The Isaac Brock Society consists of individuals who are concerned about the treatment by the United States government of US persons who live in Canada and abroad.
The United States is one of two countries in the world that taxes its people no matter where in the world they may reside. The other is Eritrea, which the USA has condemened for terrorism and for its diaspora tax. The majority of US persons who live abroad are not aware of their filing requirements. But recently, the US government has decided to crack down on those who are not in compliance.
But what is more, the US government has begun, since about 2004, to apply with great pressure a long-neglected requirement of 35-year old law called the Bank Secrecy Act. That requirement is FBAR, the foreign bank account report, which the United States government expects annually from those who have accounts outside of the United States which exceed $10,000 in aggregate. The fines for failure to file this form are extortionate, and virtually no US person who lives abroad even knew about FBAR, while most of them, over a certain age, own bank accounts with retirement savings exceeding that amount. The threats of fines and imprisonment has frightened many people who as a result have consulted expensive accountants and tax lawyers to get this mess sorted out, only to face high accounting or legal fees on top of potential fines and back taxes. In 2009 and 2011, the IRS offered voluntary disclosure programs (OVDI). Some who entered into the 2009 OVDI, because of fear of the penatlies, were shocked when the IRS assessed them fines in the tens of thousands, essentially treating them as tax evaders instead of a law abiding citizens in their countries of residence.
For many US expats, renunciation now seems like a really good idea. Why not? Many haven’t lived in the US for years and now they have few ties there except perhaps some family members. So they want to renounce their citizenship only to find that the laws regarding expatriation are confusing and that the exit tax requirements are at best complicated and invasive, and at worst, extortionate and utterly in violation of their right to expatriate.
The media coverage of this issue has been uneven. There have a been a few balanced stories, but most of the time, the media has merely publicized the purposes of the US government; this is especially true of US media sources. The Canadian media has generally done a much better job of grabbing the attention of the world about the abuses of the US government. That being said, even the Canadian media sometimes falls into the IRS trap of projecting fear in order to force compliance. Overall, we regret when the media offers only condemnation and fear without telling the story from the side of the victims or informing them of their rights and alternatives.
US persons abroad also face US border guards who are starting to put pressure on all those who have a US place of birth to travel only on a US passport, even if the person has not been a US person for decades–an arbitrary change of policy making those who relinquished citizenship into would-be loyal taxpayers to a profligate government that has to borrow 40 cents on every dollar its spends.
The Isaac Brock Society is here to fight. Sir Isaac Brock prepared Canadians for war with the United States and gave his life in repelling a US invasion in 1812. So we also want to fight for US persons who are frightened by the IRS, the border guards, the compliance condors, and the media. We are here to provide one another with resources and strategies, comfort and advice.
But not only so, we are here to warn other Canadians about the illegal incursion of the US federal government into the lives of the US expat community. Pretty soon, with the new FATCA legislation, this arrogant attitude of the United States will affect every man, woman and child on the planet who wants to open or maintain a bank account or to invest in a retirement fund. Now, according to FATCA, you will have to tell the United States whether you are a US person when you open up a bank account in, e.g., Australia or Thailand. This makes every country in the world a protectorate of the United States, for, if they comply with FATCA, they are ceding their very sovereignty to a nation which has not invaded or conquered the rest of the world, but only uses its waning hegemony over the financial sphere to coerce other nations.
So whether you are a US person living in exile, a Canadian or a citizen of any other country, we ask you to join us in this struggle for freedom and justice.
P.S. For small accounts, it is advisable to report going forward only. Remember , they are getting hundreds of millions of reports and have no idea what to do with them. In almost all cases they can’t do anything with them unless they have other reasons to look. ( Think Paul Manafort who had millions onshore. They used his lack of fbars to pile on the felonies but wouldn’t have done a thing if he hadn’t come to their attention by other means)
I posted 4 days ago but it never showed. I have a RRSP in Quebec ( 25K ) and a pension plan worth ( 40K ). Found out about FBAR a few months ago. I live in the US and I’m dual, Can and American.
I asked my H&R Block accountant who has done my taxes for 16 years why he never asked about this and he said he never figured I had money in Canada. He wasn’t sure what I should do now.
Suggestions ? Is it a good idea to file FBAR next time I do my taxes. ?
Glad you got back in touch. I found your August 2nd comment and four replies on the Tax Questions Thread.
Could someone share their experience to what happened when they were contacted/chased/audited/similar by the IRS in the situation where:
– they live in Australia or other,
– had already renounced US Citizenship
– and optionally – had no ties with the US.
And what your experience was?
I’d especially like to hear from accidental Americans.
There’s a good chance you won’t hear from anyone, since the IRS doesn’t really appear to contact or chase non-residents very often. If you mean someone who has never filed US tax returns, very unlikely that they will have heard from the IRS, even after renouncing. If you mean someone who has been filing, it’s possible that they could be audited like any other US taxpayer.
There was a report a few years back on another forum of a dual citizen in Australia with very limited US ties who began filing circa 2011 (after learning about her obligations) and was then hit with one of the many errant $10,000 fines for “late” Form 3520/3520-A. Her US accountant had considered her Super account a trust and filed accordingly (at great expense). I have no idea how that was resolved. She was panicked, and eventually disappeared. She should never filed in the first place.
Thank you Ron