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.
“Can the US impose USCship one anyone”
No. The US doesn’t need to impose citizenship on persons born in the US, since they’re US citizens by birth whether they like it or not.
Naturalized citizens have asked for citizenship, and citizenship has been granted, not imposed.
If one has given up,USCship and then had it reimposed, then US the US has imposed it upon them.
But, your focus is much too narrow, much like a laboratory environment versus the real world application. One need not be a USC to have their data sent to the IRS by their bank. One need not have the IRS act to have their whole destroyed on account of this data being collected and shared.
If the IRS does nothing but their bank closes their accounts or freezes them, regardless of citizenship, they are in a world of hurt.
You know, plaxy, you seem to follow Judge Rose’s line of thought, if in is not a consequence envisioned by the Congress, it does not exist. We should all agree that that is false.
“In the modern age of mass data collection there are bound to be false positives. The false positive rate in selection for audit generally rose to 66% in 2017.”
This is emcouraging, not.
“If one has given up,USCship and then had it reimposed, then US the US has imposed it upon them.”
No – the US has restored citizenship.
Persons born outside the US are not US citizens unless their entitlement to US citizenship is claimed. Here’s a link to the evidence that has to be provided to prove the entitlement:
https://au.usembassy.gov/u-s-citizen-services/citizenship-services/claim-u-s-citizenship/
If it is reinstated against their will, it is imposed.
Oh, so I can take the info provided in the link to my Japanese bank and release my Japanese children from having their financial data shared with the IRS?
“If [US citizenship] is reinstated against their will, it is imposed.”
A person born outside the US is not a US citizen unless citizenship is claimed and successfully proved; consequently s/he does not need to be anxious about US citizenship being restored or reinstated, since s/he has never had it.
Great! So I can take that to my bank here in Japan and free my children from having their bank data given to the US, a foreign power?
You are good at asking questions but not doung well today at answering them.
“Oh, so I can take the info provided in the link to my Japanese bank and release my Japanese children from having their financial data shared with the IRS?”
Are your children US citizens? Have they been registered as US citizens born abroad? Do they have US passports?
“You are good at asking questions but not doung well today at answering them.”
You’re not asking questions, you’re trying (unsuccessfully) to insist that my children are US citizens and should be living in fear of the US. They’re not and they don’t.
No to all those questions. However, as you refuse to acknowledge, their parental lineage is recorded in their family registry which is not easily accessed via the new “My Number” sysrem in Japan. The citizenship, place of birth etc. of both parents are contained in the family registry. As one must present the family registry for most official transactions and as it is now a part of the My Number system, my banks, their mother’s bank and their banks all know that their father is a USC.
As Japanese banks are already, at this very moment are reporting all info they have on US Persons, including Japanese citizens to the IRS and have been for four years, you can bet they will be reporting and/or are reporting my children to the IRS.
Why do you continue to ignore the actions of non US gov. entities in regards to presumed US Persons? Why are you afraid of leaving your cocoon spun of what the US can or can’t do. They are the driving force behind all this but they are not the sole actor.
“No to all those questions. ”
Then they’re not US citizens.
I’m sorry your children’s financial information is being reported to the IRS; it doesn’t turn them into US citizens.
That doesn’t matter. Why are you fixated on one tiny facet of all this and ignore everything else. Besides, if they go to the US, the US says they are USCs.
How about this? In a completely unrelated article I read recently, I was reminded that until rather recently, Japanese nationality (JN) was not granted due the mother’s nationality but only the father’s. Meaning that if one’s father was a USC and their mother a JN and they were born in Japan, they could not be a JN. So, what are they, stateless? Doubt they would be thus treated by any entity in Japan.
It does not matter if one is or is not a USC or a US Person. All that matters is how one is treated by their local FIs, employers, etc. If they are treated as a US person, then they will have they private financial data out un the wild for all to see, use and abuse. That is by far worse than having the US claim you as a citizen for you are now completely open to abuse not from the US, the IRS in particular, but also bad folk in your own country and around the world. Yet you still insist that there is nothing to fear.
“You’re not asking questions, you’re trying (unsuccessfully) to insist that my children are US citizens and should be living in fear of the US. They’re not and they don’t.”
No, I am not. I am saying that they should have a healthy dose of fear over having their data shared with the US. And if your/their situation is currently less risky than others, that does not mean that others should not be fearful of the consequences of US actions.
I have stated over and over and over again, I personally have no fear of the IRS. No matter how hard they try, they can not squeeze blood from a stone. What I do fear is bad guys getting a hold of my and my family’s financial data and using it to our detriment. What I fear is my banks either closing my accounts or freezing them. What I fear is my children not being able to attend good schools, land good jobs or even find a spouse due to the unhidable fact (given our new id system) that they are born of a USC.
Non of these actions will carried out by the US. They will be carried out by our banks and criminals based anywhere in the world. The US however causing our banks to report us and thus expose us to these risks, but it is our local institutions acting to limit their risks that is what is of primary concern. All must be vigilant towards what their countries and FIs are doing if they are to remain safe.
‘Meaning that if one’s father was a USC and their mother a JN and they were born in Japan, they could not be a JN. So, what are they, stateless? Doubt they would be thus treated by any entity in Japan.’
If the father didn’t live in the US long enough to transmit the infection to the children, they would be stateless. The Japanese government does indeed issue stateless persons’ documents to stateless persons.
…
‘I have stated over and over and over again, I personally have no fear of the IRS. No matter how hard they try, they can not squeeze blood from a stone.’
The IRS can revoke the stone’s passport. We don’t need to have the kind of fear that condors instill, but we’re right to have some amount of fear.
“‘Meaning that if one’s father was a USC and their mother a JN and they were born in Japan, they could not be a JN. So, what are they, stateless? Doubt they would be thus treated by any entity in Japan.’
If the father didn’t live in the US long enough to transmit the infection to the children, they would be stateless. The Japanese government does indeed issue stateless persons’ documents to stateless persons.”
True, but if the father has lived in the US long enogh to transmit the USC infection to their children?
Actually, I do fear the IRS revoking my passport. That can happen regardless of actual taxes or penalties owed. False positives for audit by the US are now 66%. Can just image what is in store for USCs with lives overseas you are “false positives” for passport revocation, especially with the huge problem of ID theft. One could be 100% in compliance (assuming such a thing is even possible) and still lose their passport and thus family due to a false positive or ID theft. Being a victim of ID theft makes one very nervous regarding such things.
“False positives for audit by the US are now 66%.”
If they audit you, there are ways to appeal administratively. But wait, do you mean 66% of people they choose to audit are found to have no problem or that 66% of results of audits are falsified by IRS employees?
One of my problems of course is that the IRS refused to audit. I tried to force them to audit and they still refused. There is no appeals process for that. A court denied my motion to try to force them to audit.
The former Revenue Canada sent an auditor to my apartment, found I did everything right, and that was the end of it. Japan’s National Tax Agency sent auditors to my employer (about my return not my employer’s return), found I did everything right, and that was the end of it.
JapanT:
“No, I am not. I am saying that they should have a healthy dose of fear over having their data shared with the US.”
No need, as they’re not US citizens.
“And if your/their situation is currently less risky than others, that does not mean that others should not be fearful of the consequences of US actions.”
Indeed it doesn’t. US citizens have good reason to be terrified of the US. The whole world has good reason to be terrified of the US; but US citizens – especially in IGA 2 countries – are particularly vulnerable.
True but an over simplification. It doesn’t matter if one is not a USC if they are treated as a USC by the country they live in or the FIs they use.
Countries that have registry systems such as Japan’s will know who is born of USCs and when presured are likely to treat such as USCs. Again, anyone living in Japan who has spettoo much time in the US are currently having their banking data sent to the US. Not a citizenship issue in these cases. If my banks will report 100% Japanese by blood to the US you can bet on them reporting on the offspring of USCs based solely on the fact that one or more of their parents is or was a USC.
But even in countries without such registry systems, false positives will happen. But even without these, let’s look at Canada. At first Canada was not going to sign the FATCA IGA. But then they did. One wall breached. Then “A Canadian is a Canadian is a Canadian”…except those born in the US even if they are now Canadian. Second well breeched. Not so sure that the Government of Canada even really defened either of those walls, but boy are they defending themselves from the lawsuit, aren’t they.
Don’t let complacency do you in.
@plaxy
Put a different way, you are depending on something happenening which we have not seen, Canada defending Canadian citizens from the US while ignoring what we have seen, Canada caving to the US and allowing Canadians to be victims of the US.
Not a wise position to take.
“It doesn’t matter if one is not a USC if they are treated as a USC by the country they live in or the FIs they use.”
Those are two separate factors. A person who is a USC may or may not get treated as a USC. In IGA 2 countries it is apparently more difficult for a USC to “pass” as a non-USC; in IGA 1 countries it’s easier; and in Canada it’s reportedly a piece of cake.
A person who is not a USC may or may not get wrongly treated as a USC or US Person. In IGA 2 the risk is apparently quite high; in IGA 1 countries, the risk is much lower but may cause disputes with the bank.
A person who is not a USC may or may not get treated as a USC
“Not a wise position to take.”
Sorry, I don’t follow? You think I’m doing something risky? Could you be more explicit? What would you advise me to do?
If you want to help people by warning them, you first need to understand their situation and what risks are real, for their situation, and what risks are not real, for their situation.
Most people – even USCs – aren’t going to be in exactly the same situation as you, so warning them of the difficulties you face will not be helpful. Likewise, ominous warnings about what tomorrow could bring are not helpful, since you know no more about that than the rest of us.
@plaxy
“It doesn’t matter if one is not a USC if they are treated as a USC by the country they live in or the FIs they use.”
Those are two separate factors. A person who is a USC may or may not get treated as a USC. In IGA 2 countries it is apparently more difficult for a USC to “pass” as a non-USC; in IGA 1 countries it’s easier; and in Canada it’s reportedly a piece of cake.
A person who is not a USC may or may not get wrongly treated as a USC or US Person. In IGA 2 the risk is apparently quite high; in IGA 1 countries, the risk is much lower but may cause disputes with the bank.
A person who is not a USC may or may not get treated as a USC”
These are different facets of the same problem. If the US wasn’t coercing our FIs to track down US Persons at their expense, then it really wouldn’t matter if one were treated as a USC by their bank even if they were not. There would be no need to treat USCs any different from anyone else.
As long as FIs play by Washington D.C.’s rules, non USCs tha have even a shadow of a possible connection to he US are at risk.
Banking disputes are not nothing, especially if they involve closed accounts, recall mortages and/or frozen accounts.
I said:
“A person who is not a USC may or may not get wrongly treated as a USC or US Person. In IGA 2 the risk is apparently quite high; in IGA 1 countries, the risk is much lower but may cause disputes with the bank.
JapanT said:
“Banking disputes are not nothing, especially if they involve closed accounts, recall mortages and/or frozen accounts.”
They don’t, in IGA 1 countries.
“These are different facets of the same problem. ”
Exactly. The risks are different, depending on whether the person being wrongly treated as a USC lives in a country with an IGA Model 1 agreement or a country with an IGA Model 2 agreement.
“JapanT said:
“Banking disputes are not nothing, especially if they involve closed accounts, recall mortages and/or frozen accounts.”
They don’t, in IGA 1 countries.”
Not YET. Not that long ago Canada said it woukd not report the financial data of Canadians to the US via FATCA. They are now, aren’t they? Before that, Canada said it would not had over sovereignty to the US by signing a FATCA IGA, but they did, didn’t they.
“There can be anomalies in cross-border collection: Van deMark v. Toronto-Dominion Bank, 68 O.R. (2d) 379 (Ont. H.C.J.) (Funds seized by the IRS from the U.S. branch of a Canadian bank, on the basis of transferee liability of the heir of a tax debtor, had nevertheless to be repaid by the bank to their Canadian depositor.)”
How long, how many times do you think Canadian banks are going to pay depositors’ debts to IRS? I would not hazard a guess on the number nor length of time but am confident that it won’t be forever. There will come a point when they have had enough and start weeding out problem accounts. Unless Canada stands up to the US and makes them stop. I hoping for the latter but am expecting the former. If not stopped, the US will cause Canadian banks to take actions to protect themselves from having to paying client tax bills.
“Not YET.”
And not ever. The IGA 1 agreement specifically requires banks not to close “recalcitrant” accounts; and IRS regs published last year allow the banks to retain “FATCA-compliant” status if the accountholder doesn’t supply SSN and W-9. So the disputes are about not being allowed to open some types of investment accounts. A problem for USCs, absolutely, and a factor in the rise of renunciations, but no more scary than other forms of AEOI.
As for Canada, I don’t live there, and as I understand it, neither do you, so it’s up to the Canadians – who seem to be going great guns, having a date for the court case and also, as a result of BB’s interview and Elizabeth Thompson’s article, opposition MPs actually speaking out in public on the subject of CBT. 🙂