Petros responds to Steven J. Mopsick, 30-year IRS veteran latest comment, that some Canadians have probably found that the Overseas Voluntary Disclosure Initiative penalty of 27.5% is actually quite a good deal, since these Canadians are tax cheats and frauds. UPDATE: Steven J. Mopsick responds with a Jack and Jill scenario of a wealthy montréalais couple with a Swiss Bank account.
Are you planning to buy that condo in Florida? Don’t. If you have one already, sell it, even if you have to take a loss.
Are you planning on taking that company transfer to the United States? Politely tell your boss, thanks, but no thanks.
Steven J. Mopsick explains to us why certain Canadians would gladly hand 27.5% of their wealth, including real estate, over to the IRS, who obviously needs the money more than us filthy rich Canadian tax cheats:
To all. I would respectfully ask that you read my post today on the 2% Payroll Tax and what I wrote about the IRS Manual and penalty administration particularly, the duty the IRS has to administer the FBAR penalties in a reasonable manner.
@Petros: may I suggest a change of perspective. You don’t know every Canadian who may have entered into one of the OVDI programs. In fact for some of them, and some Canadians who may be signing up to make one right now, would be embarrassed to talk to you about it because FOR THEM IT WAS A GOOD DEAL! THEY HAD BEEN FILING FALSE TAX RETURNS. In some cases, they would have done jail time had the IRS come to them first. Again, OVDI is not for everyone. Sadly, some people receivd bad advice about OVDI and did not properly weigh their options. I guess some tried to do it themselves. That said,
It’s one thing to be listed in a computer data base. It’s quite another for a government program to hunt for your name and spit it out for special abuse.
If you haven’t had any reason to think of the IRS for a period of the recent ten or twenty past years, you probably don’t have anything to worry about..
Respectfully submitted,
30 Year IRS Vet
If the IRS thinks it is ok to raid the RRSPs of Canadians, the War of 2012 really has begun. I think these two paragraphs tell us more about what is going on inside of the heads of the IRS than anything I’ve ever read; it reveals the mentality of Mordor.
Our Canadian friend, IJ, who made the mistake of moving to the states a few years ago, asks for clarification:
@Steven,
“FOR THEM IT WAS A GOOD DEAL! THEY HAD BEEN FILING FALSE TAX RETURNS. In some cases, they would have done jail time had the IRS come to them first.”Can you be more specific what facts would lead to jail time ?
Filing incorrect return with incorrect perception is not filing false return which IRS has to prove 1. affirmative act, 2. tax due, 3. acting willfully.
Did Tim Geithner file false return ? And so did Charles Rangel ?
IJ, is a Canadian in the 2011 OVDI, and he doesn’t think its a good deal at all. He is a minnow.
Unfortunately, there may be some other Canadians who live in the United States that have taken US citizenship there, but who find the OVDI a good deal. That I may grant. But they live in the jurisdiction of the United States. I just don’t know anyone like that. I don’t frequent the same country clubs.
As for those of us who are actually living in Canada, I can’t think of anyone who would see it as a good deal. I hate the extra-territorial tax reach of the United States. I believe its is evil and wrong. I believe any Canadian resident who pays an FBAR fine is inadvertently weakening the Canadian economy, and that it is a casus belli (Steven, casus belli is Latin for, “a reason to go to war”). Last I checked, Canada was a much needed ally of the United States: so why the hell are you raiding our retirement accounts? That is not the act of a friend but of an enemy.
I have much more to say to Steven, but I am absolutely tongue-tied, because the fury that I feel is keeping me from thinking straight. So I am going to take this to the Isaac Brock readership. Does anyone out there know of any Canadian residents and/or Canadian citizens, who think that the OVDI is actually a good deal because they are tax cheats and they have been filing fraudulent returns?
Originally published 7:33 am February 20, 2012
@ Blaze, @Ladybug, @TomOn, @Tiger, @Shubert, etc.
Regarding CLN’s and some receiving registered letters regarding losing US citizenship if not heard advising otherwise, sounds right on to me. I can actually remember the day my then-husband and I went to take our Oaths of Canadian Citizenship, the woman who we had babysit our two young kids, where we lived, etc.
I believe that Registered Mail from the US would be marked “Do Not Forward — Return to Sender” if someone had moved. I know that our family moved several times in the not too many years after we became Canadian citizens, eventually ending up in another small town north of Calgary.
If the mail intended to inform us was sent back to the US as perhaps a resultant CLN, where did that leave us who had moved? It makes sense to me — and I can see it happening to a lot of us during those times.
@Blaze
Happy to have you post the link I sent. I am not computer literate enough to do it myself so thank you.
@ all of the above
After becoming a Canadian citizen in 1972(October), I remained at that address for 3 1/4 years. I have no recollection of receiving any document from the U.S.Consulate. As mentioned previously my Canadian citizenship oath included an oath of renunciation. Perhaps U.S.consulate took that to mean difinitely that I relinquished my U.S. citizenship. I can only hope so!
One more thing re all of the above, it was in 1993 that my late husband read to me an article, published in the Globe that the U.S.was “offering to give back” the citizenship of those people who might have previously relinquished. But you did have to apply through the Consulate and prove your intent had never been to give up your U.S. citizenship. This after their own 9th Circuit Court ruled in 1986 in a case called Richards vs Secretary of State, that Mr. Richards had in fact given up his U.S. citizenship when he became a Canadian in 1971.
I know perhaps logic doesn’t enter into these laws but how could any court in the land (either their land or our land) not see that the preponderance of evidence supports the fact that our expatriating acts resulted in a relinquishment of U.S. citizenship.
@Schubert, et. al: My first move was about 15 months after my 1973 citizenship ceremony. TomOn’s timelines, (three years after his 1973 ceremony), that would be after my first two moves. Based on Mr. LB’s time lines (one year after ceremony), I should have received my first letter before I moved. I’m trying to think back now to whether I did. It seems weird, but something may have been awakened in the back of my mind that I did receive a letter just before I moved, but tossed it aside because it was so insignficant to me. I already knew I was no longer US citizen. By the time the second letter would have come, I had moved to another province. By the time CLN would have been mailed, I had move again.
That may be wishful thinking on my part. It may also be irrelevant because I do not personally have a CLN–and don’t want to come out of the closet to get one.
Maybe, on the other hand, they didn’t begin sending those letters until 1976, which is when TomOn received his–three years after his and my ceremony. I am crystal clear that: 1. US Consulate told me, in a call I made to them that I was renouncing US citizenship by becoming a Canadian citizen. 2. I signed a document just before ceremony with a Consular official that contained the word “permanent and irrevocable.”
I also received an Award at a 25 year high school class reunion: Only Non-US Citizen. (Great claim to fame!). I’ll have to see if I can find that. Do you think IRS would accept that instead of a CLN? I know American high school classmates would testify I did not consider myself a US citizen then–or now (including the Vietnam vets who never understood why I, a woman, moved to Canada and stayed). Too bad none of them work for IRS!
@All
Re tiger’s: “…it was in 1993 that my late husband read to me an article, published in the Globe that the U.S.was “offering to give back” the citizenship of those people who might have previously relinquished. But you did have to apply through the Consulate and prove your intent had never been to give up your U.S. citizenship. This after their own 9th Circuit Court ruled in 1986 in a case called Richards vs Secretary of State, that Mr. Richards had in fact given up his U.S. citizenship when he became a Canadian in 1971.”
We should try to find that article and like information from that year.
@Tiger: I don’t recall the article, but I do remember that in 1994, a colleague and his wife finally became Canadian citizens after more than 20 years in Canada They had waited that long because up until then, they knew they would be renouncing their US citizenship by becoming Canadian.
I remember it well because we had an office gathering for them afterward with a Canadian flag cake from Tim Horton’s and everyone singing “Oh Canada.” Everyone else in the office was asking “What took you so long?” Instead, I asked “Does that mean you’ve had to file US income tax all these years?” Their answer was “Yes.” Hearing that, our colleagues were even more stunned it took them so long!
I also remember around that time a friend asked me if I could get my US citizenship back. I replied “Maybe, but I don’t want it back.” I asked him recently if he remembered the conversation and my response. With no prompting from me, he remembered exactly what I said and where we were when I said it. No other family or friend on either side of the border has ever asked me that question (probably because they already know the answer).
I’m glad to hear others moved a lot when they were young. Isn’t that what young people do?
There’s a Toronto Star article from 1991 that is hidden behind a pay wall. Here is the abstract:
“You may become Canadian and keep U.S. citizenship
Here’s more good news. Those who lost U.S. citizenship under the previous law only because they took Canadian citizenship, may now regain it and become dual citizens. They may apply to have their cases reconsidered. Talk to the U.S. consul in charge of U.S. citizens’ services at the American consulate general in Toronto…”
It looks like you can purchase the full article by paying $3.95
http://pqasb.pqarchiver.com/thestar/access/461832801.html?FMT=ABS&FMTS=ABS:FT&type=current&date=Apr+27%2C+1991&author=Joe+Serge+TORONTO+STAR&pub=Toronto+Star&desc=You+may+become+Canadian+and+keep+U.S.+citizenship&pqatl=google
Hello Everyone,
Schubert – Thanks for your suggestion. I’ve scanned the letter re loss of nationality and it is in the capable hands of Petros who will post it later today.
Steven – My husband is quite happy to have the minor inconvenience of “showing his papers” – I just wish it were not necessary since so many others don’t have those precious papers to show. A few years ago we were going through U.S. Customs in a Canadian airport and the officer kept insisting that Mr. LB was a U.S. citizen and should be using a U.S. passport due to his place of birth shown on his Canadian passport being in the U.S. Mr. LB kept insisting that he was not a U.S. citizen because the U.S. did not allow dual citizenship when he became a Canadian citizen and he intentionally relinquished US citizenship at that time. This discussion went on so long I thought we were going to miss our flight; but finally the officer let Mr. LB leave and as we left I could hear the officer muttering under his breath, “You are so a U.S. citizen.”
TomOn & Blaze & Schubert – I agree with Schubert that receiving the CLN likely wasn’t a punishment although there seemed to be some strange system for issuing them. Just this morning someone who became a Canadian citizen a year before my husband let us know that he, too, had just found his CLN, and interestingly enough his CLN was sent a year after my husband’s was, but did show the correct date of relinquishment. Go figure.
Hyjacked2012 – Mr. LB did not take any steps ahead of time to inform the U.S. Govt. that he was becoming a Canadian citizen. Since they contacted him I do wonder if there was an agreement between the U.S. and Canadian governments to provide this information.
Blaze – I’d be honoured to take the part of Head of CSIS. With Mr. LB at my side as Lead Investigator it should go smoothly as we’ve been practicing our lines together for a long, long time.
Cal411 – The registered mail Mr. LB received was sent from the consulate in Canada so it would not have gone back to the U.S. if it was undeliverable. If mail was sent to you it likely went back to the consulate. Perhaps they thought you got smart and moved back “home.”
@Ladybug
Thanks very much to you and Petros for arranging to have the copy posted on this website. I’m sure it will be downloaded multiple times and used to good effect, as and if needed!
Interesting in re-reading your original post that your husband got the letter a year after becoming a Canadian. I wrote to Kissinger eight months after I took out my Canadian citizenship, and got the declaration form as a response about ten months after my citizenship. I’m now wondering what would have happened if I’d never written, whether I’d have received a letter a year later. It does make me wonder if there was some sort of information-sharing agreement on this between the two governments, Blaze’s experience supports that otherwise what was a US officer doing at her citizenship ceremony? (I certainly never had that experience.) There was nothing in my wife’s ATI package from Citizenship and Immigration Canada to suggest this, but there was an interesting mainly-blank page stating that something had been withheld from the request for reasons of exclusion (quoting a section of the Act). I asked the ATI supervisor on the phone about that, and he said it probably was something to do with third-party information. But it could also have been a copy of correspondence between CIC and DOS; I do know from my work in the government (for a time, I had an office next door to our Department’s ATI coordinator, with whom I had lunch and the odd card game from time to time and we did talk shop sometimes) that intergovernmental correspondence is excluded from ATI along with various other sensitive material, so it’s possible that’s what happened.
I think I’ll submit a query to CIC on their contact us page about what their past practice was about this, and see what they say. Will report results on this forum if I get a clear answer to the question.
@TomOn i would be interested in your wife’s current status. My wife also, unfortunately, went through the process of requiring her US citizenship.
@Ladybug: Welcome to the growing cast of War of 2012! I love the fact your husband has taken your name (Mr. Ladybug) instead of the other way around.
Was your husband’s letter from the Consulate and not the Canadian Embassy? Do you mind saying which Consulate it was? I was in Vancouver when I became a Canadian. As I stated above, they may have sent a letter which I did not receive because I had moved. Or, I may have received the first letter letter which I disregarded. I would have definitely moved by the time of the second letter or by the time of CLN. Darn, I wish I had stayed put, just to get the letter. But, I still may have tossed it aside, thinking it was irrelevant, because I already knew I was no longer a US citizen.
You have no idea what this letter and TomOn’s posting means to those of us who relinquished in 1970s. This, combined with information Tiger sent to me from DOS and I posted above, confirms exactly what we have been saying. With full knowledge and intent, we relinquished our US citizenship in 1970s (or some even before that). It was “permanent and irrevocable.”
So, why do we need to prove it four decades later? Shouldn’t the onus be the other way around?
Based on fabulous info from Schubert, Tiger and I have requested information from our CIC file. I will wait and see what is in that file before deciding if I will contact Consulate or Embassy.
This is really interesting. I never got such a letter back in the 70’s. I moved about a year-and-a-half after my citizenship (we all moved a lot in our 20s, eh) and it seems like these letters were sent as much as 2 or 3 years after the event.
I recall having the impression that Canada notified the US about our new citieznships, but it was so long ago that it’s only vague in my mind. I remember clearly the CIC officer warning me at my pre-citizenship interview, “This will be a big step for you because you will lose your US citizenship” (which was my understanding all along and how I wanted it to be anyway). I think he said that CIC notifies Washington, but I just can’t remember for sure. (Like it wasn’t important for me to remember the modalities because I wasn’t told I had to do anything.)
I do recall that the citizenship loss would be automatic … which does seem consistent with the administrative presumption of the time. I had no idea they sent out letters and I’d never heard of a CLN until a few months ago.
@ everyone concerned re the State Department letter of 1980 mentioned by Ladybug:
this is probably redundant, but in case there’s someone on this thread who hasn’t noticed by now, the full text of that letter is now on a separate thread started by Petros, headed “Letter from Consulate General July 25, 1980.” You can download each page as a separate JPG by just clicking on the page. Pass it on to your lawyer and to anyone else who needs it. Enjoy!
Blaze, you asked about the origin of the letter to Mr. LB. It was from the Calgary Consulate.
Several of you wondered if you might have received a similar letter and CLN if you hadn’t moved so much around the time of your relinquishment. We were lucky as we moved after our first year in Canada and then stayed put for a long while so had a permanent address when Mr. LB became a Canadian citizen and received this good stuff two years later.
Schubert, you’re probably right about the third party information being for the DOS as the US Consulate requested information on my husband from Canadian Citizenship Registration Branch re date and place of birth, citizenship number, effective date, Section of Cdn. Citizenship Act, whether an oath of allegiance was taken, and date oath was taken. It’s included in the docs they sent him with his CLN.
The brief covering letter that came with the CLN said simply, “I enclose a copy of the Certificate of Loss of Nationality of the United States, approved by the Department of State on June 4, 1981.” Signed by the Consul General. Short but sweet.
@ Schubert
You are just so clever. What a great idea submitting an inquiry to CIC re their past practice. Look forward to hearing what they have to say.
@KalC Wife’s status Canadian citizen, no CLN.
Pierre Trudeau (Remember him?) compared Canada living next to USA to a Mouse sleeping next to an Elephant. “No matter how friendly and even-tempered is the beast, if I can call it that, one is affected by every twitch and grunt.”
The Elephant may be bigger,, stronger and more powerful, but the Mouse is smaller, smarter, faster and more flexible Pierre didn’t know about tiny Ladybug. While the beastly Elephant was snoozing and Mice were scurrying around trying to protect themselves, Ladybug and Mr. Ladybug quietly and discretely bugged their lives, seeking a remedy to keep the Elephant from stomping on all the Mice of a certain era.
When she found the antidote, Ladybug gently crawled onto the Mouse’s face and whispered into Mouse’s ear: “Here’s a sleeping pill for the Elephant.”
Even the Mice can sleep better now! .
@Blaze, Keep hammering away! As an American I really appreciate what you Canadians are doing to wake up the Elephant which is sinking fast as our $730 billion trade deficit continues to skyrocket because, with its hypocritical extraterritorial policy seeks to crush its own citizens who bring home the export bacon by going abroad to sell them abroad.
Keep up the good work, all of you!
@ Blaze,
I know you said in previous posts that you were now retired. I think you most definitely have a shot at a 2nd career if you want it. Screenwriter? Novelist? Short story writer? What fun you could have.
@Blaze, Mr. Trudeau’s elephant quotation has also crossed my mind lately. But, boy, you’re good … what a delightful tale!
@Roger, Tiger, Pacifica and Others: Thanks for your comments.
Roger, I hope you saw that, in War of 2012: The Movie, I cast you in a cameo role as UN Secretary General. I hope you will accept.
In that post, because you are such an esteemed international diplomat, Canadian Parliament unanimously makes you an “Honourary Canadian Citizen.” The honour is ours to have you among us. Only three others have ever become Honourary Canadian Citizens: Dalali Lama (2006–China was not happy!), Nelson Mandela (2001) and Raoul Wallenberg (1985).
Our Minister of Citizenship and Immigration also declared Santa Claus a Canadian citizen a couple of years ago–but that was “real” citizenship, not honourary. Even Petros had to go through the normal channels to get his Canadian citizenship–the Canadian government didn’t know then that Petros was the reincarnated Isaac Brock.
I spent the wee hours this morning rewriting the Declaration of Independence. I will post 2012 Declaration of Independence revisions in a separate post. I learned my American History well in high school to remember it. (Well, truthfully, I found the Declaration at http://www.ushistory.org!)mak
@Everyone here:
We all can agree — Blaze has found her calling and she has made us dream of greater things than the US IRS.
@Blaze, I humbly accept Honorary Canadian Citizenship! Thank you.
@Ladybug Feb 23 11pm
My CLN says there’s a copy attached of my original declaration form (there was) and the information sent to them by Citizenship Canada confirming my citizenship (there wasn’t, at least on my copy, maybe on their file copy it’s there). Not that it matters, I have my citizenship certificate and don’t need the confirmation …
Does raise the question of why the Government of Canada was sending off our citizenship information to a foreign government without asking our permission first. I don’t recall when our current privacy legislation came into effect, but it seems to me that at least today under the Privacy Act that would be a huge no-no open to a nasty court challenge if they did it again now. Will be interesting to see what reply, if any, I get from Minister Kenny to my email on this yesterday …
For the record, and after discussing the letter with my wife who, on reading it, noticed a remarkable concordance with the words I’ve always used in recounting the tale of how I got my CLN, I am now fairly sure (balance of probabilities but not beyond reasonable doubt, in legal terms) that I got the same or a similar letter with the declaration form. I didn’t keep the cover letter, but I have to say the phraseology (especially in the first paragraph, the “threat” that I’d lose my US citizenship if I didn’t reply within a time period, and the overall tenor of the wording) ring all sort of bells in my distant memory.
I am sending copies of the letter and your original post explaining the context, to a few people (my MP, the NDP finance and foreign affairs critics, Flaherty, Denise Savoie of the NDP BC caucus, and my wife’s lawyer, plus anyone else I think of later). I encourage others to do likewise. One of the theme in the letter will be the hypocrisy (surprise suprise, again) of the United States in considering us all to have lost US citizenship by daring to become Canadian or whatever other nationality and then thirty and more years later saying ex post facto “oh now we think you’re still ours, you owe tax returns, and your banks have to report you under FATCA.” My, but I’ll bet the lawyers are salivating over the fun they’re going to have with the lawsuits once the banks start messing with this issue … If and when Canadian Bankers Association reply to me re the letter from Blaze that I sent them to protect her identity, I think I’ll hit them with this and explain to them how much fun they’ll have in court if they hand over financial information on anyone who became Canadian before 1980 with intent to relinquish (which is almost everyone who did that, I suspect), whether or not they have a CLN.
“Let the Games begin,” as they say in the Olympics.
By the way, for those of you who don’t reside in Canada — this policy and approach in the letter wasn’t limited to Canada, ANY American taking out nationality in ANY other country would have been affected by this. This letter is a boon beyond Canada’s borders. Thanks again to LB and Mr. LB!!!
@Schubert, et. al.: I agree under Canada’s current privacy legislation, info could not be released to US without consent. If I recall, privacy legislation was passed or implemented in the 1980s. I wonder if Canada did it with other countries–or if they just had “reciprocity” with US. For our purposes, it’s great that info was reported,
Like you, once I saw Mr. Ladybug’s letter, it twigged something in my mind. I had this flashback of reading a very similar letter after coming home for work and tossing it aside because it was irrelevant to me–I already knew I had lost my citizenship. I do admit that may be wishful thinking on my part. If the Consulate mailed the letter on the first anniversary of my ceremony–as they did with Mr. Ladybug–I was still at the same address, as I was when I became a citizen, so it would have reached me.
After one year and two months (when the second letter would have come based on Mr. LB’s experience,) I had moved across the country, and Canada Post would likely not have forwarded a registered letter (if I even left a forwarding address!) By time of CLN would have been mailed, I had moved yet again–not unstable–great job opportunities!)
I don’t think Consulates are going to make this easy for us (Surprise!). I e-mailed the Vancouver Consulate yesterday asking them if they retained records of former citizens who relinquished in 1973 and of correspondence they sent to those individuals. I did not ask for any personal info about myself or anyone else.
Here’s the reply I received: “We are unable to provide such information which is protected by the Privacy Act.”
I have e-mailed again advising I was only seeking general information, not personal information. I didn’t think what I asked would be highly classified like military or CIA records.
In terms of the hypocrisy, I think it’s very simple. They didn’t care about the huge wave of boomers who expatriated then–We didn’t have any money. Now that we’re in or near retirement, and they’re broke, Guess What–They see a potential cash cow.
If you have time, take a look at the revisions I made to the Declaration of Independence to adapt it to our needs. As I reviewed the original and began rewriting, I was absolutely blown away at how few minor changes needed to be made to reflect our needs today. .