Introducing the FBAR Marriage – A Marriage Between A US Citizen And A Non-citizen
If you're not "US" then you are not part of us: Americans abroad have lived with the consequences of the #FBAR Marriage for years. Now Homelanders are learning the consequences of marriage to an alien. https://t.co/TMlzn7UCRh
— U.S. Citizen Abroad (@USCitizenAbroad) April 23, 2020
In the early years of Brock I wrote a number of posts about the problems and difficulties caused by the “FBAR Marriage“. In it’s most basic terms, the “FBAR Marriage” is a marriage between a US citizen and an alien (non-citizen).
A January 3, 2014 comment at Brock included:
It doesn’t matter if you are in or out of the country where the USG is concerned when it comes to “foreigners” as spouses. My Canadian husband was routinely harassed by US Border guards when we were dating and it wasn’t until he told them that I was emigrating north as opposed to him coming south that it stopped. The USG simply hates extra-territorial dating/mating. The higher tax rate is a way to punish us though for not coercing our spouses into filing jointly so they too can be USP’s for taxable purposes. They see our marriages as tax evasion and while I would rule out entirely that someone somewhere at sometime may have married a non-USC for that purpose, I seriously doubt that the percentage of “mixed” marriages have tax issues to thank for their existences.
The Two Kinds Of FBAR Marriages – Determined by the immigration status of the alien (noncitizen) spouse
Some thoughts on each …
Type 1 – A US Citizen is married to a “resident alien”: A “resident alien” (AKA Green Card holder) will have a US Social Security Number and will be taxable on Worldwide income. It is probably more common for Homelanders to be married to resident aliens. The Type 1 FBAR Marriage is less offensive to the US Government. After all, the presumption is that “resident aliens” actually live in the United States, are subject to worldwide taxation and reporting and will become US citizens.
Type 2 – A US Citizen is married to a “nonresident” alien: A “nonresident” alien does not have a Green Card. (If a nonresident alien lives in the United States without a Green Card or other kind of visa that nonresident alien is an “illegal” (and subject to a whole new set of tax penalties)). It is probably more common for Americans abroad to be married to nonresident aliens. The Type 2 FBAR Marriage is extremely offensive to the US Government.
Marriage can be difficult – For both Americans Abroad and Homelanders, the “FBAR Marriage” is particularly difficult
The FBAR Marriage And Americans Abroad – Usually A US Citizen Married To A NonResident Alien
As you might expect, (at least for Americans abroad) there are tax penalties associated with a marriage of this kind.
Although there is no single decree coming from America that penalizes an FBAR marriage, there are various provisions of US tax laws that work to make the “FBAR Marriage” – well, shall we say:
“Contrary To The American Way – Definitely UnAmerican”
The penalties include (but are not limited to):
1. Most Americans abroad in an FBAR marriage will use the “Married Filing Separately” category. This is a very punitive tax category. At a minimum it means:
– higher tax rates at lower levels of income
– a lower threshold for Form 8938 reporting
2. In a pure marriage (a marriage between US citizens) property can be transferred back and forth between spouses without attracting “Transfer Tax” taxation. In an FBAR marriage, the US citizen donee is subject (if the gift exceeds more than approximately $150,000 USD per year) to the Gift Tax Regime.
3. In an FBAR Marriage, where the noncitizen spouse is a NONRESIDENT alien, a US citizen spouse who receives a gift from the nonresident alien, is required to report the gift on From 3520.
My point is that a US citizen who marries a non-citizen is entering a whole new, penalty laden regulatory regime. But, why not? The premise of the Internal Revenue Code is that the marriage between a US citizen and a noncitizen is a presumptive form of Tax Evasion. What other reason could there be for a US citizen marrying a noncitizen?
It’s clear that the Internal Revenue Code discourages (it’s contrary to the American Way) the FBAR Marriage.
The FBAR Marriage And Homelanders – US Citizens Married To Either A Resident Alien or NonResident Alien
It appears that certain Homelanders (part of a “Type 2 FBAR Marriage”) are about to learn what Americans abroad have long known.
The CARES Act payment (some Americans abroad are obsessed with getting one) is identifying which Homelanders are married to “nonresident aliens”. Once identified as having entered into an “FBAR Marriage”, the US citizen spouse is being punished. (Seriously, this really shows the problems that arise when benefits are administered through the incredibly complex and arbitrary US tax system.)
Have a look at this …
In what Peter Spiro describes as an “Aburd carve out” …
More than 1 million U.S. citizens won't get stimulus checks because they are married to immigrants who don’t have Social Security numbers. https://t.co/EYoV5akkzj
— Los Angeles Times (@latimes) April 21, 2020
Click on the blue “people are talking about this to see the incredible discussion. It’s clear that Homelanders don’t like the FBAR Marriage!
In 1990, after residing in Canada for nearly 20 years, I went through US customs in the Toronto airport, and had the following exchange with the US customs officer, as he scanned my US passport:
O: “Why have you been living in Canada?”
Me: “I married a Canadian.”
O: “You mean you couldn’t find a husband in the US?” (Tone was contemptuous.)
Me: “I did, the first time. Then I guess word got out there.”
See:
https://www.facebook.com/theglobeandmail/photos/a.157369913903.114299.140961138903/10152248250048904/?type=1&stream_ref=10
This shit will continue on until Americans abroad really stuck it to the US empire. Protest the hell out of US embassies and consulates. Support a foreign government the US hates.
I read some of the comments in the link. I do not have Facebook and can not post. I am shocked that they think this is new. I know that Obama Care had this at least in part. Under the previous administration a good friend of mine was denied his application for the same reason. He was married and filing separately. He and his wife, a Japanese National, are estranged, she living in Japan, so of course he must file as married filing separately. But his application for Obama Care was denied for that reason.
But, as I keep saying, no body knows about any of this.
Ugh, now I’m REALLY regretting filling in the non-filers form. I didn’t know I wouldn’t qualify if I’m married (though they have no record of me being married, as it’s a recent development and spouse is a lucky untainted pure Canadian.) I filled it out and put single just because I figured it was a quick way to circumvent filing — I always filed on paper and I have no way of knowing if they ever looked at them.
But I should have stayed out of it and off their radar (if I am off their radar? I filed as recently as 2 years ago.)
@cee
The good news is, you are the test case for how much one can get away with! Please keep us informed.
Given that there is apparently rampant fraud going on right now, plus money being sent to dead people of course, I’d say that in the unlikely event that you caught any grief from the IRS you could always argue that a scammer must have used your stolen ID to claim the money.
If you filed 2 years ago then you are on their radar to the extent that they have functioning radar. If you filed as single then, and they haven’t magically learned of your marriage in Canada – they haven’t – then submitting this form as single isn’t going to raise any flags, I expect. Also, a close reading of the form suggests that “single” in this case means anyone not filing jointly with a spouse who possesses an SSN, so could be taken to include anyone with MFS status and an NRA spouse. Who knows? The point is, the program was cobbled together very quickly, some who deserve money won’t get it, some who don’t deserve money (or who are no longer actually alive) will get it, and I really doubt that the IRS is going to have time to chase you afterwards.
@Ron H Yeah, I honestly figured I was single for this purpose because the form presented it as binary: single, or married to someone with an SSN. Welp.
I still shouldn’t have done it, though, and I think I would have been better off submitting an actual return (simplified and sanitized, obviously). But if I do that now it’ll just mess them up more.
Nah, you’ll be fine. It’s a shit-show. The great thing about the non-filer form, aside from simplicity, is that there’s no implication that you should file anything next year. So possibly better than a regular 1040, even if sanitized.
Interesting thing about Randy Bachman is that despite the “American Woman” song (banned at the Nixon White House) he was happily married to an American woman for almost 30 years (she became a dual Canadian-American in 1989). Then came FATCA and 1 year later they were separated. Did life after FATCA get too complicated for them or did they just drift away from each other? Used to love listening to Vinyl Tap … must get back to doing that again (anything to avoid covid coverage).
@cee.
No need to worry about “messing them up more”. They were messed up long before you arrived on the scene. Your ace in the hole, should things go totally sideways and they start to hassle you, is that you have the option of ignoring them completely. This option works well, and is always available for Canadians in Canada.
Even if, later on, you decide to renounce, you can continue to ignore them. Presumably State Dept. would eventually get around to informing the IRS that you renounced but so what? The IRS is going to be so tied up chasing down all the scammers that live in the US they will have zero time for a Canadian small fry.
The LA Times has posted a clarification – only those US citizens who are filing jointly with nonresident aliens are being denied the stimulus check. As most in this situation file separately, this really isn’t going to affect very many.