“Over the last decade the IRS has spent nearly $20 billion on information technology,” Boustany said in a statement. “Taxpayers deserve to know if they are getting their money’s worth.
“Congressmen Question IRS Technology Budget”, AccountingToday, July 17, 2012
$20 billion spent on information technology, and the system is still limited to the US, with Americans abroad still being unable to type their foreign address into digital tax forms like Free File Fillable Forms:
If $20 billion can’t buy something as simple and logical as the ability to enter a foreign country into an information system, then citizenship-based taxation is clearly not worth the money wasted. The address is the most basic element of a tax system, with a citizenship-based tax system on worldwide income requiring the entry of foreign addresses. The inability to enter a foreign address in a tax system demonstrates that the tax system is not citizenship-based, since it is not designed for all citizens.
I’m not interested in anything that makes it easier to file. I only care that I be excluded from filing any U.S. forms because I don’t live there. Being able to file electronically doesn’t do anything to alleviate the injustice of citizenship based taxation.
@recalcitrantexpat, that’s just the thing. The IRS is incapable of being just with citizenship-based taxation regardless of how many billions of dollars it throws down the drain for nothing.
@swisspinoy- I was talking with my daughter last night and she told me that she mailed off three years of U.S. tax returns. The final costs that H & R Block was just over 1100.00. She ended up owing no money to the U.S. and even got 800.00 back. This means that her net cost was 300.00. The net cost for the U.S. was 800.00 and the revenue for H & R Block was over 1100.00.
There is absolutely no benefit for the American taxpayer in a year of record government deficits. I guess this is why Sen. Grassley wants to get rid of the FEIE. But as others have pointed out getting rid of the FEIE is no guarantee that the U.S. will collect more in taxes since people will change their financial picture in order to reduce any tax liability. Plus there is still some benefit to hopefully be derieved from the foreign tax credit.
In the end it is only the international tax lawyers and accountants who are guaranteed to make money on this foolishness. They are the only ones who love this idiocy.
When I was dealing with the IRS over the telephone at the beginning of this year they said that it would take 6 weeks to order up my return from “records” (some IRS department, probably costs far more than $20b per year). This means that at least some of the returns are not automatically digitized upon receipt by the IRS. Electronically filing guarantees that your return will be available online from the moment you file it. for better or for worse.
$20 billion is an enormous sum and only the federal government could so glibly piss it away.
It’s not just the IRS. We’ve had a year long battle with a company in the USA which cannot enter a non-US address in their computer system. The result is we had to get their mail (bills to pay for my husband’s American mother) sent to an uncle in the USA who then forwards it here so a cheque can then be mailed to the company. It can take so long we fear a bill could go into collection before the payment is received.
@em- you are right. The truth is that the whole mess comes down to Congress, the Courts, the Presidents, and the laws they have enacted or declared constitutional.
America is a country that is on a permanent war footing and because of this individual freedoms are suffering.
All American capital that is in the hands of individuals must now stay in America and that means that Americans must stay in America. I personally can see the day when the existence of Americans outside of America may in the future be officially portrayed as a fiction. And the rate at which renunciations are proceeding it just may come true.
Being an American outside of America is now inconsistent with one’s very existence so unless Congress changes things there will be few Americans living permanently outside of the U.S. It just can’t be done.
@Recalcitrant, it’s why I decided to sell my US mutual funds and remit the proceeds to the UK in case it becomes more difficult to move capital abroad; My accountant believes that the IRS are less aggressive towards expats with no US assets. So in spite of facing some double capital gains taxes to the UK, I feel safer having it with me here.
*@ALL, I have a question my son received a refund from IRS (Stimulus Package) and is thinking of sending it back with a note that says, along the lines of “Thank You” for the refund it is appreciated however, I don’t feel it is appropriate for me to receive this refund from a country I don’t live in and don’t pay taxes in..I would like all Brocker’s opinion on this. The negatives and positives.. When I received my puny little refund I did not cash it, I did not want anything to do with it. So would appreciate any ideas.. or thoughts. This is a idea from a fellow Brocker, I thought it was a brilliant idea.
@Saddened, I’ve never had anything to do with the IRS, so I can’t be sure, but I suspect some low level clerk will maybe just have a chuckle at it, and just file away with the rest of the paperwork. But, it would likely make your son feel good to have made a statement, and that certainly counts for something.
*@Outraged, They would probably think this person is a Idiot sending money back. Ha!
But he is planning on Renouncing so he doesn’t really want anything to do with the US.
@Saddened, Well, I have to say that as a matter of principal, I’m in complete agreement with your son. Practically speaking, though, for every expat getting a tax refund, it would be even more proof, statistically, that citizenship based taxation is ridiculous. And cashing the cheque reduces the US government coffers. Less money to stalk us with! 🙂
*Outraged, That is true, less money for there stalking. Ha!
@saddened123- you should be very proud of your son. He is showing himself to be quite principled and to have more of a conscious than the members of Congress and that man who occupies the Presidency.
As noble of a gesture at his act would be he needs to consider whether or not keeping the check really isn’t justified as a means of offsetting any filing expense that he may have had or at the very least as a way of covering some or all of the cost of his renunciation?
@Saddened: Your son has had significant costs for accountant, lawyer, mailing, etc. He could consider the $ payback–literally.
As recalcitrant has said, he could also use it towards the cost of the renunciation fee he will have to pay.
Or, he could donate the money to a Canadian group–i.e. Brock or a Canadian charity.
I’d like to think this whole situation cannot possibly get any more bizarre, but I suspect there is more insanity ahead of us.
*@Blaze, Recalcitrantexpat, It would definetly help with his filing expenses, but he said he will either send it back or just not cash it and just put it in a file with the rest of the BS. I think he is afraid if he would cash it, it is like saying you take our money and then you turn your back on our country by renouncing.. Probably a silly way to think of it, but he doesn’t not want anything from them, even though they want to be tied to him for the rest of his life.
Who knows what penalities maybe on the horizon for him, we don’t know.
@Blaze, @recalcitrant, @Saddened,
No one in the US IRS, Treasury is going to appreciate his measly sacrifice to them and it’s not as if it is going to go to some person in need, but likely into some other pocket. At this point, anything I would get back from the US would go toward my expenses for all this. Perhaps US thinking or PR that they will be perceived fair by their giving anyone some stimulus funds, are they kidding us? Sort of like the US poplace thinking expats have some good deal in that the good guys will swoop in to rescue us when we’re in trouble in someplace foreign “bad” place. But, that’s me and I’m really just a cynical 68-year old person.
Blaze is correct — if anyone wants send back money, think again — and send it where it will do some good.
@all –
I’m with Blaze (he was made to waste money on accounting fees, and if the IRS wants to defray that a bit, so much the better) but if he doesn’t want to do that there are millions of American charities which could use the money. Congress intended the funds to stimulate the US economy, and that’s one way of doing it.
Here’s one: http://www.stjohndivine.org/social.html
@Saddened, I got a stimulus package refund for about $600 around 2001. When I lost my job, my bank closed my account since it was closely tied to my employer. As such, I had no reliable US address at the time and no US bank account to receive the refund. I also wanted to delay the refund since the value of the dollar had declined and I figured that the US government needed the money anyways. So I spoke with the IRS and they stated that as long as they owed me money, then I wouldn’t have any issues with them. So, I didn’t request for the money to be sent and they never sent it to my Swiss address. Years later, I called to inquire on the status of the refund and they stated that I had no refund since it hadn’t been collected after 3 years, informing me that I should have known this since it is documented somewhere. I stated that I was amazed that the IRS, of all people, didn’t want to pay money owed and created rules to allow it to keep owed money. In response, they accused me of negligence for not collecting the money and not filing every year. To make the long story short, my intentions were good, I had no issue with donating the money to the government and the IRS hasn’t bothered me for not filing every year. However, I have doubts that the IRS recognizes my good intentions or will continue to do so in the future. Thus, I have doubts that the IRS would recognize your daughter’s good intentions or use the money to improve the system. Thus, I’d recommend one of 3 things:
1. Collect the refund and donate to Brock
2. Collect the refund and donate/subscribe to ACA
3. Inquire if the money can be used to hire a programmer so that worldwide people with worldwide addresses can use the $20 billion system with their worldwide address (such as e-filing).
If your daughter chooses option 3, then please post the IRS response here. I bet that it will be exceedingly entertaining! I simply can’t comprehend how the most important and basic component of an information system, the address, can be neglected after spending $20 billion.
@ConfederateH
You had better success than I did in ordering up some a return. First they sent me a transcript, and not the return I requested. Then they said older transcripts were not available. Then they said they couldn’t get the older return. I ended up having to call the TAS to finally get what I needed. That took several months, just so I could amend a 2003 return (that their system rejects) as required by the OVDP to show them that I owed them a de minis amount! The whole friggin’ system is hopeless. Let’s throw another $20 billion at it shall we? I know where we can get it. From that $8.5 billion that FATCA will bring in over 10 years. The math on that works, doesn’t it?
@Just Me: that was just dealing with an IRS agent on the phone. I never requested a copy. She listened to my complaints about the IRS disallowing my FEIE in the year I expatriated, 2010. I tried to fax her a couple of pages from my copy of the return, but when we couldn’t get that working (she couldn’t give me an email address) she said “I’ll have to call up your forms from records and that will take up to 6 weeks”.
BTW: I’ll bet that $20B contract was at least in part managed by the GSA. You know, the guys who threw that $820K party in Vegas…
http://blogs.wsj.com/washwire/2012/04/02/wasteful-gsa-vegas-conference-the-highlights/
@saddened, I can understand why your son wouldn’t want to cash the cheque as he may feel it’s ill gotten or undeserved gains. Take the money, the protesting should have begun prior to filing. Take it for people like me who are only paying the US taxes because the country we live in didn’t.
@saddened, to add
If your son decides that his conscience won’t allow him to cash the cheque and sends it back to the IRS, at least wait until his bank closes his account so you can attach a letter explaining how he was unable to cash it even if he wanted to!
*@All, Thanks so much for all the good advise, I appreciate it. I will pass it on to him and let you know what he does..
*@saddened123 Cash the cheque!!!