Liberty and justice for all United States persons abroad

The Isaac Brock Society

Posted on by Posted in Issues regarding US persons abroad 78 Comments

The Quarterly Publication of Individuals Who Have Chosen to Expatriate for Q1 2018 has just been placed on public inspection for printing in Tuesday’s Federal Register, eight days later than required by 26 USC § 6039G(d). This is the seventh quarter in a row in which the IRS has been late with the list.

This quarter’s IRS expat honour roll has the names of 1,100 people who gave up US citizenship, by my count. (Andrew Mitchel counted 1,099. My initial count was 1,102, because I accidentally counted two very long names as four entries.) Meanwhile, the number of records in the “renounced US citizenship” category of the FBI’s National Instant Criminal Background Check System (NICS) increased by precisely 1,100 during the first three months of the year, from 42,693 to 43,793. (The FBI added another 341 records in April, bringing the total to 44,134.)

The IRS list is known to be incomplete. It’s supposed to be much larger than the NICS list, not exactly the same size, let alone smaller. Per regulations, NICS only contains people who terminated their US citizenship by swearing an oath of renunciation at a US embassy or consulate. In contrast, the IRS’ list is supposed to have the names of all people who obtained Certificates of Loss of Nationality from the State Department, either by swearing an oath of renunciation or by reporting any other relinquishing act specified in 8 USC § 1481(a). The preamble of the IRS list even misleadingly implies that it includes some of the tens of thousands of people who give up their green cards every year.

Demonstrating the point, this quarter’s IRS list still failed to include some public figures who gave up US citizenship more than a year ago, including Japanese legislator Kimi Onoda and Ghanaian Deputy Minister of Finance Charles Adu Boahen. However, Homelanders and their chieftains don’t care about that. They’re dissatisfied with NICS instead, so there’s some provisions in the new spending bill imposing penalties on heads of upstream agencies, including the State Department, if they fail to certify semi-annually that they’re providing NICS with all the records they should be. More about that below.

Increases in NICS transparency coming soon?

For the past five years, we’ve been relying on NICS to provide a baseline for comparison to the IRS’ expat honour roll, to try to see if the latter is honestly reporting the names of all ex-citizens. However, the State Department’s reporting of renunciants to NICS hasn’t always been particularly timely either: for example, in October 2012, State added more than three thousand renunciant records to NICS, but when Patrick Cain at Global News asked them about it, they explained that the State Department was clearing a backlog of about 2,900 records (though it wasn’t explained how long the backlog had been running). The FBI spokesman’s explanation of another large jump in the number of records two years later was even terser and less informative: State was “working on updating this file”, he said.

In short, up until now we’ve had no guarantee that NICS statistics are any more reliable than IRS statistics. But that might change, because chief spy diplomat-to-be Mike Pompeo’s bonus is on the line if it doesn’t. Section 602 of the Fix NICS Act of 2018 (Title VI of the FY2018 spending bill that got signed into law in late March) requires State to certify to the Department of Justice every six months, starting from 31 July of this year, the total number of renunciant records they have, the number they’ve submitted to DOJ for inclusion in NICS, and their plan to make sure the second number doesn’t fall too far behind the first number. The DOJ will also be required to make public a “summary of the data, broken down by department or agency, contained in the certifications”.

And, much unlike the toothless 26 USC § 6039G(d), which the “Internal” Revenue Service violates with impunity, there’s some actual penalties for not obeying this new law:

(I) NONCOMPLIANCE PENALTIES.—For each of fiscal years 2019 through 2022, each political appointee of a Federal department or agency that has failed to certify compliance with the record submission requirements under subparagraph (C), and is not in substantial compliance with an implementation plan established under subparagraph (G), shall not be eligible for the receipt of bonus pay, excluding overtime pay, until the department or agency—

(i) certifies compliance with the record submission requirements under subparagraph (C); or

(ii) achieves substantial compliance with an implementation plan established under subparagraph (G).

Conclusion

Formally relinquishing citizenship has become difficult to such an absurd degree that other countries’ legislators have started complaining. But actually complying with the US tax code while living abroad is impossible — and there is no reward for trying, only punishment.

Most self-identifying Americans abroad just pretend to comply by skipping the hardest forms and filing only the easy ones, which have the wrong numbers on them as a result. Some of these people will get very angry if you even inform them of the existence of those harder forms, and accuse you of lying about how hard it is to comply. The only way for them to preserve their faith in their civic religion is to ignore its more absurd doctrines.

And the other US tax subjects who don’t identify as “Americans abroad” — people who never realised they might be US citizens in the first place, and people who thought they’d stopped being US citizens long ago — are just doing their best to hide.

This quarter we have 1,102 names of people who couldn’t hide and couldn’t pretend to comply. Nearly $2.6 million of fee revenue for the State Department. But that $2.6 million is dwarfed by what accountants and lawyers — the privatised Inquisition of the Homeland’s civic religion — are earning from this whole mess.

78 thoughts on “1,100 names in late-as-usual IRS list of certain ex-citizens”

  2. There’s duplicated names on like every third page: pages 2, 3, 6, 7, 10, 12, 13, 17, 18, 22, 23, 26, 28

    This list keeps getting sloppier and sloppier. I suspect many of these are families where one family member’s name has been replaced with another. It’s clear there’s a lot of sets of spouses, siblings, or even whole families expatriating at once.

  3. Thanks #Eric, for keeping up with this and keeping us apprised. Re whole families expatriating, I wonder how much is related to them becoming aware of the effects of US extraterritorial CBT, of FATCA, GILTI, etc. and how it will burden them into the future.

  5. Thanks, Eric. I found 15 exact duplicates and one near duplicate — surname FANDRY versus FANDREY with same given name.

    You said, “This list keeps getting sloppier and sloppier. I suspect many of these are families where one family member’s name has been replaced with another.” I think it’s more likely they are double reports or just bad editing. It baffles me that they can’t check for duplicates themselves. It only took me a few minutes to scan the list and find them. For the employees it’s just a meaningless exercise, but it does keep them employed, and it seems that their supervisors don’t care how accurate it is.

  6. “It baffles me that they can’t check for duplicates themselves. It only took me a few minutes to scan the list and find them. For the employees it’s just a meaningless exercise, but it does keep them employed, and it seems that their supervisors don’t care how accurate it is.”

    Outdated OCR software perhaps. I don’t suppose anybody anywhere in the US Government cares whether it’s accurate.

  8. Eric, if you’re willing to listen to a question that I want to ask you, please get my e-mail address from Calgary411. She sent a message to what she hoped would be your e-mail address, but there was no answer.

  10. My guess is that it’s because most non-compliers don’t even have to renounce, they can just continue non-complying.

  11. Yup. Once you figure it out (assuming you live somewhere with no banking grief) there’s no reason to panic, no reason to spend the money renouncing or bothering with compliance.

  12. The implementation stages of FATCA have been completed. Banks have largely got the due diligence procedures in place. They’ve been through their existing customers and written the letters. The customers who need to know about FATCA, mostly know about it by now and have adjusted to the changed situation – some by renouncing.

  13. A door closed, when the Reagan administration put CBT in the passport. Permanent US tax-residence for the US-born got turned into something US passport holders were supposed to know about.

    FATCA turned it into something US citizens should have known about before they let themselves get born in America.

  15. Karen:

    “Three quarters of essentially 1100 per quarter looks a bit strange – especially after the previous volatility in numbers.”

    I expect the temp is expected to devote x hours per quarter to mangling y names per hour off the CLNs and onto the list, and x times y = 1100ish.

  17. Thanks, Karen, for alerting us to publication of the latest quarterly list. I peruse it like I do obituaries, trying to see if I recognize any of the names. Plaxy, you could be right about the “temp” (hah!) being the bottle neck, but I think it may have more to do with limits set by all the US consulates and embassies in accepting appointments to deal with renunciations. Clearly there is steady demand if this many people are willing each quarter to line up and pay the exorbitant US$2350 fee to get rid of their US taint.

    Despite the high income the US draws from this business, which should be enough to fund the production of a high-quality list, the preparer of the list still manages to make some amusing apparent mistakes. I haven’t spotted any of the usual duplicate listings this time, but one given name among the surnames starting with L is listed as a “Mr. Rabi”. It seems unlikely that “Mr.” is actually part of a given name.

  18. AnonAnon:

    “I think it may have more to do with limits set by all the US consulates and embassies in accepting appointments to deal with renunciations. ”

    Could be.

    “Despite the high income the US draws from this business, which should be enough to fund the production of a high-quality list, the preparer of the list still manages to make some amusing apparent mistakes.”

    It serves no purpose. Just an empty gesture of fruitless performative (intended) spite. No one probably ever even looks at it other than the recently renounced. 🙂

  19. plaxy, of course you are right: “It serves no purpose. Just an empty gesture of fruitless performative (intended) spite. No one probably ever even looks at it other than the recently renounced. ” I was being facetious in suggesting they could afford to produce a high-quality list.

    The purpose of the list still baffles me. Is it to “name and shame”, as some people have suggested, or is it to warn recent renunciants that the IRS knows who they are and that they had better “pay up”. In any case, it’s a small object lesson in bureaucratic inertia, and at least it provides jobs for some people and amusement for some of us..

  21. Correction: There is one pair of duplicate names, beginning with surname BA, and one name runs over two lines (three in my text file listing of the names). So now I count 684 different names on the list.

  22. I renounced last August, and am still not on the list. Was kind of looking forward to it as a badge of honour.

    This one was extremely late. Wonder if the shutdown had anything to do with it?

  25. 1,100 per quarter may indicate some kind of cap put on the amount of names that can be put on the list.

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