Liberty and justice for all United States persons abroad

The Isaac Brock Society

Posted on by Posted in Issues regarding US persons abroad 65 Comments

Wendy McElroy has written an interesting article describing the means by which one would be stopped at the border due to a tax debt. In spite of how frightened everyone is about crossing the border, there is at least one factor that a majority of expats would not meet and that is, having a sizeable tax debt. Mere non-compliance appears not to be a strong enough condition to warrant use of some of the more stringent methods available such as passport check,TECS, FBAR, or Consumer Credit eports.

Ne Exeat Republica The IRS’s powerful new weapon is actually an old one that hearkens back to 18th century English royal court, and was introduced in America as a tax collection tool by the Revenue Act of 1918. It is called ne exeat republica, which is Latin for “let him not go out of the republic.” The writ is issued to prevent a person from leaving a jurisdiction until he satisfies a claim brought against him in court. In practical terms, the IRS is using this law to obtain a court order that prevents people who owe taxes from leaving the U.S. once they have entered

Who would be most vulnerable to ne exeat republica? According to current IRS policy, “Writ Ne Exeat Republica is another action authorized by IRC §7402(a). Writ Ne Exeat Republica is the appropriate suit action when the taxpayer: is about to leave the U.S., is unlikely to return to the U.S., and has conveyed or concealed property so that the property may be taken out of the U.S.”

An IRS Field Service Advisory (November 20, 1998, WL 1757128 (IRS FSA)), described the writ and the circumstances triggering it as follows: [A] writ of ne exeat republica is an extraordinary collection remedy which may result in a taxpayer being temporarily confined in prison (if unable to post suitable bond) for the taxpayer’s non-payment of federal taxes, where the Service can show generally: (1) the existence of significant tax liabilities; (2) the taxpayer has a present ability to pay the tax liabilities; but (3) the taxpayer has chosen instead to attempt to place both himself and his assets beyond the collection jurisdiction of the United States. The writ’s purpose is to ensure “the taxpayer’s continued submission to the jurisdiction of a court” in order to award effective relief … to collect tax … to reduce tax claims to judgment, and/or to compel repatriation of assets.”

IRS policy can change quickly. The people most currently vulnerable, however, would probably be those who meet the following criteria:

*they have been identified as non-complaint by the IRS;
*they have a sizeable ‘debt’;
*they reside abroad or intend to leave the U.S.;
*a tax case can be sustained in court;
*they are without assets in the U.S. but hold considerable ones abroad;
*the tax treaties with the foreign nation does not facilitate collection (Canada is IRS friendly).

No one knows how the process of entering or leaving the U.S. will evolve. The prudent should assume it will only get more difficult and unpleasant.

The IRS Manual outlines some of the tools at the IRS’ disposal for the location of taxpayers and their assets. I am listing only those which seem to impact expats easily and to create awareness of what information they are working with. In many cases, it seems many expats may still be able to “fall through the cracks” due to lack of a US Passport, SSN, never having had a (traceable) US address, etc.


Part 5. Collecting Process
Chapter 1. Field Collecting Procedures
Section 18. Locating Taxpayers and their Assets (Cont. 1)

5.1.18.13 (03-27-2012) United States Passport Office

United States Passport Office

1. The Service may obtain passport information from the United States Passport Office in connection with an official investigation. Request a passport check when the taxpayer travels overseas frequently (or there is reason to believe the taxpayer travels overseas frequently). Requests for information from the US Passport Office are called “passport checks.” Passport checks provide information contained on the most recent passport application filed by a U.S. citizen. The information may include the following :

• the last known mailing and/or permanent address of the applicant
• applicant’s occupation
• applicant’s employer
• applicant’s phone number
• emergency contact’s name, address and phone number
• spouse’s name and birthplace.

5.1.18.13.3 (05-20-2008)
Using Passport Information

1. Use any new address or new asset information received from the passport office as discussed above.
2. See IRM 5.1.12.25, Outgoing Mutual Collection Assistance Requests, if you determine that the taxpayer:
A. resides in a treaty country, or
B. has assets in a treaty country

The TECS system appears to also have limitations again, based upon matching information already in an agency’s database. The case must be strong enough for the IRS to have issued a Federal Tax Lien before one can be placed on a TECS list. This reinforces the fact that the debt must be sizeable before one need worry about being apprehended at the border. It is somewhat amusing to notice how many times the reader is cautioned not to reveal to the taxpayer, how his/her identifying information was obtained. It also seems important to note that a TECS historical record will only record an entry to the US for a citizen or green card holder; though if border info is freely exchanged, one may assume the US could request that info from the other country.

5.1.18.14 (03-27-2012) Treasury Enforcement Communications System

Treasury Enforcement Communications System = TECS

1. The Treasury Enforcement Communications System (TECS) is a database maintained by the Department of Homeland Security (DHS), and it is used extensively by the law enforcement community. It contains information about individuals and businesses suspected of, or involved in, violations of federal law.
2. For IRS field Collection, TECS provides two sources to help make contact with taxpayers or locate assets :
A. Revenue officers can request that delinquent balance due taxpayers be entered into TECS, and the Department of Homeland Security (DHS) will then advise IRS when those taxpayers travel into the United States for business, employment, or personal reasons. The taxpayers entered into TECS for this purpose are on a DHS lookout indicators list. IRS employees must help maintain the TECS database by requesting that appropriate taxpayers be entered into TECS or be deleted from TECS. (See IRM 5.1.18.14.6.1 for criteria for including taxpayers in TECS data base.)
B. Revenue officers can also request information housed in TECS on past travel that a taxpayer has made to and from the United States.

5.1.18.14.1 (03-27-2012)
TECS: DHS Lookout Indicators

1. Many of the taxpayers entered into TECS for a DHS lookout indicator are International ones because the cases usually concern persons who reside abroad. However, domestic taxpayers may also be entered into TECS if we have been unable to locate them and if they are believed to travel outside the US . Taxpayers placed on TECS are often not subject to ordinary administrative and judicial collection procedures because they frequently reside outside the jurisdiction of the US Courts. Information derived from placing a taxpayer on TECS can facilitate contact with these taxpayers or provide asset information which, in turn, may facilitate collection of their delinquent liabilities.

1. Customs and Border Protection (CBP) will notify the TECS Coordinator when ICE becomes aware that a balance due taxpayer on TECS is arriving in the US.
2. (2) CBP will provide the TECS Coordinator with some or all of the following information:
• the taxpayer’s address while in the United States
• nature of visit
• transportation of any currency over $10,000.00
• any other available travel and/or asset information.

Reminder:
The reason it is important to enter a taxpayer on TECS is it allows CBP to notify the IRS in the future (via the TECS coordinator) about when and where a taxpayer will be traveling.

1. Taxpayers will be entered on TECS for a lookout indicator only when the case meets all of the following conditions:
• The taxpayer is living outside the United States and the United States commonwealths and territories or is about to depart to reside in a foreign country.
• The taxpayer has not voluntarily resolved his/her case by full payment or other voluntary action, including an installment agreement (IA).
• A Notice of Federal Tax Lien (NFTL) has been filed for all balance due modules. See Treasury Regulation § 301.6323(f)-1.
• The total unpaid balance of assessment equals or exceeds the dollar criteria for requesting a taxpayer be entered on TECS.
• ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
7. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Exception:
Exception: Enter a balance due taxpayer on TECS if, despite an official IRS domestic address of record, you believe the taxpayer resides in a foreign country or travels outside the United States and the United States commonwealths and territories on a frequent basis and we have not been able to contact the taxpayer.

5.1.18.14.7 (03-27-2012)
TECS Historical Travel Information

1. TECS also is a database that tracks historical travel information about taxpayers. This IRM section provides guidance for using the historical travel information available in TECS. This information may also help you attempt taxpayer contact and/or locate asset information as it can contain extensive records of commercial airline flight arrivals and departures. TECS also contains other records of air and sea travel, records of border crossings, and the specific dates that individuals have traveled to and from the United States.
2. The travel information in TECS can facilitate collection of delinquent liabilities from taxpayers who are not subject to ordinary administrative and judicial collection procedures because they often reside outside the jurisdiction of the US Courts.
3. TECS provides information that may not otherwise be available to the Service, such as where a taxpayer has traveled. This travel information may lead to the discovery of where the taxpayer has assets or conducts business activity. Additionally, TECS travel information can help determine the taxpayer’s correct country of current residency.

Caution:
Never confirm or deny the existence of a TECS record of historical travel information if a taxpayer asks how you learned about his/her past travel. Taxpayers must submit a written request to obtain information about the source of the travel information. Follow the procedures below if a taxpayer wants to request source information.
Note:
TECS historical travel information will provide both US entrance and exit information for non-resident aliens. It will only provide US entrance information for US citizens and Green Card holders.

5.1.18.14.9 (03-27-2012)
Taxpayer Request for Source Information

Advise the taxpayer to do the following if a taxpayer asks how you learned about his/her past travel:
1. write a letter requesting source information under the Freedom of Information Act (FOIA)
2. send the letter to the address provided at The U.S. Customs and Border Protection web site:http://www.cbp.gov/xp/cgov/admin/fl/foia/

5.1.18.14.10 (03-27-2012)
Using TECS Historical Travel Information

1. TECS contains information about specific dates of past international travel and locations of travel for individuals over a period of several years. It has extensive information concerning airline travel and also contains some information on other modes of travel into the US. A request for this information will provide the revenue officer (RO) with all travel information that is available; there is no need to specify particular time periods of travel

5.1.18.14.11 (03-27-2012)
Procedures for Requesting Historical Travel Information from TECS

1. Prepare Form 13931, TECS Historical Travel Request, for submission to the TECS Coordinator and include the following information:
• Taxpayer Name (Last, First, Initial)
• Known Alias(s)
• SSN
• Place of Birth (City & State or Country)
• Passport Number
• Citizenship (if not U.S.)

In spite of the original purpose of The Bank Secrecy Act (1970) to track funds engaged in money laundering and terrorism, the description below proves that the point of collecting FBAR is for the government to have acccess to information in order to locate/confiscate taxpayer’s assets.

5.1.18.16 (08-15-2013) Foreign Bank and Financial Account Report

Foreign Bank and Financial Account Report

1. A taxpayer is required to file a Foreign Bank and Financial Account Report (FBAR), Form TD F 90-22.1, if he/she has financial interest in, or signature authority over, one or more foreign financial accounts that have an aggregate value greater than $10,000 at any time during a calendar year.

2. When a taxpayer files an FBAR form, IDRS command code IRPTR will reflect that Form TD F 90-22.1 was filed by or for the taxpayer. However, command code IRPTR does not provide any of the specific information entered on the form such as the name of the bank, account number, account balance, etc.

3. See IRM 5.9.4.19, Foreign Bank and Financial Account Reports (FBAR).

4. FBAR forms are loaded onto the Currency Banking Retrieval System (CBRS) so all the information on the FBAR form will be available from CBRS. IRPTR includes the filing of an FBAR (Foreign Bank and Financial Account Report) form by a taxpayer. Although IRPTR will not reflect all information present on the FBAR form, additional information may be obtained by researching the CBRS which lists all FBAR filings. CBRS will reflect any foreign bank account or other information that was listed on the FBAR form.

5. Conduct CBRS research when IRPTR reflects that a taxpayer has filed an FBAR form to obtain the name of the bank where the account is located, the amount in the account, co-owners, and other useful information. Complete an OL5081 to become a system user and obtain a User ID and password.

Reminder:
The information is not always complete as it will only reflect the information the taxpayer entered on the form.

I would never have thought of the IRS using a credit bureau report to track a taxpayer however, with the rate that information of all types is being exchanged, it is conceivable that the IRS may, in the future, be able to request a foreign credit report.

5.1.18.18 (03-27-2012)
Consumer Credit Reports

Consumer Credit Reports

3. At the time of publication of this IRM, there are three principal consumer credit bureaus:
• Equifax
• Experian (formerly TRW)
• TransUnion

Note:
At the time of the publication of this IRM revision, Headquarters has arranged a national contract with Experian.

5.1.18.18.2 (08-15-2013)
Limitations on Ordering Consumer Credit Reports

5. You cannot secure a consumer credit report using a foreign address. See IRM 5.1.18.18.2.1 below for further information on obtaining credit reports on taxpayers with foreign addresses.

5.1.18.18.2.1 (03-27-2012)
Credit Bureau Requests for Foreign Taxpayers

1. Do not attempt to secure a credit report using a foreign address. The credit bureau vendor does not store any foreign addresses in its database.

2. Revenue officers assigned taxpayers with last known addresses in foreign countries may use the last known United States address for a taxpayer if the case requires requesting a United States credit report.

• It does not matter how old the last known address is.
• The taxpayer address used for a credit bureau request should be the same as that on the Integrated Data Retrieval System (IDRS) except when the address on IDRS is foreign. Use the last known United States address in that instance.

4. If the taxpayer has never had a known address in the United States, a credit report cannot be requested.

While there are no guarantees, I find the information above somewhat reassuring that most expats are unlikely to have real concern about being apprehended at the border. Hassled, maybe, but if one has not applied for a US passport, has never had a US address, no SSN, and remembers that for all practical purposes, his/her assets are located outside of the juridiction of US courts, there should be no reason to allow anxiety to create more difficulty than is likely to be experienced.

65 thoughts on “Ne Exeat Republica — The Next IRS Tactic vs. Expats and Accidental Americans?”

  1. Putin refused entry at border for having over 10,000.00 and not declaring it ;-))

    This Means War: US To Target Putin’s Personal $40 Billion Stash
    http://www.zerohedge.com/news/2014-04-20/means-war-us-target-putins-personal-40-billion-stash

    Hello? Anyone in IBS that wants to get great exposure for their articles needs to post on ZERO HEDGE which is the most read site in the financial world on the entire internet. Ranked #1,416 in the entire world up 166 from the previous 3 months. Why are we missing this? It’s inexcusable.

    Readership and influence

    By September 2009, Zero Hedge had begun drawing more traffic than more established financial websites[5] with 333,000 unique visitors a month, impressing even those who say the news site is full of conspiracy theory and “apocalyptic world view”.[4] Durden says two-thirds of its readers are from Wall Street.[2] According to Quantcast, Zero Hedge has as of 2012 a monthly global traffic of 1.8 million people.[7] Under the name Tyler Durden, Ivandjiiski was interviewed on Bloomberg Radio[3][8] and Zero Hedge has been quoted in the Columbia Journalism Review.[9]

    In December 2012, Bank of America blocked its employees’ access to Zero Hedge.[10]

    Zero Hedge celebrated one billion views in June 2013.[11]

    Bill Gross, the head of PIMCO, is an avid Zero Hedge reader. On August 9, 2013 he tweeted, “Gross: Strategists/writers I follow? Dalio, Durden, Bianco, Arnott, Aitken, Santelli, Grant, Grantham, Inker, Marks, Quaintenance & Brodsky.”[1

  3. Wendy McElroy’s article is very good but as with all US tax matters the case of Charles and Kathleen Barrett is complicated. In the Forbes article below be sure to read the comment made by Charles Barrett and then you’ll have to decide who to believe. Was the Forbes columnist doing a hit piece? Was Charles Barrett being less than forthright? Cripes I don’t know.
    http://www.forbes.com/sites/jayadkisson/2014/02/07/a-wedding-and-the-writ-of-ne-exeat-republica/
    @ Tricia
    That’s a lot of good information you dug up about Ne Exeat Republica criteria and how and what information is provided to whom and when. Most expats owe little or no tax so this should not be a problem for them BUT if form penalties are included in the debt calculation then we all know how high those numbers can get.

  4. @Em

    Good point but I still am not aware of anybody of low-to-no tax liability who has been hit with high info reporting form penalties except those inside the OVDP/OVDI/OVDP.

    Being involved in this over 2 years now, it seems to me that the more that can be sorted out with the intent to help undo the hysteria, the better. People get really stressed out over a lot that just isn’t likely to happen. I definitely did this (freak out), got frustrated by the lack of understanding or appreciation of the difficulties from my spouse and others, and focused way too much on things I couldn’t do much about. The more information one has and perhaps, perspective over time, leads me to believe I could have saved myself from some of the drama if I could have just realized it wasn’t something that could be immediately resolved. That no solution was going to feel right and so on. There is nothing I hate more than anxiety. Spent way too much time there for sure. Rather be depressed any day of the week. Also think this is the effect of going to quite a few of the Info Sessions. Listening to how “all is not what it seems” for example, with regard to law and citizenship, forces one to realize it’s necessary to get facts, find the ones that fit and make a decision. It’s NOT what people tend to do. There are solutions. Goodness, blabber blabber an almost 4:30 am. Hopefully making some sense. Just think we all could try to calm ourselves a bit more………………

  6. @Em @Tricia
    Is the thing to do now to make sure that the word gets out so affected people know about the Streamlined Program before it disappears and know to avoid OVDI? FATCA is such a badly drafted law that sooner or later major sections will need to be revised.

  7. @ Tricia

    Thank you for this informative and interesting posting.

    I have often felt that there would have to be a legal process in place, such as a tax lien, before anyone would be taken into custody upon entering the U.S .And, the amount of tax/penalty due would have to be a large amount for the USG (no matter what we think of them) to bother with the expensive process of detention.

    If people were arrested for merely non-filing, international travel by homelanders would be significantly affected and we would have heard about it by now.

  8. The US is going to push ex-pats to the point they renunciation rates will steadily increase. Over the weekend I engaged in a conversation with a civilian worker for the US Army. The arrogance was breathtaking, with statements such as the Taliban won’t take over Afghanistan for ‘several’ generations? I’m not so sure.

    Angela Merkel doesn’t really care if her phone was monitored by the NSA, she’s putting on a show for the German public. None of this is fantasy, this guy really believed these things.

    With ‘ideas’ like this buzzing around the USG and coupled with Homelanders ignorance about FATCA, it’s no wonder things are in the state they are.

    The US public in general live on a completely different planet than the rest of the world.

  9. The posting does not allay my fears. It simply raises the question: “Do I want to be the first one they make an example of?”

  10. @Joe Smith. I hear you. I seriously doubt I will ever cross the US border again. With my luck (repeatedly proven to be non-existent over the years…lol) I will be the one they make an example of.
    P.S. Are you the Joe Smith with a psych background, who thought we were all hysterical way back when? If so, I guess the ‘hysteria’ has warn off on you, huh? – my sympathies.

  11. This government has it set up so that it can do anything and you can do nothing. I so wish people would wake up all at once and start the process of reversing this way of governing our people. Fatca will happen without worry from our government, that is plain and simple. I have no “legal” answer to stop it. Lets stay being good little second class Canadians and just take any deal they are giving us. After all, WE elected them and that gives them the right to do whatever they want PERIOD!

  12. @Don
    I don’t doubt that the U.S. is oblivious. Yesterday I ran across a recent State PIRG website which argued that FATCA needed to be aggressively enforced to combat CORPORATE (huh?) tax avoidance and it had an unbelievable number of likes for such a poorly thought-out article.

    IMHO anti-U.S. sentiment runs deeper under Obama than it did under Bush: Britons hoped so much that U.S. policy would become more reasonable once Bush left office and now they can’t stand the NSA surveillance and the drones program. An attitude is developing, even among educated people, that Americans, not just the government, are cold-blooded. Even the muslims from the Middle East in the late 1990s used to distinguish between the people and the government, but that is gone.,

    Sooner or later FATCA and U.S. taxation policy will fall because it is too stupid. The foreign trusts listed in the IGAs are not the real foreign trust problem, which is why banks could get the exemption on reporting them. Locally available mass-market mutual funds are not the type of passive foreign investment that is a problem. Even self-employment means something different after the Great Recession. The good news is that sooner or later, people will realize that FATCA doesn’t just affect fatcats. The bad news is that lots of people will be ruined before that happens.

  13. *the tax treaties with the foreign nation does not facilitate collection (Canada is IRS friendly).”
    They are referring to the 1995 Canada USA tax treaty, in which CRA will only collect from non Canadian citizen at the time this occurred. Does anybody know how active the CRA has been in collecting money?
    The Canadian courts will not collect foreign tax liability. But does anybody know if the USA sends there claim to Canadian credit rating agencies for Canadian citizen. They mess up your credit rating and label you as American person even though they can not collect in Canada.

    By the way who was in power for the 1995 USA Canada tax treaty.

  14. The problem is that this is NOT a tax liability question. The IRS calls non filers criminals and this is totally different than what the treaty covers. Penalties and fines are not back taxes and when left unanswered, will turn into arrest warrants. Who will protect you then?? This is not going to end good at all. I agree with Chears, this is war. You’ll see!

  15. Nothing in this is that surprising and, indeed, one should assume that big brother will get more efficient over time. My own view – everyone can have a different one – is to feed the beast as little information as can reasonably be done. Herring that swim outside the ball get eaten. There are a million ex-Americans in Canada and they know very little about any of them.

    Having expatriated long before any of the notice requirements existed, I certainly don’t intend to give them a fresh name, address or anything else in order to get even a back dated CLN. For friends and relatives of more recent expatriation vintage, my advice has invariably been hold on to your Canadian passport, never contact the US government for any reason, never tell anyone you are not married to where you were born, tighten up your vowels and say “eh” a lot.

    Having studied FBAR and related rules enough, I have concluded that coming “into compliance” for a long-term Canadian is simply not an option for anyone but impecunious students. The IRS is given the theoretical right to demand virtual bankruptcy of hundreds of thousands of Canadians given that FBAR penalties alone are 100% of the value of all accounts after only two years and have no upward limit (they can reach thousands of times the value of assets in theory for someone who has lived in Canada all their life and never had anything to do with the US beyond the accident of geography or parentage). Canada should post signs outside every US consulate and embassy: “warning, any Canadian entering these premises should consult a professional advisor regarding the possible loss of all economic freedoms and life savings.” Whatever the rights or wrongs (and they are all wrongs), it is simply inconceivable to me that a long time Canadian with any savings or net worth of any kind should place themselves at the mercy of such a system. The least they will do is maim you and they have full authority to destroy you if they choose.

    I have said a dozen times and I repeat that for now at least, the US is not looking to stir up a hornets nest with its FATCA jihad any more than it has already done. They would be delighted to put Swtizerland, Cayman Islands and any other tax haven completely out of business and not lose a moment’s sleep. I think they would be worried about arresting hundreds or thousands of Canadians with US links that have been “recalcitrant” while living in Canada and paying (more) taxes here. During Vietnam there were tens of thousands of potential draftees in Canada. Not a SINGLE Canadian-registered US citizen was called up for the draft (there were, of course instances of Canadians who actually volunteered, but that is another story). If they were to start attempting to create a list of what could only be tens of thousands of Canadians in the data base of economic suspects to be picked up on crossing, there would be an outcry which might actually be heard in Washington (to say nothing of Ottawa, London, etc.). You will notice the reference to “treaty” jurisdictions in the handbook quoted in the posting. Canada has such a treaty and undoubtedly – at this time at least – their instructions are to leave Canadian residents alone absent extraordinary circumstances. I don’t discount that they COULD do all of this stuff which is why I always say that anyone living outside the US with any possible claim to “US Person-hood” should assume that the time will come that they can never go there again. But for now, no reason not to. Not that cheery I guess, but reality is what it is. Oh yeah, “Land of the Free”.

  16. “NativeCanadian says
    April 21, 2014 at 10:08 am

    The problem is that this is NOT a tax liability question. The IRS calls non filers criminals and this is totally different than what the treaty covers. Penalties and fines are not back taxes and when left unanswered, will turn into arrest warrants. Who will protect you then?? This is not going to end good at all. I agree with Chears, this is war. You’ll see!”

    We have numerous opinions from Lawyers (John Richardson, Schubet an Petros) that Canadian Courts will not extradite Canadian for not filling USA taxes.
    Can you point out a case where a Canadian has ever been extradited for failing to File US taxes.

    This is from Supreme Court ruling what do you think this means “under no circumstances will the courts directly or indirectly enforce the revenue laws of another country”
    “Held: The appeal should be dismissed.

    A foreign State cannot escape the application of the rule that in no circumstances will the courts directly or indirectly enforce the revenue laws of another country, which is one of public policy, by taking a judgment in its own courts and bringing suit here on that judgment. The claim asserted remains a claim for taxes. It has not, in our courts, merged in the judgment; enforcement of the judgment would be enforcement of the tax claim.

    Similarly, the argument that the claim asserted was simply for the performance of an agreement, made for good consideration, to pay a stated sum of money also failed. The Court was concerned not with form but with substance, and if it could properly be said that the defendant made an agreement it was simply an agreement to pay taxes which by the laws of the foreign State she was obligated to pay.

    Neither the foreign judgment nor the agreement did more than make certain the fact and the amount of the defendant’s liability to the plaintiff. The nature of the liabiliy was not altered. It was a liability to pay income tax.”

  18. Anne Frank
    I applaud you for being one of the few non paranoid type at this website, even though your screen name is paranoid.

    My question I asked is still there, can USA use a USA Tax Claim to mess up your Canadian credit rating?
    I prefer an answer that is based on facts than opinions.

  19. P.S. Are you the Joe Smith with a psych background, who thought we were all hysterical way back when? If so, I guess the ‘hysteria’ has warn off on you, huh? – my sympathies.

    YES

  20. @GeorgeIII, If Joe Smith is worried, that’s good enough for me. 🙂
    Seriously though, although it is good to keep perspective, it is not good to let one’s guard down. FATCA is a menace, and needs to be stopped, regardless how paranoid one is or not.

    @AnneFrank, I am looking into your suggestion to use an oath of allegiance as a relinquishing act, to be able to truthfully say to my bank ‘No I am not a US person’ when that US inheritance comes through and shines a light on me, but its not looking good so far.

  21. I had a Green Card which I threw out 35 years ago. I was in USA less than 1 year. I was told after 1 year outside country green card no longer valid.

    The CRA sent me a letter confirming I was a Canada tax resident as far as there record go back 1978. I also have my SIN contribution for earlier years. I keep these around should the bank ever raise any question, even though the Canadian rule is Green card holder with Canadian residence are not subject to FATCA.

    Canadian without CLN may ask revenue Canada for same tax record if they think this will prove they relinquished tax status prior to 1986 (not certain year).

  22. There is still the question, can a USA tax claim be used to mess up someone credit rating?
    Since they can not make the claim through the court, but the 1995 USA Tax Treaty unofficially recognizes CBT in Canada. Overthrow the 1995 USA Canada tax treaty as it worse than FATCA.

  23. @georgell – my screen name reflects my frustration/disgust that I or anyone else should have to conceal my identity from a foreign government in my own home country. At least Holland was actually occupied! I have relatives who were less swift off the mark than I in cutting ties with the US lo these many years ago and am not anxious to draw attention to them with a last name. Probably a bit overly paranoid, I admit since the US is not exactly a paragon of efficiency, but they can be when they set their minds to it (fortunately, I am pretty confident that they really won’t bother in this case).

  24. Oh sh*t — just one more thing to worry about in this mess. How I wish we could finally get some clarity in all this on the public record in our own countries: Who the is the US really targeting to extract money from, and how are they going about it? They raise assurances that they are only after large-scale tax evaders, but in reality many of us know that they are pressuring, scaring, and duping long-time expats of fairly modest means into paying large amounts of money to them to come into compliance with their tax laws.

    Since our own governments, Canadian, New Zealand, and presumably others, have conceded to the US the “right” to tax its citizens any way it likes, regardless of their citizenship and residence elsewhere, and regardless of the negative effect on the economies from which the US extracts wealth by its extra-territorial taxation and penalty practices, our own governments are really not protecting us.

    There is plenty of evidence that, far from just targeting major tax evaders, the US is “shaking the trees” to extort as much foreign wealth as it can from its citizens and former citizens outside the country, regardless of their means. Having seen their deceptive practices thus far, who of us can trust their assurances that Ne Exeat Republica is only aimed at cases of major tax evasion? They say one thing in public but can quietly apply the screws differently to individuals, as they have been doing for several years now.

    Why, oh why, is there no serious public debate on this other than in web sites like this, leaving us all to speculate about the risks to ourselves and to our families without assurances and support from our own governments?

  25. When the fox says, “I’m only after the biggest chickens in your hen house,” and the farmer believes him, who will help the smaller chickens?

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