The double jeopardy of a U.S. citizen (Financial Post)
Don’t have time to get all that paperwork in by Friday? You can request an additional extension until Oct. 15. However, if you do owe U.S. tax, any amount paid after June 15 would be subject to both interest and failure to pay penalties.
and other US threats,
- If you do happen to owe U.S. taxes, your ability to travel to the U.S. in the future could be severely restricted if a bill, which is now being studied by a congressional conference committee, sees the light of day. Under U.S. law, it is illegal for a U.S. citizen “to depart from or enter the United States unless he bears a valid United States passport.” A recent tax amendment added to the senate version of the Highway Trust Fund bill, would authorize the U.S. government to revoke or deny the renewal of a U.S. passport to an individual who owes more than US$50,000 in U.S. taxes, effective Jan. 1, 2013.
My response:
Hi Mr Golombek:
You need to visit us at the Isaac Brock Society. All an article like this can [do] is help the IRS frighten people about their alleged tax obligations in the United States. This issue has become an extremely complicated and delicate issue and your facile treatment is inadequate. What of the discrimination of US persons at Canadian banks due to FATCA. What about the violation of US persons rights, such as taxation without representation? What about Canadian sovereignty issues–is it right for a person who earns all their money in Canada to pay tax in the states? Doesn’t that threaten Canadian sovereignty. Please, join us there and get some help in understanding these issues. We don’t need our Canadian Financial journalists carrying water for the IRS reminding US persons in Canada of their tax obligations in the US. We need journalists who are going to expose the issues and show the injustice and corruption. But I thought that’s what journalists did? Peter W. Dunn, http://isaacbrocksociety.ca/
*I stopped in at H & R Block this past week to see how things were going and I was told that they have had to file for extensions on a number of returns. It seems that the system is so full of filers that everything is gummed up. I’m not surprised.
@recalcitrant,
Interesting finding. You’re right, likely none of us are surprised. Wonder if the IRS is?
@Calgary411. Put up a comment on the sad, bad, furthering the jihad article of Mr. Golombek. When will these people start actually using the brains they were given to actually think things through?
@All, found this interesting:
http://www.parl.gc.ca/Content/LOP/ResearchPublications/2012-31-e.htm
Library of Parliament Research Publications
HillNotes
U.S. Personal Taxation and Canadian Residency: The Deadline Approaches
Adriane Yong, Mark Mahabir, International Affairs, Trade and Finance Division
6 June 2012
HillNote Number 2012-31E
“According to the Embassy of the United States in Ottawa,
there are probably more than a million people with dual U.S.–Canadian
citizenship living in Canada. For them, 15 June is an important day: it
is the day on which U.S. tax-related forms must be filed, unless an
extension has been given.
During the past year, a number of U.S. citizens have been in touch
with Canadian parliamentarians, perhaps because of publicity in Canada
about the U.S. Internal Revenue Service’s Offshore Voluntary Disclosure Initiative, which is now the Offshore Voluntary Disclosure Program. This program is designed to allow U.S. taxpayers to disclose any previously unreported offshore accounts.
Apparently, a number of American citizens living abroad, including
those who are also Canadian citizens, did not realize the full range of
their obligations in relation to the U.S. Internal Revenue Code and other tax-related statutes.”………
“FATCA: Some Canadian concerns?
Citizens, financial institutions and industry associations
(120 kB,
7 pages) in a number of countries around the world have expressed
concerns to the United States about various elements of FATCA.”…….
……..”Interested parties in Canada are continuing in their efforts to have
their concerns about the compliance burden that may exist in relation to
FATCA addressed.”
*”more than a million people”
Arrest us all,
Just a note to tie two threads together. Badger also commented on the Double Jeopardy article here.
My comments to Mr. Golombek’s Financial Post article:
Hi, Just Me.
I would try to tie the two threads together but don’t have the knowledge to do so. Perhaps Petros will pick this up and know how to do it, but he (like you) is sure the busy man. Thanks for your suggestion.
Pacifica,
Thanks for your comment to my comments at the Financial Post!! It would be great for Mr. Golombek to have some kind of follow-up based on the comments of real people US tax and reporting is affecting.
And another article with no mention of FBARs, other reporting forms, and FATCA:
http://metronews.ca/voices/alison-on-money/259240/uncle-sam-wants-you-and-your-tax/
“In the last year there was a rumble of panic among U.S. ex-pats as the
IRS started flexing its muscle by threatening to chase down and punish
those who had fallen behind in their tax returns. Many Americans in
Canada don’t even realize they are required to file in the country of
their birth. Since then the IRS has relaxed their stance a bit but U.S.
citizens still need to comply.”
Where is the evidence of a ‘relaxed’ stance?
*In case anyone else assumed that getting an extension to file also applied to FBARs:
“The granting, by the IRS, of an extension to file federal income tax
returns does not extend the due date for filing an FBAR. You may not
request an extension for filing the FBAR. The FBAR is an annual report
and must be received by the Department of the Treasury in Detroit, MI, at one of the two addresses below, on or before June 30th of the year following the calendar year being reported.”
Odd how this page is under “Small Business/Self-Employed” on the IRS site. Why would any ordinary expat who is not slef-employed and does not own a small business even think of looking there, or that this could apply to them?
@ Howard,
I think it is important that you are pointing this out, for those that are trying to comply with these stupid rules. I, of course, procrastinate, so just got mine sent in the day before yesterday. Couldn’t help but circle the provision at the bottom where they estimate that it would only take me 75 minutes to complete the form. I think “What Crap!” was the message I left for the little agent who inputs all of this data into some antiquated legacy computer system.
BTW, for those of you that think you might find the electronic filing version easier or more helpful, reconsider. Why do you want to be their data input person and save them the time and cost of taking your paper form and imputing it themselves? Not me. They want the stupid form, then I am all for making them handle it! LOL
Hello Mr. Mopsick and other professionals that occasionally visit IBS; any thoughts or comments about this
promised ‘different kind of disclosure path’? I know that you can’t give us specific advice, and have no crystal balls to see the future, or to read the minds of the IRS – but neither do we.
@Howard;
As you note, there isn’t any way to get an extension for the FBAR http://www.irs.gov/businesses/small/article/0,,id=210244,00.html#FR9
And yet, as another set of deadlines approaches, there are people still waiting for that ‘different’ ‘disclosure path’ as mentioned here:
http://www.mnptax.ca/insights/blog/2012/3/5/us-citizens-in-canada-status-of-penalty-forgiveness
“On March 2 at the 36th annual Tax Law conference held by the US Federal Bar Association, IRS Chief Counsel William Wilkins said the IRS is “actively studying options for a different kind of kind of disclosure path for citizens residing abroad who do not have material US tax obligations.” This is the first time an IRS official has proposed something new on the record.”
The same blog author goes on to note:
from; http://www.mnptax.ca/insights/blog/2012/3/5/us-citizens-in-canada-status-of-penalty-forgiveness
“Monday, May 28, 2012 – 11:58AM GMT
|
by Kevyn Nightingale
Well, the IRS kept promising
information, most latterly for April 26. That date has come and gone, and no news yet. Consequently, the question of whether to do anything now, or to wait, becomes much more difficult.
Most people reading this blog live in Canada. As a result, they get an automatic extension of time to file their US returns to June 15. By that date, they have to at least file an extension request (which is then automatically granted by the IRS).
I strongly urge people who haven’t filed previously to file for 2011 (at least), which means that filing an extension request is pretty much a given. The form is here: http://www.irs.gov/pub/irs-pdf/f4868.pdf
Of course, once you do this, the cat is pretty much out of the bag. You then are committed to filing your 2011 return, and you have to make a decision on whether you are going to file retroactively fairly quickly. While the IRS won’t connect the dots immediately, it would probably be advisable to make your decision within the next 6 months.”
I don’t know what to think about all of this, and of course this post and the blog quoted above are not and can not be official tax advice, or fit everyone’s unique situation, and nothing is official until the IRS makes it official, so who knows how to think about it?
There are so many people trying to make life-altering decisions – and trying their best to protect their families, but fear and the uncertainty continues. Given that this is the first year for the FATCA form, which comes with all sorts of extra-draconian provisions
http://www.forbes.com/sites/irswatch/2010/11/03/facta-further-erodes-taxpayer-protections-afforded-by-the-statute-of-limitations/
timing for anyone waiting for that ‘different path’ has taken on extra significant. Wondering if an extension to file the 2011 tax return applies to the FATCA form too (for those that meet that reporting threshold)? But the FBAR for 2011 would already have had to have been filed before that (for those that meet that reporting threshold), so that’s a decision that would already have been made without the promised ‘different disclosure path’ information.
Would a professional weigh in with any thoughts?
@all- we are not interested in an alternate disclosure path because we have nothing to disclose. Our lives do not concern the IRS or the Congress. Every other nation in the world is smart enough to figure this out but the overly rated legislators in one of the most over rated countries in the world don’t have the collective intelligence to see the error of their ways.
An alternative route of disclosure just means being caught in their net of theft.
@recalcitrantexpat, I agree with you – and @all, to be very clear, my prior post above, wasn’t trying to advise or influence anyone’s decisions. That quote attributed to Wilkins is not official IRS guidance, and we can’t make serious and life-altering decisions based on sketchy and random information obtained on the internet. Similar to Ambassador Jacobson’s toothless ‘we’re not irresponsible and we’re not after Canadian grannies’ statement in the Canadian press – followed by the December 2011 fact sheet http://www.irs.gov/newsroom/article/0,,id=250788,00.html , whatever is referred to may fall far short of what any of us need, want, or believe in. But as it has been quoted as a public comment ‘on the record’, I would still like to know what will come of it, if anything.
@recalcitrantexpat and others, if you think my previous post with the Wilkins quote should be deleted, I’m open to that. Any thoughts?