This page is intended as a place to cite the portions of Constitutions, Charters, Declarations and the like that prohibit discrimination on the basis of national origin. Many of us have often argued –at IBS, Maple, and elsewhere– that prohibiting participation in certain types of financial accounts and/or applying additional tax to income and/or wealth and/or forcing particular reporting requirements to a foreign jurisdiction upon people living and paying taxes in a country protected by one or more of these documents constitutes discrimination on the basis of national and/or ethnic origin. FATCA, FBAR and Double Taxation are thus largely unenforceable.
Seventy-one years ago today, Franklin Roosevelt signed Executive Order 9066, paving the way for the internment — without due process of law, nor the consent of the legislature — of 120,000 people of Japanese descent.
Most of us are familiar only with modern-day attempts to get Americans to report non-US accounts and investments: the controlled foreign corporation laws of the 1960s, followed by the Bank Secrecy Act of 1970, and today’s FATCA. But three decades before TD F 90-22.1 and seven decades before Form 8938, there was WRA 126, “Application for Leave Clearance”, which had to be filed by any Japanese American seeking to leave a War Relocation Authority internment camp. This form is most famous for its questions about swearing allegiance to the United States, serving in the U.S. military, and foreswearing allegiance to Japan — earning it the “loyalty questionnaire” nickname, but it also asked about more prosaic matters:
15. Foreign travel (give dates, where, how, for whom, with whom, and reasons therefore).
22. Give details of any foreign investments.
(a) Accounts in foreign banks. Amount. Bank. Date account opened.
(b) Investments in foreign companies. Amount. Company. Date acquired. Contents.
Simon Black (Do I Have To Report My Offshore Gold…?) asks whether custodial gold “accounts” (e.g., James Turk’s Gold Money) fall under FATCA provisions and his people think so. However, gold kept in a safety deposit box would not fall under FATCA:
What’s more, in all of those 544 pages, there is not a single mention of the words, “gold”, “silver”, or “precious metals”. So there’s still quite a bit of mystery with respect to the question, “Do I have to report my offshore gold…?”
I’m still having my team go through the rules; after an initial read, though, the language of the regulation does suggest that custodial gold institutions (like GoldMoney, etc.) should be reported. Offshore safety deposit boxes (like Das Safe) do not.
On December 7th, Eric put up a post entitled FATCA: Facilitating Attacks by Terrorists on Citizens Abroad In that post, he referenced an excellent article out of Lebanon highlighting what I call FATCAs FATAL FLAW – Security (note new link)
If you have not read it, it is MUST READ material for all that are concerned about this seriously overlooked aspect of one of the many unintended consequences of FATCA.
However, we don’t have to wait for FATCA to see how some are already taking advantage of the fear that is being perpetrated across the American abroad community surrounding the IRS offshore jihad. Already the phishing expeditions have begun. You should be aware of them. Roger Conklin sent me this example that he just received via an unsolicited email from the IRS. First tip off that this is phony is that the IRS NEVER uses email for communication with Taxpayers.
Below is an example of the email he received: I have left most typos in place for illustrative purposes. Continue reading
With all the focus on American emigrants’ issues here at the Isaac Brock Society, it’s worth remembering that Doug Shulman’ whale-hunting efforts are also ruining the lives of immigrant minnows who keep some assets in their home countries. A major South Korean business newspaper reported earlier this month that some Korean Americans with accounts at South Korean banks are closing those accounts for fear of ridiculous IRS fines. I’ve been busy so I’m just getting around to translating this now.
If you haven’t been keeping up with the travails of IJ, on Jack Townsend’s blog, you have missed a remarkable story.
IJ is a Chinese immigrant to America who came to our shores via Canada. He got caught up in the OVDI, and after a long struggle decided to “Opt Out”. He was prepared to fight in the Court of Appeals, if necessary! But, thankfully, reason at the IRS’s Opt Out management review committee did prevail, and he was finally released from this lengthy OVDI torture with just a FBAR warning letter. Frankly, that was all that was ever necessary to obtain a compliance objective. It was the correct decision. You can read more of IJ’s story, at this post.
The vice-president of Samsung Family Office wrote an article in the Korea Economic Daily a couple of weeks ago discussing the effects of FATCA. Samsung Family Office is a division of Samsung Life Insurance which markets products and services to customers with more than three billion won in assets — that is to say, people who would be “covered expatriates” if they are U.S. Persons. Of interest: his report that South Korea’s legislature is already considering amendments to tax laws in order to pave the way for an inter-governmental agreement.
By popular request, I am making a separate post on the second of a two part effort by Stephen Mopsick to focus attention on tax justice for U.S. Persons. His first related to American Citizens abroad, and was a posted here.
On his blog, which he just posted yesterday, is his call for tax justice for immigrants as related to FBAR penalties. I know that there are many immigrant who read here but do not comment, and would be interested in seeing this commentary. They might not have been following the references to this post in other threads, so pulling it out for attention. In it he writes:
The Plight of Recent Immigrants to the US: On top of all this, we are seeing an increasingly large number of a new class of people who are wondering how to be compliant with their taxes: recent immigrants to the United States who are otherwise squeaky clean tax compliant citizens who are only now learning that that bank account back home on which they have signing authority, may now be putting them at risk for confiscatory FBAR penalties.
Note: I have not received Steven’s permission to post his commentary in its entirety, so will just provide the link here. I highly recommend it contents for your attention.
Moby was the first publicly reported Opt Out of the 2009 OVDP. He has been very generous in sharing his experience, and has been an inspiration to others who have had to battle the fear of what draconian penalties the IRS ‘might’ apply outside of the OVDP. We all believe the IRS FAQ examples are hyperbolic maximums by intention to strike fear into non complying hearts, but until tested, you really don’t know. Moby basically turned down the “in lieu of” OVDP penalty, called their bluff, and won! If you are not familiar with his story, I would strongly encourage you to read it as originally reported on January 25th here and updated on March 10th here . Since the last post, he has been at work on a FOIA request related to IRS FBAR compliance improvement efforts, and asked me to share his findings. What follows is his report. Continue reading
Prologue – December 2011 – The U.S. Supports U.N. Sanction Against Eritrea
Eritrea has put Toronto on the international map. As you know, Eritrea and the United States are the two countries in the world that practice citizenship-based taxation. Of course, the U.S. takes the position that it is wrong for Eritrea to use citizenship-based taxation. For an example of U.S. hypocrisy at it’s finest, see this video of Susan Rice at the United Nations. (Susan Rice apparently once worked in Toronto for McKinsey. It would be interesting to know whether she filed her FBARs). It is becoming increasing clear that citizenship-based taxation, in its application, may be in violation of international law.
Even the CBC “As It Happens” did a segment on this issue. Continue reading