Monthly Archives: April 2012

Democrats Abroad Canada held its annual general meeting on March 25th in Toronto and issued the minutes of the event a couple of days ago.  Of special interest was this brief update:

FBAR/FATCA
 
Joe Green, who chairs the FBAR/FATCA (Foreign Bank Account Report/Foreign Account Tax Compliance Act) task force reported that they are in ongoing discussions with members of Congress and federal agencies.  They hope to have some progress to report in the next several months.

I’m going to go out on a limb here and guess that “several months” means sometime after November 6, 2012.

At first reading, I think that this would seem to affect only the wealthy French that establish domicile in Switzerland for tax purposes:

http://www.rts.ch/info/monde/3850570-le-candidat-nicolas-sarkozy-propose-un-impot-lie-a-la-nationalite.html

Nonetheless, I would encourage a dialogue here on IBS about the implications.

What would happen if all countries tax their citizens abroad to death?   How can we grow wealth in society on both macro and micro scales with all of these punitive regulations?  How do we discern between “tax expatriates” and bone fide residents of a country that want to and deserve to pay only the taxes in their country of residence on the income and property they have/receive in such country of residence, without undue influence of their country(-ies) of nationality?

The IRS is intent on harvesting the assets of countless so-called “US persons” living outside the US, including individuals who had no idea they were US citizens. Meanwhile, the same IRS assisted Google in income shifting that saved Google $3.1 billion in taxes over three years.

From the Bloomberg article (link below):

“After three years of negotiations, Google received approval from the IRS in 2006 for its transfer pricing arrangement, according to filings with the Securities and Exchange Commission.

“The IRS gave its consent in a secret pact known as an advanced pricing agreement. Google wouldn’t discuss the price set under the arrangement, which licensed the rights to its search and advertising technology and other intangible property for Europe, the Middle East and Africa to a unit called Google Ireland Holdings, according to a person familiar with the matter.”

http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html

Google was able to avoid taxes through a no-risk process supported by the IRS. Compare this with the December 2011 so-called amnesty for individuals, described by tax expert Kevyn Nightingale as ,”pay your money and take your chances.”

US / Canada Border Issues

Both governments are stressing that all the initiatives in the plan were developed under two principles.

1. That each nation has the right to act independent of the other in accordance with their own laws and interests.

Which nation do we, dual citizens, fall under in our crossings?

2. That both countries will endeavour to promote human rights, privacy, the rule of law and civil liberties.

 
Check out this Reuters story by David Cay Johnston: More Than 100 Million Unnecessary Tax Returns Filed Each Year. Highlights follow —

On March 28, the U.S. Justice Department sought to close a nationwide chain of income tax preparation shops it accuses of fraud.

Canada, with a ninth of the U.S. population, listed all 204 tax convictions last year at the Canada Revenue Agency’s website.
 

While this is fairly old I have never seen it before. MP Jean Crowder (NDP) seems to be very much aware of the provisions of FATCA in this writeup and is none too pleased.

http://jeancrowder.ndp.ca/post/jeans-column-on-the-u-s-foreign-account-tax-compliance-act-fatca-for-the-cowichan-valley-citizen-september-2011

Given where Jean Crowder sits on the political spectrum in Canada this could be seen as something pretty close to a ultimate betrayal by American “Progressives” coming from their Canadian “Progressive” brethren.

IRS Commissioner Douglas Shulman, on Thursday (April 5), in a question and answer session at the National Press Club in Washington, indicated he would step down when his term expires in November. As we have all heard before, he repeates the numbers of how many have come forward  (33,000) and how much they have collected ($4.4 billion).  Yawn, yawn.  And particularly offensive is the following:

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