I will never forget reading in late 2010 about the situation of the Canadian-Americans and many Americans living in Europe: to become compliant with the IRS and US Gov, they had to hand over large portions of their life savings to America, a country that provided them with zero benefits living in their host countries. I thought this “criminal” on the part of the IRS to sneak-in with such a thing. This has contributed to at least 60% of my decision to renounce because I want nothing to do with countries that engage in such under-handed behavior.
Since I discovered this site, it dawned on me “If everyone declares their accounts, then the IRS can charge no penalties”. So if you really want to get back at the IRS, tell everyone you know, especially people who are contemplating moving to the US, that they must declare their accounts; otherwise, the IRS is will demand a penalty payment. If everyone declares, it will render the US efforts futile. Just today I was on three different sites with same message: declare now so you have no trouble later. I wish I could have said, “and then renounce“, but those forums aren’t geared for that sort of thing.
Now is the best time to declare. Interest rates are near zero. The actual tax paid to the greedy IRS will be next-to nil. I think that the US tried to catch 6 million people by surprise, and yes, they caught some people. I think people have to look at the risk/reward or actually going into their “disclosure trap”. For the people that renounced in the 70s – I’m no “cross-border professional” — but I know the history from that time, you lost US Citizenship, according to US history books. If you have to file, file your tax returns, pay any taxes due, and then be done with that place.
The best thing you can do is to tell everyone and deny them what they want (penalties…$$)
This is a very bad idea, in the sense that one should be aware of the risks:
(1) This post is based on an incorrect premise. There is a six year statute of limitations. Thus, by declaring your accounts this year, it makes it clear that you had them before, in all likelihood. Thus, it is a question of back filing. But this puts the person in the position of explaining why they never filed in the first place–i.e., reasonable cause. But reasonable cause is not defined. It is up to the IRS to decide whether your cause is reasonable. The IRS can also determine that your earlier failure to disclose was wilful and fine you 50% of your accounts, and indeed they have basically said that they will not be lenient on quiet disclosures.
(2) The IRS does not need this information and it is a violation of Constitutional rights to have to report it, especially the 4th amendment.
(3) I am not about to report my wife’s accounts. The IRS doesn’t now s*** about her, and they are not ever going to know about her.
The IRS can also determine that your earlier failure to disclose was wilful and fine you 50% of your accounts, and indeed they have basically said that they will not be lenient on quiet disclosures.
As far as I am concerned…I back filed as per the Dec 07th fact sheet that states that compliance can be achieved by normally filing 6 years of back returns and FBARs.
By definition this would not be “quiet disclosure”….call it what you want, but I think the true definition (of QC), is the filing of amended returns, not initial returns.
I guess what I am trying to demonstrate is the difference between filing delinquent 1040s and FBARs as opposed to filing amended 1040s (?)
@Petros, you are looking at it from the “boomer” perspective who went to Canada in the 1970s, was told they are no longer American, and now has substantial assets in Canada. That is another group that I’m NOT referring to here.
I’m mostly referring to people who are in the process of gathering assets. If someone moves to America and quickly declares their accounts, the US will be denied their “penalty income”. I know of several people in this category, and I make it very clear to them what CAN happen if they don’t declare and they want to hold onto US Citizenship.
And I hate to tell you, but there is no statute of limitations on willful tax evasion: http://wiki.answers.com/Q/What_is_the_statue_of_limitations_for_tax_evasion
Yes, everyone has different situation depending on where they are in the path to retirement. Many of us a clearly further along the path than others.
I need to point out that FBAR is not part of the tax code. FBAR is under the Bank Secrecy Act, which is, if I’m not mistaken, under criminal law, and is aimed at stopping criminal behavior. Therefore it has a 6 year statute of limitations.