Someone sent me this letter and asked me to post it. It is a timely reminder that the current government is not doing all that it can do to avoid the extraordinary rendition of the financial information of Canadian citizens to the IRS.
Monthly Archives: October 2015
Canadian expats out of country more than 5 years can still vote
This may be of interest to Canadian citizens living outside our borders for more than five years. If you are able and willing to travel to the last riding in which you resided in Canada, with proof of your ID, your Canadian citizenship, and of your residence in that riding (an old utility bill or tax assessment from CRA might do that trick), you can in fact vote either in advance poll or on election day.
http://www.cbc.ca/news/politics/elections-canada-expat-sault-ste-marie-vote-1.3266434
Maybe bring a printed copy of the above CBC story with you.
Your chance to help vote Harper into the oblivion he and his government so richly deserve. For more reasons than I have space to list here, but we can start with the FATCA IGA for openers.
Expatriation Date, Form 8854 & Certificate of Loss of Nationality
When it comes to compliance there is a lot of confusion as to:
- what day does loss of citizenship occur and
- what roles do f8854 and a
- Certificate of Loss of Nationality play?
The filing requirements are explored in two posts by John Richardson.
BRIEF SYNOPSIS
Before June 3, 2004 (before the creation of the “Tax Citizen”)
The date of your “expatriation”was determined solely by the provisions of the Immigration and Nationality Act.
June 3, 2004 – June 16, 2008 (after the creation of the “Tax Citizen”)
You continued to be treated as a “U.S. person” for tax purposes UNDER THE INTERNAL REVENUE CODE until you gave “notice” of your “relinquishment” to a government agency. For this period part of the “notice” was filing Form 8854 with the Internal Revenue Service. In other words, there was no way to cease to be a “U.S. person” for tax purposes until you had notified the IRS.
After June 16, 2008 –
A.The issuance of a CLN is confirmation that the State Department has agreed that you have relinquished U.S. citizenship. A CLN is a confirmation that you have met the “notice requirement” under the Internal Revenue Code.
B. The CLN is one way (a self-certification is also possible) to satisfy “foreign banks” that you are NOT a U.S. person for tax purposes under the Internal Revenue Code. (In other words, a CLN is a “sufficient” but not a “necessary condition” to prove non-USness.
Read more HERE
*****
1. Is the loss of U.S. citizenship for nationality purposes dependent on having a Certificate of Loss of Nationality (“CLN”)?
The answer is absolutely not.
349(a) of the Immigration and Nationality Act specifies conditions under which one relinquishes U.S citizenship.
2. Is the loss of U.S. citizenship for tax purposes dependent on having a Certificate of Loss of Nationality (“CLN”)?
Prior to June 3, 2004 – NO for either immigration or tax purposes
June 3, 2004 – June 16, 2008 – NO for either immigration or tax purposes.
After June 16, 2008 – No for immigration purposes – It is necessary as a confirmation of having met the “notice requirement” to end U.S. citizenship for tax purposes
3. What is the role of a Certificate of Loss of Nationality (“CLN”)?
For Immigration and Nationality Purposes – no relevance whatsoever
For Tax Purposes – The Internal Revenue Code
The accusation of U.S. citizenship is triggered by various indicia (U.S. place of birth, U.S. residence, U.S. phone number, etc.). The U.S. “place of birth” is the most dangerous indicia. Those with a U.S. place of birth can rebut the accusation of U.S. citizenship with either:
A. The CLN; or
B. A “Self Certification” (that must meet specific requirements) documenting why:
– the person has relinquished U.S. citizenship; and
– does NOT have a CLN.
A denial of U.S. citizenship will generally require proof.
In general, those who have relinquished U.S. citizenship under the Immigration laws of the United States prior to June 3, 2004 are more likely to be able to “self certify” that they are NOT U.S. citizens even though they do NOT have a CLN. This position is consistent with the August 2015
4. Why is the Certificate of Loss of Nationality (“CLN”) of value?
It’s simple. Unless you live in the United States, life as a U.S. citizen abroad, in a FATCA, FBAR and CBT world, will be an endless source of anxiety and difficulty. A Certificate of Loss of U.S. Nationality is becoming one of the most sought after documents in the world today.
5. What is the role of a Certificate of Loss of Nationality (“CLN”) in a FATCA inquisition?
June 16, 2008 – Present
IF (you relinquish U.S. citizenship under the Immigration and Nationality Act) THEN
You continue to be treated as a “U.S. person” for tax purposes UNDER THE INTERNAL REVENUE CODE until you give “notice” of your “relinquishment” to a government agency. The “notice” requirement is NOT to the IRS, but to the State Department. (See S. 877A(g)(3) and S. 877A(g)(4) of the Internal Revenue Code.) Once “appropriate” notice is given to the State Department you cease to be a U.S. taxpayer from the date the notice is given (on a prospective basis).
Read more HERE
Assange: US Waging ‘Lawfare’ in Bid to Control the World
From Sputnik News
WikiLeaks founder Julian Assange has accused the US of trying to universally apply its own laws and control other countries as part of a practice of “lawfare” – seen through Washington’s pursuit of people like himself, Edward Snowden and Kim Dotcom.
“This is something in academia… called ‘lawfare’ — getting access to territory by pushing your laws into this territory, instead of your military. It’s a very modern and sophisticated concept, and that’s partly what the TPP is about.“
It’s a larger version of economic warfare of using US Persons as Trojan horse to extract capital from other countries all under the guise of fighting tax evasion. When seen in connection with what is really happening in these so-called “free trade” deals, it is clear the United States is actively engaged in nothing less than complete global dominance enforced through extraterritorial law. The creation of intricate legal arrangements take the place of military occupation and allow the US to control countries and states that lie outside its jurisdiction.
Assange said the US was going to “most countries in the world, trying to get them to sign secret bilateral agreements — called Article 98 agreements — to promise that those countries would never extradite someone from the US government to the International Criminal Court.”
It’s thought that the US has concluded at least 100 of these agreements.
The Bush administration created these loopholes to protect government officials from prosecution after its disastrous interference in the affairs of Iraq. Assange says Obama, has attempted to “co-opt the ICC for broader geopolitical purposes, as opposed to the narrow view of trying to protect their own skins.”
Huge international trade deals such as the recently concluded TPP and the proposed TTIP have also been accused of being central to the US plans to exert legal influence over the world.
A clause in these deals allows multinational organizations to sue governments (ISDS) if legislation is introduced that will inhibit the investment opportunities of businesses.It is clear that such initiatives actively undermine the sovereignty of governments involved in the trade deals, allowing large multinational corporations to assert legal control and influence over foreign states. And of course, the emerging economies of not-yet-competitive states are not part of this US-created world order. Brazil, Russia, India, China & South Africa. Exactly the nations who perceive the need for the establishment of a new reserve currency as a way to usurp the U.S. dominance. Perhaps the U.S. realizes there is no way to repair its enormous deficit so a new way for it to remain at the top is being put into play. Above all, this is the defence for the enormous threat that China poses for the United States.
Makes one wonder what on earth is pushing countries to sign these “Article 98 agreements; as with FATCA, I susect there is something very unpleasant & threatening going on in these secret negotiations.
Article in WSJ by Colleen Graffy
Here is a fairly good article, published earlier today, on how FATCA makes US citizens abroad toxic:
“The law that makes U.S. expats toxic”
http://www.wsj.com/articles/the-law-that-makes-u-s-expats-toxic-1444330827
A few hours ago, I sent a quick note to the author, a law professor at Pepperdine University, complimenting her, but pointing out the issue of “accidental Americans” and similar cases. She responded within an hour or so, pointing to her 2013 WSJ article on precisely this:
“How to lose friends, citizens and influence” at http://www.wsj.com/articles/SB10001424127887323848804578607472987119796
She is hoping:
a) her article will be reposted or linked, in order to get it number one article online
b) there will be good quality comments posted.
Professor Graffy gets it, that citizenship-based taxation is buckets of trouble.
Koskinen to Face Impeachment
According to Rep. Jim Jordan (OH), Congress will impeach IRS Commissioner John Koskinen.
“It is something that has to be done,” said the Ohio Republican. “If we don’t hold some people accountable in the executive branch for the executive overreach we’ve seen in [the Obama] administration, then they’ll never get the message.”
It appears that Mr. Koskinen delayed FOIA requests and ignored court orders to turn over documents on the IRS scandal involving Lois Lerner.
Four hundred and twenty-two backup tapes of approximately 24,000 emails, including some of Ms. Lerner’s were destroyed.Given the fact Mr. Koskinen told the Congress the documentation would be preserved and that he would turn over all the documents, it appears he lied and quite possibly, perjured himself.
At a hearing in July, Judge Emmet Sullivan warned the IRS and the Justice Department that”excuses for not following His order were “indefensible, ridiculous and absurd and that “I will haul into court the IRS Commissioner to hold him personally in contempt.”
Federal officials can be impeached for:
- dereliction of duty
- failure to comply and for
- breach of trust
In Koskinen’s case this amouts to:
- failure to disclose loss of emails relevant to a congressional investigation
- non-compliance with an order to preserve evidence
- refusal to testify truthfully and according to indications given to the Congress
Tom Fitton of Judicial Watch,says some of the emails
“prove that the agency used donor lists to audit supporters of organizations engaged in First Amendment–protected lawful political speech.”
Chairman of the Oversight and Government Reform Committee, Jason Chaffetz, says the IRS has
“lied to Congress,” and “destroyed documents under subpoena.”
“He assured us he would comply with a congressional subpoena seeking Lois Lerner’s e-mails. Not only did he fail to keep that promise, we later learned he did not look in earnest for the information.”
During the trial in July, Mr Koskinen appears to have mis-characterized a GAO report that was critical of the IRS’s procedures for selecting exempt organizations for audits.The report indicates that IRS does track information about high net worth individuals. What may need to be investigated further is whether contributions to political committees are traced and whether or not the IRS then proceeds with audits of donors.
So Mr. Koskinen now sits in the hot seat and one can only hope that others involved in this, particularly former Commission Douglas Shulman may also find it difficult to evade responsibility. You may remember Mr. Shulman’s rather snarky response to an Oversight Committee member’s question as to why he made so many trips to the White House; his reply was “taking his kids to Easter Egg Hunts.” Sounds rather dishonest and quite willful at that. Oh, and let’s not forget IRS’s favourite phrase, “under penalty of perjury.”
Information about this story can also be found here, here, and here.
Hat tip to Sid
U.S. now charging $2,350 not just for renunciation, but RELINQUISHMENT as well
The U.S. Department of State has published a change to their Consular Fees: they are now charging the same amount of money for relinquishing U.S. nationality as they are for renouncing it:
Documentation for Loss of Nationality
The Department is expanding the application of and renaming item 8 in the Schedule of Fees to “Administrative Processing of Request for Certificate of Loss of Nationality.” The fee will be applied to cover not only services to U.S. nationals (i.e., U.S. citizens and non-citizen nationals) who relinquish nationality by taking the oath of renunciation under 8 U.S.C. 1481(a)(5), but also to cover services to U.S. nationals who relinquish nationality under 8 U.S.C. 1481(a)(1) to 1481(a)(4) or any earlier-in-time relinquishment statutes administered by the Department of State and request a Certificate of Loss of Nationality. Currently, the fee is paid by those taking the oath of renunciation under 8 U.S.C. 1481(a)(5) at the time the oath is sworn. The fee would be collected from an individual claiming to have relinquished nationality at the time that person requests the Certificate of Loss of Nationality (that is, after completing Form DS-4079 and signing before a consular officer Part II of Form DS-4079 entitled “Statement of Voluntary Relinquishment of U.S. Citizenship”). The Fiscal Year 2012 Cost of Service Model update demonstrated that documenting a U.S. national’s relinquishment of nationality is extremely costly whether the service is for a relinquishment under 8 U.S.C. 1481(a)(1) to 1481(a)(4) or a relinquishment by renunciation under 8 U.S.C. 1481(a)(5). Both require American consular officers overseas to spend substantial amounts of time to accept, process, and adjudicate cases. The cost of the service is not limited to the time consular officers spend with individuals prior to and at appointments. The application is reviewed both overseas and domestically to ensure full compliance with the law. The consular officer must determine that the individual is indeed a U.S. national, advise the individual on the consequences of loss of nationality, and ensure that the individual fully understands the consequences of loss, including the inability to reside in the United States unless properly documented as an alien. Through documentary review, consideration of the individual’s circumstances, and careful interviewing, the consular officer also must determine whether the individual is seeking loss of nationality voluntarily and with the requisite intent, as required by U.S. Supreme Court case law and by statute (8 U.S.C. 1481). This determination can be especially demanding in the case of minors or individuals with a developmental disability or mental illness.
The consular officer must also ensure that the commission of an expatriating act was as prescribed by statute, which is often an issue in non-renunciation relinquishment cases. The loss of nationality service must be documented on several forms and in consular systems as well as in a memorandum from the consular officer to the Department’s Directorate of Overseas Citizens Services in Washington, DC (“OCS”), in the Bureau of Consular Affairs. All forms and memoranda are closely reviewed in OCS by a country officer and a senior approving officer, and may include consultation with legal advisers. This review entails close examination of whether the requirements of voluntariness and intent are satisfied in the individual case. Some applications require multiple rounds of correspondence between post and the Department. The final approval of the loss of nationality must be done by law within the Department (8 U.S.C. 1501), by OCS, after which the case is returned to the consular officer overseas for final delivery of the Certificate of Loss of Nationality to the individual. In addition, every individual issued a Certificate of Loss of Nationality is advised of the possibility of seeking a future Administrative Review of the loss of nationality, a time-consuming process that is conducted by OCS’s Office of Legal Affairs.
Currently, nationals who renounce nationality pay a fee of $2,350, while nationals who apply for documentation of relinquishment of nationality by the voluntary commission of an expatriating act with the intention to lose nationality, do not pay a fee. However the services performed in both situations are similar, requiring close and detailed case-by-case review of the factors involved in a request for a Certificate of Loss of Nationality, and both result in similar costs to the Department.
In the past, individuals seldom requested Certificates of Loss of Nationality from the Department to document relinquishment. Although the Department was aware that an individual relinquishment service was among the most time consuming of consular services, it was rarely performed so the overall cost to the Department was low and the Department did not establish a fee. Requests for a Certificate of Loss of Nationality on the basis of a non-renunciatory relinquishment have increased significantly in recent years, and the Department expects the number to grow in the future, causing the total cost of this service to increase. At the same time, the Department funds consular services completely from user fees. The Cost of Service Model continues to demonstrate that such costs are incurred by the Department when accepting, processing, and adjudicating relinquishment of nationality cases; therefore, the Department will collect a fee from all individuals seeking a Certificate of Loss of Nationality. Taking into account the costs of both renunciation and non-renunciation relinquishment processes, the fee will be $2,350.
Oh, the Irony-US Treasury/Robert Stack voices fears over corporate tax probes by Brussels
Financial Times
By Vanessa Houlder in London and Christian Oliver in Brussels
How ironic that the US Treasury is now worried about tax investigations into Apple, Starbucks and Amazon.
Robert Stack, a deputy assistant secretary, said the US was concerned that “any retroactive tax would be borne by US taxpayers in the form of a credit”, adding that “a purely prospective remedy would alleviate these concerns”.
The Commission’s competition arm is expected to issue decisions shortly on cases involving Amazon and Fiat in Luxembourg, Apple in Ireland and Starbucks in the Netherlands. If it rules that governments gave companies favourable treatment, it has the power to force governments to claw back 10 years of unpaid taxes, potentially hitting companies with bills running into billions of euros.
The US also fears that the Brussels investigations will end up diminishing the role of its bilateral tax treaties with EU member states. It does not want the commission to override member states in deciding companies’ tax bills, as it has no treaty with Brussels that would allow it to challenge its conclusions.
Hey Robert Stack, how about a tax credit for each country’s expenditure to implement FATCA? That would keep you off the backs of the rest of the world for your insane 30% sanction at least for a while. Look who’s crying now. No Treaty with Brussels, too bad………..
Submit a tip to the Canadian Press on an issue of national interest?
From the U.S. TIGTA: Planned Improvements Have Not Been Made to Manage and Track Correspondence With International Taxpayers
TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION
Planned Improvements Have Not Been Made to Manage and Track Correspondence
With International Taxpayers
September 8, 2015
Reference Number: 2015-30-072
This report has cleared the Treasury Inspector General for Tax Administration disclosure review process and information determined to be restricted from public release has been redacted from this document.
Redaction Legend:
1 = Tax Return/Return Information
Phone Number / 202-622-6500
E-mail Address / TIGTACommunications@tigta.treas.gov
Website / http://www.treasury.gov/tigta
HIGHLIGHTS
PLANNED IMPROVEMENTS HAVE NOT BEEN MADE TO MANAGE AND TRACK CORRESPONDENCE
WITH INTERNATIONAL TAXPAYERS
Highlights
Final Report issued on September 8, 2015
Highlights of Reference Number: 2015-30-072 to the Internal Revenue Service Commissioner for the Wage and Investment Division.
IMPACT ON TAXPAYERS
As of May 2014, the U.S. State Department estimated that approximately 7.6 million U.S. citizens live in a foreign country. The rules for filing income, estate, and gift tax returns, as well as paying income taxes, are generally the same for international taxpayers as for those taxpayers living in the United States. The IRS heavily relies upon its many notices and letters as its primary means of communication with taxpayers.
WHY TIGTA DID THE AUDIT
As globalization trends continue, so too do the challenges to the IRS’s ability to provide services to and enhance the tax compliance of U.S. taxpayers living in other countries. This audit was initiated to evaluate the process for sending tax correspondence (notices and letters) to business and individual taxpayers who reside outside the United States, analyze how the taxpayers responded, and determine whether the correspondence resulted in improved compliance.
WHAT TIGTA FOUND
Even though the IRS sent approximately 855,000 notices and letters to U.S. taxpayers living in other countries during Calendar Year 2014, it cannot determine taxpayer response rates. The lack of data on response rates for international taxpayers is problematic because this information is needed to determine the effectiveness of international correspondence on increasing taxpayer compliance and to make program improvements.
IRS data systems are not designed to accommodate the different styles of international addresses, which can cause notices to be undeliverable. Other factors complicate the delivery of international mail, making its delivery less certain than domestic correspondence.
In addition, the IRS generally does not know if international taxpayers receive the tax correspondence sent to them. Without specific controls to monitor and metrics to measure international tax correspondence, the IRS cannot determine the impact of its international tax correspondence on taxpayer compliance.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the IRS: 1) develop a systemic process that identifies undelivered international mail volumes, as well as tracks international tax correspondence and receipt trends;2) develop specific performance measures to monitor the compliance impact of sending international tax correspondence to taxpayers residing outside the United States; 3) use the Postal Service Form 2865, Return Receipt for International Mail, for the countries that currently support return receipts for registered foreign mail; 4) expand the International Submission Processing Individual Master File Foreign Address Job Aid to include abbreviated address formats for all foreign countries as needed; and 5) coordinate with the other business operating divisions to make the job aid available to all IRS employees who are responsible for the input of addresses into IRS computer systems.
The IRS disagreed with four of the five recommendations. While the IRS generally agreed that TIGTA’s recommendations could provide additional insight into the factors contributing to undeliverable international mail, it does not believe this information would permit the IRS to overcome budgetary, statutory, and operational constraints as needed to achieve appreciable improvement in its current processes. TIGTA does not believe that the IRS’s response is adequate because current IRS processes for addressing international mail issues are ineffective or nonexistent.
September 8, 2015
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You can read the full report at https://www.treasury.gov/tigta/auditreports/2015reports/201530072fr.html
Thanks to bubblebustin for providing the content for this post.
