The Taxpayer Advocate Service posted a link on their Twitter feed asking for people to offer suggestions on how to reform the US tax system. Maybe everyone should send them some concerns they have? You won’t receive a response but the page says “Your suggestions are compiled and reviewed by the National Taxpayer Advocate.” It certainly wouldn’t hurt to let them know what we all think of FATCA and FBARs, and it is anonymous. I’ve already put in my two cents. Hope you all will too!
@recalcitrant — The pleasure was ours!! It was so good to meet and visit with you face to face and to have one of your fine sons for supper too. Most of all, we were so glad that you accomplished getting most of it done in one shot, so it turned out to be fine day.
The exception was how they will treat your son’s citizenship, but it is encouraging that the consul listened and asked you to email him further on your statement so he can pass it on to his superiors. You’ve put a ‘foot in the door’ at the same US Consulate for my son’s case when I am finally there. So, thanks!
@omghe’sstillanamerican- there also isn’t an IRS office in Mexico either and I believe that Mexico has a larger population of U.S. expats than does America. The IRS serves Mexico from its Florida office.
If you read the TAS report you will find that the places where the IRS does maintain an office are places like China, London and three other locations that I can’t recall right now. What all five of these locations have in common is that none of them are located in countries that have a particularly high number of U.S. citizens. What they do have in common is that they are in locations that are important to U.S. diplomatic overseas efforts.
“It is in truth not for glory, nor riches, nor honours that we are fighting, but for freedom – for that alone, which no honest man gives up but with life itself.”
– Declaration of Arbroath 1320
My God CATO you must read ALOT. I’ve never seen most of these quotes before.
I just love freedom. It has become the most precious commodity on this planet, a real rare earth element.
I am maybe being dense here – so you have officially renounced. You will now submit 5 years of tax returns and presumably FBAR’s and THEN the dreaded 8854 on which you will be able to say you are tax complaint? The timing seems important. Congratulations on getting this far. I’m still at the hand wringing stage.
@hijacked2012- yes, I did officially renounce. Raised my right hand and swore that I no longer wanted to be a citizen of the U.S. I still do have the other stuff to do for the IRS and I hope that I will never hear from the U.S. again. All that I want now is to receive my CLN.
One quick question. Do you wait to file the five years, 8854 and FBARs after you receive the CLN or do you first to the filing and then receive the CLN?
@tiger- as far as I know there is no particular order in which it has to be done. What I believe I do know is that income reporting requirements , for tax purposes, cease on the day before you officially renounce. Which means that I have to report all of my income up to January 31st, which is the last day that I ceased to be a citizen.
This is because the CLN is dated for the day that you officially renounce your citizenship.
@tiger: I think–but I’m not certain–that for those of us who relinquish because we renounced decades ago, we don’t have the same obligation to backfile with IRS. Tiger, you are in that group along with me. You and I are currently awaiting information from your citizenship file to confirm the oath to renounce.
As I understand it, if we can show that we relinquished long ago, we may be able to get our CLN backdated to the date of our expatriating act. Because we did that in the 1960s or 1970s, there should be no obligation to file back income tax returns or FBARs.
Can anyone clarify if my understanding is correct? Also, can johnnb or anyone who has relinquished from the 1970s advise if they had to give their SSN to get CLN. My SSN hasn’t been used for 44 years and I don’t even remember what it is.
Just sent my letter to the TAS as well. Thanks for the link!
Merck’s tax rate drops from 40% last year to 2% this year. I wonder if that means that they also used only 2% in government services? Don’t they know how much better they, the shareholders, would feel if they paid more in taxes?
Like you, I don’t even remember what by SSN is – I would have only filed 2 partial years of working in U.S. – 1963 and 1964. Probably got any tax paid refunded. Never used the SSN again.
I think the IRS will say we do have an obligation to file 5 years of returns. Unfortunately, although State acknowledges that we “relinquished” in the 70’s, until we actually go to State with our papers, IRS considers us ” u.s. citizens” and therefore will require tax returns for 5 years, FBARs and the Form 8854.
It is absurd, but apparently it is the law. Goes against their own constitution but is still allowed. I guess IRS is like “God”.
@tiger- the IRS is god. Not only does it make the rules but if you want to appeal its judgement you have to appeal to the IRS. Now isn’t that a conflict of interest? What incentive is there for the IRS to rule against itself? Unlike any other law enforcement agency the IRS is its own judge and jury.
There are many problems with the way that the IRS is set up and one of them is that in addition to being an agency that collects taxes it is also a quasi law enforcement agency. However it is different from other law enforcement agencies in that it does not have to comply with Constitutional rules of securing a proper warrant before it conducts a search. Actually all of our constitutional rights are non existent when it comes to the IRS.
The Congress has used IRS legislation as a way to violate the Constitutional rights of American citizens and now, with FATCA, the sovereignty of other nations.
Great post. The Taxpayer Advocate DOES read complaints and criticism. If you download the 2011 report to Congress, there is an entire section dedicated to complaints submitted by taxpayers residing abroad.
The following is a link: http://www.irs.gov/advocate/article/0,,id=252216,00.html
I submitted my ‘3 cents worth’ (3 separate Systemic Advocacy Management (SAMS) submissions) to the TAS and have been assigned submission numbers in their acknowledgment e-mails. I decided to target: FBAR/FATCA reporting burdens as applied to 1. Passport issues 2. Inequitable treatment/ extra burden/ negative impact on: (a) US ‘persons’ seeking to volunteer and participate fully in the life of their communities (i.e governance, fundraising) and (b) full involvement in professional/workplace communities (i.e. voluntary governance, fundraising). 3. Inequitable burdens on US ‘persons’ ‘abroad’ holding ‘power of attorney for property’, and acting as voluntary (unpaid) executors and guardians. Re; IRS reporting requirements, conflict with laws of other countries, potential for associated liabilities re breaches of privacy and fiduciary duty. I have also been wondering about the application of IRS FBAR/FATCA requirements and penalties on paid and government executors, trustees and guardians – at trust companies, banks, credit unions and government bodies (ex. Office of the Public Guardian and Trustee http://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/overview.asp ). If the representatives are duals/US ‘persons’, does the IRS expect them to report all their client accounts on their personal FBARs? Conversely, if the trustees are Canadians, and their clients are duals/US ‘persons’, does that mean that they must report on their clients ‘foreign’ accounts to the IRS on FBARs – because they are acting on behalf of individuals who cannot comply themselves?
Add in conflict with Canadian laws governing privacy and fiduciary duties, and the outcome could rival the infamous ‘Jarndyce and Jarndyce’ case from Dickens (Bleak House) …….. http://en.wikipedia.org/wiki/Jarndyce_and_Jarndyce in the courts of Chancery http://en.wikipedia.org/wiki/Court_of_Chancery .
@Don Pomodoro; as I write this I was reminded of your post of February 14, 2012 “How Charles Dickens viewed the US when he visited in 1842″….http://isaacbrocksociety.com/2012/02/14/how-charles-dickens-viewed-the-us-when-he-visited-in-1842/
Perhaps it is no accident that it is Dickens 200th birthday anniversary this year? Who knows, he might have found fertile ground and inspiration for satire in the workings of FBARs and FATCA.
“Keep out of Chancery…. It’s being ground to bits in a slow mill; it’s being roasted at a slow fire; it’s being stung to death by single bees; it’s being drowned by drops; it’s going mad by grains.”
(Charles Dickens (1812-1870), British novelist. Mr. Krook reporting Tom Jarndyce, in Bleak House, ch. 5 (1852).)
“A bill… is the most extraordinary locomotive engine that the genius of man ever produced. It would keep on running during the longest lifetime, without ever once stopping of its own accord….”
(Charles Dickens (1812-1870), British novelist. The Pickwick Papers, ch. 32, p. 434 (1837).)
Hey all! SAMs (Systemic Advocacy Management System) worked! I had an e-mail asking me to call to provide more details (re #2 and #3), in order to process them. A real person is on the other end reading through them!
@recalcitrantexpat: I greatly appreciate some procedural clarification. I recently acquired Indian citizenship. Since India doesn’t allow duel-citizenship, I had taken an Oath that I would relinquish all other citizenships. So I have taken Oath with the intention to relinquish US citizenship. Can I relinquish my US citizenship before US consular before filing 5 years of back taxes? I believe I don’t owe any taxes to US so I will submit nil tax returns for past 5 years. My assets are well below US$ 2 million limit. I want to do this diverse according to US/IRS requirements.
See this extensive guide
Our understanding is that you go to the consulate and tell them that you have relinquished by taking Indian citizenship with the required intent.
Later , you file 5 years of returns 2007-2011 and then file form 8854. The above website says you then file a return for the portion of 2012 to the day you tell the consulate and another return for the balance of the year. See the F.A.Q. s ‘if i expatriate, how do I do my taxes that year’ However, I think that if you are not a ‘covered expatriate’, you only need file until the day you expatriate.
@india_expat- that is a very good question. Short answer is that you already relinquished when you took the oath. So the filing of taxes has no relevance to the act that you already performed.
If you read the F4079 you will see that when a person is applying to lose U.S. citizenship on the basis of voluntary relinquishment upon taking citizenship of another country, that an absence of tax filings is one of the proofs that supports voluntary abandonment of U.S. citizenship.
When you fill out the form it will ask you for a copy of the citizenship oath that you took as a substantiation of your claim of having committed an expatriating act. So get a copy of that oath if you don’t have one already.
The key to a successful argument of relinquishment is to do nothing after your expatriating act where you are presenting yourself as an American citizen. That proviso also includes refraining from filing U.S. tax returns because only U.S. citizens file U.S. tax returns. Don’t travel on a U.S. passport either. Don’t stay in the U.S. for any substantial period of time that would indicate residencey. Don’t own property or have U.S. based financial accounts etc. In other words avoid anything connected to the U.S. like the plague.
I hope that this helps.
@india_expat- oh yes. I forgot to mention that it is after you submit your relinquishment papers that you file your five years of taxes and the F8854.
@recalcitrantexpat: Thank you for the information. I haven’t visited USA in ten years. I have no property in the USA. But I have 401k savings account and also one savings account in a bank, which I opened when I was working in the USA. Do I need to close all the accounts? After taking my oath in India, I know I can’t use my US passport or misrepresent myself as US citizen. This community is great. Thank you all for helping cluless expats.
@recal – “Avoid the US like the plague”
That’s the problem now with the FATCA. Banks are too scared to open up accounts for us, so even if we desperately want to move money out of the US, it is very difficult!
@india_expat- you should close all of your U.S. accounts as soon as you can, because they represent ties to the U.S.