“RT segment from April 15, 2013 in ‘honor’ of US income tax day. Features noted figures Jet Li and Eduardo Saverin, who recently quit their American citizenship for tax reasons. Freddi M. Weintraub, a tax attorney, provides insight into the law surrounding expatriation. Segment concludes with an interview with Mike Gogulski (me), who renounced his US citizenship in 2008 for political reasons and has lived without any nationality since — a stateless person.”
Canada may have more or less 1,455 stateless persons.
RT is a Russian channel heavily biased. Still it was interesting although I would have liked to see them do an Anti Fatca and Anti Russian IGA piece.
This video is interesting because it demonstrates that even the anti-US crowd doesn’t understand the tax issue. They make it seem like renunciations are an attempt to avoid US taxation. This is the wrong way to look at it. It would be interesting to know what percentage of the renunciations are by US citizens abroad (I suspect the vast majority including Saverin).
It is not the fact of taxation that is the problem. The problem is that US citizenship-based taxation (the extent, reporting requirements and incompatibility with the tax system in your country of residence) makes it impossible for US persons outside the US to live a meaningful life. They can’t save, invest, marry, do business ventures, etc. So the question becomes: Do you move back to the US and abandon your family, your life, etc. or do you renounce US citizenship. Obviously you do the latter.
You do fantastic research on “renunciation stats”. Is there a way to determine what percentage of the renunciations are US citizens abroad? If the percentage is as high as I suspect it is, that fact will help shape the debate.
In most cases renunciations are not an attempt to avoid taxes per se or an ideological decision. They a simply a defensive measure which is essential to being able to live a normal life. To put it another way, for US citizens abroad:
US citizenship is a cancerous tumor that must be removed.
Well said, @USCabroad; it was the +200 page tax returns and annual tax preparation fees north of $3000 that I no longer wanted to be burdened with, especially as I only earn $25,000 per year (which isn’t even guaranteed).
It would be great if the outside world understood that the financial security of non-US spouses and children of renunciates/relinquishers is a huge issue also outside of the issue of taxation. My reason for renouncing. Threat of penalties applied to reporting forms rather than taxes owed. Often the non-US spouse is main wage-earner. We say it over and over again. Besides for the mis-applied stereotype of rich fat cats abroad maybe the majority of homelanders have no similar requirements so they don’t get it.
@nobledreamer, the following article, posted today, was written just for people like you (note the screaming caps):
It basically threatens that the US government is endlessly eager to fine the hell out of minnows if they haven’t filed FBARS, unless they quickly join OVDI/P or so.
I posted a comment stating that many Americans argue that anyone who joins OVDI/P is automatically labelled as being a “tax cheat” even when they owe no taxes. My comment hasn’t been published yet and probably never will since it isn’t financially profitable for the accounting business or US treasury.
As long as there is citizenship based taxation, the USA can always make a claim that people who renounce are doing it for tax reasons, because the two concepts of citizenship and taxation are inexorably linked in that way. That is the point. Since they wrote the rules of the game so it will play this way, they can ‘win’ all the arguments that point out the unfairness of citizenship based taxation, so there really is no point in working with the system at all.
So it really comes down to this….
When you’re in a position to consider going to the US consulate to renounce your citizenship, based on this state of fundamental unfairness, will you be in an emotional and rational position to not give a damn about what the USA thinks of your decision?
@Swisspinoy, that blog is written by a tax attorney to drum up business.
Nice, isn’t it? How the US government can stir up all this FUD, and then the tax attorneys and professionals get to capitalize on it? All on our grief and expense?
Where is our say so in all of this? Oh, but of course! We don’t get a say so!
We at the Isaac Brock Society are writing “The Rise and Fall of the American Empire” in real time.
This blog is becoming a fantastic historical document. It in later years it will play the same role as “The Boston Gazette” does now. I.e. a historical account of the end of a certain kind of tyranny – that against U.S. citizens abroad.
The British survived the American Revolution as a world power.
The US will not survive. It is nothing but a debt ridden thug.
Through FATCA, drones, citizenship-based taxation, they are setting up a showdown with the rest of the world.
Through FATCA and drones, Obama has united the whole world against the U.S.
Through citizenship-based taxation and FBAR, Obama has united U.S. citizens abroad against the U.S.
Through a dysfunctional government and pandering to special interests, Obama has united a good number of Homelanders against the US.
Pretty soon there will be nobody left who is sympathetic to the US.
And that his how the US will cease to be a world power.
Bring it on! Hard to care about an abuser.
I truly feel sorry for anyone that has waited this long to do whatever is needed to get out. This is going to get s lot worse and very, very ugly.
This RT segment tries to pigeonhole renunciants as either being creative tax avoiders who do it to save money or as a protest to US policy. For those of us who are lucky enough to be able to do so, renunciation of US citizenship is a matter of survival, not for the capriciousness and greed that’s being conveyed here.
It’s too bad that they chose a pompous ass like this Gogulski to represent USP’s abroad.
I didn’t know that Obama is prosecuting whistle-blowers.
@bubblebustin, I kind of like Gogulski. He’s also an IT guy 3 days older than me living in Europe who is protesting US policy. He could become a citizen of Slovenia but prefers to remain stateless. The last time that I was in Slovenia, years ago, I met a cool IT guy under the online name of “Mike”, I believe, who was also critical of US policy. I don’t know if it was the same person, though. He had long black hair or wore a wig and vanished afterwards.
Here’s the latest in the news:
So, the focus is not on tax cheats, but rather the retirement savings of minnows such as dual citizens, VISA holders and expatriates. Very interesting!
@swisspinoy, I would take with a grain a salt propaganda spread by a lawyer who describes himself as “paranoid with the IRS”.
In his own words on this web site when he was commenting about the McBride case:
“And all I can say, is that it has me even more paranoid about the IRS. The IRS is hungry for minnows because they actually have the most to lose. And they represent the bigges threat to the state (could you imagine what wide-scale non-compliance by regular people would do?)”
Check it out:
Anthony is kind enough to comment on occasion on IBS, but after comments like that and the PR you posted, I strongly question his judgment and how he can objectively advise minnow customers who come to him to help them choose the path to compliance that is best for them.
I don’t think the IRS is hungry for minnows. I think Anthony is hungry for customers.
Another article I read, but can’t find the reference anymore was mentioning someone who had close contact with IRS lawyers, who mentioned their hyperbole was really to scare willful bad guys. I believe that was the intent of congress when they voted for FATCA, and that what happens to dual and American abroad are bad consequences of a net that was not designed for them. But to twist that into a statement that says that the IRS target is minnow dual and visa holders is fear mongering and propaganda designed to have these poor people sign up for OVDI, with him counseling them of course. I think it is pathetic.
Even the taxpayer advocate would not agree with this statement.
One more thing, I am not sure it is in the interest of new minnows who might be visiting this web site to repost misleading PRs like that. These people are afraid enough and we should not scare them more into making decisions that might not be good for them.
And this PR should have come with the standard disclaimer:
“The views expressed in this PR are IRS Medic only and do not necessary reflect the view of the IRS” 🙂
I would go as far as saying that with her recommendations in her latest report to congress, the taxpayer advocate, by recommending other ways to compliance for minnows in this situation is implicitly saying that she will help people who fit within the category she describes, who tried QDs and for some reason, it did not go well.
Moderator here is the previous comment with the typos fixed – please delete the first one.
You are absolutely right. Mr. Parent is simply promoting entry into OVDP under his professional guidance.
The message needs to be:
Stay out of OVDP unless you have a material risk of criminal prosecution and there is a financial reason why it makes sense to enter the program. The financial justifications for entering OVDP are very limited. Furthermore, we have seen that the IRS will allow people to enter OVDP, accept their paperwork and then throw them out.
Lesson: Stay out of OVDP and stay from these kind of lawyers.
Isaac Brock Society press release on this topic:
Bubblebustin, Oh yes, the Obama admin has persecuted more whistle blowers than previous POTUS, I believe. He is also the “buck stops here” guy in terms of the force feeding of “prisoners” at Gitmo, and his admin has made crusades out of deporting non-criminal illegals and have been viciously stamping out medical marijuana growers and dispensers in states where it is legal to do this. Throw in his hypocritical flip/flopping of birth control access for women (b/c he needs the religious vote) – he’s been an all around failure on most things that liberals supposedly hold dear (or did hold dear until the 2008 crash when it became all about sustaining their middle class first world lifestyles while harassing Canadians about the environment b/c the gods know Canadians don’t need jobs or anything like that).
Obama has done more to extend and actively promote the police state than Bush did. But, I don’t think anything would change if it were someone else in the WH. This is just what America is anymore.
“It’s too bad that they chose a pompous ass like this Gogulski to represent USP’s abroad.”
How can he be representing US persons abroad when he’s not a US person himself?
I’m also confused as to how he’s a pompous ass. Sure, he’s quite critical of US policy, but so am I. Maybe it’s because he chose statelessness?
Aren’t we all here because we’re critical towards some aspect or another of US policy, and we’re either wary of being victimized because of those policies, or already have been victimized ourselves?
Obama. He definitely isn’t the ‘hope and change’ that I had in mind. If they ever need a picture example for the definition of betrayal in the dictionary, they could just use his stupid looking face.
Next time it’s time to get out the vote, I won’t be involving myself in the next American political scam! Hopefully, I’ll be at the US consulate renouncing with a Canadian passport in hand.
I made a mistake. Mike Gogulski lives in Slovakia, not Slovenia:
I guess that I’m just as bad as Americans who mix up Sweden for Switzerland or vice versa. 🙁 I should have known that Bratislava is not near Ljubljana. Must be getting old or I need to go on another vacation to that area.
Funny, I started this post prior to your last comment but had to run out the door before I could finish. A revolution afoot as you say?
What, is Gogulski of too fine a human being to condescend to taking another citizenship after having the US’s? Or does he wish to ‘citizenship shop’, or be a citizen-of-the-world in his nice cage? America doesn’t even listen to its own citizens abroad, how can he expect his protests as a non-citizen to have any effect. I wonder why he chose not to mention taxation, or if he had and it was edited out. For any expat, the persecution we are forced to endure at the hands of the government should be at least as important as the other issues he spoke of. For all we know he renounced because of taxes and is grandstanding on these other issues. Something’s not adding up here with this guy.
A big Washington law firm that provided recommendations for 2 of the now closed VD programs admit that they were oblivious to USP’s abroad before both programs were launched. As I wrote on another thread:
“Scott Michel and his firm helped shape OVDI with no consideration for ‘benign actors’ living abroad. He and Mark Matthews ‘tell all’ in their report “OVDI is Over-What’s Next for Voluntary Disclosures?”:
“Approximately a year ago, we wrote an extensive critique of the first VDP and its aftermath, offering praise and criticism when we believed it was due as well as suggestions for modifying the VDP.”
Thus OVDI (or #2 as they call it) was born.
Now that it’ over, what did everyone learn from OVD#2?
“One Size Does Not Fit All
Tax noncompliance is found in a wide variety of conduct with dramatically varying levels of knowl- edge or willfulness. We can leave aside for the moment the issues unrelated to offshore accounts. In the relatively narrow categories of behavior associated with unreported bank accounts, private practitioners encountered a broad range of culpa- bility. There were a few of the stereotypical offshore tax cheats — native-born U.S. citizens who, on their own accord, decided to evade taxes and developed plans to use offshore entities and accounts to shield from taxation funds earned in the United States. That is the media image of offshore tax evaders and an image promoted by IRS public statements. For that group, the penalty levels in the OVDI programs were, in our judgment, appropriate, perhaps even generous when combined with a criminal amnesty.
It may surprise most observers, but we saw few cases like that. It is anyone’s guess why. It may be that this aggressive and risk-prone group was pre- pared to let it ride. Or perhaps there simply are not as many of them as anticipated.”
More importantly to minnows:
“Starting mostly with OVDI #2, another group of taxpayers began streaming in. They had lived abroad for many years. Some had been born to foreign parents and left this country as infants; many were dual citizens at birth. All had routine ‘‘foreign’’ bank accounts in their country of resi- dence and were fully compliant with the tax laws of that country. Few had grown up in countries that taxed worldwide income. Others had been assured by foreign accountants that they did not owe U.S. taxes (which was often true because of the foreign tax credits available to them). A few did not even know they were U.S. citizens. Yet, in part because of frightening publicity in their home country, for the first time, the taxpayers in that group — which comprised probably only a small percentage of noncompliant Americans living abroad — were anxious and concerned.
In the guidance for OVDI #2, the IRS, to its credit, attempted to create a penalty safe harbor of 5 percent as long as these sorts of individuals in- volved had little or no U.S.-source income.4 But even that penalty structure discouraged most per- sons in this group from entering OVDI. Most of them owed little or no U.S. taxes, and having to forfeit 5 percent of their unreported financial ac- counts just for peace of mind seemed excessive, especially given the need to expend thousands of dollars in legal and accounting fees to submit eight years of tax returns and FBARs. We can attest that many people in that group are likely, at best, to start filing next year, and that some will simply remain noncompliant and expect, with good reason, that the IRS will never find them.”
We can understand from this report how people like Patricia from Canada were run through the wringer under OVD#1:
“In OVDI #1, the IRS spent far more of its own resources to bring taxpayers back into the system and process their filings. There were months of individualized, intensive audits of the amended filings. That lasted until the IRS apparently recog- nized that the resources devoted to the process outweighed any incremental benefit. Still, agents spent countless hours poring over amended re- turns, plugging numbers into audit reports (often making errors, however unintentional), scrutinizing foreign bank statements and foreign exchange rates to ensure a precise penalty calculation, and then pushing the entire process through the funnel of a closing agreement. To this day, we do not under- stand why the IRS did anything but spot-check selected returns.”
I can only guess with results like this, that was how Streamlined was born.
Hindsight is a factor even for the so called experts it seems.”
They’ve been told, but how well are they listening?
Mhj, I didn’t vote in the last election. I am hoping to be able to vote in the next Canadian round of elections at the various levels. I am partial to Trudeau’s quest but the Liberals in Alberta are mostly various forms of idiots and tools. The leader here is a whiny drama princess. Have no idea how he bought the top spot. I recognize though that there are few who go into politics purely for the common good and the whole thing is just a slow process of continually compromising what you think is right for what you can bear to live with.
Lay off Gogulski. Lay off the notion that any “citizenship” amounts to more than a state’s hook snagged through an individual’s cheek. Lay off the notion that anyone on TV “represents” anything other than what they themselves say. Except perhaps a clony-crony elected or appointed official.
Alternative: Hate freedom and stay stashed away behind a sad little anonymizer. Forego “representing” yourself in public while whining about somebody else who stands out in the open.