A new resource on all the issues faced by expats, #AmericansAbroad, #AccidentalAmericans, #US persons, et al:
FATCA: Citizenship-Based Taxation,
Foreign Asset Reporting Requirements and
American Citizens Abroad
I don’t think there is anything else which is so extensive or thorough. This is brilliant research and gives reference to many, many court cases. Definitely a resource we are fortunate to have. (Brock SWAT to compliance community: “Watch out!”)
Thank you Andrew Grossman!
It is permanently located on the sidebar at Brock under the Important Information box – Introductory and Essential Material on CBT, FATCA, Citizenship Issues.
““That already being the reality, having us sign a W-9 is not a big step at all.”
Signing a W-9 means the person confirms they’re a US Person. True for a USC and a person who has spent more than whatever number of days in the US. Not true for a non-US-citizen non-US-resident person, even one who owns a US asset.”
But still true for USCs. Banks are not going to get involved in a dispute with the US over who is or isn’t a USC. If they have reason to suspect you are and fear the fine for not reporting you a/or having you sign a W-9, you’ll have to sign it or lose your account, or worse, have it frozen.
Pulling the fire alarm when there is a fire is not scaremongering.
The scariest part of this is that not enough people are taking action to put out the fire nor alert others of it.
JapanT, you seem to be eager to frighten people. Why?
A person with a US citizen parent doesn’t need to be afraid of having US citizenship imposed on them against their will. They’re not a US citizen unless they claim to be entitled to US citizenship AND can prove their entitlement.
Don’t let anyone scare you into living in fear for no good reason, children of USC parents.
actually I was thinking of it more along the lines of a court case. Has the situation occurred where the US government would say ” you are a citizen” and the argument would be “no I do not accept citizenship I ” I understand there are better arguments regarding this than my notion of constructive expatriation – this just being perhaps an additional argument. It seems to me the court rulings only address half an issue – that of wanting citizenship. How would the court rule for someone who does not want citizenship? And I came close to being scared into a plan of action where I was to claim my citizenship – file- then renounce. Now my line in the sand is I am not – and if you try to make me – then I will see you in court.
UnAmerican. The point is moot.
I haven’t heard of any case in which the US tried to impose US citizenship on a person born abroad to a USC parent. I don’t see why they would even want to.
Impeding the loss of citizenship is a different matter. They can do that easily, and have reasons for wanting to.
@plaxy, I think UShomeland tax law compliancers that might contribute to “…. scare you into living in fear for no good reason, children of USC parents.”. Even those here in Canada.
The USexportedUStax lawyer I was desperate enough to hire here in Canada was interested in the status of my Canadian born offspring, and his initial friendly tone took on a distinct change during a conversation about my US tax and information reporting situation – to what I interpreted as disapproving and disbelieving when I told him that I did not qualify with sufficient years of US residency to pass on US status (and that therefore my offspring had no US tax problem and that I had none in relation to them). He stated that I was ‘skating close to the line’ – with no information or basis to claim that. He then extolled the future US opportunities open to my offspring if they were a USC. What was strange and singular about it was that I did not even have any co or signatory powers on their Canadian RESP or birthday savings account, so it held no relevance what so ever to the US tax, FBAR and 3520/A liability discussion that was the focus of our professional conversation. I and only I (my parents were already long dead) knew personally how long I actually lived in the US (only a few years) and at what ages. There was no way for the US to know of my offspring’s existence, and no way for the US to even attempt to prove that my offspring could even potentially qualify as a USC via my parentage. As I had never even tried to register them with the US – the US would not even be aware of their existence or of any potential status. I had to be firm in stating that I had done my research, and that I was certain that I did not qualify to transmit the US status and that I was willing to put that formally in writing if I ever had to. That ended that line of questioning but was very unsettling. If my offspring had inherited my status, they too would have had a US compliance problem. I was greatly relieved when I determined for myself that they could not qualify as a potential USC.
In my opinion, the same lawyer’s tone indicated that he also did not approve of my goal to become compliant and then to formally renounce/relinquish my US status. Ironic that now there is active marketing of services related to facilitating renunciations.
Just to add that at a US tax info session sponsored by DA here in Canada (but open to non-DA members), a young audience member recounted her attempt to become compliant by coming forward via the OVDI – something she stated her USC Canadian dual parents attempted to dissuade her from. She stated that the IRS had been very unpleasant rather than respecting that she was trying to comply once she had heard about US extraterritoral CBT in the media.
To this day I hope she managed to extricate herself, and that the other audience members who spoke up about their fear, their anxiety, the expense of complying which they could not afford on modest or limited incomes (as a senior, parents, etc.), their confusion about what compliance entailed, and for those who contacted the IRS re participation in OVDI found some kind of peace and support. One audience member highlighted the existence of the Taxpayer’s Advocate services – which the DA and the tax compliance representatives had not.
I truly hope that most escaped relatively unscathed and did not listen to the US threats and intimidation and exhortations (helpfully relayed extraterritorially in 2011 by the CBC and other Canadian media) to ‘come forward’ via unwarranted and unjust OVDI.
Wish resources like this one and IBS had existed when I first had my ‘OMG’ moment in 2011 – driving back from dropping my Canadian child to school – listening to CBC.
badger – yes, perhaps you’re right, it stems from the condors. I wonder if they transmit condorhood to their offspring. 🙂
I didn’t run into that particular bit of scary-scary, (though I did take the precaution of warning my children to look puzzled and say no, if a banker ever asked them the Question). I get the impression the condor infestation is less severe in Europe than in Canada.
The OVDI stories are grim. That was over, by the time I learned that America was telling the banks to treat me as a criminal suspect. I was lucky, in coming to it late.
Given that my daughter ignores everything I say, even on the subject of her US citizenship w/out birthplace, I suspect she will have an easy time of it appearing genuinely confused if the question is ever asked of her.
🙂
@Plaxy
“JapanT, you seem to be eager to frighten people. Why?”
It is similar to informed consent. One can not be fully informed if they do not have all the information, including risks.
Let’s take the law as it as, though not enforced, on passport usage. As an example, let’s use a family which consists of the following, father a USC, mother a Japanese National (JN), children also JNs but would considered USCs in the US. Now let’s say they are traveling overseas from Japan and transit through the US. Wife and children get an Esta to enter and stay during a 6 hour lay over, as currently required. US immigration lets them in but do let the children leave without an American passport which they do not have.
The mother can not stay in the US as she does not have a visa nor esta allowing her to stay. The father, being without home nor employment in the US can not possibly be capable of providing for his children, so in sweeps Child Protection Service (CPS) to save the day.
The End…of that family.
That is how the law stands now. The fact that it is not currntly being enforced should not be taken to mean that it will not be enforced. Again, just look at FBAR.
One needs to know how great the risk is as well as the rewards of going to the States with a non US passport when the US lays claim to you.
Some may ask, “But how will they know if these children are USCs?”. Four people on the same flight, embarking at the same place with the same destination with the same non Japanese family name, purchased at the same time with the same credit card, doesn’t take a genius to figure that one out. Hell, even immigration guards can do that.
@Plaxy
Scaremongering? Not I. But I can tell what is scary, making the third visit of my life to the embassy in Tokyo for my passport. The first time as quick and easy as one could wish. The second visit much more difficult and expensive than the first and the last extremely troublesome. Just to get an appointment took 5 months of trying, when I finally got an appointment it was just DAYS before my passport expired. With my wife pregnant and several new jobs set to start that month, that was scary.
Finding on the application for my passport renewal this last time, statements about needing to provide SSN so that it can be shared with law enforcement and the IRS (illegal, or at least was back when I had to sign all those privacy act statements in the service) and learning that I should have been filing, despite the IRS making it impossible for me to do so, is scary.
Learning that due to not being able to file, the FEIE can not be applied and that I am now in fact delinquent paying taxes I can not afford to pay, is scary.
Learning that I must report assets that do not even belong to me to law enforcement every year without a warrant, propable cause nor even the suspicion of a crime is scary.
Learning that after the democrats failed at least three times to pass a passport revocation law, republican Orin Hatch managed to slip it in a bill that was passed is scary.
Knowing that one need not owe taxes, that penalties for not filing are enough (if over a certain amount) to lose one’s passport is scary.
Learning that despite being told that my banks will not be sending my data to the US (Plaxy, you might have been one of the many who told me this.) that not only will my new bank do so but that my other banks have been reporting my data to the US for the past four years is scary.
To learn that the only solution or solutions cost tens of thousands of dollars when at the end of each month I have less than $20. is scary.
Learning that there is zero attempt to varify that the delinquent taxpayer is the one who actually owes the tax when I am at least a four time victim of ID theft is FUCKING TERRIFYING.
Knowing that at least two of these have occured because the US Government can’t bother itself to secure the data it has on its service members and veterans is scary.
Learning that a wild monkey in the jungle has standing in US courts while USCs and former USCs do not is scary.
Learning that our last, great hope is focused on “saving citizenship” and offers help only for those rich enough to be in compliance is scary.
The fact the founding principle of “No taxation without representation” has been thrown out the window and replaced with taxation of and reporting by all is scary.
Learning that the solutions looked at by the legislature require retroactive compliance and taxation even without a taxable event, is scary.
Learning that “tax avoidance” is treated the same as “tax evasion” is scary.
To learn that the only solution or solutions open to me will take years of study and cost tens on thousands of dollars when at the end of each month I have less than $20. total in my various bank accounts is scary.
Well at least you have sake to dull the anxiety.
@Nononymous
No, work, which does a great job until the news or comments of “Don’t worry, be happy” given by some here bring my back this issue.
@ND
Found it, thanks.
JapanT – ““JapanT, you seem to be eager to frighten people. Why?”
It is similar to informed consent. One can not be fully informed if they do not have all the information, including risks.”
And including information about what is not a risk. unamerican doesn’t need to live in fear of the US trying to impose US citizenship on him/her.
@plaxy
“JapanT – ““JapanT, you seem to be eager to frighten people. Why?”
It is similar to informed consent. One can not be fully informed if they do not have all the information, including risks.”
And including information about what is not a risk. unamerican doesn’t need to live in fear of the US trying to impose US citizenship on him/her.”
But they do have to worry about having their financial data shared with the US if they live in Japan and other countries with similar family registeries. They must also be wary of traveling to the US with children of mixed US and any other nationality on their non US passport.
You keep asking “Why I want to scare” people. I’ll tell you. If I hadn’t listened to those who gave the same advice as you give here, I could have avoided this altogether. Instead, I took the same advice you give and ignored filing requirements and am now in a mess. True, I stopped filing due mainly to the IRS requiring me to provide point exchange rates for my income with huge fines for errors, but when I factored in the risks and benefits, the fact that I lived overseas played big in my determination that as long as I contined to live overseas, no harm. I could have and should have just returned to the US and a whole hell of a lot of shit could have been avoided. Now I learn that my banks have been reporting me to the US for four years, and all the rest. Yet, there you and others are offering up the same old advice that I, in my foolishness, followed all those years ago.
I am trying to warn others to continue to dig deep, really deep into the current situation, how it came to be and what the US and the countries they live in are doing in preparation for the future under FATCA, FBAR and USC based taxation.
While most may be currently free of much of the risk, it is likely that many will find themselves trapped as I am if they are complacent. Your advice invites complacency.
“But they do have to worry about having their financial data shared with the US if they live in Japan and other countries with similar family registeries.”
unamerican hasn’t mentioned Japan-style family registries.
“They must also be wary of traveling to the US with children of mixed US and any other nationality on their non US passport.”
unamerican is not a US citizen, so his/her children (if any) are not US citizens.
“While most may be currently free of much of the risk, it is likely that many will find themselves trapped as I am if they are complacent. Your advice invites complacency.”
I certainly do think people are better off not worrying unnecessarily. People who have a USC parent don’t need to worry about the US imposing US citizenship on them.
@plaxy
“People who have a USC parent don’t need to worry about the US imposing US citizenship on them.”
I am not speaking to unamerican only, I am also responding to statements such as that quoted above.
Here I will quote from the essay all these comments are about.
“The principle of FATCA and the Intergovernmental Agreements is to privatize enforcement by forcing foreign financial institutions to report the activities and assets of U.S. Persons.”
If one is only looking at what the US can and can not directly do, you may be blindsided but what your FI does, a point I have made here many times.
Further, “The Foreign Account Tax Compliance Act (FATCA) enacted by the HIRE Act of 2010 (Pub. L. 111–147, 124 Stat. 71, March 18, 2010, H.R. 2847) led to a web of Intergovernmental Agreements (IGAs) with virtually every foreign country providing for reporting to the IRS of accounts held by presumed “U.S. Persons” with foreign banks, brokerages and other financial institutions. “
Note the “presumed “U.S. Persons”. Regardless of what the IRS can or can not do with this data, with the known track record of the IRS’ ability to keep such data secure, the risk of ID theft is unacceptable. USCs and US Persons will have their personal financial data compromised and so will non US Persons. Not all, but that will be of little consequence to those who have had their data let out into the open. There will also be people in the country where any one USC, US Person, former of either or both and those mistakenly reported as such live, waiting to use the data being shared for their own nefarious purposes and will find ways to get it once local FIs have separated “presumed “U.S. Persons” data from the rest of their clients’ data.
As far as what he US is doing or trying to do, “Compare Rev. Rul. 92-109, 1992-2 C.B. 3: “Regarding the taxation of former and reinstated U.S. citizens, it was determined that individuals who lost their U.S. citizenship and then had it retroactively restored before January 1, 1993, will not be held liable for federal income or gift taxes as U.S. citizens between the date they lost their citizenship and the beginning of the taxable year in which the citizenship was restored.” This is extrastatutory, but it implies forced reintegration of those expatriated under former law.”
Notice “it was determined that individuals who lost their U.S. citizenship and then had it retroactively restored “. That is extraordinary, as is this, “This is extrastatutory, but it implies forced reintegration of those expatriated under former law.” These should not be ignored. Do you think that this policy will stay as it is? Get better, perhaps? Or worsen? Hey, just a one and three chance of it getting worse, forget about it and sleep tight.
Oh, non USCs who spend 183 days over a 3 year period aren’t USCs either. Guess they have nothing to fear over their financial data being shared with the US?
The US can’t impose US citizenship on anyone, and, obviously, nor can a bank.
The US birthplace equals US citizenship unless the person can prove otherwise.
A person without the US birthplace is fine, and does not need to worry.
“The US can’t impose US citizenship on anyone, and, obviously, nor can a bank.
The US birthplace equals US citizenship unless the person can prove otherwise.
A person without the US birthplace is fine, and does not need to worry.”
True, a bank can not impose US Citizenship on anyone, but they can report a non USC as a USC, or even as a US Person.
Also, a bamk can close or freeze the account/s of suspected US Persons, as have been documented. I answered your question about why, which you have not responded to, please answer mine, why is losing bank accounts either by closing or freezing a non issue to you?
Can the US impose USCship one anyone, if it has been reinstated in any manner by any name as mentioned in the article, then not only can they, they have.
@Plaxy,
Let me ask another question, why is the sharing of personal financial data with a entity that is a known leaker of no concern to you?