I was very surprised to receive the following email on Friday evening. I cannot recall ever getting anything like this before. I will not identify the author because it is not proper to publicly share an email without the permission of the sender. It is not anyone I have ever heard of before and I doubt any of you have either. It took me a while to decide if I would answer or not. I tried to put my reaction aside after all, why be surprised that a tax compliance professional would demonstrate so little awareness outside of his/her experience. In the end, I simply could not ignore how I felt. I replied and have decided to publish the email without naming its author and my response.
I wish I had pointed out to this person that technically, due to the Canadian IGA (or likely any Model I agreement), that there are no harsh penalties that have been implemented. A professional who is truly conversant with this situation should have stated this better. Does such a statement show a conscious attempt to confuse the expat, assuming penalties from FBAR, OVDP etc will come to mind? Could it be a reference to the idea that Form 8938 is a harsh penalty all on it’s own? (As a matter of torture, most definitely….) Or is the practitioner just sloppy? (Maybe we could get this person to rule on all the “plain language” misapplications we hear of….retroactive 877A, anyone?).
I also wish I had challenged the statement that “the program is working.” There is nothing to suggest that the majority of non-resident (or resident, for that matter) Americans have become compliant. The numbers quoted in the statistics for the OVDP are nowhere near 9 million and we know some of those who came forward are Homelanders. For some interesting figures regarding compliance please see Professor William Byrnes’ “Is FATCA Much Ado About Nothing“? . Prof. Byrnes states “The IRS War on the FBAR is simply not working.” (“The IRS received 807,040 FUBARS FBARs in 2012; compliance with FBAR filing appears to be declining.”) Every tax compliance professional should be required to read this report. It would go a long way in curtailing the inflammatory language we experience, intended to confuse & frighten and assumes we are all idiots.
I also should have challenged the nonsense about ICE not allowing visas of former citizens being allowed to enter the U.S. This amounts to the usual threat of the Reed Amendment. Does ICE have the power to override the State Department?
I am simply astonished at the arrogance of this person. What to say of the obvious limited exposure of such an “expert.” (I have never heard anyone suggest that there are bank problems in Canada). Mentioning OVDP and not Streamlined. Who on earth does this person think he/she is?
My USC/resident-CPA sister strongly suggests I complain to the appropriate accountancy board.
And the unmitigated gall of implying I should send clients………good gawd………
*******
(emphases are mine)
If this is the Patricia Moon who has given up her US citizenship because of FATCA, then this is for you. I have seen your “protests” regarding FATCA and filing US tax returns. You stated that you were delinquent in your filings, and that you caught yourself up and then renounced your citizenship.
You are one of the very reasons that FATCA with its harsh penalties was implemented. I have been practicing in the international tax area, specializing in US expatriates, for over 31 years. I am the chairman of a state CPA Society’s International Tax Committee, and have an international reputation in this area. Over my 31 years’ time I have prepared and/or reviewed several thousand tax return. I have seen dozens of people such as yourself , people who are American citizens, and enjoy the benefits of being an American citizen, while failing to fulfill the obligations that come with citizenship – namely filing a US tax return and paying any tax due. One cannot enjoy the benefits of American citizenship without complying with the responsibilities.
Since FATCA has been implemented, there have been citizens such as yourself who have renounced their citizenship. I understand from a couple of US Customs & Immigration attorneys that I work with that ICE often won’t allow visas to come back to the US, sometimes even for vacations, to former US citizens. However, a much larger number of persons have come forward and are now filing tax returns and complying with the responsibilities of being a US citizen.
So the law has worked. It is accomplishing its intended goals. I personally have worked with several formerly noncompliant individuals to “get them legal” through the Offshore Voluntary Disclosure Program.
Staying legal is not a difficult process. It requires filing a US tax return every year. Often there is no tax due from it, as the foreign tax credits and the foreign earned income exclusion will reduce or eliminate the tax on all but US-sourced income.
Giving up citizenship is a drastic step when compliance is so easy. It is like amputating your arm because you have a hang nail.
And, from my experience, most larger banks WILL continue to work with Americans abroad. Very few are closing American accounts. In Canada, for example, I know that BMO Harris actually promotes accounts for Americans. I have several clients in Canada who bank with them. RBS Bank, Banque Scotia, TD Mortgage Corporation, Canadian Imperial Bank of Commerce, and many others.
Just my thoughts. Feel free to give my name to any individual who wants to become legal, but does not want to go to the extreme that you did.
Thank you.
*******
My response:
Your email is extremely offensive and demonstrates that you understand this situation from one point of view and one only.
Perhaps you are unaware of the fact that the large majority of expats living outside the US for decades were simply unaware of any requirement to file taxes and information returns. The U.S. made no attempts to educate or notify people of these requirements. Surely you have known people who were “non-willful.” I certainly hope you did not put any persons such as these in the OVDP/OVDI.
Your comment “You are one of the very reasons that FATCA with its harsh penalties was implemented” is curious, given I did not owe any tax. I was a stay-at-home mother with an annual income that never exceeded $11,000 CAD from doing the books for my husband’s company. An annuity inherited from my parents was transferred at a later time and I most certainly paid the tax that was due.
As to “I have seen dozens of people such as yourself, people who are American citizens, and enjoy the benefits of being an American citizen….”
- I had not lived in the United States for thirty years and was/am a law-abiding, tax compliant citizen/resident of Canada
- I was not “enjoying the benefits of being an American citizen”
- If you are referring to having the right of return, there is nothing particularly unique there; the majority of countries on earth allow their citizens to return
- And I certainly am in no need of the Marines coming to save me in Canada (a “benefit” that one would have to pay for, were it even relevant to those living in first-world countries).
If by “benefit” you mean having access to “the greatest country on earth” I will tell you that a component of renouncing involved my observations about Abu Gharib, Guantanamo, the assassination of American citizens by drone without due process and other actions that frankly made me ashamed to have ever been an American citizen. In other words, your assertion that my renunciation was “like amputating your arm because you have a hang nail” simply does not cover all that was involved. Not the least of which, was my Canadian family and how they felt about the effect of U.S. policy on their lives. My husband resented any account information being turned over to FINCEN (given the fact it was his money)and it was a huge issue in the marriage.
I have remained active in this movement having renounced over 6 years ago. I don’t gain anything personally by volunteering a huge portion of my life to this. I am fully conversant with what is required regarding compliance. It is not always simple and it is very expensive. You fail to mention facts such as:
- the U.S. would expect capital gains tax on the sale of our personal residence for a gain greater than $250k
- the U.S. treatment of Canadian mutual funds as PFICs is particularly punitive and would require 8621 every year
- the U.S. insistence that my country’s tax-deferred vehicles designed to help save for education, disability and non-RRSP uses are foreign trusts requiring 3520 and 3520A every year; all of these plans mirror similar programs in the US (529s, ABLE and Roth IRAs)
- had I been signed on my husband’s company (I wasn’t) we could have found ourselves subject to an annual 5471 and the particularly abusive Transition Tax
I personally have no desire whatsoever to go to the United States. I don’t care what CBP and ICE do. It doesn’t frighten me at all. A Canadian does not need a visa to visit the U.S. anyway.
None of us have ever claimed that obtaining bank accounts or mortgages is difficult in Canada. This is a situation that primarily affects Europeans and it is very, very real. I know many people who have been severely impacted by it. It was perversely disingenuous for Judge Rose claim in the Bopp FATCA ruling, that this was not due to FATCA but to independent action of the banks.
Over the years I have encountered many people such as yourself, who seem to think they are entitled to inflict their opinions and judgments about character based upon presumptions made about U.S. expectations. I wonder if it could ever occur to you that there are other places and people in the world who do not base the value of their existence upon opinions such as you have expressed. I find it difficult to believe you would end asking me to send you clients. I trust this will be the end of any communication.
Regards,
Patricia Moon
Secretary-Treasurer
xxx-xxx-xxxx
Alliance for the Defence of Canadian Sovereignty &
Alliance for the Defeat of Citizenship Taxation
Well responded Patricia
The Guy is just trying to get some business in a very bad Way
Just shows how evil those tax condors are, trying to scare us to get some business lol.
What à very unethicall bad country USA has become !
Nothing to do with how it’s founders made it, but he obviously doesn’t know that, poor little ignorant naïve american.
Isn’t it great to live abroad ?
We’re all really very lucky people, thank god my dad got me out of THAT country when I was a little boy. I’ve been having a ball ever since !
Best
Steven
Excellent letter, and remarkably restrained, given the judgemental tone of the letter to you! What I would have added was some reference to FBAR and that the only homelanders who have to fill it in are suspected criminals.
I would have used shorter words in a reply, mostly of four letters.
Bravo, Patricia Moon!
This self-serving and arrogant compliance condor clearly had very limited experience (admitting that, over 31 years, to having “worked with several [ONLY!] formerly noncompliant individuals” in the OVDP program). Contrast that paltry knowledge to the vast depth of experience here at Brock, which has doubtless steered many thousands of grateful individuals away from the clutches of this and fellow condors.
Now that the lucrative (for them) OVDP program is being ended, they appear be going into overdrive – selectively and cruelly spreading fears and lies to drum up replacement business.
“I have been practicing in the international tax area, specializing in US expatriates, for over 31 years.”
And now for some inexplicable reason the stream of obedient clients is running dry? 🙂
Boy, this fires me up! What benefits of USCship do we enjoy overseas!? The first murdered by hijackers and terrorists after they collect our passports? Having to allow all my banks to report all info they have on me to an unsecure institution without any warrant? Having children that are expected to file information returns including their employers’ financial data in addition to tax returns, both to what is to them a foreign country, abouve and beyond what is required of the land of their birth.
You were/are far more restrained than I would have been.
Such people will never change their minds though, we are their cash crop.
As for clients, send him the names of just about every prominant US politician.
I need to add, his opening statements reflect what I usually get from homelanders when I try to explain to them why all this is so wrong. They truely believe that they are somehow paying for our liberties and not paying anything for them ourselves.
This fella will never understand because it is his way to get money for his lifestyle.
Patricia, thanks for sharing this letter and your response.
“Does ICE have the power to override the State Department?”
I’m not sure about the US, but in Canada and Japan the immigration officials at the airport or borders do have power to override decisions made by officials who granted or rejected visa applications.
In the US some immigration officials have been known to act on personal bias instead of carrying out their department’s policies. It wouldn’t surpise me if some would someday deny entry to renunciants. The officials might get fired for it (or maybe get transferred to a different location where they get different victims). However, the individual victims who get denied entry have to spend the rest of their lives applying for visas even for B-1 / B-2 categories even if they come from visa waiver countries and have impeccable histories.
Of course that doesn’t affect condors that we should properly ignore. It doesn’t affect IRS employees who get rehired after having been fired for malfeasance, either.
The condor says:
‘Giving up citizenship is a drastic step when compliance is so easy. It is like amputating your arm because you have a hang nail.’
If compliance were easy, the IRS’s Taxpayer Advocate wouldn’t have reported to Congress in 2011 that thousands of honest taxpayers were forced to give up US citizenship because they get penalized for being honest. It’s like amputating your arm because the IRS has driven over it with a steamroller.
‘Feel free to give my name to any individual who wants to become legal’
Maybe some readers of this blog will want to become legal. They can get the condor’s name by reading it here. Please feel free to post the name.
Patricia: I heartily agree with Norman’s final sentence: give us the name and contact information of this wretched carrion eater. You’d only be doing exactly what he asked you to do. You can even inform him:
“Sir, upon further reflection, I have happily posted your name, along with your message, on a popular expatriate website where everyone wants very badly to, as you put it, ‘become legal’. No need to thank me.”
The response that he receives is out of your hands; you leave with a clear conscience.
P.S. When I say most of us here want to “become legal”, I mean we wish to do so by seeing these obnoxious laws repealed, torn up and stamped and spat upon, not by surrendering to them. But he doesn’t need to know that.
We’re already legal. More legal than the US, under international law.
Illegal IGAs, tax haven states, tax treaty overrides… don’t get me started!
Great response, Patricia! I think your sister is right; a copy of his email and your response should go to the appropriate board. He’s dangerous!
Great response Patricia!
There’s another one on quora that uses similar language and insists that Americans abroad are enjoying US citizenship without paying for it, freeloaders. He also insists that compliance is easy, because he does it for expats for a living.
It’s all very confusing because both cannot be true, if he thinks it’s easy then he cannot have much experience of doing taxes for overseas Americans.
He also appears incapable of understanding that these are the residents and citizens of other nations and that the USA has no damned right to a single cent.
And yea, I do wonder what it is that Cheryl, my local bar lady is enjoying about her US citizenship. As far as I can tell, it scares her to death and she wishes it would just go away.
People such as a the one that wrote that letter are bottom feeding scum-bags, nothing more and nothing less. They know full well they are profiting from the immoral actions of the USA and that they are ruining lives.
If he truly does taxes for overseas Americans then the only reason he says compliance is easy is to suck them in, because he would know the result.
Bravo Patricia Bravo. I thought you had a very well reasoned and respectful response even though it certainly felt like the individual who wrote you was far from that.
Cheers.
Rocky
Jeez, that boils the blood. Glad I didn’t get that kind of balderdash.
“You are one of the very reasons that FATCA with its harsh penalties was implemented.” No. US RESIDENTS are the reason, that moron should know. One does not make such a law to go after people who, as they say, owe no tax!!!!!! Because it’s about tax evasion, and WE DON’T EVADE TAXES. What a know-nothing.
These people seem incapable of understanding the absurdity of citizen-based-tax-filing when you RESIDE elsewhere.
Also, “compliance is easy”: Malarky!! It’s impossible to comply, often. And also absurd and pointless! And much more risky and punishing than complying.
Thanks for sharing. Kudos for your measured response!
Thank you for sharing this. I have an acquaintance who went to an info session put on by the ‘compliance condors’. I will point her to this example of why they’re called ‘condors’. Bravo to you for your response. You are a better person than me!
Patricia,
Words cannot convey my thanks on behalf of so many of us for your response to this purveyor of US exceptionality while (s)he baits the uninformed into the US tax compliance industry that has taken residence in countries outside the USA.
Thanks for sharing in this post on Brock!
I rather wish I’d received that. Very restrained answer.
Apropos condors, reminder that we should be periodically checking this for events to disrupt:
https://moodysgartner.com/learning-tax/
Here’s the current schedule:
North America
June 13, 2018 | Winnipeg Seminar | US tax reform is here—is now the time to give up your US citizenship?
June 14, 2018 | Ottawa Seminar | US tax reform is here—is now the time to give up your US citizenship?
June 15, 2018 | Montreal Seminar | US tax reform is here—is now the time to give up your US citizenship?
June 16, 2018 | Toronto Seminar | US tax reform is here—is now the time to give up your US citizenship?
Europe
May 26, 2018 | London Seminar | US tax reform is here—is now the time to give up your US citizenship?
May 30, 2018 | Berlin Seminar | US tax reform is here—is now the time to give up your US citizenship?
June 2, 2018 | Zurich Seminar | US tax reform is here—is now the time to give up your US citizenship?
Upcoming webinars
April 26, 2018 | US tax reform is here—is now the time to give up your US citizenship?
May 10, 2018 | US tax reform is here—is now the time to give up your US citizenship?
None of those work for me, unfortunately, but it would be fun for others to attend if if they can. The webinar on the 26th is full, on the 10th I will be in the wrong time zone but might still try to attend, under a pseudonym so I’m not black-listed before I can show up to one in person. Given the rate they’re doing these road shoes, it’ll be this year sometime.
The two questions I would ask in public are:
1. Please confirm that it is not necessary to be tax compliant when renouncing US citizenship.
2. Please confirm that the income and assets of dual citizens in Canada are not subject to any form of US collection.
Way to go, Patricia! Thank you for taking the time to respond to this obnoxious compliance pusher. I agree they should be reported.
I nearly choked at the “compliance is easy” statement. Easy?! If it’s so easy, then why is it so costly? Makes one wonder how they can justify charging hundreds, even thousands, of dollars for a simple little tax return, no?
@Japan T
“What benefits of USCship do we enjoy overseas!? The first murdered by hijackers and terrorists after they collect our passports?”
Ha ha! Of course, you know the slogan, “America First”.
BRAVO! I am also renounced but continue to follow this website and you for the information given that can not easily be found elsewhere. Thank you.
“I have been practicing in the international tax area, specializing in US expatriates, for over 31 years.”
You have to wonder how many victims his so-called “practice” financially crippled during his 31 year career.
@Nononymous
3. Please confirm that not filing US tax returns or FBARs is not against the law in Canada.
@Maz
Good point.
I have these guys in my sights, but unfortunately the timing has been off for a both online and in-person seminars.