I just noticed a comment from EmBee, who passed on to Brock a Maple Sandbox comment from “Anthony”, apparently a “Canadian lawyer”.
— Anthony actually says that the U.S. is planning to have homes of U.S.-tainted Canadian citizens FBAR’d (annual resale values etc. reported). Nonsense? Just a scare tactic?
If true, would this be that final straw that finally pushes affected, previously FBAR-obedient and quietly compliant Canadians into mass resistance, self-certification-without-permission-renunciation, and high anger?
Would you be willing to let FINCEN (Financial Crimes Enforcement Network) know the annual resale value of your Canadian-made family home in your yearly FBAR reporting?
“… This problem will only get worse in the near future.
I have been told that plans are underway to include the annual resale value of all non-U.S. property holdings, including your own home, on future FBAR reports.
That means that your primary residence will soon be fair game for the IRS.
Second, plans are underway to also include on the FBAR report any business that a designated U.S. person may own outside the U.S., including all personal details of non-U.S. partners in the venture.
So, if you are a Canadian with U.S. taint, you will soon have to report your Canadian home’s resale value, year of purchase, personal identifying details on those who also own the home, as well as the same sort of details for any business that you may own in Canada…”
@dax – congratulations! Excellent result!
@Dax, well done. The French do seem to be a little more protective of the rights of their Citoyens.
They have also refused to sign any extradition treaty with the US , unlike the UK poodle.
Personally I don’t regard the UK as a poodle. I don’t regard France or Canada or Switzerland or Austrlia etc as poodles either, but I particularly don’t regard the UK as a poodle because it’s the country where I live.
The US is a super-power, and dominates economically and militarily. Other countries can’t very well ignore that reality when it comes to negotiating (or not negotiating) treaties and agreements with the US. It’s always a trade-off.
@iota.
It is the country of my birth and my education and a great one at that. The extradition treaty is a one way affair. How many US persons have been extradited to the UK and compared the other way around. Blunket unexpectedly signed to the critism of Parliament. Cameron has said it should be recinded/ corrected but nothing has been done.
The special relationship often quoted seems to be all for the benefit of the US.. “.just do it our way and we will be happy to call you a friend”.
I am sorry, but I dearly love England, but have to call it as I see it.
@iota
http://www.dailymail.co.uk/news/article-1308478/David-Blunketts-startling-admission-UK-US-extradition-treaty.html
@heidi – I repeat – it’s always a trade-off. Politicians in every democracy have an electorate to please, and electorates often like to hear politicians sounding as if they’re “standing up against America.”. Behind the scenes it’s a different story, fortunately.
The UK had the choice re the extradition treaty. There was little or no oversight.
I admit their backs were against the wall re fatca…but what if the EU had acted in unicen to protect its citizens….
Most if not all of the EU member countries have their own concerns about bank secrecy. I hazard a guess the five IGA-negotiating countries saw FATCA as an opportunity. The OECD promptly followed the U.S. lead with CRS, and the UK introduced their own mini-FATCA for the overseas territoried. The EU set about implementing DAC-CRS and repealing the EU Savings Directive. I don’t see any indication that the EU objected to FATCA in principle.
Agree.
They just didn’t research the fact there could/would be no reciprocity from the US, or the effect fatca would have on dual/accidental US citizens.
Hopefully the iga’s will expire once the implimentation time has elapsed. We can live in hope.
There is now discussion that crs will fail again if the US refuse to come on board.
Hard to predict, but it does seem very likely there will be further developments in the international taxation arena, in one direction or another.
From Accounting Today
First sentence in the lead story.
“The Internal Revenue Service is missing out on imposing approximately $21.6 million in penalties on taxpayers who are denied entry or withdraw from its Offshore Voluntary Disclosure Program, according to a new report.”
Has there been a study on how much income tax has been lost due to FATCA, FBAR, USA tax policy? You know, “The more you tighten your grip, the more slips through your fingers”? One component should be all the business lost when a foreign company denies service to US citizens as a direct result of USA tax policy — there is zero tax to collect. Compare that to all the income still not recovered from tax evaders, to whom I think these laws were aimed at.
@knarf-Dodd
I don’t quite understand your question. Do you mean has there been a study done to determine how much tax the US potentially loses by USP’s not investing in non-US investments?
My tax preparer recently told me that it was probable that the IRS would soon be seeking information about property and particularly property sales outside the United States.
As so many countries DON’T tax the capital gains on the sale of a primary residence, the IRS sees this as a bonanza in taxes and penalties. Just think of every US person Canadian who sells their own home and makes a nice gain in the process. For their fellow Canadians the proceeds on the capital gains are tax free, but NOT for the toxic U.S. tainted Canadian. They are indebted to the U.S. Master and must pay capital gains tax on the sale in Canada.
My tax preparer said that there is more money for them to be made in going after primary residential property sales in countries that exclude capital gains from the sale than in looking for taxes in employment income, which is taxed in nearly every case by the country that the person lives. So, from that perspective it sure makes sense that the IRS and a Democrat Congress would go after capital gains on the sale of one’s primary residence and that would explain why the first step would be having an ongoing record of the home’s resale value, so that the owner can be assessed capital gain tax upon its sale.
The U.S. operates like that, so if this comes to be, it should be of no surprise to anybody. What is more of a surprise is that the situation has reached this point. If a person didn’t renounce, they only have themselves to blame, by naively believing that it would never come to this. IT HAS!
@Benjamin
While I agree with you, there is one point I must disagree with. I MAY be able to get citizenship in my country of residence but it is a very long road from where I am at. Of greater concern, once I have Japanese citizenship, I have two years to get free from the US. Something I can not do. I am trapped.
I doubt that I am alone.
@Benjamin
That “nice gain” would have to exceed US$250K on the net proceeds, BTW.
Awareness is key as to whether one would pay capital gain tax or failure to report penalties on the sale of their principal residence.
If you’re filing and aware of the tax, there are legal ways to avoid it. If you’re not aware of the tax and sell, as Boris Johnson and I did, failure to file penalties would likely not apply as it’s pretty clear that no one in their right mind would subject themselves to the tax if they knew.
Oops, that’s “as Boris Johnson and ‘I’ did”.
I’ve heard on many occasions non-resident US persons say they’re happy they don’t have enough in savings to have to report it on an FBAR. My response: FinCen – keeping the bar low for Americans abroad since 1970.
After looking for a place to post this, this seems like the closest thread.
America’s Offshore Tax Cheats Are Feeling the Heat Once Again
NEW YORK (JULY 5, 2016)
BY DAVID VOREACOS
BLOOMBERG
“(Bloomberg) U.S. taxpayers who entered into an IRS program that made it easier to disclose their hidden offshore bank accounts may have thought they put their legal troubles behind them. Instead, prosecutors may try to put some of them in jail for not telling all.”
Is the following true?
“The risk of being scrutinized falls on those taxpayers who came forward under the government’s so-called streamlined program. Those living in the U.S. paid penalties of 5 percent of their undisclosed offshore assets, while overseas residents paid none.”
I seem to have read that more than few here IBS have paid a hell of a lot more than “none”.
@JapanT
The IRS refunded my failure to file penalties and waived the “in lieu of FBAR penalty” when I transitioned from OVDI to Streamlined. Apparently if I was open to them keeping the failure to file penalty, they would have given me a closing agreement. Seeing as I had a pretty good reason for not knowing I had a tax filing obligation to the US as I departed the country at 12, I decided I’d rather have the refund.
Those who’ve entered Streamlined appear to not be the focus of TIGTA. From another article:
1. Withdrawn OVDP Requests. The sample selected included 50 taxpayers out of a total population of 781 withdrawn OVDP requests. Only 20% of those in the sample had some form of compliance action or were included in the Streamlined Procedure. “Of the Streamlined Procedure cases that have closed, 10 taxpayers were assessed $142,711 in penalties.” (JAT Note: It is not clear to me what the group that withdrew and then were accepted in Streamlined Procedure is comprised of; my understanding was that those who were in OVDP up to the point of the intake letter could not withdraw and must either seek Streamlined Transition within OVDP or must opt out (different than witndrawing); I suppose it could include the class of people who had passed preclearance but not yet submitted the intake letter.)
http://federaltaxcrimes.blogspot.ca/2016/06/tigta-report-on-improvement-in-some.html
@BB
Refunded, so you had to first come up with the funds to pay the fines?
Did you have to pay for and professional help such as accountants a/o lawyers? If so, were refunded these costs as well?
Failure to file penalties were paid with the tax owed from the sale of our principal residence. They were refunded by the IRS with interest, the receipt of which was our only indication that we cleared Streamlined scrutiny.
In lieu of FBAR penalties were not required with OVDI submission.
Refund professional fees? That’s a ridiculous question, I’m afraid. The only way you could be somehow compensated for that would be to claim them as a business expense in Canada, against Canadian taxes.
BTW, JapanT, as far as I know, people who owe tax entering Streamlined today don’t have to submit the failure to file penalty for any tax they owe just to have it reimbursed later.
@BB
I knew the answer to my question about having the money paid to accountants and lawyers refunded, only asking to point out that not having to pay tax or fines only after/because of paying huge sums to these groups is not the same as ‘paying none’.
As I do not earn anywhere near enough to have a tax liability in the States, I am not at all worried about having to pay them. The costs of proving I do not owe and fines for not proving I owe nothing is what concerns me. Thus comments such as “while overseas residents paid none” ignores my situation and everyone else in similar circumstances.
@JapanT
If I entered the US tax system today, it would not be under OVDI, but under Streamlined, therefore the accounting fees I paid for 8 years of tax submissions would be reduced to 3. It’s money wasted, surely, but offshore Streamlined was only created because of people like me.
We know that the only solution is RBT, but the US seems intent on exploring all other options and band-aid solutions until if and when they figure it out.