21 thoughts on “Brock project: How has awareness of @citizenshiptax AKA @nonresidenttax changed your attitude toward investing and retirement planning?”

1. Hello
   Now I currently have no bank account anymore and can’t open one up.
   I refuse to file W9 form because I left the US at the age of 7 in 1973 and don’t even have a US SSN.
   My ex-wife oppened an account in her name for me to use, we’re still going along fine.
   Don’t care anymore in financial plannong for retirement (I buy siver and gold coins from time to time and stuff no state can get their hands on, with FATCA I’ve learned how to protect myself from the financial FIAT money sytem).

   Teribbly ashamed to be american…and telling everyone about our situation.
   People planning I know that were to go work in USA don’t want to anymore, Ha, that makes me laugh.

   Best to all
   Steven

2. I always try to function as an EU citizen but my ID card has my birthplace on it and is needed for just about anything here (including last weekend at a spa!!).

   – I can’t have mutual funds: I’ve done this but ignored the package warnings from the bank. So far they haven’t refused to sell them, in fact they were happy to sell them. I put them on FBARs as financial accounts. My reasoning is “hey, I declared this, maybe it was in the wrong box, but I’m not hiding anything”. And I’m a very small player anyway.

   – I can’t have a life insurance policy: This hasn’t been a problem.

   – I would have incorporated but I am afraid to: not afraid to because of the IRS, because I would never tell them. I’m afraid because it would mean explaining it to the bank, filling in those forms, and so forth.

   – I worry about having to report my spouse’s bank accounts to the IRS: I report one joint account, but do not report her as my spouse. We are “legal cohabitants” per local law, close to married, but I file as single for the IRS. I put all rental income in an account in her name (did this during a bout of paranoia, probably not necessary). I lead a double life, one vis à vis my country of residence, one vis à vis the USA.

   – I am no longer the financially responsible person I was/ I see no point in attempting financial planning: this risk of IRS trouble does hinder financial development. I certainly don’t want to open accounts or incorporate, or anything that would make me show my ID card more than I need to. It certainly does drill into your mind that you need to be careful, and probably should lie low. In fact the only financial daydreaming I do nowadays is forming a … US corporation!! But overall the situation has almost made me happy I’m not rich.

   So, problem 1 is local: all the paperwork, threats, and occasional refusal of service. Lots of it comes from overzealous, paranoid institutions that probably could find a way to make life easier but don’t want to. A fine example of US extra-territoriality. Of course now Europe is going all extra-territorial too with the data law and such (plus imposition of EU rules on Switzerland, Norway, and soon the UK). Getting harder to criticize the US for reaching worldwide when you do it yourself.

   And problem 2 is the US. Though there is probably close to zero risk of trouble, one cannot help but think of the potential catastrophe that might be an IRS audit and prosecution. It’s uncomfortable to have to just reason that they have bigger fish to go after, that they are understaffed, that they would have a hard time collecting …

   And of course renunciation is the way to go. Except… what if fascism comes back to Europe, what if taxation here continues to increase (I pay 53% tax on most of my income, and 21% VAT, meaning I need to earn 100 to buy something worth 39), what if I really do decide to go back to Phoenix to retire… Perhaps it would be financial advantageous to do so… except for health care… etc. I don’t really want to throw my passport away, it’s part of who I am, I don’t want to shut the door. So yes, the FATCA induced realization that CBT was a thing has changed my life and outlook, induced stress and restricted my financial freedom.

3. @Fred (B).

   The defenders of the ID cards say that if you have nothing to hide you have nothing to fear so ID cards can do no harm.

   Yea, right, even when it opens you up to persecution and discrimination.

   Didn’t the massacre in Rwanda involve demanding Belgian imposed ID cards before swinging a machete?

   No harm done there then, either.

   My local US friend is dealing with this the way she always has, zero official financial life of her own whatsoever and working for cash in the hand in the local bar. She’s just vanished off the US radar.

   She’s scared to death of her own government, and that is a horror that makes me burn with fury.

4. Hello happy FATCA campers! If you just answered ” all of the above” to the list of cant’s then don’t despair. If you thought it was forever impossible to live a normal life abroad without Uncle Sam and the IRS hounding you and your family to your graves then you will be delighted to hear this.

   Now there is a solution and it’s called the “Markle Miracle”. Yes you heard right, the Markle Miracle.

   You may have thought that the last of the eligible, FATCA proofed royals just disappeared from from your bucket list. IT’S JUST NOT SO…and here’s why.

   After months of exhaustive research, our experts have come with a list of desperately eligible royals of both sexes just waiting to marry someone, anyone, even an American.

   Yes! For just a non FATCA tax deductible $9.99 a month in this special offer, you will receive a TOP SECRET list on some of the world’s most desirable ROYALS. And that’s not all. Here’s just some of the features in our comprehensive MARKLE MIRACLE handbook;

   -10 tips from veteran paparazzi on how to stalk a royal and even crash social events.
   -Fashion tips for him or her on what to wear when trying to catch the eye of that special aristocrat.
   – How to look down, smile and wave at your new subjects from that magnificent palace balcony.
   – How to know if you should hide your relatives or actually wheel them out on that august wedding day. Hint, disown your brother.
   – Table etiquette. Is it ok to attack that chicken with your fingers and ask Her Majesty to pass the tabasco sauce big momma.

   That’s just a sampling of what you’ll find in our Markle Miracle help guide. There’s much, much more.

   So, FATCA victims, go from “what can I do” to “I do” and then to “what you gonna do IRS bitches”. It’s all yours for $9.99. so order today.

5. I couldn’t have a retirement plan. After renouncing, now I can, but at my age there’s no point trying.

   The IRS and US Tax Court upheld US Supreme Court rulings US v. Sullivan and Garner v. US, which upheld 5th amendment protections to not answer particularly intrusive questions as long as the amount of income is reported on a return. But the DOJ and other US courts overturn the Supreme Court and 5th amendment. Details are maintained under seal by order of US Tax Court but other courts let my withholdings remain in possession of the IRS’s embezzlers (Monica Hernandez et. al.) because of the details.

6. Nothing has changed. I remain completely non-compliant with any US tax and reporting obligations. I face no restrictions or reporting due to FATCA because, when asked, I did not admit to having US citizenship and the bank did not verify my answer. As a Canadian citizen living in Canada with no US assets or income, I would not be subject to collection of any US penalties.

   So no, awareness of FATCA and CBT has not changed my financial life one little bit.

7. Found out about Fatca and Ovdi in 2011
   Studied the problem and spent 20K. on advice.
   Wound up professional corporation. Didn’t invest in TFSA. Transferred non registered accounts to spouse.
   Waited 5 + yrs.
   Renounced. ( no questions asked). CLN. in hand. Filed 5 yrs tax returns . Zero tax owed. No response from IRS
   Filed 8854 butnot 1040 or 1040 NR for year of renouncing. Noresponse from IRS

8. my life is exactly as nononymous’s

   once i came to terms with just exactly what was and was not my now current post facta life i got on with it with the only change being me never setting foot on that countries soil ever again.

9. I renounced for the purpose of avoiding US taxation of my non-US-source pension income – plus for the purpose of not being treated like a criminal by the very banks who poured gazillions of non-US-source dollars into the unregulated US sub-prime mortgage free-fot-all in order to steal the money and then get bailed out by my non-US taxes.

10. My situation was that I did all those things without a second thought, and lived a normal financial life, planning for retirement, Isas, joint account with my spouse until the day I had my OMG moment in 2015. I had no contact with any Americans in the UK, nor did I spend any part of my adult life (or working life) in the USA so had no way of knowing about CBT. It was too late for me to start from scratch. Renunciation was the best option for me. One of the worse aspects was being stripped of financial privacy due to FATCA and having my spouse also exposed to this. The USA has no respect for other countries tax breaks or financial, retirement vehicles so financial planning would be pointless unless you either renounced or didn’t bother to file.

11. Once I figured out all the details of the situation (thanks in no small part to all the good folks here at Brock) I took on Canadian citizenship ASAP, simultaneously self-relinquished, threw my US passport away, and my Canadian financial life has continued on totally unimpeded. Screw them and their $2350 renunciation fee and all the rest of the bullshit; I’m a firm believer in doing-it-yourself. I’m no longer a US citizen and they can’t make me be one.

    I now don’t even have to lie if I’m asked “the question” by a Canadian financial institution. I open and close any sort of account I wish, move money around freely, and periodically travel to the US with no issues.

    Illegitimi non carborundum! (Don’t let the bastards grind you down!)

12. So I have renounced, but if I had know about the R.E.S.P. I would have NEVER, NEVER gone there. Prior to the R.E.S.P., I had carefully saved every penny that we didn’t need and put it into a regular savings account for my children’s education. One day, the financial advisor asked why we weren’t taking advantage of the R.E.S.P. with the government matching whatever we contribute. So I switched all of it into a R.E.S.P. Huge mistake! It never had more than $20,000 in it and yet, it was deemed a trust. $500.00 per year to file it. The bank never asked about citizenship, let alone informed me that they weren’t a good idea for Americans. It added thousands to the bill to get compliant and renounce.

13. We had a RESP as well. Oops! Forgot to mention it.

14. @Ann #1

    Your problem with the RESP was, obviously, reporting it. No reason not to take advantage of the program as long as you don’t inform the IRS. Fortunately, under the current IGA, RESPs (like RRSPs, RDSPs and TFSAs) are not subject to FATCA reporting, so the only way the US government would find out about it is if you told them.

    Even if you choose to renounce with tax compliance, you can leave the RESP off of any returns – they’d never know.

15. @ Nononymous…Once I decide to renounce, I exited cleanly. I didn’t want any doors left cracked. After all, if you are going to get compliant and renounce, which isn’t cheap, do you really want to not report something? And I seem to remember at the time, the IRS hadn’t decided on whether the R.E.S.P. was reportable.

16. @Nononymous, I would also have been concerned that the banks might just report all accounts, anyway, to make their reporting simpler. I understand that many financial institutions even report balances under the $50,000 threshold to, again, make thing simpler and protect themselves.

    I was in a similar situation to @UK Rose in that I’ve spent all my adult life here in the UK, so had done normal financial planning as a British resident and dual cititzen. Wasn’t worried about US taxation because had believed I was fully protected by the tax treaty, especially as was on a modest income.

    I didn’t socialize with other Americans do was out of the loop. I had my OMIGOD moment in early 2011 when I learned about FBAR and OVDI on my phone internet of all things! I really panicked when I also became aware that the bulk of my assets were invested in PFICs.

    I had already been filing very basic returns so was terrified I’d be hit with FBAR fines due to some ommissions. In the UK, we don’t even have to declare our ISA income on our tax eturns to HMRC so assumed the treaty meant I didn’t have to on the US tax returns either.

    I was afraid my accountant would assume I was guilty of tax evasion and force me into OVDI but, thankfully, she amended my returns quietly….I owed quite a lot of tax to the IRS but wanted to do everything honestly because that’s my moral code.

    I initially wanted to keep my US citizenship to honour my family but when I learned there might even be foreign trust issues with my personal pensions and ongoing expensive filing every year, I decided to renounce in 2013. It was emotionally very difficult to lose my birthright but I am convinced I made the right decision to simplify things.

    I resent how FATCA and FBAR seem to go against the constitutional right to privacy.

17. “I understand that many financial institutions even report balances under the $50,000 threshold to, again, make thing simpler and protect themselves.”

    There may be other reasons.

    Reporting all USC accounts is perhaps seen as less vulnerable to legal challenge: the purported reason for reporting the accounts is US tax-residence, not suspicion of tax evasion.

    Reporting only “higher value” (“higher risk”) accounts would look (even more) like a fishing expedition, and could be challenged as such.

18. I stayed compliant to the best of ability for years, with almost always zero US taxes because of FEIE and FTC, but approaching retirement I became fedup and resentful of the 50 hours it took each year to do so, and increasingly anxious about potential penalties and changes that could make the situation worse and renunciation more difficult.

    Other factors instrumental in the decision to renounce included an effective inability to benefit from investing in any Canadian savings plans with tax benefits but with no beneficial access to US versions of these plans, severe limitations around purchasing mutual funds, incorporating a business, having a PFIC, or foreign trust or whatever. No investment in or income from the US and no possibility of returning to the US because of the prohibitive cost of health insurance and insufficient FICA contributions to get Medicare.

    Pension plan values together with a significantly increasing house value suggested that net worth could eventually hit the threshhold to incur an onerous “covered” expatriate status, so it was best to renounce well ahead of that, and before they clamped down further on all those billionaire Americans abroad not paying their fair share of US taxes. The credit union suggested for years to move some money into a TFSA, and now I can. And domestic harmony is enhanced as family members without US connections are no longer drawn into the clutches of a foreign country’s tax regime.

19. Thanks, Mike: fascinating insight into ID cards in Rwanda. More ammo for my occasional anti-ID card rants. Thanks!

20. Reasons for complying: I am unlikely to owe much in the way of tax due to having a moderate income and owning house in an area in an economically-lagging place where house prices have not increased much, especially in dollar terms; my particular financial situation doesn’t conflict too much with U.S. tax law: I’m not self-employed and the U.K.-U.S. treaties are among the most favourable; I can’t really hide because of the U.S. birthplace; at one point there was the possibility of a U.S. inheritance and I didn’t want penalties to eat it up; my compliance costs are low; the uncertainty of Brexit is having such dire economic effects that my children might move there, although I have no idea how I would afford to go there; I can talk about the problems of CBT more openly.

    The problem is that my situation remains precarious. If something happens, like my spouse dies, then all of a sudden I wouldn’t have a viable strategy, since he has to do our investing. I have had to adapt a lot already. I was doing really well until January when U.S.-based ETF’s decided to leave the European Union market. I had two weeks at the end of December to choose ETFs I would be locked into for the long term. My current holdings are taxed only by the U.S. and I get it all back, but the IRS won’t wire refunds to a foreign bank account and the check cashing fees are high. So the only organization making money off of my compliance is the local bank.

21. One interesting side-effect of “compliance” for me is that in my filings there was a year with hardly any income. The IRS, after my typo problem was solved after 15 letters and almost a year, sent me 2 checks for the child tax credit. That effectively paid for my tax preparation bill. So very clearly, in my case, FATCA was a loser for the US treasury. It’s costing my banks money trying to get me to fill in forms I ignore, it’s costing me time and stress, it’s giving some business to a tax preparer, and it’s costing them in tax refunds. Go figure.