Liberty and justice for all United States persons abroad

The Isaac Brock Society

Media and Blog Articles – Part 1 of 11 (to 26 May 2015)

You can access all years at this link:

http://isaacbrocksociety.ca/media-and-blog-articles-links-for-all-years/

EmBee suggested that it would be good if there was a thread for new articles, so that people would be aware of where to comment. So, I created this permanent page.  You could mention such articles in the comment stream for this page, or if I see one on another thread, I can copy the link to here. I’ll keep adding to the list, but not deleting, so we’ll end up having sort of a “bibliography” too.  [Note:  Some articles are not open for comments]

For more articles on FATCA, enter FATCA into Google then click on the link “more news for fatca” just below the most recent featured article.

Note also: JC suggests to see #FATCA on Twitter for latest breaking news. JC finds that is quite a good source and there even are some international articles that one may read using Google Translate.” Others may help certain tweets and articles remain in elevated position by retweeting them.

26 May 2015:  This thread is now closed.  It continues at Media and Blog Articles Open for Comment, Part 2 of 2.

2015.05.26

New Survey finds US expat voting could impact 2016 Presidential Election, Greenback Expat Tax Services, NASDAQ GlobeNewswire.

This congressional committee wants to hear all your FOIA gripes, Colby Itkowitz, Washington Post, US.

The black money recovery skills of IT department are nothing to write home about, Vivek Kaul, The Daily Reckoning.

2015.05.25

The Intersection of US Federal Tax Law with Collection of International Information- – Including Other  Federal Agencies, Patrick W. Martin, TaxExpatriaation, US.

2015.05.23

America the not so brave:  America has led the global assault on tax dodgers and their enablers.  But the reality still lags behind the rhetoric, The Economist, UK.

Cash Banned from Chase Safe Deposit Boxes, Matt Chilliak, Live and Invest News.

2015.05.22

US Steuergesetz hat unerwartete globale Konsequenzen, Colleen Graffy, Geopolitical Information Service.  Also at Consequences of US widening net to catch tax dodgers, Colleen Graffy, World Review.

The horse may have bolted … but, Angelo Venardos, Asia Asset Management.

Important Correction:  Passports Required to Enter and Leave US — but SSNs May be Optional, Patrick W. Martin, Tax Expatriation, US.

2015.05.21

Americans working abroad face unexpected financial issues, Sarah O’Brien, NBC, US.

Senate tax reform groups get more time, Bernie Becker, The Hill, US.

2015.05.20

Malaysia will defer FATCA reporting, FSI Tax Posts.

America’s Self-Inflicted Wound, Moises Naim, The Atlantic, US.

Janice Mays:  The Tax Guru Who Guides House Democrats, Alex Brown, National Journal, US.

Sen. Rand Paul Launches Filibuster in Protest of Patriot Act Renewal, C-SPAN, US.

Articles from earlier in 2015 are at this link

Articles from 2014 are at this link

Media and Blog Articles Open for Comment, Part 2, is at this link

Media and Blog Articles Open for Comment, Part 3, is at this link

3,971 thoughts on “Media and Blog Articles – Part 1 of 11 (to 26 May 2015)”

  1. I notice that the accidental American they cited in the article as an example of someone who “came clean” wouldn’t have even had to do so if he had actually explored his citizenship. He was a member of a foreign army in Europe and therefore a relinquished US citizen and would not have had to file at all.

    This is the problem with going to compliance condors for US tax advice. Yet another example of an innocent needlessly sacrificed to the maw of the beast.

  2. @GwEvil
    I noticed that as well and had been trying to login using my Google+ account to make a suitable comment. However, login keeps failing with “Failed connecting. Please try again later”. Sigh.

  4. @ GwEvil
    I hope someone will point that out to Andrew Mitchel. The poor guy in the example had two relinquishment outs — government official AND military service. He could pick either for a back-dated CLN and his problem is solved. This poor guy will be livid when he finds out he did not have to do anything to “come clean” with the IRS.

    Mitchel gives the example of one client he has served (through a referring CPA) who was born in the U.S. but returned to his family’s country of origin when just a baby. This person doesn’t have “a Social Security number, never filed U.S. tax returns, probably didn’t know they have to file tax returns and is now trying to come clean.”

    The individual is a citizen of—indeed a government official of—a European country, in whose army he served; the country has a high rate of taxation, so he clearly was not seeking to dodge lower U.S. taxes.

  6. @GwEvil
    You first have to click on “Discuss this story” – after that it gives you an opportunity to login. Still can’t get in.

  9. heartsick,

    Good the subject is getting coverage and people there will talk about it. They could have done a better job in covering the *183 day* each year fallacy and the protection for consequences of not knowing that formula by filing IRS Form 8840.

  10. @ I agree I don’t think most writers bother to research the issue. It is truly amazing how many people think they can come and go at will through the border with no consequences. Most articles mention snowbirds but few include the people living near the borders that think nothing of going across for lunch or a day or even a weekend, multiple times a year. This article makes more aware that their crossings are being tracked.

  11. Love ’em or hate ’em, cross border shoppers near the border cross weekly for gas, select grocery items, beer etc. They may not know they leave a record of their visit, but the US knows the millions of dollars that are spent on their side so they would be idiots to make an issue of such crossings. Then again, if Homeland Security syncs with the IRS, there might be problems…thousands of them! The IRS may yet kill the goose that lays the golden egg (cross border shopper $$). Who among us would be surprised?

  12. I’m very familiar with Birch Bay. I’ve heard that there’s more Canadian than American property owners there.

  13. On that WSJ article some please get in there and comment that the earned income exclusion only covers earned income and is not a benefit if you are in a higher tax country. The sinkhole comes in where there are US taxes that your country of residence does not, then the double taxation comes in.

  16. Amanda Klekowski von Koppenfels says that she will post her survey results on Isaac Brock “later today.” She has an interesting finding along the lines of citizenship renunciation intent is independent of income level. Such finding supports argument that intent has less to do with income (therefore, tax) than other factors.

  17. Re: WSJ article/record numbers renounce in 2014. We all know the Treasury number is junk. Why isn’t the State Department tracking, compiling, breaking down numbers by region and then releasing the actual figures? Why aren’t reporters clamouring to get State Department figures? The 3,400 figure is crap. We should be getting better numbers– renunciations and those coming in to formally document their prior relinquishment of USC.

  18. Reading this makes me wonder if a parallel unofficial list of renunciations is feasible. People would notify this register independently. Credibility would be an issue, perhaps. If such an independent register showed much more renunciations than governmental sources, we could suspect that official figures are underestimated.

    To take myself as an example, I consider myself relatively aware of the world I live in and only became aware of FATCA in 2014, when a bank threw me out. It may take me a couple years to realize that renunciation (or reliniquishment – I do have that option by taking on a third citizenship, in the country I live in, allowing me to use that as proof) is necessary. So I may be following in the wake of many of you, in 2016 or 2017. I assume many are like me, and that the boom is far from over.

  20. Lake Superior Guy: They’ve already killed *this* goose! I was never a “cross-border shopper” but I used to visit the U.S. annually for a winter holiday as well as make trips to visit family and friends. For the past nearly four years I’ve taken my winter holiday dollars to Mexico and I’ve stopped visiting anybody in the States.

    Reading this blog tells me that I’m not alone in my actions. Real good economic policy, U.S. of A.!

  23. Dear all,

    As promised, here two documents – cut and pasted to go here, so I hope they don’t look too strange with the formatting – that summarize the initial findings of my research from the survey “The US and You”, to which some of you may have responded. Many respondents (thank you!!) took the time to write extensive comments, and I am still working my way through those (400 pages) of data. Producing a more in-depth analysis of that may take some months, but I’ll post that eventually as well.

    For now, here the initial results. And thank you to all survey respondents!!

    Best,
    Amanda
    11 February 2015
    New Survey Shows US Citizenship Renunciation Intentions Not Linked to Income
    BRUSSELS, Belgium (11 February 2015) – Figures released by the US Treasury Department show 3,514 US citizens renounced their citizenship (also includes long-term residents who gave up their residency) in 2014; this is the highest figure ever, up over 2,999 in 2014.
    A recent University of Kent (at Brussels) study surveyed 1546 US citizens and former citizens (from 5 December 2014 to 20 January 2015) on this topic. Of the US citizen respondents, 31% have actively thought about renouncing US citizenship and 3% are in the process of doing so. The study shows that, in contrast to what is commonly thought, income is not a key factor in their doing so.
    Of those who have renounced or relinquished US citizenship (142 of the total respondents), nearly half (43%) have annual pre-tax household incomes of under $100,000 (USD). There is, similarly, very little difference in renunciation intention between those with lower incomes and those with higher incomes: of US citizen respondents with annual household incomes under $100,000 (USD), 28% are actively thinking of renouncing; of US citizen respondents with incomes above $250,000 (USD), 33% are actively thinking of doing so.
    The University of Kent study shows that many overseas Americans are feeling increasingly pressured by US financial reporting requirements and that maintaining US citizenship is costly – in terms of accountants’ fees. One respondent noted: “I can’t pay an accountant 2000€ in order to pay the USA $0.00 in the end.” Fear of “draconian” FBAR (Report of Foreign Bank and Financial Accounts) penalties is also widespread, as this pensioner noted: “Annual income under $4,000; potential FBAR penalties $30,000 per annum for 3 small accounts! I am old and dependent on savings; one paperwork lateness could leave me facing starvation.”
    Numerous respondents also noted severe difficulties in retaining or opening investment accounts, bank accounts and, in some cases, securing mortgages, as local banks increasingly refuse US customers – which negatively affects their ability to plan for retirement. Some 39% have lived abroad for over 20 years, and over two-thirds (67%) say they are unlikely to return to the US.
    All US citizens living outside of the US are required to comply with both taxation on global income and financial reporting requirements. Certain groups of US citizens and former US citizens feel particularly targeted, as a respondent in Canada explained: “Canada is home to many border babies, born in the US because that was the location of the closest hospital, and ‘accidentals’ like myself who left the US as young children with no say in where they were born.”
    This University of Kent survey – the first academic study of its kind, and the largest look at the attitudes of Americans living abroad on this topic to date – shows that income is not the key motivating factor in prompting renunciations, but that increasing reporting requirements, fears of “draconian” penalties and increasing inability to hold a bank account are factors prompting renunciation.
    A longer summary of initial findings is available.

    ———-

    Executive Summary:
    Survey of Citizenship Renunciation Intentions Among US Citizens Abroad

    The US State Department estimates that 6.8 million Americans live outside of the US. The Treasury Department recently released its official numbers on 2014 fourth quarter US citizenship renunciations. In 2013, annual renunciations rose to their highest level ever, at 2,999, and in 2014 rose still higher, to 3,514.
    A new research survey of 1546 US citizens and former citizens living outside of the United States shows that 31% of the US citizens are seriously thinking about renouncing their US citizenship, and that 3% are currently in the process of doing so.
    The survey ran from 5 December 2014 to 20 January 2015, surveying 1404 US citizens and 142 former citizens, living in 69 countries. The survey was an opt-in snowball survey, distributed initially via overseas American organizations. The survey included closed-ended and open-ended questions, allowing for both quantitative and qualitative analysis.
    Initial key findings of the study are:
    Quantitative Analysis:
    1) 31% have actively thought about renouncing US citizenship and 3% are in the process of doing so; 32% have never thought about renouncing US citizenship. Another 33% have given only a passing thought to the idea, however, they have no immediate or even long-term plans to do so. Many hold strong feelings of American identity and express pride in being US citizens.
    2) More than one-third (39%) of all respondents had lived in their current country of residence for 20 years or more. The primary reason (33%) for moving to that country was to be with a spouse or partner, followed by employment (26%). 21% left the US as children. Over half (54%) are aged 50 or older, and 58% are female. 88% have at least a four-year college education. 45% have annual pre-tax household incomes of under $100,000 (USD) and an additional 18% between $100,000 and under $150,000.
    3) Of those who have renounced or relinquished US citizenship, nearly half (43%) have annual pre-tax household incomes of under $100,000 (USD). Of those who have renounced or relinquished, more than half (56%) have lived at least 20 years in the United States, and three-quarters (75%) more than 20 years in their current country of residence.
    4) Renunciation intentions are not linked to income: 43% of former citizens have annual household incomes under $100,000 (USD). Of US citizens with annual household incomes of more than $250,000, 33% have actively thought of renouncing and 4% are in the process of doing so. This compares to 28% of those US citizens with incomes under $100,000 (USD) having actively thought of doing so, and 3% currently in the process, and to 31% of all US citizen respondents who have actively thought of doing so and 3% who are in the process.

    Qualitative Analysis:
    5) US citizens who have renounced or relinquished their citizenship, or are thinking about doing so, mention several key factors. They note that financial reporting requirements are increasingly onerous and intrusive, and, second, that they are likely to remain overseas.
    6) US citizens living overseas are affected by three sets of financial reporting requirements: first, they must file tax returns on global income – unlike nationals of any other OECD country living abroad; second, they must report all bank accounts with a combined total of $10,000 (USD) or more, or the so-called FBAR (Report of Foreign Bank and Financial Accounts) and, third, they are affected by FATCA (Foreign Account Tax Compliance Act) requirements, a law which came into force 1 July 2014. All three factors play a role in individuals’ thoughts on renunciation:
    a. In open-ended responses, analysis shows that it is not payment of taxes which prompts renunciation, but rather primarily costs associated with complying with US filing requirements – particularly FBAR, which many respondents only learned about recently, and the recent FATCA law. These can be as much as $1000 to $5000 per year – as one respondent, with a household income of between $50,000 and under $100,000, put it, “I can’t pay an accountant 2000€ in order to pay the USA $0.00 in the end.” This person, who renounced citizenship, would have had to pay nearly 10% of annual income in such costs: “To maintain tax compliancy with my pension account I was going to have to pay my accountant at least £1500 per year and I only earn £18 to £20,000 per year.” Maintaining US citizenship is costly – in terms of accountants’ fees. There are, moreover, no pre-tax retirement savings options for overseas Americans – unlike their US-based counterparts.
    b. FBARs are now e-filed via the Financial Crimes Enforcement Network, a phrase which riles many. The primary concern, however, over FBAR filing is that of many non-working spouses, as expressed by this woman, who has renounced her US citizenship: “Hated being treated like a criminal and filing FBARs on money earned solely by my UK only husband.” Others speak of stress created in their mixed-nationality marriages, especially those who are home-makers with income-earning non-US spouses, because of US filing requirements.
    c. FATCA reporting requirements, also requiring reporting on joint accounts with non-US spouses, have further ramifications: numerous respondents also noted severe difficulties in retaining – or opening – investment accounts, bank accounts and, in some cases, securing mortgages, as banks increasingly refuse US customers. Numerous respondents reported great difficulties and stress in planning for retirement – with investment accounts increasingly closed to them in the countries they live in, as well as in the US (where many investment funds now require a US address).
    7) Many respondents offered a “wait and see” response, noting that that if FATCA, in particular, is not changed, they feel that they will be “forced” to renounce US citizenship.
    8) Two groups of US citizens and former US citizens feel particularly targeted by US financial reporting requirements, as well as by US citizenship policy, as explained well by this respondent in Canada: “Canada is home to many border babies, born in the US because that was the location of the closest hospital, and ‘Accidentals’ like myself that left the US as young children with no say in where they were born.”
    These individuals – or their parents – believed that they no longer held US citizenship, having naturalized or held Canadian citizenship or not been aware of legal changes in US nationality law. Many realized only recently that the US Government still considers them US citizens, often after having been assured by US officials that they were not citizens, as this respondent said: “I was horrified to find out this year that the US is still claiming me as a citizen” – having relinquished US citizenship at the time of naturalizing as a Canadian. This person is not alone. Either not having been aware they were US citizens, or having been assured, many years ago, by Consulate officials that they were not, such individuals now face the cost of filing five years’ tax returns – even if no tax is owed – and potentially a $2350 renunciation fee, which for many is “prohibitively expensive”. They feel caught and targeted by US policy.
    9) For many other respondents, a strong sense of anger and feeling of “being targeted” also emerged: “It is not a crime to live abroad and the US should not treat its expat citizens like criminals. I would never consider renouncing my US citizenship if the US treated me respectfully. As it is, I may end up renouncing, and that is a sad situation.” One person who renounced noted “What upsets me the most is the attitude by most US people that everyone outside the US is a tax cheat” and another noted “FATCA treats families like mine as suspected criminals until proven otherwise all because one family member is American who dared to marry abroad.”
    10) Many expressed strong pride in being American, noting they would never renounce citizenship. Nonetheless, even some of those who have given no thought to renunciation still note, as this person did, “Folks upset about taxation without representation is what created the US.” A respondent with no intention of renouncing notes that “1. I’m an American. 2. I deeply resent being treated like a tax fraud or a drug lord.” This respondent, also with no intention of renouncing, said: “I find it tragic that many Americans living abroad are finding it necessary to give up their US citizenship based upon primarily taxation and banking problems. I think the IRS has to revise the code.”
    11) Another person who has actively thought of renouncing, although does not intend to go through with it, said: “I do think that the mass media representation of this issue neglects to capture how difficult this decision is and how heartbreaking and frustrating it is. It’s like being in a cage.“
    12) Many of those who did renounce or relinquish their citizenship expressed the pain of doing so, as this woman did: “It’s a bit like having a mastectomy because giving up my passport was traumatic for me.”
    13) A very high degree of stress and even fear was expressed by a number of respondents, as expressed by this person “When I found about FBARs and the penalties involved I was unable to eat and sleep properly for weeks”. Many fear that inadvertent filing errors will wipe out retirement savings.
    14) Numerous respondents mentioned their frustration with a lack of political representation of overseas Americans. They noted that they do vote in US federal elections, but also noted a lack of response concerning their concerns. Above all, respondents strongly felt the lack of representation of overseas Americans per se, as these two people did: “Double taxation without representation, without services, but with onerous ‘Orwellian’ compliance” or “I don’t feel that I have any representation within the US, so I might as well start forging links elsewhere.”
    15) For many, American pride remains strong and a key factor in not renouncing, despite costs associated with remaining a US citizen (accountants’ fees, no pre-tax retirement savings options). On the other hand, frustration and resentment over US government financial reporting policies emerge strongly as well, even among those who feel they may return to the US at some point in the future.
    Dr. Amanda Klekowski von Koppenfels is the Director of the MA in International Migration at the University of Kent in Brussels (www.kent.ac.uk/brussels). She is the author of Migrants or Expatriates? Americans in Europe (2014; Palgrave-Macmillan).

    Best,
    Amanda

  24. @Amanda
    Thank you..
    I was a bit disappointed that the WSJ article didn’t make more use of your findings, since the below the line comments suggest that people have a very firm idea in their minds about who renounces. I am sure that someone will put your post up on the main board, since it is big news.

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