Administrative Note: This comment is originally posted on this thread.
@RonHenderson The plan was to go to Toronto and see a couple close friends on the way to the US to take care of some personal business. I also owe a visit to Heidi, but my friend who lives near her has found a girlfriend close to me. If you are in Berlin at some point, then it is easy for me to travel there.
The plan is to place the CRBA and US passports in safe storage and deal with the topic when the children are old enough to comprehend things. I do not want to take the choice away from the kids.
From my wife’s experience, the Swiss government sends a publication to its citizens abroad and updates them on what is happening in Switzerland. It is a completely different attitude compared to the US government’s position towards US persons abroad. I can imagine Canada being much nicer to its citizens who go abroad.
I am just curious whether you share my view that the renunciation delays ostensibly due to COVID-19 are punitive measures enacted by people at the top of the US government to punish those wishing to renounce or avoid embarrassment at the sheer numbers of people renouncing rather than an honest attempt to slow the spread of the virus. I really feel for those who had bank accounts frozen or lives placed on hold wanting to acquire other citizenships that required them to renounce their US citizenship. I never suffered in this way because of FATCA and overzealous banks, but I do now have some Russian GDRs frozen in London due to sanctions (general and not against me personally). I won’t open this can of worms :).
I will definitely share my story when I conclude this process next month. A friend of mine sent me this news story in 2013 regarding FATCA etc. Unfortunately, it is in German. https://www.srf.ch/play/tv/-/video/-?urn=urn:srf:video:49e6a744-ee42-4d23-aed9-01eb3e025bfe. I won’t go public as the man did in the report. Nonetheless, it is shocking that nothing has changed since then. This fellow who served in the US military and dutifully filed his tax return as a US person abroad felt compelled to renounce because the bank froze his accounts and he feared making some mistake on the complex tax returns and landing in trouble.
I never assumed that the slowdown in renunciation (and other) appointments due to pandemic restrictions was part of some deliberate plot to punish would-be renunciants. Just another unintended consequence. What’s weird is the variation by country. In Canada the consulates started booking appointments last summer, while in Europe it took much, much longer.
@RonHenderson: I am more cynical than you are, but I cannot really prove my hypothesis with any evidence :). I suspect the variations by country depend somewhat on the restrictions imposed by the local countries combined with some discretion the local embassies might have had.
The true cynic believes that human institutions are too collectively stupid to execute conspiracies. This was unintended consequences of bureaucratic rules – not unlike the effects of FATCA. Nobody cares enough about the tiny handful of renunciants, one way or the other, to either inconvenience them or make their lives easier.
@RonHenderson I did not mean to imply it was a conspiracy. Unfortunately, Julian Assange is not around so we will not likely read any diplomatic cables about the subject. However, I do believe people in senior positions of the US government would target renunciants. Glenn Greenwald and Matt Taibbi have written on topics involving the US government targeting dissidents using the Bush era Patriot Act and we know the IRS targeted opposition groups https://www.npr.org/2017/10/27/560308997/irs-apologizes-for-aggressive-scrutiny-of-conservative-groups?t=1655707883636. It could also just be insouciance and bureaucratic indifference as you say.
I think most of this FATCA/CBT mess is due to incompetence and the indirect consequences of terrible public policy. I believe in financial privacy, as it once existed in Andorra, Liechtenstein, or Switzerland and which does tend to exist in these countries for the locals. My rhetorical question is why people would happily grant so much power to the state, which in my view is evil, or unresponsive as you suggest. Incidentally, Obama spent part of his childhood in Indonesia, albeit at a time when no one enforced CBT, so it is conceivable he would have had more empathy. Presumably, the supporters who expected miracles from him could expect the State Department to make a couple policy adjustments to unburden people stuck in bureaucratic limbo. The same applies to the Trump Administration, which actually exacerbated the problem with the changes it made to the tax code, which made things even more complicated and punitive for US persons abroad who owned small businesses.
Human bureaucracies, especially large ones such as governments or mega corporations, are highly inefficient (at least in the conference call warrior class). The biggest human turds and psychopaths tend to float to the top of the biggest institutions and those people only care about the consequences of their actions to the extent it affects them. The indifference with which the US government has treated its citizens abroad and inability to devise simple solutions (waiving renunciation fees, introducing a simplified process for accidentals to renounce, etc.) really calls most of the lies people learn in civics class into question. The Biden Administration did introduce a gender X to the latest US passport application, which you can find on page 6 https://eforms.state.gov/Forms/ds11.pdf. However, if you do not identify as a US citizen, the options available involve a US $2,350, which helps to feed the bureaucratic beast.
@RonHenderson: This article in a local expat website provides a third reason. The US government wants to delay the renunciations to continue collecting more taxes :).
There are the usual inaccuracies, but the article claims that at least 600 people in Switzerland on the waiting list.
I expect that very few of the people on the waiting list in Switzerland are actually *paying* US taxes; I’d be quite confident that a fair number are not even filing US tax returns.
PS Article is paywalled, but I can imagine what it says.
Thanks for that. You really ought to contact the author to let her know that she’s dead wrong on the question of tax compliance being required to renounce.
Switzerland may indeed be a special case in terms of its dual-citizen demographics. Certainly the history with respect to FATCA is, um, unique. (That’s a polite way of saying it *caused* FATCA.)
@ByeBye USA,
I had to take down your 3:17 pm post because of copyright and we don’t have permission to publish The Local article in full. We can post excerpts of articles, though. Would you edit The Local quotation of your post to show just the most important points for this discussion? If you don’t have a copy of your original, let me know (on-line or by e-mail) and I’ll send you a copy. Thanks.
@Pacifica: Thanks for the e-mail and no problem. Let me summarise the most relevant points for the readership.
This article behind a paywall references that the US embassy in Bern, Switzerland has sent letters to prospective renunciants informing them that that more than 600 people are currently on a waiting list with 12 month wait times and that the embassy is currently scheduling appointments for those who applied in May 2021. Additionally, a number of US persons in Switzerland assert the reason for the delay is that the US wants to continue collecting taxes from them, as some of those on the waiting list would owe taxes in the US based on their income situation and incompatibilities between the US and Swiss tax systems.
If one uses TOR and clears the cookies, one can access the entire article free of charge.
The article links to this article, which is not behind a paywall.
@RonHenderson I don’t think The Local would want to upset the US expatriate taxation services that comprise its local advertisers :). I did write to The Local months ago when they were looking for contributors and informed them of some of the common misconceptions.
I will try to be brief and not get off topic, but I would not blame the Swiss for FATCA. Instead, I blame the US Congress, the President, the voters that elected them, and the lobbyists for the US taxation industry and the US offshore industry. I know FATCA appeared in a larger piece of unrelated legislation and that bad subcomponents of larger pieces of legislation that may have some good points end up getting through. At any rate, I think it is perfectly moral to deprive the state of revenue when the state is a coercive entity that uses force to enrich the insiders (I will leave this at that :)).
The IT systems at Swiss banks have the updates to transfer information, as required by FATCA and the OECD Common Reporting Standards (I have personal knowledge of this). However, the IT systems of some other countries are only partially or far from ready https://www.oecd.org/tax/transparency/AEOI-commitments.pdf and many less developed countries are nowhere near complying. Incidentally, the US has not adopted the Common Reporting Standard and certain offshore jurisdictions like Delaware, Nevada, Wyoming, and South Dakota are great places to hide money offshore or avoid having to declare the ultimate beneficial owner. I am not recommending these structures for this purpose, as they are expensive and one runs the risk of future problems. One other way certain people are circumventing the Common Reporting Standard is to use companies. Companies with at least four owners none of whom has more than 25% ownership are exempt from reporting under these rules, meaning one can use these vehicles to achieve financial privacy at great expense. The demagogues in the political sphere want to continue using these structures for themselves :).
@Heidi I thoroughly enjoyed reading this article, although I read it with some scepticism and questioning the spin. Birkenfeld is an opportunistic rat and I wonder whether he deliberately sought out employment in this sector hoping to strike a big pay out. I think the big players (IRS, US Justice Department, UBS, the Swiss government, and connected people who take advantage of these vehicles) made a deal so everyone could maintain their gravy train.
In the current environment, one has to approach a Swiss bank via a trusted intermediary (another client, a lawyer, someone who knows the banker and the client etc.). Otherwise, the banks tend to disavow knowledge. It reminds me of people who deal in illegal drugs who only accept new customers based on trusted intermediaries, whilst disavowing any drug dealing.
@byebye
I agree with your assessment of Birkenfeld. I heard he received a good many death threats. It was also reported that the gravy train supported friends of the Clintons. There was an arrangement that many names of those in high places were left off the UBS client list.
I was so angry when UBS tried to make me sign a disclaimer, and have my name submitted on their client lists long after I had renounced and even though they had proof of all my fbars.
Back in 2012, I remember the excuse from the banks was that the secret accounts were totally legal on Swiss soil at that time and so they had done nothing wrong. The problem was that UBS not content to have US clients approach them, had sent agents to the US to actively court them.
Yes, I blame them.
@Heidi I know this gets outside the scope of discussion, but I find it disturbing how elites flout the rules which they impose on everyone else. A good acquaintance of mine who worked for many years as an IRS prosecutor and works as a tax lawyer repeatedly tells me that the US elites and tax preparation industry want a Swiss cheese tax code, which leaves ample room for practices that enable substantial tax avoidance by people at the top (especially politicians and their donor class).
The Swiss bankers lied to their clients regarding the likelihood that Swiss banking privacy for non-Swiss persons would remain permanently inviolable and then quickly betrayed their clients once the banks and bankers faced pressure. In some respects, the end of banking secrecy forced Swiss banks to focus on delivering better returns for their clients rather than just relying on banking secrecy as their unique selling proposition. Incidentally, the banks now use increasingly more opaque vehicles to help conceal funds from the tax authorities, which means more gravy train funds for the banks and related compliance mafia.
Thanks for sharing your experience with UBS. On a private level, I have worked with someone there who makes dealing with them more bearable. On a professional level, I have negotiated large supplier contracts and I find the bank extremely imperious, inflexible, and downright insolent. I hope you stood your ground and found a more decent bank.
I will let you know when I am your area as I still owe you a visit. My friend who I see now and again comes to my area because his girlfriend is here.
@byebye
Yes, I told them to get lost. I did not give my consent and said I was no longer a US citizen and protected by my Swiss and EU citizenship. They had already closed my account back early in 2012 once they knew of my US citizenship but still tried the ‘compliance ‘ approach. It’s quite interesting to open an account in Switzerland now, always waiting for the US question to emerge in various guises…..
I have been working on opening accounts in Russia and UAE to deal with some topics of mine. They quickly ask the same question about US personhood :). I did send you an e-mail regarding the next time we plan to be in your area. Good for standing up to UBS.
Administrative Note: This comment is originally posted on this thread.
@RonHenderson The plan was to go to Toronto and see a couple close friends on the way to the US to take care of some personal business. I also owe a visit to Heidi, but my friend who lives near her has found a girlfriend close to me. If you are in Berlin at some point, then it is easy for me to travel there.
The plan is to place the CRBA and US passports in safe storage and deal with the topic when the children are old enough to comprehend things. I do not want to take the choice away from the kids.
From my wife’s experience, the Swiss government sends a publication to its citizens abroad and updates them on what is happening in Switzerland. It is a completely different attitude compared to the US government’s position towards US persons abroad. I can imagine Canada being much nicer to its citizens who go abroad.
I am just curious whether you share my view that the renunciation delays ostensibly due to COVID-19 are punitive measures enacted by people at the top of the US government to punish those wishing to renounce or avoid embarrassment at the sheer numbers of people renouncing rather than an honest attempt to slow the spread of the virus. I really feel for those who had bank accounts frozen or lives placed on hold wanting to acquire other citizenships that required them to renounce their US citizenship. I never suffered in this way because of FATCA and overzealous banks, but I do now have some Russian GDRs frozen in London due to sanctions (general and not against me personally). I won’t open this can of worms :).
I will definitely share my story when I conclude this process next month. A friend of mine sent me this news story in 2013 regarding FATCA etc. Unfortunately, it is in German. https://www.srf.ch/play/tv/-/video/-?urn=urn:srf:video:49e6a744-ee42-4d23-aed9-01eb3e025bfe. I won’t go public as the man did in the report. Nonetheless, it is shocking that nothing has changed since then. This fellow who served in the US military and dutifully filed his tax return as a US person abroad felt compelled to renounce because the bank froze his accounts and he feared making some mistake on the complex tax returns and landing in trouble.
I never assumed that the slowdown in renunciation (and other) appointments due to pandemic restrictions was part of some deliberate plot to punish would-be renunciants. Just another unintended consequence. What’s weird is the variation by country. In Canada the consulates started booking appointments last summer, while in Europe it took much, much longer.
@RonHenderson: I am more cynical than you are, but I cannot really prove my hypothesis with any evidence :). I suspect the variations by country depend somewhat on the restrictions imposed by the local countries combined with some discretion the local embassies might have had.
The true cynic believes that human institutions are too collectively stupid to execute conspiracies. This was unintended consequences of bureaucratic rules – not unlike the effects of FATCA. Nobody cares enough about the tiny handful of renunciants, one way or the other, to either inconvenience them or make their lives easier.
@RonHenderson I did not mean to imply it was a conspiracy. Unfortunately, Julian Assange is not around so we will not likely read any diplomatic cables about the subject. However, I do believe people in senior positions of the US government would target renunciants. Glenn Greenwald and Matt Taibbi have written on topics involving the US government targeting dissidents using the Bush era Patriot Act and we know the IRS targeted opposition groups https://www.npr.org/2017/10/27/560308997/irs-apologizes-for-aggressive-scrutiny-of-conservative-groups?t=1655707883636. It could also just be insouciance and bureaucratic indifference as you say.
I think most of this FATCA/CBT mess is due to incompetence and the indirect consequences of terrible public policy. I believe in financial privacy, as it once existed in Andorra, Liechtenstein, or Switzerland and which does tend to exist in these countries for the locals. My rhetorical question is why people would happily grant so much power to the state, which in my view is evil, or unresponsive as you suggest. Incidentally, Obama spent part of his childhood in Indonesia, albeit at a time when no one enforced CBT, so it is conceivable he would have had more empathy. Presumably, the supporters who expected miracles from him could expect the State Department to make a couple policy adjustments to unburden people stuck in bureaucratic limbo. The same applies to the Trump Administration, which actually exacerbated the problem with the changes it made to the tax code, which made things even more complicated and punitive for US persons abroad who owned small businesses.
Human bureaucracies, especially large ones such as governments or mega corporations, are highly inefficient (at least in the conference call warrior class). The biggest human turds and psychopaths tend to float to the top of the biggest institutions and those people only care about the consequences of their actions to the extent it affects them. The indifference with which the US government has treated its citizens abroad and inability to devise simple solutions (waiving renunciation fees, introducing a simplified process for accidentals to renounce, etc.) really calls most of the lies people learn in civics class into question. The Biden Administration did introduce a gender X to the latest US passport application, which you can find on page 6 https://eforms.state.gov/Forms/ds11.pdf. However, if you do not identify as a US citizen, the options available involve a US $2,350, which helps to feed the bureaucratic beast.
@RonHenderson: This article in a local expat website provides a third reason. The US government wants to delay the renunciations to continue collecting more taxes :).
https://www.thelocal.ch/20220620/i-feel-trapped-hundreds-of-us-citizens-in-switzerland-waiting-to-renounce-citizenship/
There are the usual inaccuracies, but the article claims that at least 600 people in Switzerland on the waiting list.
I expect that very few of the people on the waiting list in Switzerland are actually *paying* US taxes; I’d be quite confident that a fair number are not even filing US tax returns.
PS Article is paywalled, but I can imagine what it says.
Thanks for that. You really ought to contact the author to let her know that she’s dead wrong on the question of tax compliance being required to renounce.
Switzerland may indeed be a special case in terms of its dual-citizen demographics. Certainly the history with respect to FATCA is, um, unique. (That’s a polite way of saying it *caused* FATCA.)
@ByeBye USA,
I had to take down your 3:17 pm post because of copyright and we don’t have permission to publish The Local article in full. We can post excerpts of articles, though. Would you edit The Local quotation of your post to show just the most important points for this discussion? If you don’t have a copy of your original, let me know (on-line or by e-mail) and I’ll send you a copy. Thanks.
@Pacifica: Thanks for the e-mail and no problem. Let me summarise the most relevant points for the readership.
https://www.thelocal.ch/20220620/i-feel-trapped-hundreds-of-us-citizens-in-switzerland-waiting-to-renounce-citizenship/
This article behind a paywall references that the US embassy in Bern, Switzerland has sent letters to prospective renunciants informing them that that more than 600 people are currently on a waiting list with 12 month wait times and that the embassy is currently scheduling appointments for those who applied in May 2021. Additionally, a number of US persons in Switzerland assert the reason for the delay is that the US wants to continue collecting taxes from them, as some of those on the waiting list would owe taxes in the US based on their income situation and incompatibilities between the US and Swiss tax systems.
If one uses TOR and clears the cookies, one can access the entire article free of charge.
The article links to this article, which is not behind a paywall.
https://www.thelocal.com/20220211/how-americans-in-europe-are-struggling-to-renounce-us-citizenship/
@RonHenderson I don’t think The Local would want to upset the US expatriate taxation services that comprise its local advertisers :). I did write to The Local months ago when they were looking for contributors and informed them of some of the common misconceptions.
I will try to be brief and not get off topic, but I would not blame the Swiss for FATCA. Instead, I blame the US Congress, the President, the voters that elected them, and the lobbyists for the US taxation industry and the US offshore industry. I know FATCA appeared in a larger piece of unrelated legislation and that bad subcomponents of larger pieces of legislation that may have some good points end up getting through. At any rate, I think it is perfectly moral to deprive the state of revenue when the state is a coercive entity that uses force to enrich the insiders (I will leave this at that :)).
The IT systems at Swiss banks have the updates to transfer information, as required by FATCA and the OECD Common Reporting Standards (I have personal knowledge of this). However, the IT systems of some other countries are only partially or far from ready https://www.oecd.org/tax/transparency/AEOI-commitments.pdf and many less developed countries are nowhere near complying. Incidentally, the US has not adopted the Common Reporting Standard and certain offshore jurisdictions like Delaware, Nevada, Wyoming, and South Dakota are great places to hide money offshore or avoid having to declare the ultimate beneficial owner. I am not recommending these structures for this purpose, as they are expensive and one runs the risk of future problems. One other way certain people are circumventing the Common Reporting Standard is to use companies. Companies with at least four owners none of whom has more than 25% ownership are exempt from reporting under these rules, meaning one can use these vehicles to achieve financial privacy at great expense. The demagogues in the political sphere want to continue using these structures for themselves :).
@Bye bye
Perhaps not blame ‘the Swiss’ but blame UBS who not content to let US clients come to them, courted US clients on US soil and then professed ignorance of US tax rules, this finally got FATCA over the line late one night in Congress .
https://www.cnbc.com/amp/2015/04/30/why-did-the-us-pay-this-former-swiss-banker-104m.html
@Heidi I thoroughly enjoyed reading this article, although I read it with some scepticism and questioning the spin. Birkenfeld is an opportunistic rat and I wonder whether he deliberately sought out employment in this sector hoping to strike a big pay out. I think the big players (IRS, US Justice Department, UBS, the Swiss government, and connected people who take advantage of these vehicles) made a deal so everyone could maintain their gravy train.
In the current environment, one has to approach a Swiss bank via a trusted intermediary (another client, a lawyer, someone who knows the banker and the client etc.). Otherwise, the banks tend to disavow knowledge. It reminds me of people who deal in illegal drugs who only accept new customers based on trusted intermediaries, whilst disavowing any drug dealing.
@byebye
I agree with your assessment of Birkenfeld. I heard he received a good many death threats. It was also reported that the gravy train supported friends of the Clintons. There was an arrangement that many names of those in high places were left off the UBS client list.
I was so angry when UBS tried to make me sign a disclaimer, and have my name submitted on their client lists long after I had renounced and even though they had proof of all my fbars.
Back in 2012, I remember the excuse from the banks was that the secret accounts were totally legal on Swiss soil at that time and so they had done nothing wrong. The problem was that UBS not content to have US clients approach them, had sent agents to the US to actively court them.
Yes, I blame them.
@Heidi I know this gets outside the scope of discussion, but I find it disturbing how elites flout the rules which they impose on everyone else. A good acquaintance of mine who worked for many years as an IRS prosecutor and works as a tax lawyer repeatedly tells me that the US elites and tax preparation industry want a Swiss cheese tax code, which leaves ample room for practices that enable substantial tax avoidance by people at the top (especially politicians and their donor class).
The Swiss bankers lied to their clients regarding the likelihood that Swiss banking privacy for non-Swiss persons would remain permanently inviolable and then quickly betrayed their clients once the banks and bankers faced pressure. In some respects, the end of banking secrecy forced Swiss banks to focus on delivering better returns for their clients rather than just relying on banking secrecy as their unique selling proposition. Incidentally, the banks now use increasingly more opaque vehicles to help conceal funds from the tax authorities, which means more gravy train funds for the banks and related compliance mafia.
Thanks for sharing your experience with UBS. On a private level, I have worked with someone there who makes dealing with them more bearable. On a professional level, I have negotiated large supplier contracts and I find the bank extremely imperious, inflexible, and downright insolent. I hope you stood your ground and found a more decent bank.
I will let you know when I am your area as I still owe you a visit. My friend who I see now and again comes to my area because his girlfriend is here.
@byebye
Yes, I told them to get lost. I did not give my consent and said I was no longer a US citizen and protected by my Swiss and EU citizenship. They had already closed my account back early in 2012 once they knew of my US citizenship but still tried the ‘compliance ‘ approach. It’s quite interesting to open an account in Switzerland now, always waiting for the US question to emerge in various guises…..
I have been working on opening accounts in Russia and UAE to deal with some topics of mine. They quickly ask the same question about US personhood :). I did send you an e-mail regarding the next time we plan to be in your area. Good for standing up to UBS.