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
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???
- 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.
@All with reference to @Badger’s comment:
I offer this realizing that many people did NOT hear about the problems of U.S. citizenship (or the accusation thereof) until after 2011.
Under NO circumstances should anybody enter the IRS OVDP/OVDI programs without advice from at least separate lawyers. One of those lawyers MUST be a criminal lawyer!!!!!
Here is an post written on this topic (with more on the sidebar).
Apparently, telling someone to go pound sand is like telling them to get knotted.
Personally I wouldn’t bother.
“…..having a US passport remains a really cool thing for any young person. It just opens a world of opportunity…”
Sometimes you can’t tell them anything about the very real costs and jeopardy that the US ‘opportunity’ also represents.
Ex. I know a young person born in Canada, whose US born parent registered them and obtained a US passport for them, which they have been using, I don’t know if they’ve been voting from ‘abroad’ – they may not have been able to qualify to register. Now they are moving to the US so a Canadian-only spouse can take up a job offer. They pooh-poohed it when I tried to explain the US extraterritorial CBT tax and FBAR jeopardy – the OVDI jihad, the FBAR crusade, and the local account issues for Canadians when the FATCA IGA took effect. Because of their stated disbelief that it could be that dire, I doubt therefore that they have been US tax and FBAR compliant. And now they are entering the actual lion’s den – probably without enough information to plan ahead. They probably have kept their Canadian local accounts, savings, RRSP, etc. – and potentially will use their new US address on their Canadian bank records. I doubt they even understand what they’ll face with their first part year returns for both Canada AND the US, much less all the US forms and compliance complexity involved.
Opportunity, but at what cost? They’re young enough also to be likely to have a US born child soon. A whole ‘nother can of worms. And now, as a US citizen and US residents, if their Canadian resident parents die – one a dual US/Canadian, the other Canadian only, they cannot be an executor or else face a whole other level of US tax reporting on the estate, etc. They cannot be named with a POA for their parents in Canada – or else face the additional sums added to their FBAR reporting, etc. Their TFSAs are still deemed reportable taxable foreign trusts, their Canadian accounts will be FATCA’d, etc.
I hope that they will not find all this out the very hardest way, but as they refused to acknowledge the potential for jeopardy that the US extraterritorial CBT system already represented by virtue of a US citizenship via a parent when they were on Canadian soil, I doubt that they understand or planned for the additional complexities they’ve now taken on by virtue of marriage, and now by virtue of moving to work in the US. They were used to the DIY routine of Canadian local tax reporting based on their ordinary basic life situation without significant income, and without complexities.
@USCitizenAbroad @Badger…again thanks for that historical reminder. When this started breaking in 2010 my goal was to simply document that I had left and relinquished. I was a little upset in learning there was this paper called a CLN but said I am done I have done enough. OVDI did not splash on my side of the pond and CHF is its own corner.
My desktop has a motto from you guys; “I will not live my life according to the whims of a foreign government.”
I am now adding another motto having read what you too have written and linked; “If you are a ________ Citizen, living in and tax compliant in your country of nationality then you are not a tax cheat, OVDI is not for you.” Wow…that is so profound…….. The USG should have been telling people that!!!
Had I been in Canada then I think I would have gone the route Badger went suffering immense damage. I became an alcoholic without OVDI, what would OVDI had done? (dry now for a long time)
@Iota…yep telling someone to pound sand means just what the tin says.
I must say that on this and other sites having pieced together your DIY minimalist approach to enter then exit…….yep that was a good plan. You did the quick easy revolving door plan. And as they say…..if you ever hear from anyone…….bird liner.
The experience of @Fred was also enlightening but that was solely entering. Again I have great respect for that plan for @Fred……
It was also good to hear @Neil and @Bubbles comment one time that if they had to repeat it…..they would not have entered.
It took a lot of years and many had to lose life credit units but I think the lesson in 2017 is; 1. do it yourself with the only out of pocket expense maybe being $30 in software. The software will make sure you have the right forms and answer the questions so it gets processed/accepted. 2. Minimize your time involved, you could be doing something better with your time like being with family. Five hours might be the limit. 3. Send it off with the attitude what are they going to do, I am _______ living in________.
@George – I must admit I still don’t understand why “pound sand” is used in that way!
When I say I wouldn’t bother, I mean if I was a young person with a non-US birthplace I wouldn’t bother. People in that position don’t need to interact with US bureaucracy at all. I think it’s good to keep mentioning that, in case it’s relevant for anyone reading.
Those of us with a US birthplace usually do have to do something, or at the minimum, be careful not to do the wrong thing, if we want to keep hold of our banking. And yes, do as little as possible and tell them nothing they don’t know, was my approach. I’m aware I was lucky to be able to take that approach, as not everyone can.
@George, thanks for that wikileaks Podesta email link http://isaacbrocksociety.ca/2016/11/30/solving-u-s-citizenship-problems-online-january-7-2017-australia/comment-page-1/#comment-7736417 , I had not read that one or the very interesting attachment before.
So unbelievable that first they denied any burden existed, and now that it is proven and got media coverage, even now they arrogantly continue to justify the burden on all the rest of the countries in the world, their own domestic revenues, and the millions of law abiding minnows living, earning, and paying full taxes outside the US, just in case the US MIGHT catch a US resident whale – as well as extorting all the non-US taxpayers and accountholders of the world to pay for the US free lunch, – and as we know, FATCA is designed to be without any reciprocity from the US, and the IGAs do not compel reciprocity since the US Treasury is not empowered to compel US banks to do the same. AND the US hasn’t signed on to the OECD CRS – and won’t.
Unbelievable arrogance and distortion;
ex. “…….there’s reason to think that problems faced by expats will dissipate as FATCA implementation goes forward….” . Huh? What ‘reason’ or evidence?
The DA email says:
“…….FATCA as a whole has been successful in pushing governments around the world to adopt the kind of information exchange necessary to catch tax cheats socking money away abroad. Further, FATCA already contains exceptions from reporting requirements for smaller accounts of expats, and there’s reason to think that problems faced by expats will dissipate as FATCA implementation goes forward.
Nonetheless, the expat community remains upset. And, Democrats Abroad have called for an expanded FATCA “safe harbor” that would limit reporting requirements for Americans abroad with financial accounts in the country where they reside. They have an active FATCA/FBAR Task Force that has circulated letters and recommendations and letters to Congress, and regularly comments on the issue. Additionally, concerns about FATCA burdens have been expressed loudly in major media Op-Eds and reports, including the NYT and WSJ. Republicans have called for a full repeal of FATCA – which Democrats Abroad do not support.
Our suggestion is to acknowledge the concerns of Democrats Abroad, and express openness to exploring a solution that eases burdens while continuing to crack down on true tax cheats – which are a small few compared to everyday Americans living abroad….”
MEMORADUM FOR JOHN PODESTA
Date: Tuesday, September 29, 2015
From: Giulia Marchiori Ceresa, Americans Abroad Finance Director
RE: Americans Abroad Global Donor Call
And what about the ongoing costs to those in Canada and the rest of the entire globe who aren’t US citizens or expats – and who object to bearing the burden and domestic revenues and other costs of paying here at home to implement a foreign country’s law imposed by threats from afar? I’m not a US citizen any longer, but as a Canadian taxpayer I resent and will not accept paying higher fees as an accountholder and the misuse and redirection of my Canadian taxes as a result of US extortion and threats.
Here is some of what it has cost Canadian taxpayers:
Canada Revenue Agency
Quarterly Financial Report
For the quarter ended June 30, 2015
Statement outlining results, risks and significant changes in operations, personnel and program
Highlights of fiscal quarter and fiscal year to date (YTD) results
Analysis of Authorities
This report reflects the results of the current fiscal period in relation to the Main Estimates for which full supply was released on June 19, 2015, including authorities available for use from the prior fiscal year.
As shown in the Statement of Authorities, the CRA’s total Budgetary Authorities available for use have decreased by $134 million, or 3%, from $4,200 million in 2014-2015 to $4,066 million in 2015-2016. The components of this reduction are outlined below.
The Vote 1 Gross Operating Expenditure Authority decreased by $48 million, or 1%, from $3,480 million in 2014-2015 to $3,432 million in 2015-2016. This is mainly due to the net effect of the following factors:
$78 million decrease in authorities available for use from the prior fiscal year;
$12 million in efficiency measures (excluding contributions to employee benefit plans) identified as part of Budget 2012;
$4 million planned funding adjustment for the redesign of the individual income tax processing system;
$3 million in efficiency measures (excluding contributions to employee benefit plans) recognized as part of Budget 2013 which reviewed the CRA’s internal operations in the National Capital Region;
$1 million funding adjustment for government advertising programs, as part of a multi-departmental submission led by the Privy Council Office;
$29 million increase to implement and administer measures announced in Budget 2014, of which $25 million is for improving the integrity of the tax system and strengthening tax compliance and $4 million pertains to tax measures, including the implementation of the intergovernmental agreement between Canada and the United States to enhance the exchange of tax information; and
$12 million increase for the implementation of tax measures announced in Budget 2013, including enhancements to the Scientific Research and Experimental Development tax incentive program and combatting international tax evasion and aggressive tax avoidance……”…………
“Policy, Rulings, and Interpretations
The CRA plays an essential role in making sure Canadian taxpayers, businesses, and third parties have access to up-to-date, accurate, technical information and support. This is critically important when dealing with changes to laws affecting reporting requirements.
One of the most far-reaching and complex changes in 2014-2015 was the implementation of an agreement between the governments of Canada and the United States
to improve international tax compliance through better reporting of financial account information (FATCA). Beginning in 2015, Canadian financial institutions have to give the CRA information of account holders who are United States citizens or residents. To assist financial institutions and respect privacy laws, the CRA became the intermediary, receiving the information and relaying it to the Internal Revenue Service (IRS) rather than having Canadian financial institutions report directly to the IRS.
During 2014-2015, the CRA completed a number of significant steps in implementing this agreement. Key steps included making sure financial institutions had all of the information they need to meet their reporting obligations, putting in place the information return financial institutions will use, and setting up the IT systems needed to allow the electronic exchange of information with the IRS..”……………….
Annual Report to Parliament 2014-2015
It would be interesting to see if similar documentation of the direct FATCA IGA initial (and ongoing ) implementation costs to ALL Australian taxpayers (and accountholders) could be found for Australia. Thus proving the actual bill ALL Australians have been served with in order to implement a foreign=US law – at the point of the gun of US imposed extortionate FATCA sanctions on their legal local financial system and institutions.
I urge all readers to see if they can find any details of their local government and financial institution implementation costs for FATCA.
I had not heard the term pound sand either. When the article below was written I remember Stephen Kish saying he had never heard pound salt. Maybe it’s because I live above one of the largest and still utilized salt mines in North America, but pound salt is what we say here. Same meaning of course.
( Hope the link still works)
I haven’t seen any ex post enumeration of costs in Australia. With CRS due to be implemented in 2017, it may be difficult to disentangle FATCA and CRS costs – especially since the systems within the banks seem to be integrated. There were ex ante cost estimates that can be found here and are summarised on the Wikipedia FATCA page.
Looking at the financial statements for Commonwealth Bank – the largest bank in Australia – the expense for “Risk and Compliance” (which is where FATCA implementation would fall) has risen by almost 35% per year over the past two years to over A$500million in the last financial year (ended 30 June 2016). That’s an increase of over A$220million in two years. While not all of that can be attributed to FATCA – the bulk will be FATCA and CRS compliance (there were also reforms to regulation of financial advice that would be included in this item on the income statement).
@Canadian Ginny – does mining salt involve pounding it? If so, maybe that’s indeedwhere the expression came from – with “sand” subsequently sometimes replacing “salt” due to a long line of baffled people trying, and failing, to make sense of it. Chinese whimpers? 🙂
If you want to join the Online Information Session, enter your email address in this online form.
That information is listed above; as well as on the other brock post, sandbox and citizenship taxation.
I missed the change above (perhaps because at the bottom of the post it still says sign up info will be available soon).