Tim alerted me to this article at the Wall Street Journal, and I think it merits the attention of a post. It was well written by Anita Greil, with assistance from Laura Saunders who I have communicated with via email in the past.
I would recommend reading the story and adding your comment as Roger and I have. You will notice that this story has a lot of named sources and quotes. It is not just anonymous references. That makes for a much more personal and effective story that resonants with readers, I think. It makes harder to just dismiss. It is early yet, and I see the comments are already up to 81.
Pingback: Homelanders and #Americansabroad debate the status US citizens abroad in a FATCA world « Freedom from the tyranny of U.S. citizenship-based taxation for U.S. and dual citizens outside the U.S.
@Roger
Agree with you totally on the comments. They really frame the terms of he debate between US citizens abroad and homelanders. So, I did a post where I collected some of the most interesting (including yours and the one of the Just Me comments) and put them in a separate post here:
http://renounceuscitizenship.wordpress.com/2012/10/20/homelanders-and-americansabroad-debate-the-status-us-citizens-abroad-in-a-fatca-world/
@Bubblebustin
@Calgary411
Your comments about the high income professional couple transferring assets illuminate a growing problem.
To get legal advice or to not get legal advice, that is the question.
If people get legal advice, the odds are high that they will learn that they have a problem. Fortunately, the content of the legal advice would be privileged, so knowledge of the advice will be hard to prove.
It’s seem pretty clear that these are people who were not tax compliant to begin with. This is the group that is actually in the best situation. They have choices.
The people who have been filing over the years are in a very bad situation. There is nothing they can do. They have to keep filing and cannot file a return with false statements.
But, there are two lessons about “coupledom” if one partner is a US citizen and the other is not. They are:
1. If at all possible avoid having a US person as a partner. Dating services should require disclosure of this possible fact.
2. If you are a non-US person married to a US person: Put the matrimonial home in the name of the non-US person. From a US tax perspective the US person does not own the house. From the perspective of the law of certain Canadian provinces, the house is still the “matrimonial home” giving each partner a legal claim on it. Obviously the only kind of bank account and financial accounts that make sense are separate accounts.
Finally, although I have lawyers as much as the next person (and probably more), it is possible to get good legal advice in this area.
*@badger
Wow, imagine tens of billions of dollars of revenue getting away from the IRS – why that’s an entire afternoon’s worth of spending in Congress. For shame!
Previously posted, but maybe relevant in context of the aforementioned couple: a summary of legal article written by Canadian tax lawyers.
“US Tax Collection in Canada”, published in “Canadian Tax Highlights” Vol. 19, Number 9, Sept 2011-10-14 – Newsletter of Canadian Tax Foundation. The authors
are Erin L. Frew and S. Natasha of Reid Thorsteinssons LLP, Vancouver
Article documented the difficulty of enforcing US tax claims in Canada.
Article is about enforcement within Canada and is no substitute for personalized legal
advice.
Article notes:
– Canadian courts do not enforce US tax claims in Canada
– Canadian courts very unlikely to enforce FBAR penality
– Under the Canada-US tax treaty, Canada Revenue Agency cannot collect
US taxes from Canadian citizens, unless tax claim proceeded
date of citizenship.
Final summary paragraph:
“In summary, a Canadian citizen need have little concern about the
collection of US tax, interest, and ancillary penalties. However, a US
taxpayer who is a Canadian resident and not a Canadian citizen and who
owes US tax, interest, and penalties may face collection thereof by the
CRA pursuant to treaty article XXVI A. It is extremely unlikely that
Canadian citizens or residents will have to face collection of FBAR
penalties, except in the very unlikely event that those penalties may be
characterized as registrable civil judgments.”
*Bubble and Calgary. You are quite wrong. What the couple did may have been perfectly reasonable for them. It is also perfectly legal. Everyone’s situation is different.
@Duke of Devon,
As long as it is perfectly legal for them to do so; they will not get caught up in some draconian US tax trap; and Canada will protect them, I guess — more power to them.
It’s sort of like “the law is the law is the law” except when it isn’t the law. I don’t know; my tired brain won’t process any more. I want out and I guess I’ve chosen another more expensive way (and I’m, similarly, counting on Canada for protection for my son for whom I am denied the right to renounce citizenship on his behalf).
That this will one day end for all of us is my hope; that it won’t more pervesely turn into a witch hunt, with US citizens or Canadians turning in other US citizens (like my son) is my prayer. Never again crossing the US/Canadian border is part of the price.
*From what I understand, they won’t touch your son. He appears to be safe.
No wonder why Homelanders write those things–it’s because they are incited by the article writer. Every article casually slips in the rhetoric many WEALTHY Chinese are getting rid of their passports. Many WEALTHY Americans are …… WEALTHY people are …… The tainting starts there. I have yet to see one of these articles that don’t contain WEALTHY in it.
Getting your money out of USA, one has to consider that a form has to be filled out if the transaction is over 10k. I don’t know if it is the person or the institution that fills it out. When it is, it gets on the radar for a 10,000 FATCAllable reporting. If one decides to get it out in increments, it is a crime called “structuring” and there are articles about confiscations of the transferred amounts.
No more TSFA’s, RRSP’s for the US citizen of this Canadian couple; they’ve created a 3rd class of citizen in Canada not able to enjoy all the privileges of even the second class Canadian citizen and she can’t travel freely to the US! In actuality, I doubt our American friend’s transfer of assets included RRSP’s because of the tax ramifications of doing so. What next, keep adding to those RRSP’s, TSFA’s and later cashing in upon retirement what 2nd class Canadians cannot without onerous filing requirements or taxation? Cheating the tax cheat, what a concept. This will not end well.
I’ve just sent this to Andrew Allentuck regarding his recent Financial Post article. Heaven forbid such a couple would try to plan with a TFSA, an RESP or even an RDSP for a disabled family member.
Yes, the couple described by bubblebustin are even more restricted and may well now be classified third-class, terrified to breathe freely, Canadian citizens, less free than the rest of us second-class Canadians. What a way to have to live and, additionally, with restrictions on ever visiting US family members or even being a tourist or, god-forbid a Canadian snowbird.
@deckard, re”an entire afternoon’s worth of spending in Congress”.. yes, and toss around some imaginary numbers – it’s not as if anyone powerful is likely to successfully confront them with the facts.
@calgary411 ; great idea, to pose the question of financial planning for a mixed US/non-US family saving for disability re RDSPs. And added to that the ‘UScompliance’ as a ‘strategy’, mixed with the inability to renounce, and inability to take care of one’s own affairs – yet still held legally liable for reporting just the same. Lets see the Financial Post take that one on in an article about financial planning!
All…
Roger has sure been pumping out the comments. You might have a read and give him some thumbs up! 🙂
@Just Me I’ve thumbed up any/all that support us. Only made small comments as, brain doesn’t seem to be working so well today. 🙂 Boy, some of those homelanders, what idiots, eh?
@nobledreamer
If I get the time today, I will do a idiot to intelligent ratio of the comment count. Even though some are sure certainly stupid, I am encouraged by the number I see that seem to understand the issues.
@Just Me / NobleDreamer
I too get sick at some of the bigoted comments that I see. Let those who are ignorant among homelanders gripe at us. We don’t want only yes-people that agree with us but others whose arguments we can respond to in constructive and informative ways. Many homelanders are gradually coming over to our side and I think this can increase. Just look at the number of comments on this article this time. Comments from Brockers and other allies abroad seem to be increasing since we first started targeting online press articles for written responses last Spring. Comments from sympathetic homelanders are also increasing. There will be many who like Pete, WoahitsSteve, and Mopsick start out critical of us, but many will gradually become more familiar with and sympathetic to our plight.
What we are doing here at IBS, Maple, and on mainstream press sites is a lot like what the founders did by circulating handbills. Word is getting out. Understanding is increasing.
That the situation got so bad in the first place was due to ignorance and limited understanding in the US of what actually goes on abroad. When I was growing up in the US I was constantly given the impression that all other countries were either hellholes or somehow substandard to the US. This is not true and we have to get the truth to people.
@Jefferson
I believe that most Americans want to know the truth and resent it when the find they’ve been told something else. The complexity and unfairness of our circumstances are incomprehensible to most, and if often takes a lot of perseverance to drill through that natural reaction to deny what on the surface seem like outrageous claims by those who are assumed to have abandoned America, but when you do, it is somewhat of an epiphany for them. The skill in making it relevant to ‘homelanders’; that every USP is left at a disadvantage because of citizenship based taxation and its related overreaches.
@bubblebustin I agree, the more we work on debating with homelanders, the more of them will eventually become as livid at US policies as we are.
@renounce,
Your compilation of comments from the WSJ article gives good insight into the opinion of many homelanders towards expats.
That Angel “bring it on” Lazo guy comes across as the typical “ugly homelander” bureaucrat or government contractor all too content receiving his big fat government paycheck and benefits. Bashing ex-pats will always be the order of the day for people like that. Unfortunately, the US is full of them.
@Just Me, Jeff, bubble and Abused
all very good insights. Yes, there are a few who are consistently right-on and thorough. Angel is the worst though, it’s hard not to get a bit riled up. Will go back over and check if any more have been posted.
@Just Me I didn’t count each comment, just each commenter and put into categories:
anti Americans abroad 14
expat 26 (of which 6 I know are Brockers)
supportive 44
can’t tell 24
Some of the “supportive” ones could be expats, hard to tell. And the last category consisted of those who I didn’t get a clear sense of exactly what they were saying (but seemed not to be reacting against us). So you are right, it IS improving, a lot better at least, than when I first started getting into this.The ones who are against us do make lots and lots of comments. they are vulgar, rude and insulting so it seems in a way, that they dominate.
Sorry, I can’t resist, here are three of my “favorites:”
“Who
the hell needs foreign trade. The US can produce everything it needs in house.
If there was no trade, the US economy will be at full employment. Americans are
the buyers and shoppers. The world needs America, not the other way around.” DOH
“Fortunately, with all our military power, we can tax
other countries if necessary. So I wouldn’t worry about this.” WT*?
“The interests of the nation are above those of an
individual, so our government has full right to confiscate property/assets of
any individual, and if necessary, life.” Truly frightening.
@nobledreamer, thanks for the analysis. #2 and #3 of those ‘favourite comments’
ex. ‘Fortunately, with all our military power, we can tax
other countries if necessary’
Truly chilling. Even for internet idiots, that anyone thinks that….
More evidence that facism is on the rise in the US. All the indicia are there; war, inflation, deficits and debt monetization, etc. But you will meet very few homelanders who will acknowledge this (including the ugly comments above), as they were led to believe they are the freest nation on earth.