It sounds exactly like the kind of risky scenario the IRS normally goes to great lengths to avoid.”

    Says someone who hasn’t had a lien filed against them.

    I was filing, but there’s no reason to suppose that the IRS would treat non-filers better.

19. “If it happens that your US passport were to be revoked in the future, then without a second citizenship, you would be in a position of defacto statelessness, despite having US citizenship.”

    Nope. Japan allows stateless people to remain if they’re legitmately here and legitimately stateless. When the US revoked Bobby Fischer’s passport, Japan jailed and deported him. While he was in a Japanese jail Iceland gave him citizenship so Japan agreed to deport him to Iceland instead of the US.

20. @ND

    Although many differences exist, it seems to me that our situations started off the same, we were required to provide information that we could not obtain from our employers abroad. What we did after, differs greatly. I had had enough experience dealing with BS from the feds that I stopped filing. You continued to try to work out the problem. In the end, our fates may not be much different though you are much more knowledgeable of what actually does happen.

    I took the big truck approach with dealing with a tax system that penalizes the employee for the accounting/reporting missteps of their employer. Although I have never been hit by a big truck, I am relatively certain that it is an unpleasant experience and one to be avoided. You elected, unwittingly, to step out in front of the big truck and the experiences you relate for us here tell me I was correct to not continue filing.

    While I believe I know the nature of the beast, like a jealous god it will not stop until everyone it thinks owes fealty to it accepts its dominion over them, you know the gory details of many of its techniques.

21. “Says someone who hasn’t had a lien filed against them.”

    Says someone who understands the difference between law applied systematically and law applied opportunistically.

22. “Says someone who understands the difference between law applied systematically and law applied opportunistically.”

    And THAT is supposed to be reasuring!?!!?!?

23. @Nononymous

    “Furthermore, the bar for passport revocation is pretty high: a tax lien of $50k or more. ” “….(easy if they include a bunch of FBAR fines, but they’d need to do that) ”

    The FBAR fine is $10,000 per unreported account times six years. The joint account I held was over the reporting threashold. It would thus be a $60,000 FBAR fine as I held it with my spouse for over 6 years prior to learning of FBAR. IF FBAR fines are applied, every long term resident abroad is at extreme risk of losing their passport.

    The big question to me seems to be IF FBAR fines are used towards passport revocation. I believe they will be, as that is just the nature of the beast. Legalities have had very little to do with any of this. They want it, so they write new “law” that ignores previous laws and just plain ignore others that would keep them from what they want.

24. @Norman Diamond

    “Nope. Japan allows stateless people to remain if they’re legitmately here and legitimately stateless.”

    Which has nothing to do with having your passport revoked by a foreign government. That is the difference between de facto, and de jure statelessness.

    De facto statelessness doesn’t necessarily mean that you actually are stateless. It only means that you cannot exercise the benefits of holding citizenship, as though you are stateless. Nominally, you’re still a citizen, but it has no practical meaning, and you can’t use it.

    De jure statelessness on the other hand, means you actually have no claim to citizenship anywhere in the world. This is a legal definition, rather than just a factual definition.

    Therefore, if JapanT were to have his passport revoked, it doesn’t change the fact that he remains a US citizen. He only loses his proof, for the purposes of international travel, and for dealing with foreign governments, etc… which is pretty much everything citizenship that matters to an expat.

25. @Japan T

    “And THAT is supposed to be reasuring!?!!?!?”

    Indeed. Those kinds of semantics will make no difference to the victim in the end. He/she is still screwed over, anyway.

    “Hope and prayervis all I got.”

    I really wish that was enough. But then the $450 renunciation fee went up to $2,350, just before I got Canadian citizenship, back in late 2015. Now I’m resolved to just getting the damn thing done and over with, before I’m screwed over again. Why should I take another chance at hope?

    Hell, I voted for ‘Hope’ back in 2008. I’ve been kicking myself in the ass ever since. I didn’t know that him and his butt buddies would be the architects of FATCA, and I would never have known, had I not landed in Canada back in 2012.