A very special meeting for “U.S. Born People” or those who are otherwise “U.S. Persons” !(Naturalized U.S. citizens or Green Card holders)
Joining John Richardson will be Andrew Grossman
Discussing the “hot topic” of U.S. citizenship (including its liabilities in a FATCA and FBAR world)
In addition to focusing on the problems faced by those who agree they are U.S. citizens (to be a citizen or not to be a citizen …), this seminar will include consideration of …
- Why the US cannot automatically restore your citizenship without your consent
- The advantages of not making use of benefits of U.S. citizenship
- Why the U.S. cannot force those born abroad to accept U.S. citizenship
- Dominant Nationality & FATCA
- About the revenue rule: How is it affected by the Canada U.S. Tax Treaty? Is the Revenue Rule on the way out?
- Can the IRS place a lien on my assets even though I live in Canada?
The idea for this meeting grew out of Andy’s participation on a post at the Isaac Brock Society (Andy05).
“If anyone wants to follow up on issues I have raised, I will be in Montréal Dec. 1-3 & 5-6 and in Stanstead QC Dec. 3-5 and would be glad to meet for coffee and exchange views. I do not seek and scarcely ever accept clients but like to exchange views as an academic lawyer with a view to nationality law, cross-border tax and conflict of laws. French or English ok.”
Some of you may have attended one of the earlier meetings where Andrew & John collaborated. This interesting interview followed the session in Montreal in March 2014 at the Faculty Of Law at McGill University.
The video, as well as the excerpts below attest to the fact that there is likely no one better qualified to comment on the issues affecting American expatriates today.
Excerpts from the Brock post:
On non-consensual attribution of citizenship other than at birth, adoption (& previously, marriage:
Colleagues and I have written on this subject over the years. I have also noted that the IRS and the State Department seem not in accord as to the effect of judicial retroactive restoration of citizenship (Afroyim, Terrazas, etc.): international law seems not to allow non-consensual attribution of citizenship other than at a time of birth, adoption or (less commonly now) marriage. In the past, certain Argentine and Israeli laws have been called into question and changed. It seems to me that the IRS does not pursue persons with doubtful nationality status, although in the current culture that hasn’t stopped banks from at least initially refusing accounts from some who lost, or never had, US nationality but do not possess a CLN.
On case law regarding mutual collection agreements:
The curious 1989 cross-border collection case you allude to is Van deMark v. Toronto-Dominion Bank and can be found here.
The claim was for tax due from a deceased father and seems to have involved “transferee liability”. The bank had to pay out twice: once to the IRS from its NY correspondent and once from Canada to its depositor.
Retroactive tax laws, and, ironically, criminal offenses that depend on them, are more likely to pass judicial muster (human rights, constitutional rights, vested interests) than other laws. But this is not an unlimited tolerance: see Chua v. Canada (Minister of National Revenue).
Excerpts from 2007 publication Conflicts in the Cross-Border Enforcement of Tax Claims:
The debate on such expansion of the extraterritorial reach of taxation has scarcely taken into consideration important conflicts in nationality law, private international law, bankruptcy law, national tax-deferral and –sparing concessions, characterization 6, tax years 7, concepts of status, entity8 and title. 9 Nor has it addressed the constitutional 10 and public policy aspects generally, including what may prove to be true conflicts of governmental interests. Indeed, to the degree that taxpayer intent bears upon taxability, cross-border consistency may be particularly difficult to achieve.11 As will be shown, both rejection of the so-called “Revenue Rule” and its application can give rise to situations of undue hardship.
The recognition of tax levies and liens across sovereign boundaries is likewise open to doubt. While an IRS tax lien attaches worldwide to all assets of the debtor, in the absence of in rem jurisdiction, its enforceability depends upon coercive power over the person having effective control.
As far as can be determined and notwithstanding the text of the Revenue Rulings cited above 352, the United States seems not, after the Supreme Court decisions in Afroyim v. Rusk 353 and Vance v. Terrazas 354, to have asserted with any force a claim to the allegiance of persons earlier divested of nationality under laws later abrogated with retroactive effect. Much less has it sought to claim as citizens their otherwise qualifying offspring born abroad or taken affirmative steps to subject either category of persons to tax on their worldwide income if they remained abroad.355 A related category or persons is comprised of persons born abroad, otherwise U.S. citizens, whose births were never registered with U.S. consular authorities and who are therefore subject to a (rebuttable) presumption of alienage.356
Please make time in your busy lives to come and hear what will likely be one of the most important sources of information you will ever come across. All are welcome – please bring along your family and friends.
WHAT: Solving U.S. Citizenship Problems with Andrew Grossman & John Richardson
WHERE: Atwater Library-
1200 Avenue Atwater, Westmount, QC H3Z 1X4 MAP
– Avenue Atwater is just south of St. Catherine Street
WHEN: Monday, December 5 2016 19:00
ADMISSION: $20 cash payable at the door; please register in advance at nobledreamer16 at gmail dot com
Andrew Grossman is a retired U.S. Foreign Service Officer who served in Seoul, Abidjan, London, Tehran, Algiers and Geneva. He holds the degrees of B.A. in Economics (Clark), LL.B. (Columbia), M.A. in L.I.S. (University College London) and of Licencié en droit européen et international, Maître & Docteur en droit (Louvain) and he is a member of the New York and District of Columbia Bars. He lives in London where he writes on private international law issues, especially in the fields of personal status, insolvency and tax.
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 Taxation Advisory Panel. 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
6Thus: what constitutes realty and personalty, Fair v. Commissioner, 91 F.2d 218 (3rd Cir. 1937) (Cuban
hypotecas as immovables); trusts and estates as separate tax entities: PLR 9413005 (Germany-U.S.; trust
determined to constitute US domestic estate with no treaty exemption notwithstanding that assets not actually
distributed to beneficiaries were taxable to them in Germany). A foreign tax may be characterized as other than
an income tax, and credit denied: Rev. Rul. 76-536 (Irish wealth tax) citing Biddle v. Commissioner, 302 U.S.
573 (1938), Rev. Rul. 70-464 (Swiss wealth tax) citing Lynch v. Turrish, 247 U.S. 221 (1918); see RIA ¶ O-
4233 for rulings and decisions on specific foreign taxes. For an argument as between characterization and
timing in relation to a Canadian statute of limitations and method of accounting, see Coulter Electronics, Inc. v.
C.I.R., T.C. Memo 1990-186, aff’d 943 F.2d 1218 (11th Cir.) .
7Notoriously among them the conflict of tax years for cross-border cash-basis taxpayers resulting from
the UK tax year, April 6 of one year to April 5 of the next (reflecting its origins in the ecclesiastical calendar).
The INLAND REVENUE DOUBLE TAXATION MANUAL, DT1921, discusses the impact of varying tax treaty
definitions of “tax year” on the taxation of employment.
8 Liechtenstein Stiftung as trust: Estate of Swan v. Commissioner, 24 T.C. 829 (1955), acq., 1956-2 C.B.
8, aff’d in part and rev’d in part on other grounds, 247 F.2d 144 (2d Cir. 1957); PLR 200302005, PLR
910 David Schmudde, Constitutional Limitations on State Taxation of Nonresident Citizens, 1999 DET.
C.L. REV. 95.
352 n. 341.
353 387 U.S. 253, 268 (1967).
354 444 U.S. 252, 260 (1980).
355 Cf. Rocha v. Immigration and Naturalization Service, 450 F.2d 946 (1st Cir. 1971) (U.S. nationality of
mother deemed never to have been lost). It would seem a heroic undertaking for a tax agency to inquire sua
sponte into matters relating to derivative acquisition of status, whether nationality or domicile. The task is
rendered all the more difficult in the wake of Wauchope v. U.S. Dept. of State, 985 F.2d 1407 (9th Cir 1993)
and Benner v. Canada (Secretary of State),  1 S.C.R. 358.
356 6 Rios v. Civiletti, 571 F. Supp. 218 (D.P.R. 1983) (father, U.S. Army deserter, recorded birth in
Mexico using fictitious name); Corona-Palomera v. INS, 661 F.2d 814, 818 (9th Cir.1981); Matter of Leyva, 16
I. & N. Dec. 118, 119 (BIA 1977
I can still recall, with great thankfulness, the information session I attended with John Richardson in Vancouver, BC. There are a number of people I know, friends and neighbors, who are still struggling with lingering US citizenship issues. Is John planning a session in Vancouver anytime soon? There are those out there who would benefit from his insights. His presentation gave information which allowed me to find a path out of the FATCA darkness into the light of once again being a free agent in the universe (a non US person).
Sorry if this isn’t the right place to post this but I want to go to my MP (UK) about FATCA/CBT human rights violations and would like to be able to give him some idea of which MPs in other countries e.g. Canada are active on this. Is there any international group of MPs/representatives that are working on this?
Thanks for reporting this important opportunity for those however deemed *Accidental Americans* to have further discussion with lawyers versed on citizenship, Andrew Grossman and John Richardson. I would certainly attend if I were anywhere in your part of Canada.
Jenny, that’s a great question / suggestion on whether or not there is any international group of MPs/representatives working on this issue. In Canada, MPs, especially Liberals who formerly seemed concerned about the rights of those in Canada who the US deemed US citizens, Canadians or permanent residents, completely changed their stance when they came into power after our last election. See: https://www.youtube.com/watch?v=0XJoH3J5xOc. I don’t know of any international group (unless one feels American Citizens Abroad does so — I don’t personally think it does). An international group of government representatives from countries around the world working on this seems common sense, but appears most bow to allowing extra-territorial taxation through US citizenship-based taxation and IGAs they have signed with the US government.
There was a Complaint submitted to the UN Human Rights Council — see: http://isaacbrocksociety.ca/2014/07/28/human-rights-complaint-on-behalf-of-all-u-s-persons-abroad-has-now-been-submitted/. For whatever reason, we have been unable to get any reply to requests for the status of that Complaint. There are also lawsuits in Canada and the US — see http://isaacbrocksociety.ca/2015/02/17/adcs-adsc-litigation-updates-key-actions-milestones-and-timeline-estimates/.
@Patricia Moon– I “discovered” and watched the 2014 interview of Andrew Grossman (@Andy05) by John Richardson for the first time last night. The interview is very interesting and I would highly recommend Brockers take the time to watch it. I was happy to see the interview was carried out at McGill, my alma mater! Thank you for posting it.
@calgary411 thank you very much for this info which will be useful for my MP. Maybe there is some way of starting a reference page for people taking political action, perhaps with letter templates and names of MPs in different countries who have responded to and/or know about the issue. If we could get even 2 MPs, e.g. 1 Canadian and 1 UK, in contact with each other perhaps they could start an international group.
We have something here, Ongoing Projects — Make Change Happen!, that may be useful — and additions to it are really welcome too. You can also access it through the Sidebar box “Take Action!”
Thanks for providing these for Jenny, pacifica. I wish there were one or more Canadian MPs who wish to take this on in an international way. I don’t see that happening until we have results of the Canadian ADCS litigation.
Before contacting you UK MP, Jenny, I too would recommend a thorough reading of the wealth of information in the sidebar that pacifica references, Jenny. Keep in touch regarding discussions with your MP. For those of us who have been at this for many years, what we thought would be positive action by many Canadian MPs turned out to be a disappointment. That does not mean that we should give up though.
I’ve put up some Australian resources on http://fixthetaxtreaty.org – including some links to letters that were posted in various comment streams here on Brock. Our MPs have been sympathetic, but have toed the party line that the FATCA IGA was necessary to save the banks. No one has yet stepped up to champion our cause.
There has been more success in Europe. Perhaps someone can fill in some details – but there was a recent Commission in France and there is a friendly member of the European Parliament (Sophia In’t Veld). Sorry I can’t give you more details, but my focus has been on Australia rather than Europe.
How about Calgary or Edmonton as venues?
Pat – It really is nice to hear that the Info Sessions are helpful!
Outside of what is posted, there is nothing firm at the moment. As soon as a meeting is planned, it is usually posted so stay tuned!
@Calgar @Jenny in the UK I have found its often better for two plus to meet a mp. One person being a constituent and someone maybe being a party member. Besides with another person its easier to make all the points.
As a note I live in the north but have easy rail access.
Lastly I think the judges brexit decision may be helpful in the UK regarding the IGA which I believe did not undergo parliament scrutiny but caused a loss in rights of UK citizens deemed us persons.
George: “I think the judges brexit decision may be helpful in the UK regarding the IGA which I believe did not undergo parliament scrutiny but caused a loss in rights of UK citizens deemed us persons.”
Didn’t the relevant loss of rights initially occur when the DTT first included a “Mutual Assistance” article committing HMRC to hand over the personal and financial information of UK citizens deemed US persons on request? In fact, the DTT seems to violate the rights of UK citizens deemed US persons in all sorts of ways.
Not sure the Article 50 ruling applies though, given that Parliament is always given the opportunity to discuss Finance Bills, including the Finance Act 2013 which included the IGA legislation. (See http://services.parliament.uk/bills/2013-14/financeno2/stages.html).
@Iota, thanks for that contribution. Allow me to think out loud for a moment. Pre-BrexitJudges, I had resigned myself that we in the UK had been rolled over and were stuffed. As a Leaver (which has no bearing at IBS) I was disappointed in the ruling the other day but the claims by the woman involved hit home, she was saying how Article 50 stripped her of EU Citizenship and that made her sick. Sound familiar?
The UK IGA stripped you and me of our UK Citizenship and made us both sick! Whilst we were not stripped of our UK Passports we were stripped of our UK Citizenship in the eyes of financial institutions, meaning in the 21st century we were indeed stripped bare.
We know from the judges ruling that such a stripping is possible but there is a right way and wrong way to do it. The Executive can not do it and a short bill in the commons likely can not do it.
Do you have close at hand how exactly in Parliament and in what tiny clause and when we were stripped naked? I tried to find it in the link….
While this may not be of use in a court of law it could be of use by analogy in the court of public opinion!
There are tens of thousands US Persons who solely carry a UK Passport in the UK according to the last census and we need to tap into that vein. Part of that is explaining to others and having analogies to use.
Ergo, I would now argue that stripping a person of his/her EU Citizenship whilst drastic is pale in comparison to a UK Citizen being stripped of their UK Citizenship in favor of a foreign power! If A is bad, then how can you defend B?
Sounds like a great event!!
“Why the US cannot automatically restore your citizenship without your consent”
That will be interesting and whilst I agree from an international law perspective, I believe US Courts would rule automatic restoration is constitutionally because its a great benefit.
“The advantages of not making use of benefits of U.S. citizenship”
Concur, the risk of using any benefit of US Citizenship comes at a great cost i.e. voting. What do you gain by voting in the US but what is the possible future cost?
I would be interested in a comprehensive list of benefits to avoid! One would include that a US Person flying to Canada should make it clear on the new “Canada ESTA” they are coming as a non us person.
“Why the U.S. cannot force those born abroad to accept U.S. citizenship”
Concur with respect to international law but from a US perspective?
“Dominant Nationality & FATCA”
WHEN we prevail, that I think will be the core. I also believe that is where Ginny and Gwen are in mindset. Again, I would LOVE for Ginny to take the stand in court and be asked “Are you a US Citizen?” I would be so tempted to fly to BC to witness that. 🙂
“About the revenue rule: How is it affected by the Canada U.S. Tax Treaty? Is the Revenue Rule on the way out?”
First they tossed out our dominant nationality…….so yes its on the way out.
@George: “…she was saying how Article 50 stripped her of EU Citizenship and that made her sick. Sound familiar?”
The referendum result has left me feeling heartsick for all kinds of reasons, but not, for myself, the loss of EU citizenship. I’m a UK citizen, and that’s enough for me.
“The UK IGA stripped you and me of our UK Citizenship and made us both sick! Whilst we were not stripped of our UK Passports we were stripped of our UK Citizenship in the eyes of financial institutions, meaning in the 21st century we were indeed stripped bare.”
I don’t feel stripped of my UK citizenship – not at all. As a UK citizen I prefer to see the UK government co-operating with other countries, as that’s more likely to bring about a workable solution than confrontation. It’s the way the US defines who is US-tax-resident that is out of step with other countries and causes discrimination against those deemed US persons. Pressure on the US to fall in line, reciprocate, sign up to CRS, and agree to standard cross-border definitions of tax-residency, is in my view the way to go.
“Do you have close at hand how exactly in Parliament and in what tiny clause and when we were stripped naked? I tried to find it in the link….”
Not sure what you’re looking for. The Agreement itself was presented to Parliament September 2012 (see
http://webarchive.nationalarchives.gov.uk/20120913103048/http:/www.hm-treasury.gov.uk/d/facta_agreement_tax_compliance_140912.pdf). The nitty-gritty, i.e. the Exchange of Notes setting out Appendix II, was laid as a Paper Subject to Negative Resolution 13 July 2013. The IGA was made law in Part 6.228 of the Finance Act 2013.
@George and Iota.
I understand the feeling of others who feel that the Brexit decision has stripped them of their EU citizenship.
I have many UK friends who as part of ‘once ‘belonging to the EU decided to settle in Spain, Portugal, France etc in their retirement. With a UK pension they were guaranteed reciprocal healthcare, which is almost impossible to obtain independently as a retired person. Now all is up for negotiation. Not just their ability to maintain a bank account where they live, but their very right of abode in in EU is now at risk. It looks like they will be used as bargaining chips by Mrs May; she has not guaranteed them the right to remain as she will not do the same to EU citizens now in the UK, and what else does she have to bargain with?
@Heidi – that’s why I said “for myself.” I do sympathise with UK citizens living in Europe, and EU citizens without UK citizenship living in the UK. And with wouldbe immigrants to the UK who were hoping to get leave to remain via EU citizenship.
“Do you have close at hand how exactly in Parliament and in what tiny clause and when we were stripped naked? I tried to find it in the link….”
Finance Act 2013 – Clause 222
International Agreements to Improve Tax Compliance
The sponsor was David Gauke, Treasury Minister.
The clause was originally numbered clause 219. If you search under this, you find such things as the original HMRC response:
Search results are found here (and there are at least 50 different links, some leading to various committee meetings in the Hansard recording MP’s comments):
I did have Mr Gauke’s original 1st reading in the House, but It appears I’ve lost it.
The following is the written record of the estimates of the costs associated with complying/not complying with FATCA given at the time.
Not sure at what location in the document the link will take you. If at the start, it’s roughly 2/5 of the way down under “Tax Avoidance”.
Thank you SO much for your help @calgary411, @pacifica777, @Karen, @George, and everyone who has put all these resources together, such amazing work. Good idea @George about having another person there. I’ve submitted the letter to my MP. I will let you know what happens.
@OAP, cheers for that. 🙂
@Jenny – good luck!
I said: “The referendum result has left me feeling heartsick for all kinds of reasons, but not, for myself, the loss of EU citizenship. I’m a UK citizen, and that’s enough for me.”
For those in Britain who will be adversely affected by loss of EU citizenship, there could be good news if this proposal goes through: http://www.independent.co.uk/news/uk/politics/brexit-eu-citizenship-freedom-of-movement-passport-how-to-keep-parliament-live-move-abroad-a7405196.html?cmpid=facebook-post
Interesting proposal, but I am afraid Teresa May may be planning on using the right of present EU citizens to remain in the UK (and UK citizens in the EU) post Brexit as a bargaining chip in her hope for EFTA free trade without free movement negotiations. That is why she is not willing to commit to guarantee the right to remain for existing EU citizens. Private Eye confirmed my suspicions last week. After all, what other bargaining chips does she have?
@heidi – as I understand it, this EU proposal would apply to UK citizens who want to retain EU citizenship. So, for instance, a UK citizen could opt to move to an EU country in order to still live in the EU. Or UK citizens already in the EU would be able to remain. Theresa May doesn’t have power to prevent that.
Unfortunately it wouldn’t help existing EU citizens living in the UK. TM would still have the power to use them as bargaining chips.