What an idiot -does he have any idea what is going on? #FBAR #FATCA #TransitionTax #GILTI doh……Former Hamilton school superintendent pleads guilty to forging documents to get his children U.S. citizenship https://t.co/2dc9RKkViK via @torontostar
— Tricia Moon
Just a little something likely to amuse most Brockers
Really, it boggles the mind……..would appear nothing further reached the Consulate.
Those kids don’t know how lucky they are!
Excerpts:
Patrick Rocco’s case, which the judge called “puzzling,” leaves loose ends that Thursday’s court proceeding failed to answer.
Topping the list is why Rocco, who had a good career, no criminal record and a history of community service, broke the law to qualify his kids for dual citizenship.
While looking into the expenses, Figeuiredo inadvertently discovered emails between Rocco and Patrick Elliott, a vice-principal with the board, that hatched a plan to alter documents for the citizenship applications.
Rocco’s children are now aged 22, 21 and 19. He has been married 24 years.
On Jan. 5, 2015, Rocco, who was born in the United States, received correspondence from the U.S. Consulate in response to his inquiry about obtaining U.S. citizenship for his children.
The consulate outlined the criteria, which included that one parent needed to be a U.S. citizen at the time of the child’s birth and living in the U.S. for periods totalling five years prior to the child’s birth, at least two of which were after the parent’s 14th birthday.
Rocco, who lived in Canada continuously since 1970 and has dual citizenship, did not meet the criteria.
On July 14, 2015 Rocco sent an email to Elliott that said: “I will call you, but need to change address on a PDF — I have the original as well that I scanned — any thoughts? Need to put in my US address and will explain.”
A series of email exchanges over the next month has Rocco sending two Niagara University documents to Elliott asking him to change the address he lived at while he was a student there from one in Niagara Falls, Ont. (where he actually lived from April 1977 to December 1986) to one in Lewiston, N.Y., where he fraudulently said he lived from 1984 to 1987.
On Aug. 4, 2017, Rocco was arrested by Hamilton police…..charged with two counts of making forged documents and two counts of using forged documents.
Court heard there was no evidence of plans to use the citizenships for financial gain or to jeopardize U.S. security.
“This was the misguided result of an effort to give broader options to his children,” Rocco’s lawyer told the court, without elaborating.
This begs the question, how many US expats are being forced to forge documents to hide or get rid of their US citizenship?
“Broader options”? Yes, one has to wonder what rock Rocco has been hiding under for the last seven or eight years…
@Bob
Interesting question. I have not heard of that and the thought never crossed my mind. Somebody could be making a bundle!
@BB
Maybe Rocco is compliant. One of the ones who thinks there are no problems.
Then he should know better!
There are yet very few who have any idea of any of this. Companies still send their employees and schools their students to the States. There are still the occasional article here and there of expectant Japanese mothers going to the States to give birth there so that their children will be dual citizens.
How many Brockers are there? How many comment on other blogs?
Out of the 6-9 million YSCs living abroad, a drop in the ocean.
The fact is that a lot of people still want US citizenship.
It is a huge country with lots of opportunity and if you live there, the tax situation is not a problem
Fascinating. In my mind there is no way he was compliant or aware of FATCA and CBT.
That said, it’s true that the US continues to be a land of opportunity and has great draw for many.
Indeed. And the tax situation is not necessarily a problem while living outside the US either, for individuals who actively want dual citizenship, and are aware of the tax laws (thus able to pick a compliance/non-compliance strategy and tailor their investments accordingly).
But it seems in this particular case that only a part of the backstory is being reported. Perhaps a deal was agreed.
Maybe the missing information is that Rocco doesn’t file US tax forms at all, doesn’t get in trouble for it, and assumed that his children also wouldn’t get in trouble for it.
As discussed in other threads, the IRS is legally allowed to create a Substitute for Return for any person that they wish to attack, make an assessment based on that Substitute for Return, file a lien and levy, and sue in US District Court (for the District of Columbia District for a US citizen living outside the US). But I think the IRS hasn’t actually been creating Substitute for Return for any person, and that is what prevents them from taking other actions. Rocco didn’t send the IRS the bullets for the IRS to use in shooting him, so he doesn’t get shot.
Those who don’t comply don’t have to renounce.
“…one has to wonder what rock Rocco has been hiding under for the last seven or eight years…”
When I was at the consulate to relinquish last year, there were two couples there to apply for citizenship for their newborn children. One of the couples was German – where the mother had dual citizenship and was thrilled to be passing it on to her baby. The other couple’s infant had a USC-only father and an eastern European mother, and might easily have lived without a CRBA, but Dad apparently didn’t realize there was no rush to claim US citizenship for his child (and was surely ignorant of CBT).
It’s must be quite a big rock all these people are hiding under.
@Fred
There is no indication one way or another as to
Rocco’s tax status. There are many, many Homelanders Abroad in Canada. They can be found in the usual places-Meetup Groups, DA chapters ( got a real mouthful once from one of them; don’t think I ever posted it; perhaps I will. It’s a true gem ;-P ). He could just as easily be as plaxy described in his first paragraph. I am curious, what makes you think he is not tax-compliant?
ND:
“Maybe the missing information is that Rocco doesn’t file US tax forms at all, doesn’t get in trouble for it, and assumed that his children also wouldn’t get in trouble for it.”
We can only speculate. I speculate that this case is really about the expenses fraud, and the serendipitous discovery of the emails about the forgery gave the authorities what they needed to persuade the defendant to pay back the ill-gotten gains five times over. Better a hefty fine and house arrest than being put on the next flight south.
It will be interesting to see if the defendant turns up as a witness for the prosecution when his co-forger comes to court.
ND: “the IRS is legally allowed to create a Substitute for Return for any person that they wish to attack, make an assessment based on that Substitute for Return, file a lien and levy, and sue in US District Court”
Surely the point of the substitute return is to avoid any need to sue. It’s the taxpayer that has to do the suing.
“ (for the District of Columbia District for a US citizen living outside the US).”
Fortunately, the IRS can’t put a lien/levy on non-US income/assets.
Deemed to be US by FIs, do you mean?
“I am curious, what makes you think he is not tax-compliant?”
Even if Rocco’s filing US taxes, what makes him think he’s US tax compliant? Surely he would not want to intentionally deny his children the ability to invest in the types of things other regular Canadians get to invest in like TFSA’s, RESP’s, mutual funds, etc?
All three children are adults. Rocco pled guilty of forging the documentation to support their applications for US citizenship, but he can’t be held responsible for their doing the deed.
@BB
But those wealthier than we DO do all of those things, file returns, visit family in the US etc. Toronto is full of them…..
“the IRS is legally allowed to create a Substitute for Return for any person that they wish to attack, make an assessment based on that Substitute for Return, file a lien and levy, and sue in US District Court”
‘Surely the point of the substitute return is to avoid any need to sue. It’s the taxpayer that has to do the suing.’
The Substitute for Return is what enables all of the subsequent actions. The point of a lien and/or levy is to let the IRS avoid the need to sue. The IRS can sue if it wishes. But anyway, without either an SfR or a real return (person sending the IRS the bullets to use), the IRS can’t do any of those. The only thing the IRS can do in that case is confiscate withholding, either legally or illegally.
“(for the District of Columbia District for a US citizen living outside the US).”
‘Fortunately, the IRS can’t put a lien/levy on non-US income/assets.’
Somehow they got CRA to collect part of the penalties they assessed against Dewees (the part that Dewees wasn’t suckered into paying by himself).
@Norman
There is no mystery as to why the CRA collected part of the penalties against Dewees. It’s in the US-Canada Treaty. Had he at least been dual at the time (from whatever it was 1998), he would have been protected.
ND:
“The Substitute for Return is what enables all of the subsequent actions. The point of a lien and/or levy is to let the IRS avoid the need to sue.”
That’s what I said.
“The Substitute for Return is what enables all of the subsequent actions.”
According to the statute, the a substitute return can only be treated as a taxpayer’s return if the IRS has sufficient information to compute liability. (https://www.law.cornell.edu/cfr/text/26/301.6020-1)
For US-resident taxpayers, the IRS may well have sufficient information, but not for non-US-resident taxpayers.
You attribute to the IRS powers it doesn’t have.
Dewees was suckered into providing the information enabling assessment; he refused to pay; since he wasn’t a Canadian citizen, the IRS was able to request collection assistance from Canada. There’s no mystery about it.
-> “The Substitute for Return is what enables all of the subsequent actions. The point of a lien and/or levy is to let the IRS avoid the need to sue.”
That’s what I said.<-
I quoted myself and then I quoted you. You didn't say all of that.
‘Fortunately, the IRS can’t put a lien/levy on non-US income/assets.’
I think we’ve all agreed that that’s a useless fortune. CRA didn’t care about the IRS’s inability to put a lien/levy on Dewees’s assets.
ND: “I quoted myself and then I quoted you. You didn’t say all of that.”
I’ll try again and see if I can keep it clear what was said by whom.
ND:
Me:
ND:
According to the statute, a substitute return can only be treated as a taxpayer’s return if the IRS has sufficient information to compute liability. (https://www.law.cornell.edu/cfr/text/26/301.6020-1)
For US residents, the IRS may well have sufficient information, but not for non-US-resident USCs.
For non-US-resident USCs, the IRS can’t assess without information, and can only request assistance if the USC lives in a treaty country and doesn’t have citizenship.
ND:
The IRS can’t put a lien or levy on non-US income/assets. You attribute to the IRS powers it doesn’t have.
ND:
Yes, if the IRS has enough information to assess a liability, and does assess, and the USC doesn’t pay, the IRS can presumably bring a case in a US court. But can’t collect if the person has citizenship in the residence country.
The moral is, if a USC only wants to be liable for taxation in his/her country of residence, s/he should be a citizen of the residence country, should not invest in the US, and should not write to the IRS offering to pay US tax.
ND:
That’s a complete non-sequitur. Nobody put a lien or levy on any of Dewees’s assets. He contacted the IRS offering information; then refused to pay. The IRS was able to request assistance in collection because he wasn’t a citizen of his country of residence.
“According to the statute, a substitute return can only be treated as a taxpayer’s return if the IRS has sufficient information to compute liability. (https://www.law.cornell.edu/cfr/text/26/301.6020-1)”
I see that in the CFR, but later it gets more confusing. The IRS employee can make a Substitute for Return using the IRS employee’s knowledge about some things (such as income) and calculate a tax liability based on the things that the IRS employee knows about, which isn’t the tax liability based on the combination of things that the IRS employee knows about and things that the IRS employee doesn’t know about. I can’t quite figure out how much of an assertion the IRS is allowed to make at that point. I wonder if that’s the reason why the IRS isn’t actually making Substitutes for Returns these days even when it’s allowed to do so.
“For US residents, the IRS may well have sufficient information, but not for non-US-resident USCs.”
In both cases the information isn’t really sufficient but a tax liability can be computed based on the amount of information that’s available.
“The IRS can’t put a lien or levy on non-US income/assets.”
It doesn’t matter. The IRS can issue a notice of intent to levy even if there are no US assets, and the IRS can file a lien in the District of Columbia even if there are no assets in the District of Columbia. If the victim doesn’t petition Tax Court in time then the case is essentially over and the IRS can tell CRA to collect for the IRS.
“But can’t collect if the person has citizenship in the residence country.”
Right. Dewees’s biggest mistake was neglecting to naturalize in Canada. His second biggest mistake was trying to comply with the IRS.
…
“Nobody put a lien or levy on any of Dewees’s assets.”
I think the IRS did either issue one or both of those notices, which they can do even when there are no US assets. I think that’s how the IRS enabled itself to tell CRA to collect.