Media and Blog Articles Open for Comments, Part 9 of 9 (2022-2024)
You can access all years at this link: Media and Blog Articles – Links for All Years
Media and Blog Articles
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. I’ll make a permanent list of links posted here and keep adding to it, but not deleting, so we’ll end up having sort of a “bibliography” of FATCA/CBT articles. [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.
Notes:
From JC: 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.
From Badger: On an important archival note, please use the Internet Archive Wayback machine https://archive.org/web/ (see bottom right ‘Save Page Now’ box to enter URLs of webpages you want saved for posterity, and try to save backup copies of articles and other items of interest in some other form – such as a datastick or external drive. Some important and very significant webpages and the fulltexts of articles are no longer available (although some can be retrieved if someone using the Wayback machine saved them).
Be sure to read the comment stream for this thread — there are often very recent articles mentioned since this list was updated.
2023.02.28
Supreme Court Rules in Taxpayer;s Favor on FBAR Penalties, Kelly Phillips Erb, Forbes, US.
Bittner v. United States, Supreme Court of the United States, (decision referred to in above article).
2022.10.23
Kids stuck with $2000 bill each for KiwiSaver, Rob Stock, Stuff, New Zealand.
2022.08.26
American Expat Campaigners laying groundwork for citizenship-based tax challenge, Helen Burggraf, AmericanExpatFinance.
Next, the Supreme Court Decides How to Punish US Expats, Andreas Kluth, Washington Post, US.
2022.07.30
FATCA isn’t the problem, CBT is, Ross McGill, AmericanExpatFinance.
2022.04.22
TIGTA Report on IRS Effort to Enforce FATCA, Federal Tax Crimes, US.
2022.04.07
Additional Actions Are Needed to Address Non-Filing and Non-Reporting Compliance Under the Foreign Account Tax Compliance Act, Treasury Department, US.
2022.03.30
Long awaited ‘Gwen and Kazia’ FATCA appeal hearing in Canada takes place today, Helen Burggraf, American Expat Finance.
2022.03.25
A bilateral data-sharing deal with US better than status quo, James McCarran, Winnipeg Free Press (Canadian Press).
2022.03.23
Canada, US enter talks on deal to access, share data in criminal investigations, James McCarran, Orillia Matters (Canadian Press).
2022.03.22
United States and Canada Welcome Negotiations of a CLOUD Act Agreement, Department of Justice, US.
Responsibility Deflected, the CLOUD Act Passes, David Ruiz, Electronic Frontier Foundation, US.
2022.03.18
CLOUD Act, Department of Justice, Canada.
2022.03.04
Decades of Neglect Leave IRS in Tax Season Chaos, Alan Rappeport, New York Times, US.
2022.02.15
Can the Whistle be Blown Against Accidental Americans, Part II, Alan S. Lederman, Bloomberg Tax, US.
2022.02.11
Those in Kamila Valieva case may be prosecuted under new US law, Katie Wermus, Newsweek, US.
This could be a Brock Feature.
Reposted from Monte Silver on Facebook:
CHANGE IS COMING
Two years ago, AARO (association of Americans Residing Overseas) asked me to join the board of directors and head it’s tax advocacy. Two years have passed and in mid- March 2022 or shortly thereafter, AARO’s public members will elect a new board of directors.
I believe that AARO can do great things in the area of expat advocacy, and beyond. However, I realized that this requires a fresh team. So I reached out to the most respected expat community activist leaders (ie people who do stuff!) to join me. Within days, they all agreed.
Fabien Lehagre, Karen Alpert, Laura Snyder, John Richardson, Keith Redmond and our fearless Washington DC lawyer Marc Zell are all part of the team.
We are now on the ballot. But to win we need you to join AARO and vote.
Together we can have fun, do neat things and take our advocacy up a few notches.
To join AARO and learn more – visit
How’s this for extraterritorial governing?
https://www.newsweek.com/those-kamila-valieva-case-may-prosecuted-under-new-us-law-report-1678561
This reply came in on another thread. I’m copying it here as the “Move” function isn’t working.
“George Heah said (3.11 p.m.):
“For extradition to the US to happen, the country extraditing to the US would have to have similar legislation. In the case of this law, it’s quite possible the US is the only jurisdiction that has it on their books.”
It’s quite clear that the US no longer knows where their borders lay, we allow them to pass laws for the globe without so much as a whimper at our peril because it will always be the thin end of the wedge.
@ Mike
No expert but I don’t see this as an extraterritorial infringement. Every country has/makes their own laws and has its own extradition treaties ,accordingly. Generally, for extradition, the violation must be valid in both countries. The trick is in the nature of the extradition treaty.I believe France,Germany,Austria,Israel do not allow extradition of their nationals.
I dunno, Robert. Seems to me a little thing like not being enforceable outside of US borders would not stop the US enforcing it outside of US borders.
Anyway, fascinating reading to be had here though I don’t see a comments section though?
A whistle blower in the USA trying to cash in by outing an accidental outside of the USA. The courts don’t seem too keen on seeing things his way, neither do the IRS.
https://americanexpatfinance.com/news/item/902-latest-twist-in-long-running-accidental-americans-saga?fbclid=IwAR3aBODCsCDguvQrnYt2dgsDN2hppcWshyK_GlIEZXevS3iA9C1R3PON-YI
Broken link…
Yes, reported broken on the facebook link, It was good when posted. Hopefully Helen Burggraf of American Expat Financial News Journal will get it fixed.
It is a truly amazing tale of a US resident trying to cash in via a whistle blower program with the IRS, the “target” being somebody with no real connection to the USA other than place of birth but presumably worth a penny or two.
It gets better when the whistle blower has a copy of the “targets” birth certificate and detailed knowledge of the parents activities in the USA to try and prove that the “target” must be a US citizen due to place of birth.
https://news.bloombergtax.com/tax-insights-and-commentary/can-the-whistle-be-blown-against-accidental-americans-part-ii
The link above contains information on this particular case. Amerika never ceases to amaze.
https://www.taxnotes.com/research/federal/court-documents/court-opinions-and-orders/tax-court-upholds-rejection-of-whistleblower-claim/7cr49?h=*
Historic information is here. It seems insane that someone could be rewarded for turning in an accidental.
This seems to suggest that even if you are born in the USA ,if you don’t behavior in any way as american ,as accidentals certainly do not,you may be off the hock.
Interesting find. This confirms what we know already: the IRS has essentially zero interest in Accidental Americans or dual citizens abroad with no US assets or income sources.
The whistleblower sounds like a nasty piece of work. Among other things I’m sure the IRS wasn’t too interested in the whistleblower’s claim because it knew it had very little chance of ever collecting from the target.
The Bloomberg writer is also a nasty piece of work: “The determinations of the IRS … seem to show a lack of an iron will in the IRS to ferret out past tax noncompliance by accidental Americans” I will in due course send a polite expression of my concern to the editor and reporter.
Finally, I’m slightly intrigued by this reference I found in Part I of the Bloomberg piece:
@RobertRoss Thanks for the fantastic find. From what my tax lawyer (an ex-IRS prosecutor) tells me, the IRS does not both with accidentals or people who left the US many years ago and have no US assets or income. However, this seems more like a political and operational decision by the IRS and subject to change in the future.
My concern is that a better funded and resourced future IRS combined with the hatred for people who emigrate from the US and general government financial mismanagement means that the policy is subject to future changes. On a practical level, people without assets and income in the US will be ok, but one could see the potential for abuse. The recent decision from the Trudeau government to freeze bank accounts from anti-COVID measure protestors is a disturbing one.
The US has a numerous tools to coerce foreign banks and the US is a capricious country with little rule of law. If one combines this with increasingly Orwellian big tech and big data information harvesting capacity, the future looks ominous. One can see the US government to misuse these powers to target politically active citizens or those with unpopular viewpoints.
@RonHenderson I think the bolded section will refer to some regulations relating to relinquishing acts. It is rather hard to ascertain what not yet issued regulations mean!
Second attempt, without Ottawa commentary.
I remain cautiously optimistic. Sure, if you’re a Manafort-level bad actor, the US or any other country would deploy considerable time and money to making your life miserable. But there’s no ROI in going after ordinary members of the bourgeoisie. This is pretty clear from the response to the whistle-blower claim – it wasn’t worth the IRS making the smallest of efforts. Punishment of unpopular viewpoints or “hatred” of emigrants are not realistic concerns. (Current events north of the border are a false equivalency.)
I will try to avoid the penalty box this time. Please accept my apologies Pacifica.
@RonHenderson You are right that ordinary people of modest means who are tax compliant in their country of citizenship will probably not have to worry in the future. My worry is people like me who are above the exit tax threshold and who plan to vocalise their opposition to things more publicly in the future. I am far away from Oleg Tinkov level of net worth, but examples like his do have the deterrent effect that the IRS is trying to achive https://www.forbes.com/sites/joewalsh/2021/10/01/billionaire-russian-banker-will-pay-feds-500-million-on-tax-fraud-charges/.
I do not want to go off-topic, so feel free to delete the part below Pacifica. I do see a tendency for some countries to adopt US style CBT. For example, South Africa is making it extremely hard to emigrate and exit the tax net. Sweden requires filing taxes for a few years after leaving Sweden. A few Western countries like Canada, Australia, and Italy impose stringent tests when one emigrates so that one is no longer a tax resident.
The trend toward working remotely will make it easier for highly paid professionals to adopt some of the tax avoidance strategies used currently by extremely rich people (domiciling oneself in Monaco, Switzerland, various British Overseas territories). Presently, it is relatively easy for someone earning $200,000 as an IT consultant or lawyer with proper planning to establish a company offshore, travel permanently or domicile oneself somewhere with very low taxes, and legally avoid taxes whilst generating income in his former country. This requires proper planning but it is very doable and more people will adopt these strategies in the future.
Bankrupt governments will not refrain from using special powers that the government currently has ostensibly to fight money laundering, terrorism, and tax evasion to target these types of people. I can tell you from my professional experience that banks use big data analytics to monitor and flag transactions. Governments have access to treasure troves of this information. Big tech is working together with big government to create an Orwellian world not too dissimilar from the Chinese social credit system using big data (the coalescence of financial data, social media data, and personal data generated by smart devices, etc.). I could see a dystopian future where high tax OECD countries work in tandem to ensnare people in the tax net and big tech/big government stifles dissent, creating a kind of unaccountable monster state even worse than what we have presently.
Anyway, I won’t bore you all beyond this. I say the population needs to be very careful about giving too many tools to governments because governments will invariably misuse these tools and powers.
I can see a great many dystopian futures. I’m less concerned by technocratic bureaucracy than I am by climate collapse and authoritarian populism/nationalism, particularly whatever may emanate from a large post-democratic state directly to the south. We’re already experiencing the spillover effects.
As for the highly paid tax-dodging nomads, I think at the end of the day that will never amount to a serious loss of revenue for the simple reason that most folks are tied to place, family and community. They want to settle down. The number of migratory expats will remain tiny. Furthermore, nobody is at risk of being targeted until laws are changed to make consulting income taxable by source or citizenship rather than residency.
As for the Canadian departure tax, I’m fine with that. (I paid it once, when we left for an indefinite period and I’d actually made money on an investment.) It is most definitely not a variant of CBT. Asking someone to settle up and pay capital gains before leaving the country is not unreasonable. It’s no different than an estate paying capital gains when someone dies – which I suppose is simply a more extreme form of becoming non-resident. Ultimately we do need to pay taxes, or life grinds to a halt.
A final aside. While it’s grand that Canada does not have CBT – there are no “Accidental Canadians” with tax obligations – the government back in the day went too far in reaction to the Lebanon evacuation (see “citizens of convenience”) and made the rules for transmission of citizenship so strict that Canadians born abroad who themselves meet and reproduce abroad are, in some cases, having to deal with stateless children. The American rules for transmission, based on residency critieria, make so much more sense.
@RonHenderson: I think you and I have some major philosophical differences on taxation and the role of the state:)!! My philosophy is libertarian, albeit a realist and pragmatist.
This discussion is probably better over a beer. I do not want to make a nuisance of myself and breach the forum rules. Furthermore, I have a great deal of respect for you because you have been a very public advocate against the US’s Citizenship Based Taxation, FATCA, etc. You often make it onto the comment sections of various articles providing excellent analysis and dispelling erroneous information that people believe about these topics.
In the highly unlikely case that the US ever persecutes you for your seditious suggestions to ignore US tax obligations, I will donate to your defence! I am saying this in a jocular and friendly tongue and cheek way, but with a bit of seriousness given the kind of monstrous world we live in. I wholeheartedly agree with your advice that accidentals and that normal people of modest means who are citizens of other countries and complying with the rules locally need to protect themselves from the parasitic tax compliance industry and the excessive fear.
One last question, what kinds of rates apply to this Canadian departure tax? I Googled the tax and it seems people can exclude their primary residence, Canadian businesses, TFSA’s, and similar things, so it would presumably not affect most normal people of modest means. Is someone with a high net worth say US $50 million going to be on the hook for a sizeable sum if he leaves Canada? Thanks for your help and sorry to the moderators if the nuances of Canadian tax policy is somewhat out of topic.
Indeed, I am no libertarian. I believe that to live in a just society requires both rights and obligations, and a competent administrative state is generally a good thing. I am also a strong believer in the power of human laziness and incompetence, which is why I don’t fear persecution for all my seditious commentary and many personal failures to follow American law.
I don’t know all the details of the Canadian departure tax. There are indeed many carve-outs for different asset types (homes, registered accounts). My one experience came many years ago (back in the early dot-com bubble) when my stock options vested prior to our heading to Europe semi-indefinitely. I paid the same capital gains tax on those as if I had sold them on the day we left the country. I think the rate was somewhere in the 20 to 30 percent range at the time. I do think it’s very similar to how estates are taxed (this is something I’ve had to learn about recently): real estate and registered accounts pass to the beneficiaries intact (with a caveat about RRIF payouts being treated as the estate’s taxable income in the year of death); the estate pays capital gains on non-registered investments before they are distributed.
What this means in the real world is that it’s very easy to leave Canada when you’re young and don’t have a lot of money. If you leave to retire, it may be easy or not depending on what you’ve done with your money. (To continue with my analogy, it’s akin to settling your estate early with Canada, while you’re still alive.) If you come here and get rich, leaving can be expensive. I did once meet someone who was a high-earning executive for a multinational, not a Canadian citizen, who’d essentially trapped himself here by staying too long. It would have been very expensive for him to make a permanent move back to Germany so he decided to stay put until retirement. (I suspect that if he’d been a bit devious about offshoring his money, he could have avoided/evaded this problem.) All this is not too different from what happens to green card holders who stay too long in the US.
@RonHenderson I tend to think that the amount of government is subject to the law of diminishing returns. A bit of government yields a great deal of benefit, but at some point the benefits decrease or even become negative. Smaller countries with more social cohesion and with less distance between the government and the governed usually function better. I like competent and transparent administration and I am happy to pay for social goods.
Prince Hans Adam of Liechtenstein wrote a book titled The State in the Third Millennium, which encapsulates my views in case you are interested https://www.amazon.com/State-Third-Millennium-Prince-Hans-Adam/dp/3905881047.
Thanks for the great explanation on the Departure Tax. It looks as if it does not affect most normal people, but it can be quite punitive if one has sizeable sums of money. I think Canada taxes 50% of the capital gain at an ordinary income tax rate. When you had to pay the Departure Tax, did the province apply the Departure Tax or did you only pay the Departure Tax on the federal level?
Honestly I don’t recall. My accountant in-law did the departure return for us. There was a bit of a wrinkle: shares were trading when we left, but I was not yet allowed to sell (six-month rule for employees) so we offered to pay capital gains on a discounted value. This was accepted without complaints. We made out like bandits, particularly as we where wandering tax residents of nowhere when we did pull the trigger. (We’re not talking millions here, just enough to wipe out the student loans and take a modest holiday.) This was long before CRS of course.
As for the current situation, not familiar, and not overly concerned as we don’t have any immediate prospects of leaving, nor any non-registered investments on which we’d owe capital gains. I don’t know how widespread these sorts of departure taxes are elsewhere but I imagine it’s fairly common. If wealth was generated within a country they probably want their cut before you export it. If you can’t escape capital gains at death, you shouldn’t escape it by exile, would be the thinking. This is fundamentally different from any sort of CBT.
@RonHenderson Thanks for sharing the info. I am rather strange that I find the taxation topic fascinating. Have a great day!
Decades of neglect leave IRS in chaos….. The IRS is a paper tiger for minnows. best to not deal with them in any fashion.
https://www.nytimes.com/2022/03/04/us/politics/irs-chaos-tax-season-2022.html?smid=url-share
Portland, I am unceasingly grateful to you for your help to me and others here. At the same time, I, a minnow who had been in the US tax system since forever, had at least three minor skirmishes with the IRS since FATCA. If a person •has been* filing US tax returns, make sure those are boring, processable returns that follow the current rules— which will change from one year to the next and they won’t tell you that. A return that contains any anomaly can draw their interest.
Since my renunciation, silence. I’m not opposing your POV, just reporting my experience.
Duchesse. Thanks for your kind word.
https://youtu.be/4EQ8Z1aN2Cc
The Nomad Capitalist “Americans Angry They Can’t Give up Citizenship”
Andrew comments on the huge backlog of Americans waiting to give up their citizenship.
@Petlover: Thanks for sharing the video. I like Andrew Henderson’s videos and his refreshing perspectives, although I have heard some negative things about his consultancy business.
I know one can currently renounce in the Bahamas. Switzerland is doing renunciations, but there is a massive backlog. I think some Canadian consulates are processing renunciations, but working their way through backlogs. Spain is currently not doing renunciations. Poland is only doing them on a limited basis for people living in Poland and Luxembourg is doing them, but working through the backlog.
Our third and final child arrives in May, so I am registering her as a US citizen born abroad and then I am renouncing. Being a covered expatriate and having my own history of non-compliance has convinced me it is best just to sever ties and enjoy my other citizenships, which have fewer encumbrances than the US.