The following are ramblings as I wonder the group most represented here, those who are so ‘gobsmacked’ and talk about their similar reactions after their OMG moments and the reality of what the U.S. requires of them.
This largest group of us seems to be:
- 50 years and up,
- generally financially responsible, and
- ALL here, completely tax compliant where we live.
This experience for us has dispelled ALL our beliefs and assumptions, ALL of them. What an awakening, our OMG moments.
This experience is so hard for this group of people to deal with. As people who have tried to follow the rules, we don’t comprehend how we are being most hurt. We see our lives being destroyed at the hand of the country we once believed in. We are at the end of the building of our lives and planning for leaving something to our offspring. We also have the burden of realizing (as most of us didn’t know) we have passed onto our children a U.S. citizenship — an automatic gift, rather than a claim to a U.S. citizenship from their birth to parent(s) who had been born in and lived in the U.S. for a requisite number of years. We feel a whole lot of guilt about that — and our children are actually the other group most affected by the realization of U.S. tax and reporting responsibilities. For them (and for us, their parents), it is almost incomprehensible.
I, like most of this group, felt in control of my life, knowing I had saved and planned responsibly for what I would leave my children when I’m gone. I, and perhaps we, cannot believe that control over life has gone, now being determined by congresspersons of a country we may not have been part of for decades. For someone proud of having worked hard and of putting one foot in front of the other to overcome other life challenges, anything I now do to insure my future proves futile. At 70 years of age, I cannot start over. There is no consistency; my life has up’s and down’s; hope and despair in the long wait to learn how my Government of Canada will protect my family from a foreign country being able to come into Canada and effectively categorize me and my family members as second-class Canadians. Why have I lost that sense of joy I once had? Why can I not now plan or spend from savings and enjoy some of my retirement years? Why am I now afraid of future costs I will have related to my son’s U.S. matters? Why do I continue to be so angry?
There are obviously many of the million or so of us in Canada who are not affected this same way. I ask myself why that is. I ask myself if there are different types of personality, rendering some persons more resilient and able to live in denial of what is happening to them.
Most of this group have fond memories of the America in which they grew up, were “taught about” in American schools and pledged allegiance to at the start of each day. I now recognize that as a soft form of brainwashing that we believed, as the homelanders now, America is a special place you can count on: exceptional from other countries of the world.
This group of us generally was taught and believed that fairness and justice correlated with law and lawyers. We tried to live up to being good citizens, believing the U.S. to be the most moral country with the justice of law carried out by law and lawyers — they were equated with our concept of morality.
Our young minds were molded based on that ‘U.S. entitlement’ and belief that law is basically moral. Most of this group has believed and some may still believe that lawyers are basically honest; we trusted that it would be with their help we would be able to do whatever we needed to do to bring ourselves into compliance with the U.S. that we honestly had not known was required. All would turn out OK. The extent that some lawyers have taken advantage of many is almost incomprehensible to us. In most cases they have exacerbated problems. Distrust of lawyers is now extreme. There are, however, those that abhor what is happening to us and do want to effectively help. Most people now think all lawyers (even the ones many absolutely need) will take advantage of them. We feel rather helpless, then, to find solutions by ourselves.
That molding of minds is the basis for which we ask ourselves, “Why did I not know?” and blame ourselves because we did not, although we should have.
‘No fool like an old fool’ comes to mind as we now realize what fools we were to buy into any of that concept of American exceptionality. We feel a strong and justifiable sense of betrayal of the country in which our lives started. We have and are losing a lot of responsibly saved and invested money — and it has nothing to do with tax evasion.
This experience disrupts our very relationship with ourselves. We no longer understand ourselves – and that’s what is a real problem. We see some caught into a place where they blame themselves and cannot move on. Even those of us who think we don’t blame ourselves, probably do in more minute ways.
I did not know there was any difference between the citizenship-based taxation of the U.S. (and do not remember having ever learned of that concept in any US civics class) and that of other countries, which is based on residence. I never became aware of that citizenship taxation concept during my adult years, so finding that I WAS still considered a U.S. citizen and had U.S. tax return and reporting responsibilities the whole time I have lived in Canada, was unbelievable to me. I ask myself why would I not have known of this as the media asks the same and calls me a U.S. tax evader, or at least a U.S. tax avoider, and a US traitor for choosing to live in Canada. I only knew that I had decided to stay in Canada and raise my family here and in 1975 felt a responsibility to Canada to became a citizen here. At that time I was warned by the U.S. Consulate that I would be relinquishing my U.S. citizenship by doing so — WARNED as that was the message at that time. Message taken; should I blame myself for never again checking in with the US on what my tax responsibility might be? In my mind, I just changed my responsibility to my new country, Canada, and paid the U.S. no more attention, except that I still had family there. Why did I not know — self blame?
I do know that I and we feel so betrayed. THIS IS ALL ABOUT BETRAYAL!!!
One of my favourites that helped me understand myself, I recommend to you: a piece that said what my mind was thinking is My Wound is Geography. I could absolutely relate.
I wonder what is the difference between this most affected group and those who have the same definition of U.S.ness but are not here discussing this with us? What allows some to stay in denial? Is it that different personality types handle all this differently? Is there a relationship between personality types and the damage this has done to us?
Are those of us in discussion and working at advocacy here the same who ARE tax compliant and many of whom have made our decision to renounce or claim the relinquishment of our US citizenship? Do you feel, as I do, a real need to carry on as a voice for the many of our brothers and sisters who will be affected by FATCA and U.S. citizenship-based taxation coming to the countries in which they chose to live.
Then, there is the group of “Accidental Americans” who have lived their whole lives outside the U.S., with absolutely no connection to the U.S. Pure incredulity that the U.S. can tell them they have to file U.S. tax returns and FBARs and will penalize their not having done so by draconian fines. Why?
There is one lawyer I am aware of who is advocating for common-sense solutions for these persons.
[ UPDATE: I am reminded by Em's comment below that it would, of course, be a best solution for the US to change from citizenship-based taxation (CBT) to residence-based taxation (RBT). That would solve so much of this injustice for U.S. Persons Abroad. "After multiple delays, it seems that the Republican leadership has finally authorized the Ways and Means Committee to go ahead with tax reform..." Will the U.S. consider that or (yes, cynically) is it more likely they won't as continuing with CBT gives the U.S. IRS such an effective means of collecting tax on passive income that is not subject to the Foreign Earned Income Exclusion (FEIE)? Is the time right for tribute from the "foreign" retirement savings of so many in the 50 and above age group? ]
The context within which I ask you to consider the enclosed proposal is based on the following categories of US citizens that generally follow those outlined to the Commissioner in March 2009:
1. US citizens and permanent residents who live in the United States;
2. US citizens and permanent residents who are on temporary work assignments outside the United States or who work for US government agencies overseas;
3. US citizens, not covered by Category 2 above, who have resided outside the United States continuously beginning on or after January 1, 2003;
4. US citizens who have resided outside the United States continuously for more than ten years as of January 1, 2013 and continue to reside outside the United States;
5. US citizens who were born in the United States, but moved from the United States prior to their 18th birthday and have resided continuously outside the United States since that time; and
6. US citizens born outside the United States who have never resided in the United States.
The OVDP exists for people in categories 1 & 2, and is a good option for such people to bring themselves into compliance with their US tax and bank reporting obligations.
The SFCP is probably suitable for people in category 3 with several minor modifications as noted below: (1) changing the eligibility requirement to “on or after January 1, 2003”; (2) fixing a hard tax liability amount ($1,500 is too low for many reasons); (3) setting a fixed number of tax returns to be filed and clarifying the tax year for which returns are required (e.g., three years counting from the most recent year for which a return is delinquent); (4) maintaining the number of FBAR’s to be filed at six years, counting from the most recent year for which an FBAR is delinquent; and (5) removing “simple” before tax return in the eligibility criteria or providing a more definitive description of what constitutes “simple”.
The enclosed proposed new procedure is for people in categories 4, 5 and 6. In a nutshell, it creates a “noisy” alternative for taxpayers who can establish that they fall within one of the last three categories listed above by answering a detailed questionnaire, the purpose of which is to provide a basis on which the Service can determine their culpability for being delinquent.
I want to be in tune to what will come of this lawyer’s plea to the U.S. for common sense on behalf of these ‘U.S. citizens’ who had no choice; they automatically obtained a U.S. citizenship with so many costs and no benefit (although there could be benefit if one so chose, for instance more easily accepting employment and living in the U.S.). That could be remedied by CHOICE, an option to claim a U.S. citizenship at adulthood if somehow these persons inherited the qualifications.
So, my question again, what are our personality types that give us or deny us resilience?
In the meantime, let’s all of us give up blaming OURSELVES for any of this!! We are not BAD people, no matter the bad that is happening to us because of our having lost (or won for some who wish to choose that) the U.S. citizenship lottery that now equates, for U.S. Persons Abroad or Green Card holders within the U.S., to toxicity. No matter what we tell ourselves; no matter what any others may tell us, we are just more collateral damage of more bad U.S. law.