USA affirms position that #accidentalAmericans have two choices: 1. Pay to enter the US tax system or 2. Pay to renounce. Bottom line: If "Born In The USA" then you must "Pay The USA": "Treasury Offers Little Wiggle Room on Foreign Bank Reporting (1)" https://t.co/Z7el7P5RII

— U.S. Citizen Abroad (@USCitizenAbroad) March 31, 2020

Part A: Background

On March 3, 2020 I wrote a post on Brock, which was based on the problem of FATCA IGAs requiring banks to include US Social Security numbers, in their FATCA reporting.

Basically there is a tension between:

On the one hand the banks are required to include the Social Security Numbers of their US clients. On the other hand, many people who are “technically” US citizens don’t have Social Security numbers.

This is a problem that has long been in the making. My March 3, 2020 post described the problem and referenced the work of CBC reporter Elizabeth Thompson’s reporting reporting on this problem. The post also included a background/summary of the events leading to the problem (which has been included in this post as an Appendix*).

US Treasury has said very little about this issue.

Described by Helen Burggraf as …

The U.S. Treasury is continuing to maintain its silence with respect to the issues European banks have been struggling with for months over their perceived need to report to the U.S. – under the tax evasion law known as FATCA – government tax information details on certain of their American account-holders that they don’t have, European banking sources, expat groups and others report…

This is in spite of the fact that so-called “accidental Americans” in Europe are continuing to have their non-U.S. bank accounts frozen in cases where their banks say they have failed to provide “Tax Information Numbers” (TINs, typically Social Security numbers) as the banks say FATCA requires them to have as of the end of last year, according to sources in the accidental American community.

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The US official extradition request is due 60 days after the Dec 1 arrest—before Jan 30. Approving the request and holding a court hearing is at “sole discretion” of Minister of Justice, points our extradition lawyer Gary Botting. https://t.co/38q0MfnnYl

— Tom Parkin (@TomPark1n) January 27, 2019

This is the second of in my series of posts exploring extradition. The first post described the increasing importance of extradition in an increasingly unpredictable world. Individuals are clearly becoming more and more aware of the risks of being forcibly transplanted to face criminal proceedings in another country. The examples discussed demonstrate the risk of extradition to face the justice system in a country where no crime was actually committed. The United States appears to be aggressively interpreting its laws to apply in an extraterritorial manner and is willing to aggressively apply those laws to people who have no presence in the United States. What is most frightening is that extradition treaties allow the United States to get other countries to retrieve those accused and arrange for their transportation to the United States.

Extradition from Canada – An Explanation of the process https://t.co/Fgfdfb84W2

— U.S. Citizen Abroad (@USCitizenAbroad) March 27, 2020

The purpose of this post is to identify and briefly describe the role of the various laws and practices which are engaged in a request for extradition. I will use Canada as the model. Note that Canada allows for extradition to and from a large number of countries. Therefore, let’s begin our analysis with a “Canada Centric” view of extradition.

Treaties and statutes are written in technical language. They take time to understand. Therefore, let’s begin with a simple overview of Canada’s extradition process, which is found Canada’s Department of Justice website.

extradition_eng

The description of extradition from Canada’s Department of Justice can be summarized as two categories of information.

Category 1 – What are the legal tools governing extradition?

“Extradition in Canada is conducted in conformity with the Extradition Act (Canada’s general law applying to extradition with all countries), international treaties (Country specific agreements) and the Charter of Rights and Freedoms (applicable to all individuals subjected to the Extradition process). All individuals are afforded fair treatment and due process (this is clearly aspirational).”

E-23.01

Conclusion: The law of extradition is an amalgamation of domestic law, constitutional law and treaties. Interestingly this is analogous to the law of FATCA, which is also a amalgamation of treaties/international agreements and domestic law (The FATCA IGAs were enacted into the Income Tax Act as Canadian domestic law. The purpose of the Alliance For The Defence Of Canadian Sovereignty lawsuit is to seek a ruling that Canada’s Charter of Rights also applies to the FATCA issue.)

Category 2 – How does the extradition process (from beginning to end) unfold in the context of those legal rules?

There are three phases to the extradition process:

1. Authority to Proceed: the decision to commence the proceedings by issuing an Authority to Proceed; this decision is made by Department of Justice officials.

2. Judicial Phase: the extradition hearing, which takes place before a judge of the superior court. Note that the extradition hearing is NOT a hearing on the merits of the case. The extradition hearing is a hearing on whether the requirements of the Extradition Act and the Tax Treaty have been met. More on the requirements to extradite later. The result of the “Judicial Phase” will be a decision on whether the requirements to extradite have or have not been met. If the answer is “no”, then (subject to an appeal) the case would end. If the answer is “yes”, then the decision to extradite will be in the hands of Canada’s Minister Of Justice.

3. Ministerial Phase: the decision on surrender, which under the Extradition Act must be made by the Minister of Justice. This decision cannot be delegated to officials. At the end of the day, the Justice Minister makes the decision. It is entirely possible for the Justice Minister to decline to extradite even if the result of the “Judicial Phase” is the conditions to extradite have been met.

About the possibility of appeal

The individual sought may appeal the decision of the extradition judge and/or apply for judicial review of the Minister’s decision to the Court of Appeal in the province where the extradition hearing took place.
If the Court of Appeal upholds the decisions of the extradition judge and the Minister, the individual may seek leave to appeal either or both decisions to the Supreme Court of Canada. The Supreme Court will only hear appeals that raise issues of public importance.

The third post will discuss the legal prerequisites that are necessary to support an extradition order.

The text of both Canada’s Extradition Act (Appendix A) and the Canada US Extradition treaty (Appendix B) are included below.

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March 31 UPDATE:  In March 2020 U.S. Treasury said: “Fatca was enacted to provide the Internal Revenue Service (IRS) with additional tools to identify gaps in and reinforce our systems of voluntary compliance of US taxpayers with respect to non-US financial accounts or…” — $41,076 (91% !) donated, $3,924 more needed to pay legal fees installment for Canadian FATCA lawsuit

Prologue – Extradition as perceived by the great powers

US fury after France releases Iranian prisoner wanted on US sanctions-busting charges https://t.co/gwf8gP7Y6V

— U.S. Citizen Abroad (@USCitizenAbroad) March 25, 2020

The public may not understand the technicalities, but it does understand the risk

China – Proposed changes in a Hong Kong law

Q. What's the turmoil in Hong Kong? A. "Tensions with Beijing came to the fore again in the summer of 2019, when hundreds of thousands of people protested against a legislative proposal that would have allowed extraditions to mainland China." https://t.co/FfvHzH8T2L via @CFR_org

— U.S. Citizen Abroad (@USCitizenAbroad) March 26, 2020

The freedom fighters in Hong Kong were spurred into action by the threat of a Hong Kong law that would allow extradition to China. This is the world’s most visible symbol of the importance of extradition.

The United States – The Julian Assange extradition hearing

Two ships passing in the night: Assange's lawyers will try to make their case later this week that the charges are politically motivated and that their client simply acted as a journalist and publisher.
"Julian Assange Extradition Hearing Begins In London" https://t.co/wHyJVHST1J

— U.S. Citizen Abroad (@USCitizenAbroad) March 26, 2020

In a lengthy and well organized comment, Embee (of Isaac Brock Society fame) opines that the Assange extradition hearing was “a matter of inhumane treatment at the direction of the UK judicial system and a blatant overreach by the US in order to punish and make an example of a journalist who revealed that which they did not want to be public knowledge”. Embee further notes that:

The UK judge, Vanessa Baraitser, not only denied Julian Assange the dignity of sitting with his lawyers during that portion of the trial (he was in a glass cage, could barely hear what was being said in court and could not communicate confidentially with his lawyers), she has denied him bail knowing full well he is already in poor health and could be very vulnerable to an outbreak of COVID-19 in Belmarsh Prison.
https://consortiumnews.com/2020/03/25/assange-extradition-assange-denied-bail-further-visits-despite-virus-risk/

Extradition is becoming a very important political (and possible immigration) issue

There are many things in life that are invisible until you become aware of them. I have never given much thought to extradition. My basic understanding of extradition (to the extent that I understood it at all) was that it was a process to return criminals to the country that had jurisdiction over the crime. For example, Britain is attempting to extradite Anne Sacoolas back to Britain, to stand trial for the death (homicide?) of Harry Dunn. In this instance, it’s agreed that Ms. Sacoolas, while driving on the wrong side of the road, hit Harry Dunn and that resulted in his death. It’s clear that this occurred in Britain. It’s also clear that Ms. Sacoolas returned to America and has refused to return to Britain to stand trial. In a statement which is indicative of the height of American hypocrisy, her lawyer, Amy Jeffress, is reported by the Guardian to have said:

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The last words of Orwell …

As goes language, so goes the the capacity for critical analysis

A trip down memory lane – A Brock post from June 10, 2013

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their creator with certain inalienable rights, that among these are life, liberty, and the pursuit of happiness. That to secure these rights, Governments are instituted among men, deriving their powers from the consent of the governed. That whenever any form of Government becomes destructive of those ends, it is the right of the People to alter or abolish it, and to institute new Government…

It would have been quite impossible to render this into FATCASpeak while keeping to the sense of the original. The nearest one could come to doing so would be to swallow the whole passage up in the single word crimethink. A full translation could only be an ideological translation, whereby Jefferson’s words would be changed into a panegyric on absolute government.

A good deal of the literature of the past was, indeed, already being transformed in this way. Considerations of prestige made it desirable to preserve the memory of certain historical figures, while at the same time bringing their achievements into line with the philosophy of Amtot. Various writers, such as Eric, Orwell, Just Me, Em, Badger, Calgary, Plato, Petros, Deckard, Joe Smith, SwissPinoy, Jefferson Tomas, Blaze, Outraged Canadian, Roger, Nobledreamer, Tim, Victoria, Bubblebustin, Recalcitrant,  Markpinetree, Pacifica777, Calgary411, Bubblebustin, usxcanada, RenounceUScitizenship and some others were therefore in process of translation: when the task had been completed, their original writings, with all else that survived of the literature of the past, would be destroyed.

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No renunciations …

The COVDI-19 pandemic has meant the cancellation and unavailability of appointments to renounce US citizenship. At least London UK, Australia and Canada have temporarily ceased processing renunciations of citizenship. pic.twitter.com/pxVTplYnyA

— U.S. Citizen Abroad (@USCitizenAbroad) March 20, 2020

Too bad, net worths are falling daily meaning that fewer renunciants would be covered expatriates and subject to the Exit Tax.

It’s unclear whether renunciations are being processed in any countries.

No passports …

https://t.co/KC5CtlYqPW pic.twitter.com/X2DG9JINOr

— U.S. Citizen Abroad (@USCitizenAbroad) March 20, 2020

Introduction

The good thing about bad things is that go away. The bad thing about good things is that they go away. FATCA is a generally bad thing, but a good thing for "Form People". Who are Form People? Why are they the way they are? https://t.co/yZZy0ungNF

— U.S. Citizen Abroad (@USCitizenAbroad) March 19, 2020

Professor Byrnes says that: “FATCA is the force and the force is FATCA”.

The Issac Brock Society has been a consistent critic of FATCA. But, who or what is the Isaac Brock Society?

In a very real sense: “Brock is the commenters and the commenters are Brock”.

EmBee has been one of the most consistent commenters at Brock. But she is more than a commenter. She has also written the lyrics, to the songs, that have become part of the “Brock Choir”. This post is centered largely around an “EmBee Classic” – “Form People”.

No celebration of FATCA would be complete without an acknowledgement of the “Form People”, who have contributed to the idea that:

FATCA is the force and the force is FATCA.

FATACA could not exist without “Form People”.

My last post featured a discussion of Professor Byrne’s description of the true beneficiaries of FATCA. He pointed out that:

The Force Is FATCA and FATCA Is The Force!

What he means is encapsulated by:

“The Force will take care of you with high salaried private firm and corporate employment as well as employment in a government position, or a policy thinktank, and even as an academic.” Inevitably a student brings up tax simplification to which I respond, “Young Skywalker,” “once a Jedi, always a Jedi.” Elaborating, I explain, “Legislation and regulations are written by Jedi, known as tax staffers and Treasury counsel, who have become one with the Force and the Force is strong.”

Professor Byrnes calls members of the compliance industry “Tax Jedi”. In 2014, Brockers called them “Form People“.

Who are “Form People”? Outside looking in

"Form People" Theme Song – adapted by @IsaacBrockSoc composer EmBee on December 17, 2014 – from Goldfinger Theme Song – James Bond https://t.co/COPFxvGm1e via @YouTube

— U.S. Citizen Abroad (@USCitizenAbroad) March 19, 2020

The lyrics of Form People as decreed by EmBee – To be sung to the tune of Goldfinger …

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First Professor @WilliamByrnes explained why #FATCA was misguided https://t.co/GOctkmz0zH and based on wrong assumptions. Now he explains why it is so difficult to get rid of such a misguided law. Hint: "FATCA Is The Gift That Just Keeps On Giving" https://t.co/0wn04Gf1nV

— U.S. Citizen Abroad (@USCitizenAbroad) March 16, 2020

Professor Byrnes exhibits an approach to FATCA (and other tax matters) that is logical and pragmatic. He analyzes the assumptions upon which FATCA is based. Was there really a tax gap of 200 billion dollars? Can this claim be justified? What are the costs of FATCA, etc. Do people really have foreign bank accounts to avoid U.S. taxation? We saw Professor Byrne’s “reasoning style” in this recent post Brock post.

In a subsequent post – “US Tax Reform, Simplification, and FATCA: “The Force Is Strong, Young Skywalker” – Professor Byrnes asks the question (this is a paraphrase): If FATCA is not working, then why is it so difficult to get rid of it?

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The Obama Legacy

What follows is a comment from an individual (since deceased) that appeared on the Renounce US Citizenship blog:

Now I understand that President Obama is indeed behind all of this. It is going to be very difficult to be an American Abroad and vote for him. Not that I am against him going after tax cheaters, but for lumping us Americans Abroad with them. You know hell is full of people with good intentions. I believe now that he should realize that Americans Abroad are not tax cheaters and should be treated differently. He chould look at the penalties being levied by Mr. Shulman on Americans whoi live and work abroad who want to comply and did not know about FBARS. My God, even the TAX Adviser feels this way, that is, that we are being trapped.

This is a repost of a Brock post from July 15, 2012. The July 15, 2012 Brock post was in itself, reposted from the Renounce US Citizenship blog. Remember that the IGAs – imposing FATCA requirements on non-U.S. banks – were not operational until July 1, 2014. The CRS did not exist. But, FATCA’s reporting requirements as applied to individuals (Form 8938) were operational. This post (along with the comments) is a very interesting trip down memory lane. It reflects the concerns of the day. I strongly suggest going to the original post and reading the comments. It’s also worth reflecting on all the initiatives that have taken place since that time.

What follows below the line is the post (along with comments) exactly as it appeared on July 15, 2012. You will need to go to the original post to read the comments …

Finally – thanking Andrew Grossman for the following update …

The 2012 Hale Sheppard article on Form 8938 (broken link in IBS page) can be found at https://chamberlainlaw.com/assets/htmldocuments/Form%208938%20Article.pdf | Other Sheppard articles are linked to at https://nyulawglobal.org/globalex/Fatca_Citizenship_Based_Taxation1.html

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Cross posted from RenounceUScitizenhip

The following video is of particular interest.

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Where it came from – 2009 – Obama describes his justification for what is to become FATCA

Obama Goes After Overseas Tax Cheats AKA U.S. Citizens Abroad – See the following video which was uploaded in May 2009.  Obama says taxes are an obligation of “citizenship“.  Obama lauds the work of Levin and Rangel (at this point they are the future architects of FATCA). The whole video (where “First Tax Cheat Geithner” introduces Obama) is interesting.  Note in particular the video starting at 7:30 where Obama provides his justification for what is to become FATCA.

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For the great enemy of truth is very often not the lie — deliberate, contrived and dishonest — but the myth — persistent, persuasive, and unrealistic.- John F. Kennedy, 1962. From NPR's The Best Commencement Speeches, Ever. https://t.co/lHJbiCXvrh

— U.S. Citizen Abroad (@USCitizenAbroad) March 11, 2020

The Myth(s)

Whether #offshore tax evasion was costing USA 200 billion, 100 billion or 36 billion, it's clear that Elise Bean's claim of 200 billion (which she committed to in the Meadows hearing) was fantasy, unsupportable and therefore an intentional false statement! https://t.co/S7hXwDHNWX pic.twitter.com/A6w8Oh8sps

— U.S. Citizen Abroad (@USCitizenAbroad) September 4, 2019

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