Rolled Back Deadline of FATCA Gives Critics Hope
Once again James Jatras of RepealFatca.com offers-up another succinct and pithy interview, this time to iExpats.
As Blaze over at Maple Sandbox commented, here’s the article’s takeaway quote about FATCA:
“There’s no way anyone can put enough lipstick on this pig to make it kissable.”
Scott Michel is at it again. Spreading the FATCA gospel.
@USCitizenAbroad
I think the best FATCA advice applies to most things in life: hope for the best but plan for the worst. Of course, planning for the worst is exactly why the FATCA Compliance Complex is salivating like a panting dog more than any country contemplating a self-defeating IGA. Scott Michel knows he won’t have to worry about putting his kids through college.
Deckard and USCitizenAbroad
…Yes, plan and be aware if there is any hope.
I’m thinking of a 20-ish talented independent musician that is right now playing with veteran indie musicians at many Canadian and American music festivals in the summer circuit, born in the US to Canadian parents. They are in demand and playing almost every night somewhere. He has a US passport and says he doesn’t make enough to have to file US tax returns. I have heard more than one person (many of them musicians) say this. Damn the US for not educating its “supposed” citizens properly, ALL of us.
He (and so many) needs to know what he can and can’t do as a dual Canadian / US citizen.
First, he (and so many like him — I think this affects many musicians) surely will make much more as a single person earning income as a musician performing in both Canadian and US festivals than the “Single $9,750 threshold”. This is the starting point for filing the US tax return.
You’re right, KalC, nothing is in real English!
http://www.irs.gov/publications/p54/ch01.html#en_US_2012_publink100047318
As it has been pointed out to me, the US filing instructions are so much obfuscation or I was trying to read into them something that would work in his case. Not to be — so he’s behind the 8-ball already, THINKING he did not have to file as he was not making enough income. Sort of like an urban legend. He’s going to take his cue from what other musicians think they are doing correctly.
The next thing he needs to know about are the FBARs because it sure isn’t hard to have $10,000 total in all bank accounts sometime in the year. I will be sure to tell him that Canada will not collect FBAR penalties for him or for any other US Person in Canada. He was a dual citizen from birth so he will never be subject to the obscene Exit Tax if he checks out correctly with the 8854. Do you think he is in the mindset to delve into all of this? Who will he believe — fellow ill-informed musicians or someone like me, who has shown up in his life out of left field?
He must also know that he must not put any money away for retirement. The RRSP would be a better choice for him if he wants to file US tax returns each year, along with the Form 8891 to delay what could be DOUBLE taxation. The TFSA would be the better choice for some savings that could be for retirement (or not) for a young all-Canadian musician; he’d better be aware he can’t do this.
Then, he’d better be aware that he should never reside in the US and be subject to passing along an unwanted gift of citizenship to any children he and a future wife / partner bring into this world.
I’m sure that in his mind, in so many minds, we are blowing things out of proportion. We are not!
James Jatras always “tells it like it is” and now Lynne Swanson (Blaze) and Victoria Ferauge have too. Their article at The Hill’s Congress Blog has been posted and here’s a heads up — IT”S REALLY REALLY GOOD!!! 🙂 Someone will soon make a new thread for this I’m sure. Thanks’s Blaze and Victoria for doing this.
http://thehill.com/blogs/congress-blog/foreign-policy/313775-fatca-simple-premise-gone-terribly-wrong
Dashed that off way to fast — THANKS (not Thanks’s) — big palm to forehead slap for that one. 🙁
@Em
It’s gooder than really good 🙂
Yes, yes — double plus good. I read your comment and Swiss Techie’s too so I’ve been doing some up arrowing on The Hill.
In terms of my example above of an indie musician with a lot of festival and other work during the year: just what defines a US Person (or a Canadian) as an employee or an independent contractor and how does that affect taxes, US or Canadian? http://denveroriginalmusic.com/2012/05/26/musicians-as-employees-or-independent-contractors/
US Tax Lawyer, Phil Hodgen, highlights one misconception of US Persons believing they do not make enough money to have to file US tax returns or FBARs. http://us2.campaign-archive1.com/?u=b343af01b0c3e75921e909c4d&id=1260a20c4d&e=41c124a90f
I wrote the following note to Kevin Shoom and received a response.
‘Dear Mr Shoom.
I am a Canadian born Canadian citizen married to a person born in the USa but who became a Canadian citizen in 1980 without formally relinquishing US citizenship (although she thought she had by becoming Canadian). As a result until she does relinquish, she is considered a Us person and subject to the provisions of FATCA. There are many troublesome and unfair impacts of FATCA most of which you have no doubt heard about. One of my major concerns as a Canadian citizen is the fact that FATCA rules consider any joint account to be a US account for their tax and penalty purposes. This means that every contribution I have made to our joint accounts (and it has been the majority) is subject to penalties and US taxation. This is totally inappropriate and in my opinion is US imperialistic overreach. How on earth can such a policy be justified? I sincerely hope that Canada does not sign an IGA, but if it does, surely it will not agree to any provision that joint accounts are to be considered US accounts and where one of the partners on the accounts is a born Canadian. Please assure me that this will not happen.’
He responded within 48 hours saying the following:
‘Dear Sir:
Thank you for providing me with this. While I cannot comment on the substance of the negotiations that are underway, please be assured that your comments will be taken into consideration. ‘
@JOE ZINGA
I received the same reply from him.