Monthly Archives: November 2016

When some politician or media gives that standard line “#FATCA’s unintended consequences” — think twice about whether you should be pacified by the author’s pandering.

Michael Parenti, in “To Kill a Nation–The Attack on Yugoslavia” describes also the “unintended consequences” of the actions carried under orders of the 1999 leader of the executive branch after having been caught with his pants down.  During this time, the to-be-FATCA-implementing Secretary-of-State was hiding in embarrassment from the U.S. public, but this SoS-IGA-implementer-to-be was known in the targeted villages and cities at that time as The Mistress of the War.

Parenti enlightens us: “Top policy makers are intelligent, resourceful, and generally more aware of what they are doing than those who see them as foolish and bungling. US policy is not filled with contradictions and inconsistencies. It has performed brilliantly and steadily in the service of those who own most of the world and who want to own all of it. That some critics may not know what policy makers are doing does not mean the policy makers themselves do not know what they are doing. That Western leaders make misleading statements about their goals and intentions does not denote confusion on their part but a desire to confuse their publics as to what interests they are really serving. That they are misleading others does not mean that they are themselves misled, although of course there are times when they make mistakes and suffer bafflement in regard to tactics and timing.”

When the law tries to paint us all “offshore tax evaders”, and it turns out they are talking about us, there are lessons to be learned as to how the media and politicians operate to accomplish a mission. Whether you are ready to hear this author’s entire premise or not, it gives a valid lesson as to how a population of diaspora can be used to accomplish a political and economic goal.

http://michaelparenti.org/ToKillANation.html

Don’t allow yourself to be pacified by the talk of “FATCA’s unintended consequences” and plan your strategy knowing that it wasn’t an unplanned attack.

Information Session

Of particular interest is the issue of the Australian “Super.”
While all expatriates worldwide experience country-specific problems, this one is perhaps one of the worst. By law, Australians are required to contribute to their own retirement; this system is unique among government-sponsored retirement planning. Why on earth should the U.S. be able to tax these?

Online Renunciation Information Session with John Richardson – 9 Jan 2017

Presented by: John Richardson is a Toronto citizenship lawyer, the co-chairman of the Alliance for the Defence of Canadian Sovereignty as well as the Alliance for the Defeat of Citizenship Taxation. He is a member of the ACA Professional Taxation Advisory Council. He holds the degrees of B.A., LL.B., and J.D. He is a member of the Massachusetts, New York and Ontario bars. His law practice focuses on “Solving the Problems of U.S. Citizenship” including relinquishing and the “Exit Tax”. He gives programs for expats all across Canada and Europe. He writes extensively at citizenshipsolutions.ca

WHEN: Monday 9 January 2017
10:00 AM AEDT (Sydney, Melbourne);
9:00 AM AEST (Brisbane);
9:30 AM ACDT (Adelaide);
7:00 AM AWST (Perth);
UTC: Sunday 8 January 11pm. Convert to your time zone
Program will last for one hour

REGISTRATION: HERE

If you are interested, leave your email address here and in early January we will send you instructions on how to join the information session

What’s this about?

Since Australia agreed to the FATCA IGA in 2014, Australian financial institutions have been asking ALL new account holders and some existing account holders whether they are U.S. citizens. Many have no idea of the consequences of admitting to U.S. citizenship, a U.S. place of birth or being born to U.S. parents. In this one hour session, John Richardson will address the following topics:

Who is a U.S. citizen?

What about those born in Australia who
a) were registered with the consulate and have U.S. passports, but never lived in the U.S.;
b) were NOT registered with the consulate and do NOT have U.S. passports.

Look before you leap!!

• The pitfalls of entering the U.S. tax system – a brief overview of what it really means to be “U.S. tax compliant” in Australia
• Can the U.S. really tax my super?
• The ATO says tax treaties “eliminate double taxation,” so why can the U.S. tax my Australian income?
• How do I relinquish/renounce U.S. citizenship?
• Is a CLN necessary? How can I document loss of citizenship without a CLN?
• How is relinquishment different from renunciation?
• Didn’t I lose U.S. citizenship when I became an Australian citizen?
• There’s an EXIT TAX???

Other topics

• How renouncing U.S. citizenship may put your superannuation (and other savings) at risk
• How to renounce and exit the U.S. tax system cleanly and avoid being a “covered expatriate”
• I have just learned about the FATCA problem! The difference between “responding” and “reacting” – things you should NOT do!
• I thought I lived in Australia! Why do I have to follow U.S. law when I live in Australia?
• What can the U.S. do if I’m non-compliant?
• If my bank has identified me as a U.S. Person, can I satisfy the bank without entering the U.S. tax system?

 

THIS SESSION IS OF A GENERAL NATURE. IT IS NOT INTENDED TO AND SHOULD NOT BE UNDERSTOOD TO OFFER LEGAL ADVICE OF ANY KIND.

I agree with others that Jim Jatras’ words in The Hill is important for its own post.  Thank you, Mr. Jatras, saying that…

FATCA’s only beneficiaries are the army of lawyers, accountants and software vendors who are making a fortune on it, with the costs passed onto consumers. 

I started my journey regarding US tax compliance almost ten years ago. I have paid dearly from my retirement savings and, although compliance has ended for me (but will that ever change?), the absurdity has not ended for my US-deemed Canadian-born son who has a developmental disability and, without requisite mental capacity, who would be trapped into such ongoing, never-ending costs of US tax and reporting compliance.  Again, I will say that it is not only for my son that I have come forward in this fight but for that of any person / family with the same entrapment.  My son will not be the only one so affected and for them this injustice to continue, year after year, to benefit that described army of lawyers, accountants and software vendors who are making a fortune on it, with the costs passed onto him and others like him.

I chose to go the route of having these professionals help get my family out of this US citizenship-based taxation nightmare, but have found it is impossible.  I don’t want any special work-around for my son.  I want this to end for all such sons and daughters.  Personally, I want the end result to be US residence-based taxation so no *accidental American* faces this injustice.  If there is the exceptionality of US CBT rather than RBT of the rest of the world (save Eritrea), then, in my eyes, there should only ever be an OPT-IN to US citizenship if the facts permit, never an OPT-OUT where some, the most vulnerable, are entrapped into, by US tax law, never-ending US tax compliance and reporting.

FATCA needs to go.  The unconstitutional IGAs need to go.  And the US needs to change to the same and much fairer residence-based taxation as the rest of the world and end the unconstitutional “warrantless seizure of personal financial information without reasonable suspicion or probable cause.”

I continue to be incensed that my chosen country of citizenship, Canada, and the country in which my son was born and raised (and never registered as a US citizen abroad) chose to honour the US in agreement to sign the extra-territorial IGA with the USA.  I continue to say that the words of Prime Minister Trudeau that *A Canadian is a Canadian is a Canadian* were political rhetoric, untrue and audacious. It is discriminatory that some Canadians, those with some US connection, however meaningless, do not fit with his faux words.  I don’t know what will take away the injustice for many.  I continue to feel betrayed by both my chosen country and the country in which my children were born and the country of my birth.

Again, thank you for this article, Mr. Jatras.  I have included it all below.  (If there is a problem for this site with quoting all of it, I will update to remove part of it.  I think it important for all to read the article in its entirety.)

The Hill, Contributer: Jim Jatras, November 16, 2016 — Dumping Obama’s faux foreign tax legislation should be high on Trump’s to-do list

President-elect Donald J. Trump.

President Trump

The NYT title says it all:

Donald Trump Is Elected President in Stunning Repudiation of the Establishment

Donald John Trump was elected the 45th president of the United States on Tuesday in a stunning culmination of an explosive, populist and polarizing campaign that took relentless aim at the institutions and long-held ideals of American democracy.

The surprise outcome, defying late polls that showed Hillary Clinton with a modest but persistent edge, threatened convulsions throughout the country and the world, where skeptics had watched with alarm as Mr. Trump’s unvarnished overtures to disillusioned voters took hold.

I watched basically all day as I did other things. It seemed to start slowly enough but once it was clear he had won Ohio, it seemed to me, that the entire dynamic changed. You could hear the puzzlement of anchors as they spoke, realizing everything they expected to see, was not happening. It wasn’t disappointment or disapproval but more an absorption, a wonderment, as to how this could be happening. Questioning how the pollsters and pundits could have gotten it so wrong. Some had no problem allowing that to have a positive edge; you could see them mentally re-arranging their thoughts. John King was the first I heard say, long before it was a given, that things were not going well for Hillary. He seemed to have a feel for it, to see the pattern present itself and then play out, state by state. It was fascinating to watch him go through each one, accurately assessing which pockets had yet to be counted, which ones would go to Hillary but as things progressed, would still not be enough.

A long long wait to get the final counts for Wisconsin, Michigan and Pennsylvania (which earlier in the evening, had seemed clearly in the Democrat’s pocket). Trump had 244 electoral votes with 9 states to go. It was pretty obvious how it was going to work out in the end.

An ugly argument took place between Van Jones and Corey Lewandoski once John Podesta announced that there would be no announcement from Clinton’s end until all the votes were counted. In a very undignified and ungracious way, Lewandoski pounced on the fact that Trump had been roundly criticized for saying he might not accept the results of the election. He did not listen when it was suggested that if Trump were in Hillary’s shoes, he likely would have waited too, until every vote had been counted. I believe in that exchange also came the statement that Hillary would be investigated for all of her alleged issues.

That aside, the DOW fell 1000 points the last time I checked. The USD was worth $0.75 CDN. Just like that. The Senate remains Republican; thank God Chuck Schumer, will not be the Senate Majority leader. (What a nice taste of revenge for expats.) Let’s hope we see some of what was in the Republican platform, though I expect it may take some time to get to it. At least we can envision tax reform. This time, we will be speaking to a more receptive group.

So, the American people have chosen to strike down the establishment. It is not difficult to understand. In spite of some of Mr. Trump’s less-than-dignified ideas/statements about Muslims, women, Mexicans, et al, the American people said “Enough” to the useless bureaucracy of Washington. I don’t blame them.

FINALLY, IT’s OVER!

I want to give you a status update on the Alliance for the Defence of Canadian Sovereignty (ADCS-ADSC) “FATCA IGA” lawsuit against Canada’s Justin Trudeau Government.

Our lawsuit argues that the Canadian legislation that enables the U.S.-Canada FATCA “agreement”, made under threat of financial penalty imposed by the U.S., violates Canada’s Charter of Rights and our Constitution.

The Case Management Judge who is handling the logistics of the lawsuit has asked for a status update from Plaintiffs Ginny, Gwen, and Kazia. Our Vancouver litigators responded on their behalf on November 4, 2016 and said:

“We can advise that counsel for the Attorney General has advised counsel for the Plaintiffs that the Attorney General will be filing a motion for production of documents and particulars within the next two weeks.

The Plaintiffs intend to file a summary trial motion and supporting materials by December 2016. The Attorney General takes the position that a summary trial cannot proceed, even with respect to setting dates for service of materials in response, until the Attorney General’s motions have been resolved, any resulting orders satisfied, and examinations for discovery of the Plaintiffs have been completed.”

This means that our litigators expect to provide the Court with the submission for the Constitutional-Charter FATCA IGA trial (including expert testimonies and witness affidavits) by December 2016.

However, there is ongoing back and forth between Government and our side regarding timing of the production of “documents” (I can’t go into the details). These disagreements will have to be sorted out by the Court and could result in a delay in the trial, which will be held in Federal Court next year.

I know that litigation moves slowly, will keep you posted on developments, and thank you for your patience.

The Claims can be found HERE.

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US 2 Pursue Enforcement in Spite of Foreign Laws-"OUR interest..substantially outweighs.. https://t.co/NcOtApc8SQ Who r they 2 decide?

— Patricia Moon (@nobledreamer16) November 5, 2016

Philadelphia Tax Conference Wednesday, November 2, 2016:

“We will pursue enforcement of a Bank of Nova Scotia summons when a domestic entity has dominion or control over records located outside the United States, even where the domestic entity asserts that production may be a violation of foreign law, if our interest in combatting tax evasion substantially outweighs the interest in foreign jurisdictions in allowing banks to preserve the privacy of their customers.“

 
Bank of Nova Scotia summons

V. CONCLUSION

Absent direction from the Legislative and Executive branches of our federal government, we are not willing to emasculate the grand jury process whenever a foreign nation attempts to block our criminal justice process. It is unfortunate the Bank of Nova Scotia suffers from differing legal commands of separate sovereigns, but as we stated in Field:
In a world where commercial transactions are international in scope, conflicts are inevitable. Courts and legislatures should take every reasonable precaution to avoid placing individuals in the situation [the Bank] finds [it]self. Yet, this court simply cannot acquiesce in the proposition that United States criminal investigations must be thwarted whenever there is conflict with the interest of other states.
In re Grand Jury Proceedings. United States v. Field, 535 F.2d at 410.

For the reasons stated above, the judgment entered by the district court is

AFFIRMED.

*****

I am not at all suggesting that minnows would have any need to be overly fearful. Given our government’s recent “throwing us under the bus”, I have little faith they will do anything to fight this if it becomes larger in scope.

If a bank acted outside of the tidy IGA arrangement and was involved in the exchange of private taxpayer information to the IRS (a PIPEDA violation-even if against US Persons), wouldn’t the bank open itself up to being sued?

I think it is totally possible Harden, Van deMark etc, may not be of much help given the overall shift regarding extraterritorial tax…..

********

Principal Deputy Assistant Attorney General Caroline D. Ciraolo Delivers Keynote Address at the American Bar Association’s 27th Annual Philadelphia Tax Conference
Philadelphia, PA United States ~ Wednesday, November 2, 2016
Remarks as prepared for delivery

Excerpts concerning “offshore” efforts:

In addition, since 2008, the department, working with our colleagues in IRS Criminal Investigation (IRS-CI), charged more than 160 U.S. accountholders with tax evasion and willful failure to report foreign accounts and more than 50 individuals who assisted in this criminal conduct. We also reached resolutions with nine foreign financial institutions outside of the Swiss Bank Program and continue to pursue investigations of entities located within and outside Switzerland.

Our criminal offshore enforcement efforts have encouraged participation in the IRS offshore voluntary disclosure programs, through which more than 55,000 taxpayers have come into compliance and paid nearly $10 billion in tax, interest and penalties since 2009. In addition, filing of Reports of Foreign Bank and Financial Accounts (FBARs) has increased from 332,000 reports for calendar year 2007, to over a million reports for 2015.

Our civil trial attorneys also furthered our offshore tax enforcement efforts, seeking the issuance of John Doe summonses to identify U.S. taxpayers whose identities are unknown and who are engaged in violations of the internal revenue laws and initiating summons enforcement proceedings to assist the IRS in conducting its examinations and determining the accurate tax due. The information we seek is often located in the United States; however, as we recently demonstrated in a district court in Miami, we will pursue enforcement of a Bank of Nova Scotia summons when a domestic entity has dominion or control over records located outside the United States, even where the domestic entity asserts that production may be a violation of foreign law, if our interest in combatting tax evasion substantially outweighs the interest in foreign jurisdictions in allowing banks to preserve the privacy of their customers.

Our civil trial attorneys also are actively engaged in suits involving penalties assessed for failing to file FBARs. These suits include affirmative litigation to collect unpaid penalties, and defensive litigation raising a variety of issues. We have approximately three dozen cases involving FBAR issues pending, the vast majority of which include a willfulness penalty for at least one of the years at issue. These suits have raised issues related to the computation of the penalty, burden of proof, service of process abroad, definition of a foreign account, corresponding assessments on spouses, venue, jurisdiction, and challenges under the Administrative Procedures Act.

UPDATE
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