Thank you, USCitizenAbroad, for once again bringing this subject forward as many, including those like me, who struggle with real black and white clarity on this as we read this subject quoted in articles intended to reel us into *US tax and reporting compliance* for  the child born outside the US to two US parents or just one US parent (biological mother or father and why there is, in this day, the differences for that distinction) with the requisite facts.   We see that it is even an issue of contention between US Republican candidates, Senator Cruz and Donald Trump and follow with interest what will happen in that realm.

(i.e., my legal advice was that my children were US citizens from their first breath and that’s all there is to it and, from posts past from me, I failed to get anyone at the Department of State to state clearly that that deemed acquisition of US citizenship has to be claimed.  Nothing in my being will make me accept this seeming injustice especially as one of my children also has a developmental disability and would not be allowed to renounce that *deemed acquired US citizenship and all of its consequences*.  I maintain my son is Canadian and I want his Canadian government to guarantee that he and others like him have the same rights — *A Canadian is a Canadian is a Canadian*.)

I’m putting your comment into a separate post for better visibility for those who will weigh in, as you say:

Again, I renew my request for comments on this issue.

PART 1:

(From USCitizenAbroad comment at *Media and Blog Articles* refer to full post for detail)

With respect to issue of “derivative citizenship” which started with the comment here:

http://isaacbrocksociety.ca/media-and-blog-articles-open-for-comments-part-3-of-3/comment-page-8/#comment-7076684

My personal view is that people born outside the United States must consider their situations very very carefully. This is an issue that has been “popping up” on this blog for a number of years. One aspect to the question is this:

Can the U.S. deem somebody to be a U.S. citizen or (in the FATCA, FBAR and CBT world) forcibly impose U.S. citizenship on a person born outside the USA?

In July 2015, Eric wrote an interesting post that raised this issue. It’s worth a reread. The comment that I wrote to that post was:

http://isaacbrocksociety.ca/2015/07/10/2nd-circuit-retroactively-extends-jus-sanguinis-citizenship-to-us-emigrant-fathers-out-of-wedlock-kid/comment-page-1/#comment-6285662

Can the U.S. “deem” people “born outside the U.S.” to be U.S. citizens?

@Eric

Fantastic post and fantastic comments. Thank you for this. I see this decision as being more narrow than some of the comments to your post suggest. To cut to the chase, I believe that the significance of this decision depends on whether the U.S. can “deem” people born outside the United States to be U.S. citizens.

With that question in mind …
Continue reading →

BC Doc says…

@JC says

“@Calgary411 I suggest for consideration that blog from Rachel Heller for an IBS feature.

As part of renunciation, one must sign a statement that they have not done it under duress ! I suppose US goverment duress is not to be considered!”

+1 JC. Many of those who renounce or relinquish are doing so with a metaphorical Smith and Wesson revolver held to their temple by the USG.

I will use myself as an example. I am a naturalized Canadian citizen here for over two decades. I have Irish citizenship via my parents and grandparents. Their is no disincentive which has forced me to give it up. My Irish passport sits in a lock box and generally gathers dust save for the odd trip to Europe. I was a US citizen by birth– Boston will always be my home town. Given that I still have family in the US and right of return was my birthright, even though I had no intention of living their again, Citizenship Based Taxation combined with FATCA made retaining my US citizenship untenable. The result? US citizenship destruction, under duress.

Good for Rachel for throwing a wrench in the US citizenship destruction machine.

From Rachel’s Ruminations, January 8, 2016, *THE IRONY OF RENOUNCING UNDER DURESS*

When Americans renounce their citizenship, as I did, we are required to sign a form called “Statement of Understanding Concerning the Consequences and Ramifications of Relinquishment or Renunciation of U.S. Citizenship” (Form DS-4081) that includes the following:

I am exercising my right of renunciation/relinquishment freely and voluntarily without force, compulsion or undue influence placed upon me by any person.

…

Renouncing Under Duress

‘Under duress” means that you were somehow forced or pressured to renounce citizenship, and I agree that no one should be forced. However, many people who have renounced recently, or are planning to renounce, state that they have to do so: they are forced into it by circumstances.

For some, it’s a matter of being unable to find a bank to do business with because the banks don’t want the expense of complying with the new FATCA disclosure rules.

For some, renunciation is necessary because otherwise, according to their adopted country’s IGA with the US, they’ll be double-taxed on sales of property or pension payments.

For some, including me, it’s a matter of the cost of paying an accountant and dealing with a resentful non-US spouse who ends up handing his financial information over to the US government.

You could, then, interpret our reasons for renouncing as being an example of acting “under duress,” except the pressure comes from the US government itself!

(This post requested by JC.)

By law, the National Taxpayer Advocate must submit two reports to Congress each year.

National Taxpayer Advocate’s Objectives Report

The first report (Objectives Report), delivered each June, contains the goals and activities planned by the Taxpayer Advocate for the coming year.

National Taxpayer Advocate’s Reports to Congress

The second report (Annual Report), delivered at the end of December, includes: A summary of the 20 most serious problems encountered by taxpayers; recommendations for solving those problems; and other IRS efforts to improve customer service and reduce taxpayer burden.

******************

**********************

Volume I: FY 2016 Objectives Report to Congress

1. PREFACE: National Taxpayer Advocate’s Introductory Remarks
2. REVIEW OF THE 2015 FILING SEASON
3. AREAS OF FOCUS
   1. The IRS Should Provide Victims of Identity Theft with a True Single Point of Contact to Help Them Resolve Their Account Problems and Obtain Their Refunds
   2. The IRS Agrees It Should Issue Refunds to Victims of Return Preparer Fraud, But It Has Been Slow to Develop Necessary Procedures
   3. The IRS’s Administration of the Affordable Care Act Has Gone Well Overall, But Some Glitches Have Arisen
   4. The IRS’s Implementation of FATCA Has in Some Cases Imposed Unnecessary Burdens and Failed to Protect the Rights of Affected Taxpayers
   5. IRS Procedures for Levies on Retirement Plan Assets Create Financial Harm and Undermine Taxpayer Rights
   6. As the IRS Migrates to More Self-Service Tools and Online Services, Low Income and Other Vulnerable Taxpayer Populations May Face Greater Compliance Challenges
   7. Additional Requirements for Appeals Access and Compressed Case Timelines Impair the Fundamental Rights of Taxpayers
   8. The IRS Approves Many Applications for Tax-Exempt Status Almost Automatically, Often Based on Insufficient Information
   9. International Local Taxpayer Advocates Would Provide Valuable Assistance to Taxpayers and Protect Their Rights
   10. TAS Continues to Work with the IRS to Implement the Taxpayer Bill of Rights into IRS Operations
   11. The IRS Must Have a Comprehensive Review Process for Guidance and Other Documents to Protect Taxpayer Rights, Improve Customer Service, and Operate More Efficiently
4. EFFORTS TO IMPROVE TAS ADVOCACY AND SERVICE TO TAXPAYERS
5. TAS RESEARCH INITIATIVES
6. TAS TECHNOLOGY
7. APPENDICES

Volume Two: IRS Responses and National Taxpayer Advocate’s Comments Regarding Most Serious Problems Identified in 2014 Annual Report to Congress

There are now several Brock commenters who have brought to light what we have already known in the years of Brock commentary — the hypocrisy in the subject of US tax evasion provided by the USA itself: Tax Justice Network’s *Financial Secrecy Index – 2015 Results*.

The US has jumped from sixth place to third in the Financial Secrecy index, which is prepared by the Tax Justice Network (TJN) every two years. It is estimated that between $21 and $32 trillion worth of private financial wealth resides in so-called tax havens across the globe, where they are untaxed or lightly taxed.

While TJN noted that “most countries’ secrecy scores have improved,” the United States is the “greatest” concern and is “more of a cause” for worry than any other individual country.

“Our analysis also reveals that the United States is the jurisdiction of greatest concern, having made few concessions and posing serious threats to emerging transparency initiatives,” the TJN said in a press release.

The United States is one of the few countries whose secrecy score has worsened since the previous survey in 2013.

“The US stays a tax haven, and undermines global co-operation,” the TJN concluded.

Don says; we can agree:

Perhaps the Trudeau Government should be reminded about Canada’s place on the Secrecy Index – 29th.

The USA is the 3rd most secret banking country in the world behind Switzerland, and Hong Kong.

The US should put its own house in order before going to countries like Canada.

badger provides RT *Question More* “Tax haven: US ‘threatens’ global efforts to fight tax evasion, financial crimes”.

U.S. Placed Above Cayman Islands in Financial Secrecy Blacklist comes from a Tom Alciere comment earlier today.

Both Barbara and The Mom provided The Guardian’s US overtakes Caymans and Singapore as haven for assets of super-rich, which was also highlighted in a query/comment at ADCS-ADSC, saying

*Please make this hypocrisy known as widely as possible*.

JC suggested this conference be highlighted in a post at Brock.

 Allison Christians:

I’ll be there to talk about U.S. citizenship based tax and #FATCA
https://twitter.com/taxpolblog/status/659882576958660608

Taxpayer Advocate:

Professionals from around the world will be attending International Conference on Taxpayer Rights. Register today: http://ow.ly/TY4tH

 

The IRS *Taxpayer Bill of Rights*

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. Explore your rights and our obligations to protect them.

 The Right to Be Informed

The Right to Quality Service

The Right to Pay No More than the Correct Amount of Tax

The Right to Challenge the IRS’s Position and Be Heard

The Right to Appeal an IRS Decision in an Independent Forum

The Right to Finality

The Right to Privacy

The Right to Confidentiality

The Right to Retain Representation

The Right to a Fair and Just Tax System

JC:

We need to add a few more to the taxpayer bill of rights: Right to Reasonable Compliance Costs.
https://twitter.com/JCDoubleTaxed/status/659883830791176192

Need TPBR #11 Right to Reasonable Compliance Costs with TPA focus on vast inequity in this regard for US persons overseas.

https://twitter.com/JCDoubleTaxed/status/659884772479504386

#10 The Right to a Fair and Just Tax System >> Neither Fair nor just for USP overseas > No Services! > TPA Should highlight

https://twitter.com/JCDoubleTaxed/status/659894268396335104

For USP Overseas. How can US FBAR Compliance be fair and just (TPARight #10)when rpt of employer accts costs job or promotion?

I received the following by email — it is from Keith Redmond’s Facebook page (I still do not do Facebook so could not otherwise access). This story deserves its own post here. How many other Canadians who were border babies will one day sooner or later have their own OMG moments? There was a push to inform them in correspondence to mayors and a CBC broadcast. We wanted them to know of this site but that effort seems to not have connected with too many born across the border as long ago that is where the nearest hospitals were.

A truly heartbreaking story of a Canadian Accidental American…..

‎XXXXX to Accidental Americans

I just received the following heartbreaking story from a Canadian accidental. I wish there was something I could do or say to make her pain go away. I can’t. The only thing I can do is speak up and fight back on her behalf.

To all Accidentals. We need your stories and more stories. If we can collect more stories like this one out open letter to Obama will become extremely powerful. Please help us by 1) sharing your stories with us 2) writing to your domestic politicians asking them to act and also help you connect with other Accidentals 3) contact the press in your home country and 4) spread the word. Our strength is in numbers and nationalities.

*****************

http://isaacbrocksociety.ca/2015/10/19/interview-opportunity-abc-news-nightline-would-like-to-interview-an-american-living-abroad-who-is-in-the-process-of-renouncing-his-or-her-us-citizenship/comment-page-2/#comment-6740570

Dear President Obama,

I am Canadian, married to an Accidental American, but we only found this out this summer, and it has turned our world upside down.

My husband was born in xxx just because it was the closest hospital to the small border town his parents lived in, and medicare had not yet come to Canada, so the cost was the same here or across the border. He was taken home within a day of his birth, and lived his entire life up to now right in this same area. He grew up on a farm, and always dreamed of one day owning his own farm. We worked day and night to make that dream come true, went without to pay for the necessities, raised our children on our farm. Up until a few months ago, we were in the process of semi-retiring and our son taking over the farm, but now that seems impossible. We are faced with huge accounting fees, because there is so much work involved to comply when you own a business, and we will also face huge capital gains if we sell. All this just because of where he was born, it seems like we don’t have the right to live here in Canada. Our tax-free savings will be taxed, our investments will be taxed because they are “foreign” investments?? How are they foreign, we are Canadians!! Because we own a farm, we have over 2 million dollars in assets, so he can’t renounce without paying the exit tax. We are trapped, and for what? Because the US owns him? Because you need our money more than we do? We get nothing in return! I really don’t think you fully understand what this is doing to so many Accidentals who knew nothing about this until now. The amount of money you will get from us will make little difference to you, but will most likely bankrupt us and ruin our lives, lives we have struggled to make a success. You also know about the TPP and what that is doing to dairy farmers in Canada, because you are the county who wants to dump milk into Canada, so we are also losing there. Our future looks bleak. I have had to start taking anti-depressants and sleeping pills just to carry on. My husband is angry and moody, very hard to get along with. I fear that if this goes bad and he has to pay huge taxes, that I will lose him, he will kill himself before he will watch his farm fail and our son’s future be ruined. This is my biggest fear.

Another problem here is that it is impossible to know where to turn, we have accountants everywhere who don’t know a thing about doing this and they just scare people into dropping it and “taking the chance” that they won’t get caught. The first accountant we paid to talk to told us so many things we later found out to be false, like the spouse has to file, the children have to file, he will have to pay taxes on my income, so many other things that were not true. We paid 3 account firms before we settled down and hired one to do it. The work involved in this was astronomical! My entire summer was swallowed up between farm work and US tax work!!

So please, Mr. President, think long and hard about the people this is hurting. We are human beings trying to survive. You are a human being who holds in your hands the power to let us go, let us live our lives as we were before we learned of US citizenship taxation. Please, I beg of you, for thousands of Accidentals, give us our lives back, let us renounce without losing our businesses, our life savings, our hope for the future of our children and grandchildren. Do what you know is right, your proposal in the 2016 Green Book shows that you know about Accidentals and that is just isn’t right, please help us, let us go. We are not saying we want nothing to do with the US, that just isn’t the case, we respect the US for the most part, but knowing what citizenship taxation is doing to Accidentals and expats is disturbing to say the least.

Should these letters to President Obama not also be copied, as a minimum, to US Presidential candidate Bernie Sanders AND, ESPECIALLY, our new Prime Minister, Justin Trudeau?

NOTE: From Mark Twain’s earlier comment at Brock, re who to contact:

If you are interested in letting Nightline chronicle the days leading up to your renunciation, please contact Geoff Martz at geoff.martz@abc.com or private message Keith to discuss further.

https://www.facebook.com/groups/AmericanExpatriates/523975671101843/?notif_t=group_activity

************
Also passed on to me by email, another notice from Keith Redmond:

FYI from Republicans Overseas: “Ben Carson will host a conference call with Republicans Overseas country chapter leaders worldwide to announce his support for our FATCA lawsuit and FATCA repeal on Oct 30.”

TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

Planned Improvements Have Not Been Made to Manage and Track Correspondence
With International Taxpayers

September 8, 2015

Reference Number:  2015-30-072

This report has cleared the Treasury Inspector General for Tax Administration disclosure review process and information determined to be restricted from public release has been redacted from this document.

Redaction Legend:

1 = Tax Return/Return Information

Phone Number  /  202-622-6500

E-mail Address /  TIGTACommunications@tigta.treas.gov

Website           /  http://www.treasury.gov/tigta

HIGHLIGHTS

PLANNED IMPROVEMENTS HAVE NOT BEEN MADE TO MANAGE AND TRACK CORRESPONDENCE
WITH INTERNATIONAL TAXPAYERS

Highlights

Final Report issued on September 8, 2015

Highlights of Reference Number:  2015-30-072 to the Internal Revenue Service Commissioner for the Wage and Investment Division.

IMPACT ON TAXPAYERS

As of May 2014, the U.S. State Department estimated that approximately 7.6 million U.S. citizens live in a foreign country.  The rules for filing income, estate, and gift tax returns, as well as paying income taxes, are generally the same for international taxpayers as for those taxpayers living in the United States.  The IRS heavily relies upon its many notices and letters as its primary means of communication with taxpayers.

WHY TIGTA DID THE AUDIT

As globalization trends continue, so too do the challenges to the IRS’s ability to provide services to and enhance the tax compliance of U.S. taxpayers living in other countries.  This audit was initiated to evaluate the process for sending tax correspondence (notices and letters) to business and individual taxpayers who reside outside the United States, analyze how the taxpayers responded, and determine whether the correspondence resulted in improved compliance.

WHAT TIGTA FOUND

Even though the IRS sent approximately 855,000 notices and letters to U.S. taxpayers living in other countries during Calendar Year 2014, it cannot determine taxpayer response rates.  The lack of data on response rates for international taxpayers is problematic because this information is needed to determine the effectiveness of international correspondence on increasing taxpayer compliance and to make program improvements.

IRS data systems are not designed to accommodate the different styles of international addresses, which can cause notices to be undeliverable.  Other factors complicate the delivery of international mail, making its delivery less certain than domestic correspondence.

In addition, the IRS generally does not know if international taxpayers receive the tax correspondence sent to them.  Without specific controls to monitor and metrics to measure international tax correspondence, the IRS cannot determine the impact of its international tax correspondence on taxpayer compliance.

WHAT TIGTA RECOMMENDED

TIGTA recommended that the IRS:  1) develop a systemic process that identifies undelivered international mail volumes, as well as tracks international tax correspondence and receipt trends;2) develop specific performance measures to monitor the compliance impact of sending international tax correspondence to taxpayers residing outside the United States; 3) use the Postal Service Form 2865, Return Receipt for International Mail, for the countries that currently support return receipts for registered foreign mail; 4) expand the International Submission Processing Individual Master File Foreign Address Job Aid to include abbreviated address formats for all foreign countries as needed; and 5) coordinate with the other business operating divisions to make the job aid available to all IRS employees who are responsible for the input of addresses into IRS computer systems.

The IRS disagreed with four of the five recommendations.  While the IRS generally agreed that TIGTA’s recommendations could provide additional insight into the factors contributing to undeliverable international mail, it does not believe this information would permit the IRS to overcome budgetary, statutory, and operational constraints as needed to achieve appreciable improvement in its current processes.  TIGTA does not believe that the IRS’s response is adequate because current IRS processes for addressing international mail issues are ineffective or nonexistent.

September 8, 2015

********************

You can read the full report at https://www.treasury.gov/tigta/auditreports/2015reports/201530072fr.html

Thanks to bubblebustin for providing the content for this post.

The *never-give-up actions* of a Brocker who is a constituent of Conservative MP, John Weston, received positive news today (see the link to the pdf of the letter in this email) …

From: <john.weston.c1d@parl.gc.ca>
Date: September 24, 2015 at 12:12:21 PM PDT
Subject: Letter from John Weston.
Suzanne,

Thank you for contacting our office with the information from tax controversy watch. I wanted to provide to you the letter that was sent to Minister Findlay’s office regarding the delaying the information exchange.

We will continue to keep you up to date.

Kindest regards,

Sue McQueen
Chief Member’s Assistant

John Weston, MP
PO Box 1505
Sechelt, BC V0N 3A0
604-885-2939

Says our fellow-Brocker,

This is the FIRST Conservative MP to write to the Revenue Minister about the delay that I know of. Maybe it would be good to post on Brock for other people who have Con MP’s too. If we can get enough Con MP’s to write – who knows??? Never say never!
…
And guess what, just as I was ready to send this to you, I heard back from my Lib candidate who I just sent John’s letter to and was told that she’s working on it and to “stand by”!

**************

Message to the rest of us:

Stay tuned —

AND contact YOUR Conservative (or any other Party) MP and ask them to responsibly and urgently act on behalf of *US Persons in Canada*.

UPDATE: September 23, 2015, p.m.
From Lynne:

It looks like when Murray Rankin’s Assistant said “We sent…” , she was referring to Nathan Cullen’s letter.

This afternoon, she sent me the following e-mail attaching the Cullen letter.

Hello Lynne,

I trust you have seen this by now. Please find attached Mr. Cullen’s letter to ministers urgently asking for a delay in transferring information.

Regards,
Maura Parte

Please refer to Nathan Cullen’s letter, as posted here: http://isaacbrocksociety.ca/2015/09/23/letter-from-nathan-cullen-canadian-ndp-finance-critic-to-canadas-minister-of-national-revenue-and-the-finance-minister-requesting-delay-in-fatca-turnover/

******************
AS REPORTED EARLIER TODAY:

Building on Elizabeth May’s letter to the government that Stephen Kish advised about yesterday:

http://isaacbrocksociety.ca/2015/09/22/letter-from-elizabeth-may-green-party-of-canada-leader-to-canadas-prime-minister-requesting-delay-in-fatca-turnover/

Lynne Swanson reports this morning — thanks, Blaze:

After I contacted the NDP National campaign and Murray Rankin’s office yesterday, I received this reply sent from Murray Rankin’s Assistant at 10:57 last night:

Hello Lynne,
We have sent an urgent letter to the minister. I can provide you with more detail tomorrow.
Maura

I will post any updates when I receive them. I am working on Scott Brison and the Libs.

We’ll stay tuned here and at MapleSandbox for more from Blaze.

(..and I hope the NDP Party Leader, Thomas Mulcair, and other Party candidates will weigh in on the important action of the NDP Deputy Critic for National Revenue for *US-deemed US Persons in Canada*.