A memo from Demsabroad is posted on the Ask your FATCA Question thread. It is copied here for broader distribution.
Marie
*FYI, Just received this update from Democrats Abroad via e-mail:
Dear Fellow Democrat Abroad,
It has been a while since we last reached out to you, but the pressure of the 2012 election and the holidays did slow us down. And now that we are approaching President Obama’s second inaugural, we feel it most appropriate to reach out to you with this brief report.
In mid-November, four groups representing overseas Americans (Dems Abroad,Association of Americans Resident Overseas, Federation of American Women’s Clubs Overseas and American Citizens Abroad) met for an hour with senior IRS and Treasury officials. Joe Green represented DemsAbroad and also had meetings with the Taxpayer Advocate and the IRS assistant deputy commissioner for service and enforcement.
As you may recall from our previous reports, the IRS has two existing voluntary compliance programs for delinquent tax filers; these are intended to reach out to US “persons” (a very complicated term indeed!) who may have significant unreported income and/or accounts and who wish to avoid potential criminal action by paying the fines and penalties imposed by the IRS. These programs are aimed at helping delinquent tax filers who may have considerable unmet tax obligations.
But the IRS also understands that there are a number (many, some, at least a few) of us whose failure to file does not reach the size or complexity that is anticipated by the official voluntary disclosure programs. So, this past August (and now in effect for the 2012 tax year) the IRS announced a less onerous amnesty program for what the Service calls low-risk non-filers.
The details of this option (called “New Filing Compliance Procedures for Non-Resident U.S. Taxpayers”) can be found at the following IRS website:
“The IRS is aware that some U.S. taxpayers living abroad have failed to timely file U.S. federal income tax returns or Reports of Foreign Bank and Financial Accounts (FBARs), Form TD F 90-22.1. Some of these taxpayers have recently become aware of their filing obligations and now seek to come into compliance with the law. The Service is announcing a new procedure for current non-residents including, but not limited to, dual citizens who have not filed U.S. income tax and information returns to file their delinquent returns…
“The IRS will determine the level of compliance risk presented by the submission based on certain information provided on the returns filed, and based on certain additional information that will be required as part of the submission. Low risk will be predicated on simple returns with little or no U.S. tax due. Absent high risk factors, if the submitted returns and application show less than $1,500 in [US] tax due in each of the years, they will be treated as low risk. In general, the risk level will rise as the income and assets of the taxpayer rise, if there are indications of sophisticated tax planning or avoidance, or if there is material economic activity in the United States. Additional risk factors include any additional history of noncompliance with United States tax law and the amount and type of United States source income.”
Slightly more detailed, but perhaps more complex “Options Available to Help Taxpayers With Offshore Interests” may be found at this IRS website:
Please note the following admonition on the above website: “The IRS reminds taxpayers to consult with their professional tax advisor in determining which option is the most appropriate given their facts and circumstance.”
While using a tax preparer can be burdensome, and while there are tax-filing sharks in the international waters (beware!), we may have to conclude that IRS compliance will likely involve a financial cost associated with the privilege of living abroad.
For those overseas Americans who have not been filing and who fit within the IRS’s definition of low risk, this recently announced option could bring some relief.
We also want to tell you that, while the implementation of the FATCA regulations is still being worked out amongst and between the IRS and various foreign governments and financial institutions, the threshold for reporting financial holdings by overseas Americans has been raised to $400,000 US for single filers and to $600,000 for joint filers.
We must reiterate as we close this update that we cannot offer tax advice and neither do we maintain a list of tax consultants..
We will bring you further updates as our work with IRS, Treasury and Senate and House members and staff continues.
With best regards for peace at home and abroad in the new year,
Democrats Abroad FBAR/FATCA Task Force
Living overseas is a privilege? Gee, thanks, Uncle Sam.
WTF?
@a
Yes, that caught my eye too, especially since my husband was born in Canada, never lived in the US, but is a US citizen through his American father through descent. He had a few 4-letter words to describe how he felt about Dems Abroad’s myopia.
It is a right, not a privilege, to live abroad. The idiot democrats have never read the United States Constitution. Dumb. Dumb. Dumb.
*Wow, so many threats and scares simply for choosing to not be unemployed in America! It really sucks to be an American. The memo should have started off stating: “We are proud to announce that America switched to a residency-based system and that free-filing has been fixed to also be available to those with US-based income who don’t have a US address!”
I feel extremely privileged to no longer be an American citizen, but far less privileged that I will have to spend the rest of my life proving it.
“We’re working on it.”
Same message as before.
As for the “privilege” they are referring to in my case it works out to, “Marry a foreigner, live in his country and raise children there – these are privileges for which you must pay.”
Nuts to that.
Yeah, low risk $1500, but with the cost of living in Switzerland, the AMT, the Medicare surtax and the rest, it is easy to exceed that without being rich enough to afford the additional taxes and pay the accountants and lawyers thousands.
What idiot wrote that DemsAbroad memo? PRIVILEDGE to live abroad? HOW DARE THEY. Come on, we need people with more balls than that defending our interests in Washington.
I wanted to throw my computer across the room when I read that.
This looks more like it says–we’ve now finished electing them–now it is time to start complying with them, too.
“While using a tax preparer can be burdensome, and while there are tax-filing sharks in the international waters (beware!), we may have to conclude that IRS compliance will likely involve a financial cost associated with the privilege of living abroad.“
It’s a privilege to live in my own house, with my own family, supported by my own wages earned entirely outside the US, for which I should find it reasonable to pay for professional tax preparation even though I don’t owe any tax?
I’ll tell you who sounds privileged to me: the little bundle of preciousness who wrote that sentence.
By the way, this appears to be incorrect: “We also want to tell you that, while the implementation of the FATCA regulations is still being worked out amongst and between the IRS and various foreign governments and financial institutions, the threshold for reporting financial holdings by overseas Americans has been raised to $400,000 US for single filers and to $600,000 for joint filers.“
According to the instructions for Form 8938 on the IRS website (Nov. 2012 version), the thresholds are $200,00 at year end/$300,000 at any time for individual filers, and $400,000/$600,000 for joint filers.
While Dems abroad advertise for their FATCA plan, there are advertisements for the Health plans
http://www.usatoday.com/story/news/nation/2013/01/15/health-care-site-helps-uninsured-get-coverage/1835589/
Perhaps we can get bronze, silver, and gold Fbar plans, too
The Dumbocraps ought to know if anyone does that it is a privilege to live abroad – after all, their honcho just nailed down the top job inside the prison. Why a privilege? Because being able to live abroad is the absolutely necessary first step toward renunciation of US servitude.
A privilege? Lol, it will be my privilege to relinquish the little blue book soon!
It’s hilarious, Dumbocrats Abroad remind me of those East German Marxist-Leninist scholars arguing about the virtues of the DDR in late 1989/ early 1990.
Idealists who believe in a bankrupt system and government who have no problem destroying other people’s lives while spewing their horse crap.
This really is very sad. As a lifelong Democrat I chose not to vote in the most recent election as I could not vote for a party that victimizes Americans living overseas. How can Democrats Abroad live with their cowardly stance?
I’m glad it’s been raised to 400’000 USD for single filers. I won’t have to fill out that dumb ass form ever cause I’ll have relinquished by then.
*In March 2012 Democrats Abroad hosted a tax seminar in Toronto which I attended with my sister. There was a representative from Investors Group and a CPA specializing in cross-border taxation (both Ex-Pats). The gentleman from Investors Group began the meeting by giving us a brief history of Democrats Abroad. He explained that the main function of the organization was to support the Democratic party and “make sure that President Obama gets re-elected”. At that point I chuckled out loud (a bit too loud). I thought he was making a joke. I thought they would be more critical of the current administration. I was wrong. Later on in the meeting they pointed out some things they were doing, like forming the FBAR Task Force and speaking to the Treasury Dept. However, the overall vibe that Democrats Abroad was giving off at the meeting was, “Oh well, what can you do? Gotta file these darn taxes.”
@Marie
It’s been said before: Democrats Abroad = Stepford Wives.
Stepford wives indeed. Here is the post which also references that message from Joe Green in the summer:
http://isaacbrocksociety.ca/2012/12/19/democrats-abroad-are-like-the-stepford-wives/
@Marie is right. Democrats Abroad is the just a branch of the Democratic Party. Therefore, I hate to put it this way, but:
In the same way that the Obama Administration is your enemy, Democrats Abroad is your enemy.
This latest bulletin from Democrats Abroad is notable for its mindless stupidity. It’s a true “Stepford Wife” special. They have simply acknowledged the existence of OVDP and the streamlined compliance process. So, what else is new? Perhaps we should encourage Democrats Abroad to take lessons from the Isaac Brock Society.
What is interesting is their statement to the effect that it is a “privilege to live abroad”. This speaks volumes about the Obama democrats.
There is NO constitutional right to leave the U.S! The U.S. has made it virtually impossible for U.S. citizens abroad to survive. Of course, your average “Homelander” would not be able to understand, why anybody would want to live outside the homeland. Approximately 50 years after JFK’s speech at the Berlin Wall (“We have never had to put a wall up to keep our people in ….” the U.S. has done just that. Today the U.S. has created an “invisible fence” around the country.
I suggest that all of you look at the broader picture here – Democrats Abroad really do believe that it is a privilege to to be allowed to live abroad. That may be the mindset (to the extent that they have one) of Democrats Abroad. But, that is not the mindset of any person who values freedom. Ronald Reagan noted that “Freedom is never more than one generation away from extinction.” The Obama democrats are trying to extinguish freedom within Obama’s second term – why wait until the next generation. Now, that’s change that the Democrats can believe in.
Democrats Abroad don’t value freedom. But, then again, historically the Democratic party didn’t value freedom either. It’s a true privilege for U.S. citizens to leave the yard!
Speaking of the “Invisible Fence”, check this out:
[http://www.youtube.com/watch?v=25AoKta_gjU]
From the FATCA discussion thread, I wrote:
@Marie
Better than raising the reporting thresholds for accounts under FATCA (8938) I would have been more pleased to hear that they’ve raised FBAR to an amount that corresponds with this and combined the two forms, but then the USG isn’t about making things easier and less costly for the taxpayer is it.
Dem’s Abroad’s comment “compliance will likely involve a financial cost associated with the privilege of living abroad” reminded my why USCitizenAbroad refers to them as “Stepford Wives”:
Democrats Abroad are like The Stepford Wives
@Marie wrote:
*With FATCA threshold reporting requirements now at 400k for single filers and 600k for joint filers, it makes absolutely no sense why FBAR’s remain at 10k.
@Foo wrote here:
According to the instructions for Form 8938 on the IRS website (Nov. 2012 version), the thresholds are $200,00 at year end/$300,000 at any time for individual filers, and $400,000/$600,000 for joint filers.
I can’t find anywhere that the thresholds have increased. Dumbocraps Abroad are delusional!
“We also want to tell you that, while the implementation of the FATCA regulations is still being worked out amongst and between the IRS and various foreign governments and financial institutions, the threshold for reporting financial holdings by overseas Americans has been raised to $400,000 US for single filers and to $600,000 for joint filers.“
This is misleading. They seems to refer to the FATCA form 8938, not to the $50k threshold that FFIs are going to use to report people’s information to the IRS.
Agreed with all the comments regarding the priviledge of living abroad. I actually got that comment myself, in the context of acquiring experience abroad. And I am in Victoria’s case. Moved abroad for work, and founded a family.
*The IRS could have set the threshold to 1 penny or $10^99999999, and I wouldn’t care. It’s irrelevant. What matters is that one is not denied financial services, unemployment opportunities or is threatened with jail time, fines, etc., and that filing is free and simple.
I don’t care if the IRS counts my pennies to learn that I don’t have many. The most that it should demand from an expat is for them to click ‘refresh’ then ‘submit’. All of this “do this, and do that” nonsense needs to stop. If the IRS wants the data, then it should go and get it itself.
demsabroad and repubsabroad need to pull their heads out of the sand.
@SwissPinoy
The point is, many people are relying on Dumbocraps Abroad for correct information.
@Christophe
My understanding is that under FATCA FFI’s must do electronic searches for US indicia on accounts of $50K or more. Under FATCA US persons who are resident in the US must report foreign accounts with balances of $50K or more, whereas non-resident USP’s according to the IRS: If you are a taxpayer living abroad you must file if:
It would appears that Dumbocraps Abroad are telling otherwise, or making an announcement ahead of the IRS doing so.
President Reagan: “Mister Gorbachev, tear down this wall”. Today it is “Mister Obama, tear down this wall”.
the limit for 8938\s is connected to Obummer’s definition of who is rich. It helps keep the 99%’ers cheering for finding tax evaders.
Does Barrieboy know anything about comparative consumer price indexes, inflation, or forex markets?
“Stepford Wives” is such an apt analogy, not only for Democrats Abroad, but for any overseas apologists for the United States that it’s really worth a closer look:
http://en.wikipedia.org/wiki/The_Stepford_Wives
“The term “Stepford wife” entered common use in the English language
after the publication of [Ira] Levin’s book, and is generally used as a term
of satire. It has recently been used by critics to describe Laura Bush,[3] and Katie Holmes after her marriage to Tom Cruise.[4]
The label “Stepford wife” is usually applied to a woman who seems to
conform blindly to an old-fashioned subservient role in relationship to
her husband, compared to other, presumably more independent women. It
can also be used to criticise any person, male or female, who submits
meekly to authority and/or abuse; or even to describe someone who lives
in a robotic, conformist manner without giving offense to anyone. The
word “Stepford” can also be used as an adjective (“He’s a real Stepford
employee”), or a noun (“My home town is a Stepford”),[5] denoting servility or blind conformity, or a seemingly perfect society hiding a dark secret.”
Servility. Blind conformity. A seemingly perfect society hiding a dark secret.
Not if we have anything to do with it.
Thanks again to USCitizenAbroad for making such a brilliant connection.