Surprising number of foreign students r Muslim -universities could see revenues shrink if students r barred https://t.co/2SnTZxTN8i pic.twitter.com/SBCf3SgPZJ
— Patricia Moon (@nobledreamer16) January 29, 2017
Recently I received a paper from an expat in Australia-it is a submission to the Ways and Means Committee. I am very impressed with it and shortly thereafter came across this article at the NYT.
Both Canada and Australia choose to take a positive approach and encourage the immigration of those who have studied in their countries; the citizenship process is fast-tracked. The U.S. on the other hand, has an extremely difficult regime which makes the path to citizenship much more difficult. As with other policies we are aware of, the U.S. once again, shoots itself in the foot with it’s exclusionist attitude. Add to that, President Trump’s Executive Order effective today, will likely prevent some who are already studying in the U.S., the ability to return and continue with their studies. The following groups of people find themselves barred from entry into the United States:
- suspended entry of all refugees to the United States for 120 days
- barred Syrian refugees indefinitely
- blocked entry into the United States for 90 days for citizens of seven predominantly Muslim countries: Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen
- barred green card holders from those countries from re-entering the United States
It is fairly well-known in the expatriate community that USCIS has no information for new immigrants warning them of what is involved in citizenship-based taxation and the ramifications of it should they desire to return to their home countries one day, without renouncing their U.S. citizenship. The more likely “hit” they will take, are the FBAR and FATCA provisions with the emphasis on reporting foreign accounts and assets. This is particularly obscene in that many of these students will have accounts in their home countries solely for sending money back to help their families. So perhaps the students who will NOT come to/remain in the U.S. are, for the moment, more blessed than they can possibly appreciate, by not entering/remaining in the U.S.
Those who are “more in the know” or have connections that alert them, are lucky to have access to Canadian and Australian schools and citizenship. These students as well as the countries they choose, represent a reasonable and mature approach that matches the direction of the rest of the world – globalization. Given I have the permission of the author, I am reproducing this paper in its entirety.
January 15, 2017
Dear Committee Members
I am writing to the Committee from Australia about one particular issue involving an unintended consequence of the Act, which apparently has not been considered in any cost/benefit analysis to date. My concern is that there exists the possibility of a significant adverse effect on the major income stream for the American higher education/university sector, in relation to attracting international students to continue their education in American educational institutions.
As of the Fall of 2015, total international student enrolment in both public and private educational institutions in the U.S. was 1,043,839 with the highest numbers from China and India, Saudi Arabia and South Korea, followed by Canada, Japan Taiwan and Vietnam. Previous years show an increasing number of students from these countries (and others) attending American educational institutions.1
According to a 2015 report by the U.S. Department of Commerce, the increasing numbers of international students attending U.S. educational institutions has had a significant impact on the American economy, adding more than $30.5 billion to the economy. The report found that 72 percent of all international students are funded from sources outside of the U.S., coming from personal and family sources as well as assistance from their home country governments or universities. 2
Besides being an important funding source for higher education institutions, many students, after graduation would like to gain employment in America, a fact not lost on the previous Obama Administration which wanted science/tech international students to be able to put their skills to use in America, not overseas. Obama stated at the time: “In a global marketplace we need all the talent we can attract…We don’t want the next Intel or the next Google to be created in China or India. We want those companies and jobs to take root here”.3 How the incoming Trump Administration views this remains to be seen. In an article written in Forbes (June 2015) by Evangeline Chan, an immigration attorney, she points out that restrictions on the number of H-1B visas available for graduate foreign students with a bachelor’s degree or higher is forcing this pool of skilled people to have to leave the U.S. As of 2015 only 85,000 H-1B visas were available while there were 233,000 applications.
According to Chan, “Our communities have become more global but our immigration system has not kept up”4.
These are highly skilled US higher educated potential migrants who are willing to live and work in America, most likely eventually getting a green card or citizenship. What is an unknown however, is how many of these potential migrants would like to leave open the possibility of, sometime in the future, being able to return to their home countries to live and work. After all, they would be highly sought after by U.S. corporations, with branches in these countries, who recognise the advantages of hiring people with extensive local knowledge.
International students in Australia
Despite Australia’s relatively small population of around 24 million, it is the third most popular destination for international students (approximately 300,000 in 2014). By 2015 this was a $15 billion industry and is Australia’s third largest ‘export’ following iron ore and coal. Skilled students are encouraged to stay in Australia after graduation and are considered as an important source of migration, which can address skill shortages and contribute to Australia’s long-term economic prosperity.5 As of February 2016 the international education sector in Australia had risen to a $20 billion export industry with data showing that international students were making a significant contribution to the economy.6 This is further confirmed by a 2015 extensive analysis on the value of international education to Australia by Deloitte Access Economics. They found that it was the professional, scientific and technical services which benefited the most from the international education sector. Deloitte estimated that Australia’s current stock of international students would contribute 130,000 skilled migrants to the Australian workforce after graduation. Other benefits included:
• Economic benefits stemming from increased entrepreneurship, knowledge exchange and international collaboration;
• Economic benefits derived from trade and investment links and soft diplomacy both in Australia and in source countries; and
• Social benefits flowing from improved cultural literacy, stronger cultural linkages and enhanced cultural capital in both Australia and in source countries.7
One of the issues raised by the Deloitte report was the volatility in international enrolments due to an increasing number of countries now competing for international students.8 It is important to point out here that the income generated from foreign students has become an essential part of maintaining the financial viability of the higher education sector in both the U.S. and Australia.
The FATCA risk factor for the U.S. higher education sector
In this increasingly globalized world, where a number of countries are competing for a bigger slice of the ‘international student’ cake, and in which Australia is competing with the U.S. for Asian students, FATCA will inevitably affect both countries but in opposite ways.
As the Committee is well aware of the controversy surrounding the provisions of the Foreign Accounts Tax Compliance Act I need not go into it here, other than briefly examining how it can ensnare unwary former international students into becoming a “US person for tax purposes” if they later decide to return to their home country.
• Most foreign students in the U.S. have an F-1 student visa. After graduation, he or she can remain in the U.S. for a period of 12 months for training, internships or employment related to their field of study. This is called Optional Practice Training (OPT).
• If the former student has obtained a degree in a STEM (Science, Technology, Engineering or Mathematics) field, then they would be permitted to remain for an additional period of 17 months.
• Then the former student has 60 days to depart from the U.S. If they then depart back to their home country they would not be subject to the FATCA provisions and would not be considered a “U.S. person for tax purposes.
• However, if they instead, qualify and apply for a H-1B temporary work visa (limited availability, as explained earlier) in preparation for a “green card” which then allows them to live and work in the U.S., or they later take up U.S. citizenship, they will have a significant tax problem if in the future they decide to leave the US to live and work elsewhere.
• This possibility is not being explained to prospective foreign students who apply to study in America.
Under FATCA, “U.S. persons” for tax purposes includes dual nationality citizens, Green Card holders (regardless of country of residence) and U.S. residents, or Deemed Residents, regardless of citizenship. In addition, a U.S. person is anyone born or naturalised in the U.S., foreign born people with a parent whom is a U.S. citizen, anyone who visits the U.S for an extended amount of time (180 days). Note that a Green card holder is still considered a U.S. person if they fail to surrender it when leaving the U.S. This is still the case if an un-surrendered Green Card has expired. For tax purposes it never expires unless surrendered.
A Possible Scenario under the FATCA Intergovernmental Agreement (IGA):
After graduation from a U.S. university an Indian born (or Chinese, or Canadian, etc.) student gains a H-1B visa and gains employment in a American tech company. He goes on to get a Green Card and soon after, full U.S. citizenship. Some years later, as an American citizen (U.S. person), he decides to return to his nation of birth to take up employment with an Indian company working in his field of expertise. However, he soon finds that as a “U.S. person” the company will not hire him in any position of authority for to do so could expose the company’s finances to investigation by the American IRS. He then finds that he cannot open a bank account because the bank is refusing to take on “U.S. Persons” as clients because of the onerous requirements placed on reporting financial details to the IRS. He marries an Indian woman who is not pleased to learn that, as a spouse of a “U.S. person” the IRS wants to see all her financial details as well. They then have a child, and much to their horror, they find that their child (and any subsequent children) is considered to be a “U.S. person” by the American IRS because the child has a parent who is a US citizen.9 He decides to renounce his US citizenship to be free of this quagmire but finds that it is very difficult process costing many thousands of dollars to do so. He then is given a tax demand from the IRS for “Exit Taxes” based on the value of all his assets – in American dollars10. He finally frees himself of the quagmire after several years of worry and at significant expense. He then is informed that, even though he has renounced U.S. citizenship the IRS still considers his child a US citizen who will have to start filing complicated U.S. tax returns when turning 18 if the young adult wants to continue to live outside the U.S. As with what the father found, his child will find that living outside of America as an adult U.S. citizen is a significant liability. The only solution to this for the young adult is to either move to the U.S. and live out his life there, or go through the complicated process of renouncing after the age of 18, as his father had done. Trying to solve all this for his family reminded the father of that lyric from The Eagles song, “Hotel California”, which he remembered from his university days: You can check out any time you like / But you can never leave…
The all–important question for the American international student education sector is this:
If prospective foreign students were given the full facts on the possible future impacts of the FATCA IGA, if they stay in the US after finishing their education to take up employment, would they consider it worth the risk of being ensnared by FATCA, when much safer alternatives exist, such as studying and working in Australia? If so, what is bad for America may turn out to be very good for Australia.
In my opinion FATCA constitutes a significant financial risk to the American foreign student higher education sector and this should be taken into account in your deliberations over FATCA and the wisdom of maintaining citizenship-based taxation.
Thank you for your consideration.
Don Maisch PhD
1 Project Atlas, http://www.iie.org/Services/Project-Atlas/United-States/International-Students-In-US#.WHW9RZL4mUc
2 Institute of International Education, http://www.iie.org/Research-and-Publications/Open-Doors/Data/Economic-Impact-of-International-Students
3 Fox News, Obama Administration Lets More Foreign Students Stay in U.S. for Jobs, Raising Competion Concerns, http://www.foxnews.com/politics/2011/05/17/dhs-allows-foreign-students-extended-stay.html
4 Chan E, Our Immigration Policies Are Telling Foreign Students To ‘Get Out’ After They Graduate, Forbes / Opinion, http://www.forbes.com/sites/realspin/2015/06/08/graduating-congratulations-now-get-out/#4305b47312d0
5 Group of Eight Australia, International students in higher education and their role in the Australian economy. https://go8.edu.au/publication/international-students-higher-education-and-their-role-australian-economy
6 Dodd T., Education revenue soars to become Australia’s $20 billion export,
7 Australian Government document prepared by Deloitte Access Economics, The value of international education to Australia, https://internationaleducation.gov.au/research/research-papers/Documents/ValueInternationalEd.pdf
9 U.S. Citizenship and Immigration Services, Citizenship Through Parents, https://www.uscis.gov/us-citizenship/citizenship-through-parents
10 Exit tax and further taxation of citizens who renounce,
@Pat Moon, OK the one thing you know about old George is political controversies need to be avoided and you need to stay out of the affairs of politics in foreign countries. You also know that I do my utmost to remain positive and encourage everyone to help OUR unified cause. When I saw the headline I thought you were going into the realm that is not the best realm to go into. Personally as a European while I react to what Trump did I am also clouded by what Merkle did to Europe with her open door no checks policy!!
All that said I am a firm believer in turning lemons into something nice to drink.
There is a UK political site which has touched on the US entry ban and I posted a comment that I would like to share with everyone as it may provide ideas and other encouragement;
Dear Mr. Goodman;
When Nadhm Zahawi, MP writes that he is a proud British Citizen and sad that the United States is now going to discriminate against him based on his place of birth, I understand exactly what he is going through and understand the “humiliation” that he has now stated in other quarters on this matter.
The United States has effectively stripped a British Citizen of their British Citizenship implying that he is something other than a British Citizen. I hope and pray that this Member of Parliament and this Conservative Government condemn this type of discrimination in all its forms. A British Citizen is a British Citizen is a British Citizen.
Unfortunately the United Kingdom joined the United States in 2012 in stripping the British Citizenship of me and my entire family based on place of birth. We share this daily humiliation because of an agreement signed by the Conservatives and the Liberal Democrats with the United States in an agreement called an IGA which is now also being challenged in US Courts as to its constitutionality.
My family can no longer have a normal financial life equal to any other British Citizen. All of our accounts with National Savings and Investment (NS&I), an arm of Her Majesty’s Government were closed when they changed their Terms and Conditions to add a third exclusion to those that may not have accounts that being US Citizens along with the mentally incompetent and recently bankrupt. Other financial institutions in the United Kingdom no longer want our business as well. It is utterly humiliating when you are opening an account for your children, you present your British Passport and when they see the place of birth they effectively tell you to take your money elsewhere.
The IGA signed by Mr. Zahawi’s colleagues in Government specifically states that UK Financial Institutions are to look for specific evidence when opening accounts called Indica. One of the indica to look for is “Unambiguous indication of a U.S. place of birth.”
The justification for the UK to sign the IGA in 2012 was to combat money laundering, fight tax evasion and combat terrorism. The US Executive Order that is causing 90 days of humiliation of Mr. Zahawi is equally noble in its written goals.
Judging a person based on place of birth for any reason has no place in modern day life.
My family stands with Mr. Zahawi, MP as a British Citizen is a British Citizen is a British Citizen irrespective of ones place of birth.
PS. I know I could have done a lot better in my writing but I hope it twigs some peoples minds. The site is one that is read by MPs every day.
Oh good. At least some Brockers are on the verge of finding out that the current regime in Washington will be worse than the last one.
@Sally, the “last regime” has caused tremendous direct harm to me and my family. The “last regime” has caused OAPs that I know and care for to attempt suicide.
Maybe you are an “American Citizen Abroad” do domestic politics is of interest to you.
Donald Trump may be many things but he has caused no harm to me and my family. Should he cause harm to me and my family I shall condemn him but until then it is a matter for the Americans.
I did make a further comment in the thread that I mentioned above that shows the sole extent of any linkage;
If he became a British Citizen prior to 2006, he automatically lost his Iraqi Citizenship.
Regardless if he desires to travel on a UK Passport he is proclaiming that he is a British Citizenship and the UK Government has an obligation to protect each and every British Citizen.
The UK Government should speak out and obtain clarification that the US Government will recognize his British Passport.
@Brockers…..I think especially in Canada this is another opportunity that can aid our cause. Can you get JT to confirm and demand that Canadian Passports be recognized REGARDLESS of place of birth on Canadians wishing to travel to the USA?
You need to word your disgust in terms of “regardless of place of birth” and avoid stating Canadians born in Baghdad.
@Pat, you hit another great point……
Should a green card holder who is barred to re-enter the USA still be liable to be subject to US tax treatment?
That would be another great one to focus attention.
Other subject……it was warming to see the climb down on the Ex-Pat facebook page of the person who appearred to attack ADCT, same person who had been attacking everythiing instead of trying to find the mud in the lake with your toes and taking positive action.
Do you know what George’s reaction was when I first saw his “attack?” It was hmmm have not heard much from ADCT/ADCS lately…….where can I send some money!!!
Ooops green card holders not likely affected per se….the person who commented earlier was an “acting spokeperson” for DHS not a political appointee.
And my guess is that the Conservative MP will be able to travel to the USA on his UK Passport after all as further clarification is obtained.
Anyways as they say make hay whilst the sun shines…….there are some morsels in this for our cause.
PMO says Canadian dual citizens can travel freely to the U.S. despite Trump travel ban
Immediately after the above CBC story comes this one:
Transfer of banking records of Canadian residents to U.S. taxman doubles
All that I can say is that it would be a shame if the IBS became a platform for Trump bashing when the man was just sworn into office nine bloody days ago.
For the record I was a Cruz supporter and was less than complimentary in my thinking about America’s new president. That said, he is presently talking about cutting 75% of federal regs that adversely affect the free market, cutting corporate taxes and some other good things. Hopefully he’ll even take a look at FATCA. Hope springs eternal.
Is he right about immigration? Who knows, but it certainly is a much needed and visible contrast to the immigration/open borders anarchy currently practiced in the EU, Canada and the US.
I will say this and then never bring it up again on this site;
1. If 70-90% of the war “refugees” you allow to just pour into your respective country are single males between the age of 17 and 40 then your government is playing with fire and public safety.
2. If a “refugee” from Africa or the Middle East shows up at the border with a functioning cell phone then he/she isn’t really in need of refuge.
3. America, for all its’ faults, takes in more immigrants and refugees than any country on earth.
4. Stop feeling sorry for those that can’t get their house in order…or rather refuse to do so. How many generations of third world countries does the West have to absorb before those countries start fixing up their own goddam messes. It’s not like nobody sends them food, aid, money, advice and technology, and hasn’t since the end of WWII.
Switzerland has been fairly good at keeping the refugee door under control but even with that most of the newcomers are young, single men; and very few from a country actually torn by war.
In the early nineties with the Balkans war Bern told the refugees “come on down”! And they did and in the thousands. Golly, maybe thirty percent were actual women and children. The rest were single young men, mainly from Kosovo or Albania. In Geneva they quickly took over the heroin trade from the Turks and Lebanese. No easy task. They also ran guns for the street thugs.
All this to say that our politicians have been telling us law abiding, tax paying citizens for years that if you don’t like the growing street crime, hard drugs, the mosques, the gangs, the rapes, the assaults and the terrorism, then tough luck and suck it up. We have to be compassionate.
Now Donald Trump, for better or for worse has flipped the script and it’s up to the refugees to suck it up. I say bravo. Somebody had to hit the brakes and it’s about time. When something is out of control it’s out of control. Hopefully the west will step back and look at this refugee monster before it destroys our respective cultures.
That all I had to say. Feel free to flame me but I decline to carry on the debate on this forum out of respect for the the main mission, ie. killing FACTCA, CBT and the rest.
@Eric in Switzerland: I agree completely. Donnie boy is our last hope.
Considering that he nominated Mulvaney to OMB (OMB controls the regulations in government) and Mulvaney was a co-sponsor of Rand Paul’s repeal FATCA, there is a hopeful chance. If Donnie comes through, then he is my hero, if not then he deserves all the criticism.
@Eric, as I have stated so many times…Trump has not harmed my family….Obama/Clinton/Democrats have harmed my family.
In regards to the matters that Trump has done in the last nine days, I solely look at them as a means to help our cause. If I am handed lemons I will make lemonade. I am not critical of them rather I am looking for tools to use.
In regards to immigration I look you look at this from a European perspective and what The German Chancellor has done has influenced me. My opinion today is not the opinion I had a decade ago.
And yes, Trump and the GOP are our last and FINAL hope. In one year the question “Do all roads lead to renunciation?” will be answered.
Should Trump and the GOP deliver I shall be forever grateful. Should they deny their written promises I will condemn them.
@Calgary the link on the dual passport issue and the order changes the direction of play with regards to us. Now we can ask our respective Governments to demand the USA treat us as Canadian/Irish/French…..and we be allowed to enter the USA just like an Iraqi from Canada can!
This is not a post about Donald Trump. The introductory remarks to the paper (a submission to the Ways and Means Committee) are simply a contrast to it; i.e., FATCA potentially denies the US of great potential and the current action speaks to that particular categiry of people being discriminated by place of birth. A situation akin to ours.
If every post for the next four years that mentions Mr. Trump is criticized for being political (rather than focusing on the effect of a policy being discriminative, etc ) I don’t see how anyone will be able to write anything. I honestly do not understand how this is different from any other post about a policy that discriminates based upon place of birth regardless of who initiated the action.
I heard the great interview with Lynn Swanson on CBC Radio this morning. I went to the cbc article which Calgary 411 posted above. Some of the people who posted comments still don’t get it, surprising, since it’s an excellent article.
Thank you very much, Lynn, and everyone else who helped to get this information to the Canadian public.
@clarence: Hope is really better suited to the domain of religion than to politics.
I do not hope that Trump will change FATCA/FBAR/CBT.
I expect on the other hand for him to act in accordance with the national disease with which he too is afflicted: http://isaacbrocksociety.ca/2015/10/29/our-sociopathic-society-ii-narcissitic-sociopathy-is-an-american-disease/
Normally I can’t go near any news comment section, anywhere, because of the rampant stupidity and ignorance on both sides of any issue. However, I held my nose and scanned the CBC piece. What’s interesting is that every thread that starts out with the usual “tax dodgers” complaint is usually answered with a succinct explanation of the situation for accidentals, and that’s it, the discussion stops. No response.
@Petros: The barrier between Religion and Politics is an artificial one. As you would know, the concept of “Religion” is largely an 18th and 19th century intellectual creation.
It’s own post at Brock — Lynne Swanson’s at MapleSandbox:
“He then is informed that, even though he has renounced U.S. citizenship the IRS still considers his child a US citizen who will have to start filing complicated U.S. tax returns when turning 18 if the young adult wants to continue to live outside the U.S.”
Age 18 has nothing to do with it. If the child is 3 years old and gets a sufficiently large inheritance the child has to file FBARs, and if income from the inheritance is sufficiently large the child has to file tax returns too. If the child becomes a famous athlete at age 12, guess what. If the child founds a company at age 15, guess what.
If a person has a close relationship (such as for example investing in a golf course) in a predominantly Muslim country (such as for example UAE), the person shouldn’t be allowed back into the US after a trip abroad.
Or if there’s some reason the person has to be allowed into the US (such as for example being a US citizen), he should be prohibited from working in any capacity as a US government employee (such as for example presidency).
By executive order from the p… um … ex…
“This is not a post about Donald Trump.”
It isn’t? Recognize this?
“The Wisdom of Countries that Welcome Diversity”
“Add to that, President Trump’s Executive Order effective today, will likely …”]
IMO, this is starting to diverge from
If we can’t bring justice to our own case then better to stay focused and not take on additional injustices – and leave these to other websites/groups, IMO.
Discriminated by birth – yet the article does not cover U.S. citizens (but does cover Green card holders). In Australia commentary was on an Australian citizen federal Senator who was born in Iran who may be impacted (dual citizens impacted & disrespected). Oopps, I just diverged & had better stay focused.
I tend not to claim allegiance to Democrats or Republicans but for whoever is out to right the injustices against U.S. Persons overseas by the U.S. government. The ball is in the Republicans court on this one – so I may highlight with them the injustices and encourage them to remedy – not to attack them.
The top is different than the letter which makes a case against FATCA.
Part of the selection of these countries is a view that they are failed states (Libya, Somalia, Yemen). Yet there is no ban on FATCA there (did they sign IGA’s?). ~ endemic corruption (making it easier to get fake documentation), and lousy bureacracies (making documentation suspect or unreliable) ~ should all be reasons to not require FATCA there. Yet it appears there will always be these states (and apparently always be countries not signed onto FATCA – I believe most African countries – thus presenting lots of opportunities for tax cheats and ensuring that the burdens fall on the 99% and those in FATCA compliant countries ).
To answer my own question, Only Iraq has Agreement in Substance FATCA IGA. The other countries do not have anything. Could be another way of strong arming them.
“endemic corruption (making it easier to get fake documentation),”
Hey, I think I know a country where that happens.
“and lousy bureacracies (making documentation suspect or unreliable)”
I know that I know a country where that happens. The IRS unintentionally provided enough transcripts that conflict with each other to prove that their documentation is unreliable.
Further to Norman’s useful info: “Age 18 has nothing to do with it. If the child is 3 years old and gets a sufficiently large inheritance the child has to file FBARs, and if income from the inheritance is sufficiently large the child has to file tax returns too….”
Can someone tell me is there a specific age when a young adult, living in America is required to file a tax return, if they have minimal or no waged income and are perhaps still living with (dependent upon) their parents?