My last post was in early July 2025 and I ended with:
My next post will discuss the “Trauma” that continues to be experienced by individuals living outside the United States when they are forced to deal with the U.S. tax system. (In fact, as recently as yesterday I spent two hours talking somebody “off the edge”.)
Prologue – August 2011
Today is August 25, 2025. This coming weekend is Labour Day weekend. It was almost 14 years ago to the day that many U.S. citizens (and some former citizens) in Canada and around the world were feeling pressure to enter into the 2011 OVDI (“Offshore Voluntary Disclosure Initiative”). Additional information about the 2011 OVDI program is here. The deadline was August 31, 2011. Because of hurricane Irene, the deadline to enter OVDI (and the time to make the difficult decision) was extended to September 9, 2011.
What exactly was the decision to be made? The IRS, the Media and the tax compliance community were sending the message that:
- U.S,.citizens (regardless of where they live in the world and regardless of their filing history) were on the verge of receiving enormous, life altering penalties (and possibly more) for the failure to comply with laws that they didn’t know existed (example FBAR, Form 5471, Form 3520, etc.)
- They could save themselves from these enormous life altering penalties by agreeing to offer a substantial percentage of their net worth to the IRS in exchange for the IRS not imposing penalties that would facilitate the confiscation of a substantial percentage of their net worth.
To put it simply: Americans abroad were being offered the opportunity to commit suicide to avoid dying!!