US Senator Bill Nelson and his Senate colleagues are back up to their old tricks of trying to get a Passport revocation rule instated for back/unpaid taxes. This time they are trying to do it through enacting an amendment to the “Veteran Jobs Corps Act of 2012” which who could be against such a piece of legislation until of course you look at fine print and notice the provisions of the act that have nothing to do with veterans or jobs. The following Senators are Senator Nelson’s partners in crime so to speak on this issue:
Sen Blumenthal, Richard [CT] – 9/10/2012
Sen Franken, Al [MN] – 9/11/2012
Sen Gillibrand, Kirsten E. [NY] – 8/2/2012
Sen Merkley, Jeff [OR] – 9/10/2012
Sen Murray, Patty [WA] – 7/30/2012
Sen Schumer, Charles E. [NY] – 9/10/2012
Sen Stabenow, Debbie [MI] – 9/10/2012
Sen Wyden, Ron [OR] – 8/2/2012
Link to legislation
The maximum additional penalty for a continuing failure to file on Form 8938 and you received a and attach them to Form 8938 is $50,000.— http://www.irs.gov/pub/irs-pdf/i8938.pdf
The largest number of persons naturalizing (acquiring citizenship during the year 2011) lived in California (151,183), Florida (87,309), and New York (76,603)—http://www.dhs.gov/xlibrary/assets/statistics/publications/natz_fr_2011.pdf
Bill Nelson’s constituency is the majority boy with the Confederate Flag embossed on the year window.
rear window.
*Here is a message I sent to Sen Nelson a couple of days ago via his website. Being one of his constituents I am able to do that. I have had trouble posting this but hopefully it makes it this time.
Dear Senator Nelson,
As a resident of Florida and a member of the Board of Directors of American Citizens Abroad (ACA), a non-profit, non-partisan all-volunteer organization of loyal and patriotic US citizens living and working abroad, please allow me to express my strongest objections to your sponsorship of your bill that would revoke the passports of US citizens who allegedly owe the IRS $50,000 or more.
I can assure you that your sponsorship of this bill will virtually destroy support for you personally from the hundreds of thousands of overseas US citizens who last lived in the State of Florida and are therefore registered and will cast their absentee votes in the last precinct where they lived in Florida in the upcoming election. In a narrow election the absentee ballot votes of US citizens voting in Florida who are resident abroad can well decide the outcome of this election, as they did in the presidential election when Bush was declared the winner over Gore.
Copied below is the ACA Position Paper issued in May of this year when this bill was first introduced as part of the Surface Transportation Bill, but was removed before that bill was approved. I urge you to take seriously the information in this position paper and withdraw your sponsorship of this bill which would destroy the ability of US citizens to live and work abroad. They are unpaid ambassadors of the United States and are the only Americans many citizens of the countries where they serve will ever know, and the destruction of their ability, as loyal US citizens, is not in the best interest of the United States.;
Sincerely,
Roger Conklin
Position Paper (Dated – 25 May 2012)
Revocation of US Passport Used to Collect Taxes: Tax Amendments to Surface
Transportation Bill
A provision in the Surface Transportation Bill, which is being worked on by a Congressional Conference Committee, would authorize the US Government to revoke or deny renewal of a passport when the individual in question has $50,000 or more of unpaid federal taxes, which the IRS is trying to collect through enforcement actions.1
1 The House-passed version of the Bill is the Surface Transportation Extension Act of 2012, Part II (H.R. 4348). The Senate-passed version is Moving Ahead for Progress in the 21st Century Act (S. 1813). The Passports provision was added at the time of consideration of the legislation by the Senate Finance Committee.
2 FEDERAL TAX COLLECTION: Potential for Using Passport Issuance to Increase Collection of Unpaid Taxes (GAO-11-272 Passport Issuance, March 2012).
AMERICAN CITIZENS ABROAD OPPOSES ENACTMENT OF THIS PROVISION AND ASKS THAT THE CONFEREES STRIKE IT FROM THE BILL.
This provision creates a tax-collection mechanism that is frankly far too draconian. This approach puts disproportionate pressure on the taxpayer and risks mistakes and unforeseeable consequences, which would be life-changing for the individual. It discriminates against Americans abroad who, unlike Americans living in the US, are overwhelmingly reliant upon their US passports in their everyday lives.
As noted in a recent GAO Study, the constitutional, policy and practical issues involved have not been carefully studied, and this must be done as a first step, before enactment.2
Moreover, there are better ways for the IRS to collect from individuals living abroad, including improving its services by posting collections personnel overseas and/or making it easier for collections personnel to conduct taxpayer meetings abroad. INDIVIDUAL AMERICANS OVERSEAS SHOULD NOT BE MADE THE PRESSURE POINT TO IMPROVE THE IRS’S TAX COLLECTIONS PROCEDURES.
Americans living outside the US, especially if they have no other nationality, every day rely upon their passport to go about their lives. If their passport were to be revoked they could not travel anywhere outside their country of residence and could not perform many every-day tasks that require identification.
The tax rules for Americans outside the US are extremely complex. It is easy for mistakes to be made. If made, mistakes commonly affect more than one or two years, and, therefore, the amounts owed can be relatively large.
Communications with the IRS about a tax liability and payment is difficult for many reasons. Examples of difficulties are unreliable mail service and confusion over IRS letters and forms. The IRS, to our knowledge, has never had collection officers located outside the US and in recent months travel of collection officers to meetings outside the US has been curtailed. The process for issuance of liens and levies in the IRS collection process, as is well-known, is not free of mistakes. Corrections sometimes have to be made and actions are sometimes successfully challenged.
These new rules will affect less affluent taxpayers more than the wealthy, as the former are more likely to be caught up in the confusion and mistakes that come with a IRS audit.
FOR ADDITIONAL INFORMATION, CONTACT MARYLOUISE SERRATO AT +1 202 684 6525.
American Citizens Abroad (ACA), for over 30 years, has been the voice of Americans overseas. It is a non-profit, non-partisan, all-volunteer organization that represents the interests of Americans living and working outside the U.S.
*Roger Conklin,
I’ve been thinking of becoming a lifetime member of ACA, but I’ve been unsure of such lately because it seems that many politicians don’t want for me to be a lifetime member of USA. With most banks in Switzerland refusing to refinance my mortgage simply because I’m a US citizen and with me being unable to live in the US without losing my Swiss home, thanks to FATCA, I’ve decided that I’ll become a lifetime member of ACA if I schedule to renounce. This would show that I want to help Americans living abroad but cannot do so as a US citizen due to US discrimination based on national origin.
*@Swisspinoy, I don’t know how many there are, but there are several ACA members who have had to renounce US citizenship in order to survive living abroad.
I wish it wasn’t necessary to do so, but many are left today with no other choice
The bill was defeated today. Most Republicans voted against it, because they didn’t agree with more spending. I wonder if they realized that the revenue from passport cancellation was way overestimated.
http://www.washingtonpost.com/blogs/federal-eye/post/bill-to-create-veterans-job-corps-fails-to-advance/2012/09/19/a56b532c-0270-11e2-91e7-2962c74e7738_blog.html
*@shadowraider, revenue for passport cancellation? Did this bill include a provision that persons whose passpoarts would be canceled would be assessed a fee?
Thanks for keeping track of that ShadowRaider. Always appreciate your posts.
Yup, this bill just died in the Senate under a Republican Filibuster. Rachel Maddow apparently doesn’t know of what else was in the bill.
https://twitter.com/maddow/status/248462214535716865
@Roger, There was no fee, but Congress imagined that some people were not paying their taxes, and that they would pay if it were a condition for keeping their passports. In other words, the passport cancellation would be an enforcement mechanism for people to pay taxes. Congress estimated that this measure would raise $743 million in 10 years. Combined with some Medicare levy that the bill would also create, the bill would generate $1 billion in additional revenue over 10 years, to be used for the veterans jobs program.
http://www.cbo.gov/sites/default/files/cbofiles/attachments/S3457,paygo.pdf
That’s Congress’s estimate, but I don’t understand how on Earth they came up with those numbers. I can’t believe that there are so many people leaving the US to avoid paying taxes, that their combined unpaid tax would be $743 million in 10 years. I think this was a gross overestimate.
@badger, You’re welcome.
I received my Florida absentee ballot via email today.
Gosh, should I vote for Bill Nelson?
It does not sound like we’re out of the woods. From the Wash Post article that Shadow posted, it states:
“Murray and Nelson said the vote effectively kills the legislation,
but Sen. Jeff Sessions (R-Ala.), the ranking member of the Senate
Budget Committee who raised the budget point of order, said the action
simply requires the veterans committee to come back with a bill that
does not add to the deficit.
Sen. Richard Burr (R-N.C.), the ranking member of the Senate veterans
committee, voted against allowing the job corps bill to advance. He has
introduced alternative legislation that includes several veterans
job-training initiatives but removes the provision establishing the job
corps.”
There is likely to be another stab at this.
Also, to Shadow’s point, nobody is challenging the 743m in revenues. This means that it will likely get attached to some other piece of spending legislation in the future in order to float somebody else’s domestic goody, thus making it “free” to homelanders. The only way that this could be such a revenue raiser is if it is an attempt to squeeze US expats.
@ShadowRaider: thanks for the update. Know where we can see the roll call for the vote? All I get on THOMAS is:
http://thomas.loc.gov/cgi-bin/bdquery/z?d112:SN03457:@@@X
@Eric, Go to the link you posted, click on “back to bill summary” on the top, then on “all information”. In the list of actions, there is a vote on 9/19/12. Technically, this was a vote on an amendment, but effectively it was a consideration of cloture. The link to the roll call is: http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=112&session=2&vote=00193
All 51 Democratic senators, the 2 independents, and 5 Republicans voted in favor; 2 Republicans did not vote; and all other 40 Republican senators voted against the bill.
I’m not necessarily saying this specific to the passport confiscation legislation, but what US lawmakers don’t seem to have the comprehension of when coming up
with these revenue generating schemes, is that the folks they hope to ensnare
may just change their habits or the conditions that allow them to continue to be
that source of revenue. They assume
that conditions will remain static, for instance, that no one will choose to
rid themselves of the one thing that makes them liable: US citizenship. Or that
if every USP living abroad filed US taxes it would likely cost the IRS far more
than it would bring in, and could very well be what many USP’s do in order to
renounce. Their desperation to find revenue is resulting in a complete
disregard for the realities and unintended consequences of these schemes.
That’s why folks like Schumer try to fix things by closing the barn door after
the horses have left. To me they look like a bunch of adolescents.
*bubblebustin, absolutely! Looking at my situation, I can’t say that Schumer, Nelson and others are thinking logically. When I fled the US, my total debt was over $250’000. Yet, within two years of working abroad, cut spending, sold, repaid and became debt-free. Now I’m investing into the US and creating jobs while they are talking nonsense.
@bubblebustin and @swisspinoy, similar to Roger’s comments here about the obliviousness of US lawmakers who undervalue having us as US goodwill ambassadors abroad; the US doesn’t seem to get it that for example, if at least aprox. 1/32 Canadian citizens and residents are being persecuted by the US, the trickledown will only increase enmity towards having any type of economic or other relationship with the US. I have already warned single citizenship Canadian-borns, in IT, and in banking, not to partner with US citizens, and not to plan to retire in the US because of the insane US taxation, financial reporting and insane penalty regime they might become liable for if they partner in a business venture, or buy property, or stay too long in the US. They didn’t know about FATCA, or FBARs and the like. Another couple sold their US retirement property, because they didn’t want to end up with unforeseen liabilities. Others might have considered filing married with a non-US spouse, but I mentioned the huge downside of that, including opening up the non-US person to the FBAR. Some duals are now concerned about their children inheriting US status, and staying away from going to the US.
In the end, is this worth the penalty revenue that the IRS likes to crow about? No, since it makes people think twice before doing anything that would result in any kind of relationship with the US. The non-US spouses won’t consider moving to the US, and won’t forgive what is happening to their US person children and partners. We’re not shopping there, or spending tourist dollars. We’re going to be extra critical of the US vis a vis Canadian foreign affairs, and will vote accordingly.
Toronto mayor Rob Ford went down to Chicago this week, and raved about all the business possibilities it might bring. http://www.cbc.ca/news/canada/toronto/story/2012/09/20/ford-toronto-chicago-trip439.html Well, only if the Americans who come up here don’t open any Canadian accounts, and only if the Canadians don’t mind ending up deemed ‘US taxable persons’. Ironically he met US Ambassador to Canada Jacobson down there on his trip. Which is funny because Mayor Ford is usually very much publicly against burdensome taxation. What would he make of intrusion into Canadian bank accounts under FATCA, and US citizenship-based double taxation of Canadian born citizens in Toronto? The big banks tend to be headquartered here, and there must be a very large population of those affected, in Toronto. Too bad Ford didn’t ask Jacobson when the IRS was going to start acting in a ‘reasonable’ manner, and stop harassing a million or so ‘Canadian grannies’ over US taxes they didn’t owe, and their local everyday Canadian savings, as the ambassador publicly promised they would. http://www.cbc.ca/news/canada/story/2011/10/18/taxes-us-citizens-canada.html In Jacobson’s own words: “”My message on this one is to sit tight. We are not unreasonable. We are
not unsympathetic. We are not irresponsible,” David Jacobson said
during a speech to the Canadian Club in Ottawa.”…..”First, there are so many dual citizens, typically by birth, probably
more than a million. So this issue is much more common here than in any
other country in the world. Second, the penalties — at least in a
theoretical sense — can be quite severe.””
So if the Ambassador to Canada knows and acknowledges that the scale of those affected is more than a million, and that many or most are duals, often by birth, then he also knows the numbers of those who would be forced to get and use a US passport to visit the US – even just as money spending tourists. Has he not been able to get that across to the Senate? Especially those who are from border states that need the crossborder dollars from Canadian visitors? Do they want over a million Canadian households staying away from the US for a lifetime?
Looks like it if we stay on this same track under citizenship-based US taxation and the FBAR’n’FATCA fundraiser.
*I have been racking my brain over this for a long time. I guess the only answer I can come up with is despite the fact Canada and the US might look and feel they same way they are in fact very different countries both culturally and politically. One difference is in the past few years despite the huge difference in population Canada has become much closer to being an “equal” to the US economically. At the same time the US is moving to try throw its weight around much more than ever before. The real problem the US has is increasingly Canada has many of the advantages the US once had to itself without having the disadvantages of the screwedup screwball economic and political systems of the US.
@Tim, I know we’ve pondered this over and over again, but I still just don’t get how the US really thinks it will force millions all over the world to comply. Logistically even, how could they ever process that many? And at what cost in IRS expenses, given that most will owe zero US tax? They must have some kind of cost/benefit projections that they’re working from , or maybe not! Did they just multiply 1 million by 10,000. or more FBAR penalty each for those in Canada? By now, many more who are laying low, know that US citizenship is an onerous burden, a threat to their family, and an unacceptable lifetime liability, and renounce if and when they can – or just carry on. And, why the US doesn’t mind creating serious enmity and lasting illwill and distrust in over 1 million households just over the longest shared border, next door in Canada, or oppressing over 1 in every 32 people here – well, who can fathom that as a strategy for economic and political success?
*My personal hunch is they believe that 31 out of 32 don’t and would rather not risk a major confrontation with the US on a very emotional issue. I don’t know how rational of a judgment that is especially as when it really gets down to it might be something like only 25 out of 31 people who actually have no ties to the us. I actually think the issue is discussed among the public at large much more than in the media. The Canadian media for different reasons seems to be very reluctant to discuss it.
*I also have pretty good information that none of the key people involved in FATCA have ever visited Canada since the law was passed despite the fact that some such as Deputy Treasury Secretary Neal Wolin have found time to make official visits to countries such as Tunisia, Lebanon, and Saudi Arabia.
*Note the flying time between Washington National Airport and Ottawa Macdonald Cartier Airport is about 1 hour and 15 minutes. From Macdonald Cartier Airport to Flaherty’s office is a 20 minute drive.
@Tim
The predominating left lean media in Canada are anti-Harper. Harper’s government, by all appearances is against FATCA. Need I say more? You bet if the Harper government and the NDP weren’t on the same page regarding FATCA, you’d be hearing a lot of bellyaching about how the Tories are allowing the US to threaten the sovereignty of Canada, non?
*Check out my new post. John Baird basically almost threw out the Eritrean Ambassador out of Canada if they didn’t stop their citizenship based taxation policies. Note: the US nor any of the FATCA G5 countries appeared to have been willing to take such a strong step. I had been expecting this in light of Iranian Embassy closure in Ottawa. Supposedly Eritrea was next up after Iran for a pounding due to their diaspora tax.
@Tim- well now he needs to get up the nerve and do it to the Americans too. There aren’t enough Eritrean citizens in Canada to make much of a difference to the Canadian treasury but there are sure more than enough U.S. persons.