US expat tax and FBAR: Discussion thread (Ask your questions) Part Two
Please ask your questions here about US Expat tax and FBAR.
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NB: This discussion is a continuation of an older discussion that became to large for our software to handle well. See US expat tax and FBAR: Discussion thread (Ask your questions) Part One.
@Norman
On extradition for tax, or for tax-related perjury. The few cases where there has been extradition, notably Ian Leaf (Switzerland-UK) have involved Carousel VAT fraud, money-laundering, terrorism, common-law or wire fraud, Swiss bankers (plea bargains and not extradition; but risk of that if the bankers went to another country)
https://www.everycrsreport.com/reports/98-958.html
http://digitalcommons.lmu.edu/ilr/vol25/iss3/9/
I seem to recall cases where extradition was for an offense that satisfied a “dual criminality” clause but where tax fraud, added on, was not prosecutable because of a condition of the extradition.
I am fairly confident that “perjury” on a non-US bank’s FATCA/CRS form, or even on a W8 that is held by the bank, would, if caught, only result in the customer being quietly fired by the bank. IANAL, but I can’t see either the US or your own government having much incentive to go after you in your country of residence for merely dodging reporting, unless it involved vast sums of money, other crimes, or political scandals.
@plaxy Collection assistance does not of course apply to anyone with citizenship in their country of residence. There was a case where it went the other way, the IRS was compelled to collect on behalf of the Danish authorities. Otherwise Dewees is the only recent case we know of. Pomerantz is the amusing counter-example of someone telling the US to pound sand, and getting away with it.
@ND I realize that something very weird happened to you a long time ago, but really, endlessly repeating things like “the IRS requires you to commit perjury and penalizes you if you don’t” or “illegally tells the truth on a US tax return” etc. will only serve to confuse people like Mary who come here for sensible advice. Regulars have learned to tune it out by now, but newcomers might not.
“Regulars have learned to tune it out by now, but newcomers might not.”
Amen. I skip everything posted by ND.
“I am fairly confident that “perjury” on a non-US bank’s FATCA/CRS form, or even on a W8 that is held by the bank, would, if caught, only result in the customer being quietly fired by the bank.”
I’m fairly confident it would result in the bank being careful not to catch it.
“Dewees is the only recent case we know of.”
It seems to be the only case. Full stop. Canada wasn’t asked to assist in collection in the Pomerantz case, and wouldn’t’ve, since not only was he dual
but the case was about FBARs.
It seems to confirm that in reality there’s very little risk of the IRS requesting collection assistance.
@plaxy
As things currently stand, that appears to be the case. Dewees essentially invited it, the poor sod. He even made a down payment on the penalty.
Personally I think it’s very very easy to simply skip comments that one doesn’t want to read. No need to launch into personal chastising.
I’ve learned some interesting stuff from ND’s accounts of his experience at the hands of the IRS swindlers. It is an agency out of control. Interestingly, members of my US family who at one time would not have spoken out against the IRS, now do so, having learned from me about the crazy FATCA impact on expats.
Indeed, there are a few useful nuggets among the repetition of personal grievance, which I generally skip over too.
However I think it is most unhelpful when someone like Mary comes along, new to this, possibly overwhelmed and needing help with a specific situation, and she sees confusing nonsense like “you’re a US citizen but don’t have an SSN then odds are that the bank will withhold 30% US withholding from German sourced interest income that the German bank pays into your Germany account in Germany” followed by strange comments about being required by the IRS to fabricate an SSN. Not what she needs to hear.
“Dewees essentially invited it”
Indeed. There’s a limit to how much can credibly be blamed on the lawyer.
“However I think it is most unhelpful when [a new poster] comes along, new to this, possibly overwhelmed and needing help with a specific situation, and she sees confusing nonsense”
But you’re not the moderator – it’s not up to you. And other people are just as able as the rest of us to skip what they don’t find helpful.
It’s the IRS that has created this confoundedly confusing situation – deliberately and with malice. I’m all in favour of concentrating fire on them.
Indeed I am not the moderator, but I will jump in and say so if I think it’s directly confusing the issue for someone who needs advice and assistance.
Apropos SSN, an interesting tidbit from the Facebook group. Apparently the US passport application changed late last year. Where once you could enter all zeroes if you had no SSN, now it says you must supply an SSN to obtain a passport (if not there will be delays and all manner of bad things). According to Keith Redmond, this is wrong. The law has not changed, though the application form has. He has apparently informed contacts in both the State Department and SSA, and appropriate guidance is being sent to US consulates.
So just file that away the next time a non-compliant US citizen with no SNN is worried about being able to renew a US passport.
‘@ND I realize that something very weird happened to you a long time ago, but really, endlessly repeating things like “the IRS requires you to commit perjury and penalizes you if you don’t” or “illegally tells the truth on a US tax return” etc.’
It continues today. Also continuing today, for people who are still subject to US laws compelling submissions of tax returns, IRB 2005-14 and other IRS bulletins continue to label honest declarations as frivolous, and US courts continue to uphold them. The IRS’s Taxpayer Advocate reported to Congress in 2011 that thousands of honest taxpayers were forced to renounce. The situation today is worse not better.
“Where once you could enter all zeroes if you had no SSN, now it says you must supply an SSN to obtain a passport (if not there will be delays and all manner of bad things).”
Comply with US Court of Appeals for the Federal Circuit. The court overturned a statute that used to make it illegal to fabricate a social security number. If you can’t get a number by traditional means, you have to report one anyway.
https://www.random.org/integers/?num=1&min=0&max=999999999&col=5&base=10&format=html&rnd=new
Did you actually read the rest of the comment? Presumably you can still leave it blank or enter all zeroes, but it will require negotiation with the consulate to do so. Who knows, at some future date the passport application form might even be corrected.
Dear all,
once again I would like to thank you for your valuable advice.
I copied your comments and will study them to take a final decisison – which will not be easy.
Slightly off topic: The situation in Germany is terrible. We’ve got knife attacks on young girls and men nearly every day. The look of our cities is changing. Some districts look lika African slums. In street cars you’ve got the feeling you are in the midst of Arabia.
Although the USA might not be a good place, they nevertheless might turn out to be a better place an Germany.
So handing in a passport due to all the tax troubles might still be a wrong decision, as this would close an escape route.
Anyway – we will have to wait and see and endure many things to come.
Kind regards
“The look of our cities is changing. Some districts look lika African slums. In street cars you’ve got the feeling you are in the midst of Arabia.”
The look of North America changed too. Where native American tribes used to hold sway, cities started to look European, some districts looked like African slums, and in street cars you had the feeling that you were in the midst of Europe or Africa depending on whether you were seated in the front or in the back.
The US has gun attacks instead of knife attacks. Some of them are perpetrated by police.
I don’t know where you should go, but if you’re afraid of violence maybe no country is safe and if you’re racist then maybe every country suits you.
Dear Norman,
we are not talking about the USA – we are talking about Germany from which Germans migrated to the USA and killed native Americans. Correct statement and terrible.
Now, that we as women in Germany should be punished for deeds long ago in the USA – no, I disagreee. Especially as making people suffer in the present time will not put things right that happended in the past.
Our politicians have been calling us citizens here racist now for three years, whenever we voiced our fears, just to stop any criticism. You do not know me, whether I have friends from other countries etc.
But you may go on calling me racist or whatever, since such words have lost their power anyway in Germany.
I will not respond to you comments any longer and would like to thank the others again for their helpful advice.
Personally I would have offered quite different advice if you hadn’t described yourself as an “accidental American” – a term widely understood as applicable to those who regard the accident as a misfortune.
A US citizen who values their US citizenship and intends to keep it, may be able to find a bank that won’t insist on proof; the other option is to sign the W-9.
ND:
“The look of North America changed too. Where native American tribes used to hold sway, cities started to look European, some districts looked like African slums, and in street cars you had the feeling that you were in the midst of Europe or Africa depending on whether you were seated in the front or in the back.
The US has gun attacks instead of knife attacks. Some of them are perpetrated by police.”
Well said.
@Mary
If you intend to keep your US citizenship as an escape, you have a different set of calculations to make.
I spent May in Berlin. It’s terrible there now, it’s changed so much over the last twenty years. You don’t hear Geman on the streets, you go into shops and restaurants and none of the staff speak the language. Terrifying, really. Everywhere you turn, they speak English. Bloody Australians and Israelis running the cafes without bothering to learn the language. Spaniards and Swedes working in the shops. Horrid. It’s not safe to learn German any more.
@Nononymous wrote:
Imagine how much it has changed since I was last there the end of July 1961, just 2 weeks before the Wall went up. In fact I was on a tight budget. I camped out in the rubble of bombed-out buildings in East Berlin. Nobody bothered me. During the day they made fun of my schoolboy German, but then I just shouted it louder. I wonder if the STASI noticed me: If I’d seen the film The Lives of Others I might not have done that.
Seven years later I went back to Germany, but to Heidelberg, not Berlin. My new wife had grown up there as an Army brat at USAREUR & 7th Army Hq. I found curious the number of Holocaust survivors who had returned to Germany to help with the Occupation and establish the rule of law. Among them the lawyer Edmund Schwenk who had worked with Telford Taylor one of my law professors.
Sorry for the digression. What you don’t say is what might be relevant to Brexit: are the languages you heard EU/EEA/Swiss ones or American/Canadian (OK, the latter were at Lahr, not Berlin), or something else. But: the Germans (and you too) have no right to complain about the Israelis and those who speak Yiddish (like my ancestors, but they left in 1886), Hebrew or English. Anymore than they can complain that Russian, and only Russian, is spoken in East Prussia today, in Kaliningrad.
“Now, that we as women in Germany should be punished for deeds long ago in the USA”
No, no one should be punished just because their racial appearance resembles some criminals. This fact applies to you, it applies to me, and it applies to the people whose racial appearance scares you.
Ethnic groups unjustly fight each other everywhere, but you and I should be above that. Your chancellor had a good reason to learn this lesson and so should you.
Fascinating to imagine Berlin in the summer of 1961. I made it soon enough after 1989 to see the east before it transformed.
Yes, perhaps one should be willing to make an exception for Israelis but in general the anglification of Berlin is not a great development. It’s not visitors but rather resident expats who’ve hit the critical mass needed to turn some workplaces anglophone. Not only Brits/Aussies/Kiwis/Canadians/Americans but also other Europeans using the common tongue. Something of the city’s old culture is being lost there. Otherwise the Turkish neighbourhoods have been great places to live. You’ve got a better chance of using your German there than in the trendier parts of town. And the food is exceptional.
@Nononymous
The story of languages in Europe and worldwide is tragic on many counts. The loss of indigenous languages is a cultural crime by governments (‘native schools”), the U.S. Indian Child Welfare Act being one act of contrition. The EU grants migrants the right to assimilate and the right not to.
There has been a resurgence of Yiddish among Hasidic groups. Ladino is gone. European minority and tribal languages are endangered except to the extent they are subsidised by governments or given preferential status in law: Maltese, Welsh, Gaelic and/or used for schooling: Arctic and Faroese, etc. languages. But 33 European languages are endangered: https://mashable.com/2014/11/14/endangered-languages-europe/#rKUs5lJgyiq3
When i was staying with my grandfather in Zurich in 1961, I could speak to any educated Swiss there or anywhere in French. Today the lingua franca is English. As it is today in Belgium, where I was at University for six years. http://uniset.ca/naty/hebdo_allemand.htm
The best and purest Welsh is spoken not in Wales, where it is polluted by English, but in Patagonia where expats are welcomed into Welsh football-related jobs, including working in pubs, because Spanish is also useful.
Yet: as the linked article shows, learning English rather than the other main national language adds maybe 15% to lifetime earnings in the private sector. The statistics of parental choice of schooling must reflect that.
This does not apply to migration. Although Spanish is an “official” language of the USA as to Puerto Rico (the Treaty of Paris 1898, the Organic Act, local law) it may be reasonable to expect an economic migrant to a country of immigration to assimilate and learn the (or a, Hawaiian maybe) language of where s/he settles. The “right” to family reunification — i.e. the right of chain migration by sequential generations marrying chosen spouses from the place of origin — is reasonably limited. If it is not, then the mass migration to Europe in recent years has obvious implications, beyond what is spoken in Berlin shopping districts. A Convention “refugee” has many or most of citizens’ rights. An asylum seeker granted temporary, however long-term, residence does not.
A few of you have mentioned renouncing without filing taxes/becoming compliant but I haven’t been able to search the comment thread well enough to find out how. How do you avoid covered ex-pat status? I am an accidental american–had a US passport as a child/teenager (parents insisted) but have flown under the radar ever since. Have debated doing nothing about the whole thing, but I would like to renounce for good eventually. That said, I don’t want to report FBARs or income. I’m not hiding anything, but view it at as a massive invasion of privacy–especially given that most of my accounts are joint with my non-US husband. Could someone summarize?
There is no requirement to be compliant in order to renounce.
If you renounce, the consul will tell you that you are supposed to ‘contact’ the IRS. i.e. file their garbage.
However, if you choose not to, there is bugger all they can do about it. In theory you would be a covered expat- but so what? If you don’t have a social insurance number they have great difficulty in finding you.
You don’t mention where you were born. If not in the US, it would be easy to stay under the radar.