Dutch citizen loses lawsuit contesting bank requirement to provide U.S. TIN: Thank you for taking this to Court
The PURPOSE of this post is to thank the courageous Dutch citizen (below), the Jennys, the Gwens and Kazias, the Fabiens, the Marc Zells (and their Plaintiffs), and all others who decided to take their complaints and their names to an actual Court of Law to stop imposition of these bad U.S. laws on their own countries.
[This news came from Fabien Lehagre and the AEFNJ.]
A Dutch citizen, who left U.S. as an infant, went to Court to contest his bank’s requirement that he needed to obtain a U.S. Tax Identification Number (TIN) for his accounts.
The Central Netherlands District Court ruled in an Interim Injunction on December 23, 2020 that the Volksbank may close one of his accounts and that the Dutch citizen would have to pay part of “costs”.
— There will be different reactions to this litigation, but there will be some who feel the need for many more citizens of Netherlands and other countries to lodge these complaints against their own governments.
From the Court Ruling (see link), here are some of the Dutch citizen’s complaints (using Google Translate to English)[Do you agree with his arguments?]:
“3.4.
[Claimant] puts forward four arguments on this point, which – in short – read as follows:— It is not Volksbank’s task to enforce compliance with foreign law. There is no Dutch legal basis for this and there is also no Dutch legal obligation to request a TIN.
— Possible obligations of Volksbank under US law must give way to the right of [claimant] to a (basic) bank account. Volksbank must respect the fundamental rights of [claimant] (arising from, among other things, the GDPR and the ECHR).
— Volksbank may not put the problem of extraterritorial US regulations on the hands of [claimant] by terminating the relationship. Instead, the banks, in collaboration with the Dutch and European governments, must make an effort to improve the position of the Accidental Americans.
— For the time being there is no question of American sanctions against financial institutions such as Volksbank and by allowing the claims of [plaintiff] in these interim relief proceedings, Volksbank can demonstrate that it has fulfilled its best efforts obligation to obtain a TIN from [plaintiff]. Such an obligation of best efforts complied with averts the risk of US sanctions.
[3.5.
The preliminary relief judge is of the opinion that these arguments of [claimant] are unsuccessful and explains this below.]AND
“Other arguments
3.10.
— This termination is contrary to legal and contractual obligations (including the General Banking Conditions) and also unlawful.— Volksbank may not assume that [plaintiff] is guilty of forgery and tax evasion and may not terminate the banking relationship on that ground. By terminating on these grounds anyway, Volksbank provides [plaintiff] with a bad history, which prevents him from entering into a new banking relationship with another bank.
— The termination of the bank relationship must be assessed on the basis of neutral grounds for termination on the basis of the usual assessment framework. In that context, a weighing of interests must take place and this works out in favor of [claimant], because the consequences of termination for [claimant] are too great. It is essential for him to have access to the banking system and to keep his retirement products.”
See Link to December 9, 2020 U.S. District Court filing against U.S. State Department. It argues that excessive (US $2350) renunciation fee violates First, Fifth, and Eighth Amendments and is “…arbitrary, capricious, contrary to a constitutional right, not in accordance with law, not supported by substantial evidence, and in excess of statutory jurisdiction”
Here is the link to the December 9, 2020 U.S. District Court filing by Marc Zell on behalf of plaintiffs and AAA.
The Complaint starts out by saying:
“1. Voluntary expatriation, the ability to renounce one’s nationality [1], is a fundamental right, upon which, arguably, all other civil rights ultimately depend. In the words of Thomas Jefferson, expatriation is a “natural right which all men have.” A Bill Declaring Who Shall Be Deemed Citizens of This Commonwealth, June 18, 1779….”
Another Country Threatens to Enforce Citizen-Based-Taxation
Serbian President Vucic threatens to enforce its Citizen-Based-Taxation, using a method of credits and exemptions similar to USA’s tax regime.
The articles are translated below, describing a system similar to the US system. The article describes that the ability to tax extra-territorially exists according standing laws. It highlights the usage of “or” in their language mentioning a significant connection such as property or bank account back in the Serbian expat’s homeland.
Southern Europe (both in and outside of EU) is well known for having a large net loss of young workers due to economic migration to high-wage countries. Serbia has a long history of high education and skilled craftsman which are under high demand in high-wage countries. With a rich culture and strong Christian family ties, most Serbs have a strong connection to their families, church, and family properties in their homeland.
The exemption is proportionally lower than the US exemption, however the tax level appears lower. The details would be difficult to fully understand, as the Serbian system has a very high (50%?) employer-contribution social fee (that paid prior to the employee receiving his salary). The social fee appears to potentially be charged to expats. As salaries inside Serbia are very low (typical white-collar worker might have a salary under 500 Euros per month), it seems that most locally-employed persons have an income tax of about 10%. However, the salaries of an expat would be many times greater, and the credit amounts would become more complicated as the local Serbian tax rates raise above 10% at the level of the salaries of Europe or North America.
U.S. “TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION” (TIGTA) argues in IRS audit for much better enforcement of tax rules for those who expatriate to support “Congress’s attempts to create disincentives for tax-motivated expatriation”
[The audit is now mentioned in Tax Connections from, I think, a tax compliance perspective]
A commenter on Brock found this link to a recent September 28, 2020 TIGTA audit, a “review to determine the effectiveness of the Internal Revenue Service’s efforts in ensuring compliance with the expatriation tax provisions under Internal Revenue Code Sections 877 and 877A…”
Expatriation is a human right.
However the United States Congress and the U.S. Treasury Inspector General for Tax Administration (TIGTA) aim to discourage anyone who renounces because they don’t want the burden of annually filing those US tax forms — there must be disincentives for these persons.
TIGTA specifically argues that without a much better IRS “Centralized effort, Congress’s attempts to create disincentives for tax-motivated expatriation via I.R.C. § 877A will not be effective”. Of course, the disincentives would be applied also to “Accidental ‘Americans’”.
The audit concluded that IRS tax compliance efforts for expatriates is a mess and found, for example:
“TIGTA found that the IRS database of expatriates was incomplete for 16,798 expatriates who did not file Form 8854. In addition, TIGTA found instances of potential nonfiling, underreporting of income, and/or payment compliance issues by expatriates. From a sample of 26 expatriates who did not file a Form 8854, five had potential unreported income over $6 million. From a sample of 61 expatriates who filed a Form 8854, 15 had potential unreported income over $17 million. Lastly, TIGTA also found that expatriates with high net worth appear to not be paying their exit tax.”
… and TIGTA made some recommendations.
Stop Extraterritorial American Taxation (SEAT) Launches
A new organisation, Stop Extraterritorial American Taxation (SEAT), which is singularly focused on ending CBT, has been formed by John Richardson, Keith Redmond, Karen Alpert, Laura Snyder, David Johnstone and Suzanne Herman.
“While there are several organizations for American expatriates that address the tax issues, none is solely focused on extraterritorial taxation. SEAT is a non-partisan international organization created under the laws of France (Law of 1901). Furthermore, SEAT does not accept sponsorship from anyone in the tax compliance industry, so you can be sure that information on this site is independent. You can learn more about SEAT and its founders on our website.”
I encourage current and former US citizens to take SEAT’s Survey. Deadline is November 30th. Your participation in the Survey will enable SEAT to better educate policymakers, the media and the public.
E-mail your question to Toronto Star virtual meeting on Americans in Canada – TODAY 22 September
Good article that accurately explains why people are renouncing US citizenship
Interesting article that accurately explains WHY people are renouncing US citizenship – AKA #citizide: "COMMENTARY: U.S. citizenship is not as coveted as it once was – National" | https://t.co/r5V8GeCTh7 https://t.co/WRVgZ3ZijC
— U.S. Citizen Abroad (@USCitizenAbroad) September 12, 2020
The above tweet references the article written by Brett Goodin. Although not entirely free of technical errors (let’s not point out the errors in the comments to this post), the article debunks the absurd suggestions that individuals are renouncing for political reasons or because of the coronavirus.
Mr. Goodin writes that:
NPR Article focuses on the “foreignness” of the individuals receiving the $1200 checks – Maybe it’s really a new Marshall Plan
Rewarding nonresident aliens who filed a 1040 instead of a 1040NR …
Foreign Workers Living Overseas Mistakenly Received $1,200 U.S. Stimulus Checks https://t.co/paaAkliTPF
— U.S. Citizen Abroad (@USCitizenAbroad) September 10, 2020
As has been widely discussed on Brock, there has been much discussion of:
1. Nonresidents of the United States receiving the $1200 CARES Act payment; and
2. The fact that certain US citizens whose spouse does not have a Social Security number were disentitled by statute from receiving the payment.
It appears that the media has woken up this reality. The NPR article was referenced in a September 9, 2020 article in the Washington Post. The comments to the article are fascinating and I think worth the read. For example:
FWIW, I live in Germany and have still not received my stimulus check either. I spent hours on the phone with IRS to find out why. The representative I spoke with said they had not received my 2018 or 19 tax returns, both of which I had filed. I checked with my accountant, who informed me that when they tried to do an electronic filing, it had been rejected and they had to send a paper filing. We have followed up both by fax and by paper, again, and still nothing. I’m not sure if I’ll ever see a dime, don’t know if it’s the IRS or USPS holding things up, but am to the point that I wonder why I have to file every year if they aren’t going to bother to process my returns.
I know of at least one non-resident who received a check overseas. I assumed it was because he was receiving Social Security payments from 10+ years of working in the US. How many others are there?
Its been 5 months, told twice they mailed a check to us overseas. Never received it. I was told no International mail came from the US postal service, guess that was a lie too.
Checks to deceased U.S. citizens?
Checks to non-citizens?
And people wonder why the national debt is exploding under “Only I can fix it” Chump
Could it be that the United States is actually establishing a new “Marshall Plan” to assist the rest of the COVID-19 afflicted world?
July 2020: Heightened Canada Revenue Agency Enforcement of #FATCA IGAs Likely To Lead To More Renunciations of US Citizenship
In March of 2020, @LizT1 warned that CDN Financial Institutions would come under increasing pressure to tighten the compliance requirements in #FATCA IGAs. "U.S. tax rules raising the stakes for Canadian residents with American citizenship" | CBC News https://t.co/2FdUY78ZlV
— U.S. Citizen Abroad (@USCitizenAbroad) September 6, 2020
March 2020: From Elizabeth Thompson of CBC …
Thanks to Stephen Kish for posting this on the Media and Blogs thread.