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Democrats Abroad urgently requests “expat tax stories” for May 15th IRS hearing

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Just received another update on the activities of Democrats Abroad’s FBAR/FATCA Task Force. Previous posts can be found here and here.


From: demcan@sympatico.ca
Subject: FBAR/FATCA Relief Efforts Underway: Tell Your Story Now!
Date: May 3, 2012 1:11:52 AM GMT-04:00

Dear Democrats Abroad member,

Your FBAR/FATCA Task Force has created two instruments to drive home our efforts seeking relief from potentially draconian fines and penalties in relation to new tax filing requirements. We are gathering data from overseas Americans to use in advocating for amendments and reforms to FATCA. We need your urgent participation in this effort!

1. Take our survey to record your circumstance as an overseas citizen and taxpayer. It is completely anonymous and can be found at http://www.surveymonkey.com/FATCA_FBAR

2. Tell us your story of managing your tax affairs as an expat American. If you have a tale of woe and frustration to tell then please go to http://www.ExpatTaxStory.us where you can post your story on a completely anonymous basis.
The Task Force has received an invitation to appear at an IRS hearing on May 15 in Washington. Having results from the survey as well as the website will strengthen our position at the hearing. So please complete at least the survey by May 9.

QUICK UPDATES ON OUR ADVOCACY EFFORTS:
Since our last update a few weeks ago:

Meeting with IRS and Treasury: Your FBAR/FATCA Task Force has continued to work with senior staff at both the IRS and the Treasury Department. Indeed, thanks to Congresswoman Carolyn Maloney’s efforts, Task Force member Joe Smallhoover attended a meeting in Washington DC to accommodate the presentation by various groups representing Americans Abroad to IRS and Treasury officials of our concerns about the tax filing and compliance requirements. A summary of that meeting is expected shortly.

Submission to IRS on FATCA Proposed Regulations: We have made a formal submission to the IRS in response to that agency’s request for responses to its February 8 release of proposed FATCA regulations, and we have asked to be invited to speak at the May 15 hearing on those proposed regulations.

Meeting with National Taxpayer Advocate: We are arranging a meeting with Taxpayer Advocate Nina Olson; whose 2011 report to Congress is highly critical of IRS handling of overseas tax filers.

DPCA Resolution on FBAR and FATCA: We have submitted a formal resolution to the DPCA Resolutions Committee for discussion at the May global meeting in Mexico. If passed, Democrats Abroad will then submit that resolution to be considered for inclusion in the Democratic Party 2012 Platform.

BUT WE STILL NEED YOU!

Please click here to take our anonymous survey and here to post your anonymous expat tax story.

Your DPCA FBAR/FATCA Task Force,
Joe Green (Canada) Chair (demcan@sympatico.ca), Stanley Grossman (UK), Maureen Harwood (Canada), Carmelan Polce (Australia), Maya Samara (Switzerland) and Joe Smallhoover (France)

31 thoughts on “Democrats Abroad urgently requests “expat tax stories” for May 15th IRS hearing”

  3. This is the same Richard Neal that said that “we need to use the tax code to boost retirement savings and personal savings as well.” to help Americans save for retirement – but, apparently not all Americans, only those who live INSIDE the US. All the rest of the Americans should be formed and penalize into dust – and not allowed to use registered savings where they work and live – if it is in ‘foreign’ banks anywhere else in the world – except in the US. He is also in favor of simplifying the tax code (except for us
    See :
    http://www.advisorone.com/2012/02/16/no-tax-reform-without-incentives-for-retirement-sa

    “No Tax Reform Without Incentives for Retirement Savings, Argue 2 Congressmen
    At Washington event, Republican and Democratic congressmen push resolution to retain current tax incentives

    By Melanie Waddell, AdvisorOne
    February 16, 2012

    ……..”Neal commented that the “stunning” statistic that half of Americans go to work each day and aren’t covered by a retirement plan at work is just another sign that “we need to use the tax code to boost retirement savings and personal savings as well.”

    The bipartisan resolution provides that it is the “Sense of the Congress” that:

    tax incentives for retirement savings play an important role in encouraging employers to sponsor and maintain retirement plans and encouraging participants to contribute to such plans;
    existing tax incentives have increased the number of Americans who are covered by a retirement plan; and
    a reformed and simplified Tax Code should include properly structured tax incentives to maintain and contribute to such plans and to strengthen retirement security for all Americans.”

    To be accurate, the proposal should really say ‘except for all those Americans who ‘choose’ to live outside the US. For those, the ‘Sense of Congress’ is that they be fined and form-ed into oblivion.

    One rule for those inside the US, and only more complexity, denial of the same rights, and oppressive penalty punishments for those outside. Who apparently, according to the ‘voice of Congress’, don’t have or deserve to “boost retirement savings and personal savings”. Congress’s voice doesn’t speak the same language of empathy to us if we’re born or move or live outside the US.

  4. So… What has Joe Green said about the hearings? Did anyone listen to what he had to say? I thought not! 🙂

  5. Well, the FATCA hearings came and went, and did you see a lot of US media coverage? But of course not. I was wondering if anyone would report back on what Joe Green had to say, but since I heard nothing, I went looking. Below is the transcript of his testimony….

    MS. HWA: Next we will have Mr. Green, representing Democrats Abroad.

    MR. GREEN: Hi, thanks for having me. I’m Joe Green and I feel intimidated. I’m a former dean of a university fine arts faculty and I never felt intimidated in front of 1,500 kids, all of whom thought they were better than we were as teachers, nor in front of the faculty of 150, all who knew they were better than I was. But I see in front of me a sea of corporate and association representatives in the financial world.

    I will tell you, ladies and gentlemen, that I’m here with Democrats Abroad and my colleagues on the task force that we have established who represent your clients: The people who bank with you, who insure with you, who live with you around the world. I’ve been in Canada for 42 years going up to start this fine arts operation and my bank — and I see that TD is represented here, who’s my bank — to me is a local bank. It’s not a foreign bank to me. I don’t bank in the U.S. My retirement program is solely with a Canadian institution. My wife’s retirement is solely with the teacher’s pension plan. And millions of us — hundreds of thousands of us around the world face the same problems.

    The escalation in tax filing and complexity and the associated angst that’s created is more severe than perhaps you recognize. We hear it all the time. I have, for anyone who wants it at the end of my presentation, a survey that we have done with 2,800 responses in a week from around the world with a number interesting insights.

    We are concerned with privacy issues and we’ve heard about that already today and we’ll probably hear more today, especially regarding assets shared with non-national spouses and partners. A woman whose husband is a non-U.S. citizen and has a joint account is required, we understand, to report that husband’s holdings to the IRS. This has led to many serious familial and relationship problems. There’s been talk of divorce.

    There’s certainly been talk about putting assets in one — in the name of the husband, in which case the wife is vulnerable. If all the assets are with the non-American husband and the marriage, which of course will never happen, goes on the rocks, where is the woman? With no support. U.S. citizens, we feel, who live stateside are not subject to this kind of scrutiny. The IRS is not asking for my brother, who lives in Fort Myers, to report on his holdings. But they’re asking me and hundreds of thousands of others around the world to report holdings that you guys have for us.

    We’ve also heard, and some of this is rumor but some of it is substantiated — and I know that the IRS and Treasury think that anonymous responses are suspect; we are not making this up — that Americans living abroad in Germany and other countries have been refused accounts in what they consider to be their local banks because they’re American citizens and because the banks don’t want to deal with them. What is the American citizen supposed to do?

    We haven’t even talked about the accidental Americans yet, and that’s the child who was born of foreign parents when they were at Cornell doing their Ph.D. They go back to their country as foreigners and take the baby home. Twenty-five years later, the baby is now a noncompliant American. He or she didn’t even know that he or she was an American. There’s a tremendous amount of anger, I would point out to you, amongst this group about being considered that.

    We know that we are supposed to be compliant. It says it in our passports. We’re aware of that, and many of us have not done it through ignorance — ignorance is no excuse, we understand — naivety, lack of English, they can’t read the passport, and it’s pretty fine print. So we are really coming to the IRS, to Treasury, and to Congress to seek redress for those of us living around the world who have to do our local banking.

    And I would point all of us to Nina Olson’s 2011 report to Congress, the taxpayer advocate who takes the IRS, with all due respect, to task for how they handle overseas citizens and the reporting requirements. I’m sure you’ve read all that and I’m sure you’ve read our submission.

    There’s also discriminatory impact on U.S. senior managers in foreign corporations. If they have signing authority, do they report the corporate holdings of that corporation? We have heard that certain corporate officers in foreign institutions who are American are being refused a promotion because it puts the company in a vulnerable position.

    There’s a weakening of entrepreneurial activities on the part of Americans abroad who represent, very frequently, American interests: Commerce and sales. The solutions that we seek are to redefine foreign or offshore accounts to reflect the needs of Americans abroad. How you do this, we don’t have solutions. I don’t have any answers as to how you do this. I’m not a lawyer. I have a Ph.D. in dramatic theory. I can’t even read your 388-page document and I only have one eye, which makes it even worse, so I read half of it.

    We request that you raise the FATCA reporting threshold. Ten thousand dollars in 1970 may have been a lot. It’s a little weird today. Anybody that doesn’t have $10,000 and is living abroad is in really deep trouble. Maybe you could index the FBAR reporting threshold, exclude those who do not owe taxes from the requirement to file that onerous 8938, which to many of us looks like the FBAR, but different.

    And when Mr. Shulman says on television that he doesn’t do his own tax forms because it’s too complex, think about us out there with the five or six forms. Now we have to pay for this. And fine, when you live abroad, there are certain responsibilities you take on yourself. Understood. But the penalties that are being proposed are really scary to Americans living abroad. We suggest that you consider merging the FBAR reporting requirements with the developing FATCA legislation so that the Americans abroad do not have to deal with two sets of legal entities.

    Finally, we suggest — in my minute and 22 seconds left — that the IRS and Treasury consider offering an amnesty, not like the Voluntary Disclosure Program, but an amnesty to invite American citizens who are naive, ignorant, unaware of the reporting requirements to come in, file their forms, pay their taxes if they owe any, which is unlikely in many, many cases, and become compliant U.S. tax filers. The only other thing you could do is start to tax on residency as every other developed country in the world does instead of on citizenship. I don’t see that happening, but that would solve a lot of problems for the Americans living abroad.

    That brings me to the end of my presentation. I do have our survey for those that are interested. I brought a bunch down with me, stopping at Staples to have it duplicated. And I thank you for the opportunity to express our woe. Thank you.

    So do you think anyone asked or cared about that survey? How many copies got handed out. Did the IRS representatives request or get any? Friends, after reading all the testimony with note one question asked, the feeling I got was this was just a passive one ear listening exercise, (kinda like my wife accuses me of listening to her) and then back to the work of making everyone comply!

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