James Fallows has written an article in the Atlantic about FATCA. He has indicated he will write more about its unintended consequences on US citizens abroad in the future, based on the hundreds of links he’s gotten from people in Asia, Latin America, the Middle East, and Europe.
The link is: Fatca – The Menace You’ll Hear About in 2012
I noticed he didn’t mention Canada, so I have just written him to make sure he knows about the huge effect and consequences FATCA is having here.
Here is what I wrote:
“Dear Mr. Fallows,
Thank you for writing about this issue which is affecting as many as 6 million American citizens who live outside of the US.
You stated that you have many links to the problems that FATCA is causing in “Asia, Latin America, the Middle East, and Europe about people and institutions going crazy over this law. ”
You didn’t mention Canada, which has more expats than any other country. Due to the fact that Canada shares the longest undefended border in the world, Canadian expats are more deeply enmeshed in the US economy than expats anywhere else, and therefore have suffered some of the most horrendous personal pain and financial damage due to the effects of FATCA, and citizen-based taxation in general.
We also have a large and growing protest constituency. You can find many of our stories on expat sites such as expatforum.com, where we have an entire sub-forum dealing exclusively with the issues raised in the past four months by the effects of FATCA on our personal and professional lives. The link to the subforum is here: http://www.expatforum.com/expats/expat-tax/
The expat forum led directly to the creation of the Isaac Brock Society ( http://isaacbrocksociety.com/ ) , a public blog that is gathering information and resources to help Canadian expats find answers to their questions and provide support for those caught in the myriad dilemmas into which FATCA and citizen-based taxation has thrown them. An astonishing number of these people are “accidental Americans” who did not know they were Americans, or thought that they had lost their US citizenship long ago. And many many more are “US persons” who, as a result of FATCA, are renouncing their US citizenship in such large numbers that some US embassies in Canada have had to carry out official renunciation ceremonies en masse.
Isaac Brock, you may know, is considered a Canadian hero for defending Canada against US incursions during the War of 1812. There is an ironic symbolism felt on this side of the border that two hundred years later, Canadians once again are uniting to fight off the threat of a US invasion that threatens their property and their future.
Thank you once again for publicizing this issue. We are aware that most Americans know nothing about the enormous impact that FATCA is having on US citizens who live normal lives abroad but are being treated as if we are criminals guilty of willful tax evasion. I have found that, in general, Americans know virtually nothing about how deeply offensive their government’s action are perceived by those outside the US, especially in countries that consider themselves friends and allies of America. Not even the world’s greatest power and largest economy can survive alone.
Kindest Regards….”
I’m encouraged by the increasing number of media figures who are telling our story to Americans within the US. Very few people within the US are aware of the effects their government is having on fellow citizens abroad. Americans want to be liked. Government doesn’t have a very good image in the US right now. I’m still looking for a change I can believe in.
Thanks for sharing this, Ladyhawk. Very well said.
Wonderful letter. James Fallows will surely research the links you have provided, Ladyhawk. Thank you for sending the letter so quickly. The story of Canada’s US citizens, as you point out, is huge.
Hopefully, this issue will take a bigger stage in 2012, including all States of the USA.
Thank you very much for your post and email to James.
I am very grateful to James for taking the time to review the subject and make some comments on the issue. I am sure he is aware of Canada, as I have sent him tons of stories, and he probably just overlooked mentioning it when he was writing his post. Understanding the entire scope of the issue related to FATCA, FBAR, Citizenship taxation takes time to get your brain around, unless you are directly being effected. Your email does an excellent job of highlighting the issues for Canadians and many expats everywhere. Thanks for emailing him. I don’t know if he will respond or not. It is the holiday after all, but he does read his email. For me at least, he has often jotted off a quick note of acknowledgement, or with suggestions as to how to craft a better narrative. That is rare from a journalist/author of his stature and very much appreciated.
Just an aside issue. The one voice, that still does not get any attention from the current IRS actions, is the immigrant community in America who are just beginning to understand that their family accounts at home are subject to a lot of same issues that Expats are now painfully aware of. There is no real community of bloggers or advocacy that I know of, who speaks for them. They have to piggy back on the efforts of Canadians, I guess. Keep up the good work 🙂
Ladyhawk, Thank you so much for sending this wonderful letter to James Fallows, Thank you!!.. We all appreciate it!! Bravo!!
I’m glad to see so many posts on James Fallows’ article here today. Just Me, thank you for all your efforts on this issue in addition to your correspondence with Mr. Fallows. It is gratifying to see someone with Fallows’ influence taking an interest in something that affects huge numbers of people who have no clout.
You are right about the dilemma FATCA poses to the immigrant community in the US, many of whom OF COURSE have bank accounts in their home countries! A big part of the success story of America is that, not only is it (or was) a place where anybody can work hard and do well, these immigrants can send support home to their families and friends and spread their success to those who are dear to them in other countries. It is a largely unrecognized form of foreign aid that has the virtue of being entirely voluntary and based on a percentage of the new wealth creation that immigrants contribute to America. Unfortunately people like Senator Levin, the “brains” behind FATCA, either do not recognize this, or they see it as an undesirable outflow of money that should remain in the US – so the government can tax it some more.
The people who will be hardest hit are people who are educated foreigners that have more than $50,000 in bank accounts in their home countries who go live in America.
Once their banks in their home countries send their names to the IRS, they will be threatened with jail time in America unless they fork over a large part. Who cares if they saved the money over the years (100% legally) to fund their retirement! There’s a comment like this from a Swiss gentleman, on that tax attorney’s blog, who this happened to. I feel badly for him, but it was his decision to live in America and become a citizen there.
It’s a terrible thing, and financial advisers often would tell their wealthier clients to avoid becoming US citizens. I feel most badly for the immigrants to the United States from India. They have been clobbered hard by this issue and in their case, it makes the United States look like a monster, stealing the wealth of poor people back in their home countries because they didn’t know about FBAR.