I have been in contact with a victim of the current IRS OVDI who is living in Europe. I have been asked to share some details of this person’s situation plus a copy of a recent letter that has been received from President Obama. This was written in response to a letter sent to the White House petitioning for redress of the current IRS OVDI program for minnows.
As a preface to that letter, what follows is an Executive Summary of the situation I am writing about. I have been asked to share this, while maintaining anoymity which I am respecting.
Personal Profile:
Dual national resident outside of US ~25 years.
Lives in a high tax European country.
No family or friends left in the US.
No contacts with Americans in country of residence.
6 days spent in US in last 6 years – transit only.
Only ties left to the US are emotional – from a childhood spent there.
Filing taxes faithfully for all the time out of the US thinking they were done correctly.
Posterchild for Nina Olson’s statement in the 2011 Taxpayer Advocate Report to Congress: “The complexity of international tax law, combined with the administrative burden placed on these taxpayers, creates an environment where taxpayers who are trying their best to comply simply cannot.”
Quote:
‘I filed my taxes faithfully in both the US and my country of residence for all those years. Never had any problems with either country until I realized I may have made an omission in the US taxes and failed to file the required FBARs. I wanted to correct it and pay any taxes if owed. I did not think I owed anything. Taxes owed to the U.S, over 8 years, were de minimis. I was even entitled to some refunds that I never got because I had no clue about them.”
OVDI Participant:
Joined upon advice from a U.S. tax practitioner as the ‘only option’ when client sought advice about FBAR compliance problem. Has already been charged big fees to produce nicely bound documents to send to the IRS. Attorney now wants client to sign the 906 when it arrives. The advice being given is to just pay the OVDI penalty which, after practitioner fees, doubles the compliance cost. Estimated fees for attorney to handle the Opt Out would be as much or more than the current OVDI penalty.
Reason petitioner is sharing this information:
“I want to contribute to the effort to raise awareness of the unjustness of the treatment in OVDI. We should not go it alone. There are many of us who have been affected, and we can contribute our voices to help each other. The Isaac Brock Society and Jack Townsend blogs have been important information sources that have helped me to realize that there are others like me out there. If other people had not been public about their suffering and experience, I would probably still be thinking I was the only person in the world who had made a paperwork foot fault. I would still be thinking I deserved to be indebted to the IRS for the rest of my life for that failure.
Thank you for what you all have contributed to help me see that I am not alone. “
Reasons petitioner wrote Obama:
Wanted to highlight to President Obama the suffering that OVDI was causing normal people, and point out the need for a better way of handling “minnows” to make compliance easier.
“I was gullible in that I still believe that the ‘little people’ can make a difference. I believe that politicians might listen even if you are not a Big campaign contributor. I believe in mutual respect between government and citizens. I don’t want my belief to turn into a past tense.”
What was expected from Obama:
“I wanted some recognition that there are U.S. citizens overseas. I was looking for some statement of what President Obama was going to do to address the issue of innocent overseas citizens who had entered OVDI and were being treated as criminals.”
What was received from Obama:
This is the letter. You are welcome to click on the link below and read it yourself. What you think?
How was the letter perceived by petitioner?
“Honestly, I did not expect anything more than some standard response, but this response makes me feel worse than if he had not answered at all. At least I still had some hope when I did not receive an answer. What I got was a bland, previously composed political statement. It does not address any of the concerns I expressed.”
My (Just Me) Opinion:
This appears to be a 100% re-election campaign statement. It is nothing more than “principles”, with no specifics and only vague promises. Even the first two lines are crafted to apply to anyone writing about any “tax” issue. In my opinion, some staff person looked at the letter and then selected from the menu of pre-programmed form letters prepared for the campaign. I would bet, that every response sent out from Obama on any issue from now until Election Day will be framed around a campaign issue. I would further wager, that this is SOP in the White House for both parties. Very disappointing, but sadly not unexpected!
A Request:
If anyone else has written President Obama (or even a Congress person) and got an answer back that was as unsatisfactory as this one, I would ask you to share it here. I think the reality is, all we are going to see is campaign related responses from now until November, rather than anything that indicates that a petitioner’s pleas were heard. I hope there are some examples that prove me wrong. 🙂
Well, if we wants to “sell products stamped with “Made in America” all over the world,” he’d be better off not deterring Americans from going abroad and making sales.
@just me: good post. The White House response was totally unacceptable and was clearly a canned letter written by a staffer. Your contact should be advised to write again respectfully and say why the letter was unresponsive and why it appears as though the White House does not seem to be listening.
The White House doesn’t even appear to be listening to people at the highest level of government from Canada. I don’t know what their deal is.
I am revolted by every aspect of this. This guy has been filing his tax returns all these years. He has been f*** over by yet another one of these so called “cross border professionals”. I am not sure who is more dangerous – the IRS or some of these lawyers.
But, the most disgusting aspect of this is the letter from Obama. It is obviously a form letter – but the more important aspect of this the white house doesn’t even have a form letter for those who live abroad – that’ who significant they are.
Here is somebody we should get in touch with. Professor Maurice Williams in BC entered OVDI, paid a lot of money and apparently wrote Obama. He teaches in BC and should be quite easyy to access. Would be interesting to know whether he ever got a response and so what it was.
Here is a link to a post that I wrote where he is interviewed:
http://renounceuscitizenship.wordpress.com/2011/11/13/expatriating-acts-the-status-of-your-u-s-citizenship/
Calling Calgary411?
Very disappointing – obviously canned response 9642-B. Wonder if there will be anything coming out that is as obvious and audacious as Obama’s 2008 campaign promises to Americans abroad. Maybe they’ve decided to just ignore expats this time around, even at the risk of not getting their votes. Can’t wait to hear what happens after ACA’s visit.
The president doesn’t come off looking very serious. Imagine that. The president does not seem intellectually curious, whereas Pete the Planner gets it? Pete the Planner for president.
Not much of a response at all. He totally ignored our problems and once again reiterated the partiotism position. I no longer live in that community and my interest are not aligned with those who live in America. I don’t need to make a donation nor do I want to.
As always, I’m intrigued by so-called advisors who tell people that entering the VDP is the only option. As for the nonresponsive response, how many of us would really have expected better?
Does anyone seriously think that Pres. Obama would have seen the original letter? of course not. Some lowly staffer opens the mail, chalks up another mark in the ‘complaints about unfair taxes’ column and hits a button to send out a response. There are probably hundreds of complaints about unfair taxes a day. We need to work through our governments, organizations such as ACA and CBA and individuals with some influence such as the TAS. By the way, does anyone know of any follow up to M. Wente’s ‘crosshairs column?
IRS employees at the higher levels involved with international compliance issues have their email address and telephone numbers publicly listed on the IRS website. I dont know whether that means it is appropriate to contact them directly or not. Or is TAS the only appropriate channel that taxpayers are expected to go through?. If writing to them directly is OK, can that be an altenative route to shed more light on the situation?
@renouncecitizenship,
Are you asking me to contact Professor Maurice Williams? I certainly will try to do so.
Everyone should revisit your November 2011 post http://renounceuscitizenship.wordpress.com/2011/11/13/expatriating-acts-the-status-of-your-u-s-citizenship/, including listening to the CBC interview!!
@All.
I have a slightly different view and perhaps an idea worth pursuing.
The fact that the White House responded at all gives the IBS an opportunity to use the response as a vehicle to further publicize the issues facing expats and the inequity of citizenship based taxation in general. You now have a letter from the President dated April 18, 2012. It is in effect, and invitation to dialogue with him. What if the IBS board were to respond to the WH as follows:
“Dear Mr. President:
Thank you for your letter of April 18, and to respectfully suggest that you that your letter was not at all responsive to Mr. XXX’s letter to you of [date] in which he detailed for you, a glaring inequity affecting seven million voting Americans living abroad who find themselves potential victims of the unintended consequences of a law you approved regarding their tax obligations……
[explain the problem]
[don’t make the IRS the issue]
[offer a solution]
[dont disrespect him or the Office]
Perhaps a closing with the suggestion that it would be nice to hear in his acceptance speech for the nomination of his party at the DNC convention in Charlotte, N.C. in September, one sentence in which he acknowledges the problem and pledges to do something about it if he is elected again in November.
It might also be a good idea to send a copy of the letter to:
Geithner
Shulman
Ms. Olson
Cong. Carol Maloney
Democrats Abroad
Senators Levin, Baucus and a few others.
Mr. Romney and some other top Republicans
Selected Canadian officials.
This the way the game is played in Washington. If he doesn’t respond in a few weeks you can write to him again and cc everyone again to let the world know that you are not going to go away and the problem is going to keep getting worse if it is not addressed.
Thoughts? Comments?
I got exactly the same letter after writting to the White House about the plight of Americans Abroad.
I am a Democrat and want President Obama to be re-elected. I have contributed to his campaign. I said this in the letter. I asked him to take a look at the Tax Advisor Repport 2011. I said that I wished he has the absentee votes of all Americans Abroad. I even mentioned that the Republicans are doing this, trying to get their votes. I identified myself.
This was the letter I got back.
My interpretation is that the Democrats (my party) don´t know what to do with this since this is a part of President Obama´s government. I don´t know how the Democrats Abroad are going to handle this. Just curious.
Changing subject it seems to me that it dangerous to hire an US Tax Lawyer to advise you…My God… my sleep is gone and my personal and professional life is a mess. I think about these issues 24/7.
@Anon: it is most appropriate to contact the IRS officials if their contact information is readily available. These people are working for us. I can tell you that you will not likely a get a response but your message will not be deleted either. The bureaucratic response will be to forward it up the chain of command until it gets to the office of public affairs or someone else responsible for writing a monthly report to the IRS leadership which says in effect, “we are continuing to receive an increasing amount of communication from members of the Isaac Brock Society. Is the Service doing anything at all to help these people?”
@Calgary411 – Yes, I think it would be great for to contact him. I thank you for your tracking down the woman in Sask.
@Steven
My thinking on this (whether right or wrong) is that all channels should be explored at the same time.
I like the idea of IsaacBrockSociety writing directly to Obama. I don’t think that individuals have a chance. Also, IsaacBrock is beginning to elevate its profile a bit. I think that your suggested content is on the right track. I like the idea of copying the people you suggested because it makes it clear that everybody is at least being apprised of this issue.
The trick is to initiate a dialogue. Furthermore, although the letter should be supported by ACA and others, the more idividual groups that are making this an issue, the better.
Interestingly, Obama has begun drawing attention to Romney’s Swiss bank accounts.
“Sam Stein, Barack Obama Campaign Attacks Mitt Romney Over Swiss Bank Account (Huffington Post 4/9/12), here.
“I asked Warren Buffet in a meeting we had recently, ‘Have you ever had a Swiss bank account?’ He said, ‘No, there are plenty of good banks in the United States,'” Durbin said.
“So I started asking people: ‘Why do you have Swiss bank account?’ One, you believe the Swiss Franc is a stronger currency than the United States dollar. And that is apparently the decision the Romney family made during the Bush presidency. And secondly, you want to conceal something. You want to hide something. Why would you have a Swiss bank account instead of one in the United States? I would like to … ask the press to really press some of these questions, the obvious questions. When is the last time a presidential candidate for the United States had a Swiss bank account? I think the answer is never.”
http://www.huffingtonpost.com/2012/04/09/barack-obama-mitt-romney-swiss-bank-account_n_1413130.html
Romney is going to have to deal with the issue of the complexity of his finances. I actually believe that contacting Romney is a good idea. He will be able to leverage IsaacBrockSociety to show how the IRS, Levin and Obama are essentially mistreating anybody and everybody with an offshore account. For reasons that I have previously given I believe that Romney is actually the best hope to do something about citizenship-based taxation.
Anyway, good idea. I think that we need to begin working on the letter or letters. This will require patience, focus and perserverance – attributes that the Isaac Brock Society has demonstrated in abundance.
Your inside experience in Washington would be invaluable in this context.
@markpinetree,
It is so disappointing and a kick in the gut to get these impersonal “form or photocopy letters” from our government representatives in whatever country. It is obvious when what we have set out / the questions we have asked are glaringly not mentioned or responded to — ‘a one size fits all letter to anyone who painstakingly writes and asks questions on the subject’ does not an effective communication make.
Should we not expect more of the people who ask us to elect them into whatever office, including the President of the United States?
@30 Year IRS Vet,
Thanks for your suggestion and view on how things are accomplished in Washington, using the non-responsive letter from President Obama as a springboard.
@Chester12…
Of course a WH staffer responds. I noted that in my opinion. I would have hoped for something a little more focused than just a campaign policy statement, but understand the game right now. Maybe something to direct the petitioner to some staff office that deals with tax issues. That is what my Senators have done when I wrote them.
@30 year Vet…
Excellent idea(s). So, who at Isaac Brock wants to be the spokesman for all to do this? I am pretty sure that the petitioner is going to follow up as you suggested in your first post.
@Just me Personally, I think it should be someone in New Zealand.
The Obama Reply – another excellent example that he doesn’t have a clue, and neither do his minions. “Taxes – OK, here’s our standard response.” You would have hoped someone had the audacity to actually read the letter. He’s been spouting this nonsense about changing the tax code for four years – never did a thing to change it, not even against the rich he likes to beat up. But who is going to bail out the country from his stupid spending? As far as the WH is concerned overseas Americans ARE the rich, which is why they’re doing this to us! Vote Republican and stop the madness!
Patrick Hale said: “But who is going to bail out the country from his stupid spending?”
Haven’t you heard, they’re going to tax the world according to Biden.
@Patric…
Welcome aboard Mate. 🙂 I try not to be partisan. I voted Republican before and got invasions of preemption, doubling of the national debt, unfunded new entitlements and financial melt down. Hard to know what to do now. I would like to think that “This time they will be different.” Maybe there is a 3rd party candidate that I can waste my vote on…
Anyway, thanks for joining the conversation. You have a lot to offer to the understanding of how America got into its current mess!
@at All.
The petitioner should ask IBS to respond on his behalf.
Actually, his facts are good but there may be a composite, very simple fact pattern you can craft and represent to the whole world as a “very typical situation for many of our readers.”
The worst thing you could do is give an example which is too long, makes the reader think too hard, and doesn’t make the reader see in just one page of writing, why it is absurd for the US government to expect a third generation Canadian family who think of the United States as often as Antarctica, to prepare and file a tax return with the IRS simply because someone in the family had an American ancestor.
That is as much a “no-brainer” issue for anyone and more importantly, if you win that issue, you will have opened the door for a whole new set of common sense rules and exceptions for expatriates abroad, EVEN IF you cannot change the law on citizenship based taxation.
You should carefully define what you want and focus on something you can reasonably achieve and NOT ask for something like the repeal of FATCA, keeping Canadian banks from sharing electronic data with the world wide banking community, or the lynching of the IRS Commissioner at noon on Inauguration Day in Washington in front of the IRS National Office at 1111 Constution Avenue. 🙂
The IBS board should circulate a draft response amongst themselves and then post it as a draft on the IBS web site for comments before it is sent to the WH.
Definitely include ACA as a cc. There are probably a dozen other organizations or people who should be copied.
In MHO (my humble opinion) it should not be more than one page long although the cc page is likely to add a whole page 2. It can be simultaneously delivered to every one electronically the day it is mailed, but it should be a real letter on Isaac Brock Stationery perhaps including that cool logo you have with Isaac Brock at the battle of Niagra. It should be mailed to the White House at 1600 Pennsylvania Avenue NW, Washington,D.C 20224(?) with a return receipt requested.
No long rants. No one in Washington reads them. They are dismissed and trashed. Be passionate about the cause but try not to be emotional.
While it sounds like most IBS readers are Republicans, you have a lot of Democrats out there and the letter should really avoid committing to one side or the other.
As Renounce and Just Me have indicated, with Petros’coup on the Peter Dunn Show, (you should indeed take him up on his offer to help with letter) the Isaac Brock Society is elevating its profile onto the world scene. There is a real opportunity here to lead the fight for tax justice for americans abroad, and certainly be the leading voice from Canada in the dialogue with Washington to actually make the government be responsive to the citizenry.
I would be happy to donate my time to the Isaac Brock Society board of directors if I can be of any help should you decide to go ahead with the White House letter initiative.
Respectfully submitted
Thirty Year IRS Vet
Wow, thanks so much for your generous offer, Steven Mopsick. The professionals who have contributed to Isaac Brock are another of the legs holding us up and keeping us focused. With your help and backing in what we are fighting for, we are stronger. We do appreciate it.
@30 year IRS vet – A few of us are probably wondering, what powers of collection does the IRS actually has abroad? And what hoops do they need to go through to collect? Is it a long winded process that has to go through the foreign court system concerned?
It’s my impression the IRS does not have the usual tricks available to it inside the US such as liens on property or attachments on pay. The most they can do is go to a foreign court under MLAT and get a judgement similar to a credit card company which you don’t have to pay in the end.
Can you elaborate? I suppose this would be governed by the tax treaty signed by the country concerned. However there must be a common thread to this situation.
How can you forget so soon? mauryw has been a Brocker!
http://isaacbrocksociety.com/2011/12/12/how-to-join/#comment-1423