Author Archives: calgary411

Some may want to keep an eye on this October 2013 conference in San Diego which will focus on Canada/US/Mexico. One of the panels will have the Canadian Taxpayer Ombudsman, the US Taxpayer Advocate (Nina Olson), and the Mexican Taxpayer Advocate. Moderating that panel will be Roy Berg, Moodys Tax Advisors in Calgary.

From the Canadian Taxpayer Ombudsman, Government of Canada Taxpayers’ Ombudsman — Upholding Your Service Rights:

Information for Canadian citizens that are subject to American tax laws

Some of us (many of us?) may have been interviewed for this well-researched book and awaiting its publication.

Where Are Overseas Americans?
Who Are Overseas Americans?
Counting the Uncountable
How Many Americans Leave the United States in a Given Year?
Census Counts
Other Estimates
Counting Overseas Populations: An International Challenge

Dear Survey Respondents, dear Interviewees–

Thank you so much for your patience with me! Turns out book-writing is a long process. However, it’s nearly here! I’m delighted to let you know, if you haven’t happened across it already, that my book is listed on Amazon – although it’s not actually published yet.

… until the book is actually published, which is scheduled for January 2014. …

In the meantime, a colleague and I wrote this piece, which you might find interesting (the book expands on these points): http://www.migrationinformation.org/USfocus/print.cfm?ID=951

May 17, 2013

The migration debate in the United States — a country with a long history of immigration and currently home to around one-fifth of all international migrants — often focuses on the number of foreign born who enter and reside in the country. Much less focus is paid to Americans who live abroad. While small numbers of high-profile Americans such as Gertrude Stein, Ernest Hemingway, Richard Wright, or Josephine Baker have long captured the imagination of the American public for their adventures in Paris and elsewhere, there are millions more living lower-profile and very different lives.

The US government does not formally track how many Americans leave the United States, whether temporarily or permanently, meaning that one has to rely on estimates to get a sense of how many US citizens live overseas, in addition to the 289 million US citizens (out of the total population of 311.6 million) who live in the United States. As the Census Bureau reported to Congress in 2001: “No accurate estimate exists of the total number of Americans living abroad or of the other components of this population. At this time, we cannot estimate accurately the size of the universe of the overseas population.”

Despite efforts by American organizations and the US government to achieve more consistency, current estimates vary from 2.2 million to 6.8 million — a substantial range. This population’s size, characteristics, and distribution remain an enigma — as do their economic, political, and societal impacts both in the United States and abroad.

This article explores what is known about Americans overseas — common destinations, occupations, and motives for leaving the United States (and ultimately staying abroad) — and also examines the challenges of calculating the population’s size and distribution. It draws on a variety of sources, including the US Census Bureau, the US State Department, the World Bank, and a forthcoming study based on interviews conducted in 2011 with 115 Americans in Berlin, Paris, and London, and a survey with 884 respondents, based primarily in Western Europe.

As always, if you have any questions, please don’t hesitate to contact me.

My best regards,
Amanda Klekowski von Koppenfels

* Copyright @ 2002-2013 Migration Policy Institute. All rights reserved.
Migration Information Source, ISSN 1946-4037
MPI · 1400 16th St. NW, Suite 300 · Washington, DC 20036
ph: (001) 202-266-1940 · fax: (001) 202-266-1900
source@migrationpolicy.org

Bloomberg: Obama Chooses John Koskinen as Next US IRS Commissioner

President Barack Obama said he will nominate John Koskinen, former chairman of Freddie Mac (FMCC), as the next Internal Revenue Service commissioner.

Koskinen will be tasked with revamping the U.S. tax agency, which has come under intense criticism for giving extra scrutiny to small-government advocacy groups as they applied for tax-exempt status.

“John is an expert at turning around institutions in need of reform,” Obama said in a statement today. “With decades of experience, in both the private and public sectors, John knows how to lead in difficult times, whether that means ensuring new management or implementing new checks and balances.” …

Also:

Forbes: Obama Picks John Koskinen To Revamp IRS As Next Commissioner

Related, including documentation from Nina Olson:
Examining the Skyrocketing Problem of Identity Theft Related Tax Fraud at the IRS

Make sure your US social security number isn’t in the wind.

The IRS suggest care with this key number. Show your Social Security card to your employer when you start a job, the IRS says. Also show it to your financial institution for tax reporting purposes.

But in general, the IRS says you shouldn’t carry your Social Security card with you. For that matter, don’t carry other documents that display your number either. If your Social Security number is stolen, the IRS warns that someone else may use it to get a job. The unwitting employer may report the income to the IRS under your purloined Social Security number.

The IRS will assume when it sees that income reported to your number that you failed to report all your income on your tax return. Trouble will ensue. If you end up in this pickle, you can explain the fraud to the IRS and get our record updated. But you don’t want to go through this if you can help it. Be careful out there.

It has been my observation when in the US, people generally write a check more readily than using a debit card for such mundane purchases as groceries, etc., and it is common practice that their US social security number is inlcuded on their check. Boggles the mind.

I am going to follow the lead of Blaze from Maple Sandbox.

Blaze has congratulated Finance Minister Flaherty, by email, with copies to Kevin Shoom and others:

Congratulations on continuing as Canada’s Finance Minister.

I hope Canadian citizens and residents who were born in the United States can continue to count on you to ensure our rights under Canada’s banking, privacy and human rights laws are protected. I hope we can continue to count on you to ensure we have the same rights as all other Canadian citizens and residents to manage our finances with confidence and in privacy with our financial institutions without interference from a foreign government. I hope we can count on you to ensure we are not second class citizens in our country of choice. I hope we can continue to count on you to ensure Canadian Charter of Rights and Freedoms applies to all Canadians, regardless of their national origin or place of birth.

Please tell US they can’t FATCA Canada or Canadian citizens and residents. Please do it now.

Every Canadian here at Isaac Brock should think about doing the same. Can we even imagine educating a new Canadian Finance Minister on FATCA?

Many thanks to Steve Klaus for providing this visual of what ‘US Persons’ are being asked to do in one country. What happens if they don’t comply with this request? When will full page ads appear in our Canadian or other countries’ newspapers?

 NOTICE TO ALL U.S. PERSONS
REGISTERING OF U.S. PERSONS UNDER THE FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA)

The Foreign Account Tax Compliance Act (FATCA) is a U.S. legislation aimed at preventing tax evasion by U.S. Citizens and residents through overseas assets.  FATCA was signed into law on 18th March, 2010 by the U.S. Government and will come into effect in 2014.

FATCA is extra-territorial by design and requires “U.S. Persons” to report their financial assets held overseas.  It also requires Foreign Financial Institutions (FFIs) to report to the Internal Revenue Service (IRS) of the Unites States of America about their American/U.S. clients.  The law requires financial institutions to report more extensively on business they conduct with U.S. persons and introduce a new reporting and withholding  regime for FFIs.

Under the provisions oF the Act, the following criteria may classify you as a “U.S. Person.”

• A citizen of U.S.A. (including an individual born in the U.S. but resident in another country, who has not renounced U.S. citizenship;
• A lawful resident of the U.S. (including a U.S. green card holder);
• A person residing in the U.S.;
• A person who spends a certain number of days in the U.S. each year;
• U.S. corporations estates and trusts;
• Any entity that has a linkage or ownership to U.S. or to U.S. territories;
• Non-U.S. entities that have at least one U.S. Person as a “substantial beneficial owner.”

If you fall within the above criteria, please make arrangements to register yourself with your respective Bank/Bank Branch within two weeks of this notice in order to be in compliance with FATCA.

In order to fulfill the Bank’s obligations, your Bank may ask you to provide necessary information to establish whether you are a “U.S. Person.”

If you require further information, please contact your Branch Manager.

SRI LANKA BANKS’ ASSOCIATION (GUARANTEE) LIMITED

This newspaper notice was placed in a Sri Lankan newspaper last month by the Sri Lanka Banker’s Association, requesting the voluntary ‘registration’ of U.S. Persons with their banks to facilitate the identification of U.S. Persons under FATCA. The voluntary registration was, apparently, not required by the Sri Lanka Central Bank, and Sri Lanka has not (yet) publicly signed an IGA or waived Sri Lankan banking secrecy to allow banks to directly enter into agreements with the IRS.

Certainly, the notice for voluntarily registering oneself harkens back to 1939 for some of us, and exemplifies the positive discrimination that FATCA requires. The fact that many of the affected individuals are also Sri Lankan citizens, living in Sri Lanka, and under the protection of their own laws and government, does not factor in at all. Sadly, it also did not factor in to the governments of the U.K, Germany, Mexico and other countries that have signed IGAs either.

Here is a news article that Pacifica found regarding this:

US Citizens in Sri Lanka Asked to Register

“The Sri Lanka Banks Association (Guarantee) Limited today informed all United States citizens living in Sri Lanka to register themselves with their respective banks so as to comply with US legislation termed the Foreign Account Tax Compliance Act (FATCA). …”

…and badger asks:

Has Sri Lanka signed an IGA yet? If not, how can they direct US persons to go register with their Sri Lankan banks now?

The article says; “The Sri Lanka Banks Association (Guarantee) Limited today informed all United States citizens living in Sri Lanka to register themselves with their respective banks so as to comply with US legislation termed the Foreign Account Tax Compliance Act (FATCA)….”

I note that the entity directing US persons to do this is NOT the Sri Lankan government, or the US government, but a corporation – “…The Sri Lanka Banks’ Association (Guarantee) Ltd. is a Company registered under the Companies Act in Sri Lanka….”

On what legal basis can a Sri Lankan company direct ALL US persons or ALL US citizens in Sri Lanka to do anything on behalf of themselves or the US government?

I’m making this morning’s comments to another thread part of this separate post so more of those affected will realize there needs to be certainty for them about this issue.

From USCitizenAbroad, and I agree:

There is ONLY one clear answer from the USG that is acceptable and that answer is:

People born abroad are NOT automatically U.S. citizens.

This would clarify the position of the USG.

If they say:

People born abroad ARE automatically U.S. citizens – that is their position but it is (in my opinion) as a matter of law wrong. Eventually the validity of their position will be tested in court.

Now, what is more important than the clear position of the USG, is that the persons affected by this take a clear position on their own.

That clear position: I am not a US citizen and therefore NOT a member of their “Tax, form and penalty club”.

Finally, I would be very surprised if the Consulate writes back and says people born abroad are not automatically U.S. citizens.

Some people make things happen.

Some people watch things happen.

Some people ask “What happened”

By featuring this prominently it will force the issue. This is extremely important for FATCA IGAs (if they happen).

But if the IGAs don’t happen, the banks will probably enter into agreements with the IRS. Now, the question becomes:

Who are they looking for? If it is U.S. citizens then the ONLY question that is relevant is:

Were you born or naturalized in the U.S.?

If the answer is Yes, then the logical next question should be:

Have you relinquished your U.S. citizenship?

There is no other question that is even relevant.

We need keep a very close eye on this.

Now, of course IF THEY ASK THE ONLY RELEVANT QUESTION, the banks are moving closer and closer to HUMAN RIGHTS VIOLATIONS.

This is as my frustration abounds. I still have not gotten a reply from Sylvia D. Johnson from the US Embassy, Ottawa.

Nor have my comments to the “The Accidental US Citizen” blog gotten out of moderation: Comments Still Awaiting Moderation — Flott & Co. PC — The Accidental US Citizen.
Continue reading →

Moodys Tax Advisors Blog, July 4, 2013: Blog Renouncing your US citizenship: New law may keep you out forever! by Alexander Marino JD, LLM (US Tax)

…
Under the proposed amendment, a renouncing individual who would be classified as a Covered Expatriate under §877A, must prove to the Department of Homeland Security by “clear and convincing” evidence that he or she did not renounce for tax avoidance purposes. The burden of proving this negative falls on the renouncing Covered Expatriate if he or she desires to ever re-enter the US.
…
In a nutshell, all Covered Expatriates will now have the burden of proving that tax avoidance was not a primary purpose of their renunciation. Under the original Reed Amendment, the burden was with the US government to show that the renouncing US citizen did so to avoid US tax. This shifting of the burden of proof is enormously important and greatly increases what is at stake for a Covered Expatriate. Under the original Reed Amendment the advantage was clearly with any renouncing US citizen (whether a Covered Expatriate or not). It can be very difficult for the US government to meet its burden of proof regarding tax avoidance motives. Under the proposed Reed-Schumer Amendment, the advantage would be squarely with the US government when dealing with a Covered Expatriate.

Under the newly proposed regime of the proposed Reed-Schumer Amendment, the importance of avoiding the US exit tax under §877A could be even more important than before. Not only will the repercussions of being classified as a Covered Expatriate under §877A result in a deemed disposition of the renouncing individual’s worldwide assets under the exit tax rules, but the burden to prove that a primary purpose of the renunciation was not to avoid US tax, falls on the Covered Expatriate and not the US government.
…
CONCLUSION

The Reed-Schumer Amendment is not law yet, but the danger of inadvertently being barred from the US while also being hit with the US exit tax are real concerns for those considering renouncing if it becomes law. Any US citizen, who renounces their US citizenship with either the original Reed Amendment or the proposal Reed-Schumer Amendment regimes in place, needs to understand the repercussions and timing of this decision.

Click HERE for a summary of filing and reporting obligations required by US citizens residing in Canada.

Further to Just Me’s “HR 2299 Calls for Withdrawal of FATCA IGA Reciprocity Tool (DATCA lite)”,

Blaze reports:

We’re not free yet, but check Maple Sandbox for breaking news out of Washington.

James Jatras is reporting a “death knell” for IGAs and possibly for FATCA

Maple Sandbox — It’s Official, No American Reciprocity

Thanks, James Jatras. Thanks, Blaze. Thanks, Petros. Thanks to every Brocker who posts and comments and has added to this important discussion. We stand together against what is not right!

Listen to Mr. Jatras once again: FATCA Fact Finding Forum – Part 7 of 9 – James Jatras – How FATCA Can Be Defeated

From Maple Sandbox:

Do they really see that FATCA is not the panacea — at great cost all round, that it would not rope in the true tax evaders, just the small minnows — and more US collateral damage?

Now, if only the US would come to their senses and change to Residence-Based Citizenship… and if we could all live in peace in the countries of our choice, reporting our incomes and paying our taxes to and for the countries that give us our benefits.

With thanks to tiger who alerted me to this, I am linking two posts authored by Stephen Flott of Flott & Co. PC The Accidental US Citizen. It furthers discussion we have been having here on these very questions for “Accidental Americans.”

[If the following legal opinion is correct, finally I will have done something right (in the US realm) for my developmentally delayed adult son by not having registered his “US Birth Abroad.” And, if this is true, I’ve just ducked damage by a major flood in southern Alberta and nonsensical US tax and reporting compliance for my son for the rest of my life and his — my good KARMA vessel is getting low. Of course, this is just one subset of those deemed “Accidental Americans.” In my common-sense view, NONE of ‘supposed’ US Persons Abroad who are somehow classified as “Accidental Americans” who had no choice to whom they were born or where they were born should be caught up in the absurdity. The only way to solve that is a change by the US to Residence-Based Taxation. Let’s get real; let’s get fair.]

Accidental American – US Citizenship: Self-Executing or Not? (May 23, 2013)

Ms. X was born in the United States. She is a US citizen by birth. Her US citizenship is self-executing and non-consensual. Her birth certificate is all that is needed to establish her citizenship.

Let’s say she goes to Canada and enters as a landed immigrant. Her entry into Canada as a landed immigrant is not itself an expatriating act. Section 349(a)(1) and (2) of the Immigration and Nationality Act provide that swearing an oath of allegiance to a foreign sovereign is an expatriating act if taken with intent to set aside US citizenship. As soon as Ms. X swears the Canadian citizenship oath before a Canadian Citizenship Court, she will become a Canadian citizen. If she swears the oath with intent to set aside her US citizenship, she will then complete a Form DS-4079 and establish that she relinquished her US citizen upon becoming a Canadian citizen. Her oath of allegiance to Canada is sufficient when combined with her statement of intent to extinguish her US citizenship. However, the mere fact of becoming a landed immigrant is not sufficient as it does not involve the taking of an oath of allegiance and thus, by itself, is not sufficient to expatriate her.

Mr. Y was born in Canada to a Canadian father and a US citizen mother who resided in the US long enough to give her the right to pass on US citizenship to him. However, his mother takes no steps to register his birth abroad or otherwise assert US citizenship and he has not done so either. Mr. Y is not a US citizen automatically, that is, his citizenship is not self-executing. The language in the Section 301(a) states: “The following shall be nationals and citizens of the United States at birth:” [at which point the section lists seven subcategories, including subsection 7 dealing with children born outside the United States “of parents one of whom is an alien, and the other a citizen”]. Most people, including virtually all US lawyers interpret the “shall” to be mean Mr. Y automatically became a US citizen at birth.

However, I believe that “shall” in the context of subsection 7, where one of the child’s parents is not a US citizen and the child has obtained citizenship by birth or heritage of a country other than the United States, to mean that the child has the absolute right to US citizenship upon providing adequate proof of his heritage AND that his US citizen parent meets the residence requirements of the section.

However, Mr. Y’s citizenship is not “self-executing”. Someone must do something to establish his citizenship. His mother did not obtain a certificate of registration of birth abroad before Mr. Y turned 18 and cannot now do so. Mr. Y has not yet sought to assert US citizenship by obtaining proof of same which he would do by obtaining a US passport. That process would require him to present evidence of his US citizenship. He is, of course, free to do that at any time he wishes. However, until he takes some action, his US citizenship in an “inchoate right”, that is, something that he can assert and cannot be taken away from him by the US government. Clearly, he must be a “citizen” to obtain a passport. However, being “entitled” to citizenship is not the same as “being” a citizen. In other words, US citizenship in Mr. Y’s case is not self-executing.

In the absence of any action taken by Mr. Y, the question then turns to whether the US government could force him to obtain a US passport. Indeed, there is no case in which the US government has forced a person in Mr. Y’s position to obtain a US passport. Thus, the “automatic” citizenship position fails. The real question turns on whether US citizenship for those born outside the United States is mandatory. Clearly, it is not.

As a practical matter, Mr. Y has nothing in his official citizenship file in the United States. His Canadian passport indicates a place of birth in Canada. Thus, there is no outward evidence that he is a US citizen and, in the absence of obtaining a US passport, nothing to identify him as a US citizen. Both as a legal and practical matter, Mr. Y is not a US citizen and is not identifiable as a US citizen. He may, of course, choose to apply for a US passport and will undoubtedly obtain one should he do so.

and

Citizenship Article Series: US Birthright Citizenship (June 13, 2013)

Birthright Citizenship — The Absolutely Clear Case

All persons born within the borders of the United States are citizens. It does not matter if their mothers were in the U.S. legally (as tourists, for example) or illegally, or whether the children leave the United States the day they were born. It bears repeating: all persons born in the U.S. are automatically citizens. This is the absolute citizenship situation.

I left this comment, which is awaiting moderation:

calgary411 | June 29, 2013
Your comment is awaiting moderation.

Thank you for this blog entry. We are discussing the very same at Comments. I will post as a new thread your above article. I am awaiting confirmation from Sylvia D. Johnson, General Consul, US Embassy in Ottawa, Canada that advice given in three instances as reported at Isaac Brock is indeed correct — that they do not have to go through the process to obtain US citizenship if they were not registered as births abroad to US parents to then be able to renounce that US citizenship.

We all (especially “Accidental Americans” born in a country abroad to US parent(s) but not registered as US births abroad) need absolute clarification on if there is an OPTION of US citizenship, to not be blindsided by the US further down the line (worst-case scenario). I want to know:

Is a person born abroad to US parents (with all the time definitions) automatically a citizen from the time of birth?
OR
Does that person have to a claim to US citizenship if he/she so chooses upon becoming an adult?

I know that many don’t think this necessary, but I’d rather go forward with an absolute answer. I just think a big segment of US Persons Abroad should not have to find work-around’s to live normal lives in other countries. Why don’t we absolutely know?