Author Archives: Petros

The phone rang this morning.  For a few minutes, my actual phone number was on the blog, by mistake, and one very quick reader, Dianne, phone me from Winterpeg.  Not long ago, she learned that the United States still considers her to be an American, even though she hasn’t believed herself to be American since the age of 18.  So I asked her to write up her story so that the Isaac Brock Society could help her sort out this issue.  Here it is: Continue reading →

Fox news reports that the EPA’s Al Armendariz, after coming under scrutiny for a comment that he made in 2010:

Armendariz made the original remarks at a local Texas government meeting in 2010. He relayed to the audience what he described as a “crude” analogy he once told his staff about his “philosophy of enforcement.” Continue reading →

I am making what you could call a “noisy” non-disclosure. I have stated that I do not plan to file FBAR. I am no criminal, but because I’ve not done FBARs in the past, and I plan never to file one, actually filing an FBAR creates a substantial hazard because of its criminal penalties.  This is the fatal flaw in the FBAR requirement.  If there were only draconian civil penalties, no one could invoke the Fifth Amendment in refusing to file it.

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Please note the following comment by Michael J. Miller:

3. Re: collection in Canada, I’m not sure what would possess a person to sign a closing agreement with the IRS if s/he did not intend to pay, so I’m not sure when it would be relevant. Having said that, if you signed a closing agreement providing for a 20% or 25% (or other) miscellaneous penalty, ostensibly under Title 26, then in my view it would be reasonable for the US to ask (and for Canada to agree) to treat it as a tax penalty.

If you ask me, our government has done a lot to assure Canadians and residents of Canada protection from FBAR penalties. But to enter an OVDI program and agree to penalties voluntarily is perhaps something that the Canadian government won’t or can’t protect you from. Please do not enter an OVDI program without taking into consider the possibility that the government of Canada will not protect you from the penalties. Credit goes to RenounceUScitizenship for pointing this possible problem. Thanks.

For those in doubt about whether they may claim Canadian charitable gifts on their US taxes, there can be no doubt that the answer is a resound: “Yes!”  Thanks to the generosity of my wife, I have been able to zero out my 2010 tax liability in the United States with our donations to my church and other Canadian registered charities.

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I finally figured out how to zero out my taxes using TaxAct.  I consider doing a tax return a game that expensive accountants and their clients play in order to create either a zero tax return or even better, to get a refund.  I figured that I just needed to continue playing with TaxAct until I owed zero tax.  That way I could just send my 2010 and 2011 retunrs with the completed Form 8854 and be done with the IRS, once and for all time.  My problem is that nearly half of my income is unearned, passive income that is not counted in the Foreign Earned Income Exclusion (FEIE).

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In trying to do my 2010 taxes I realize that it was absolutely the right choice for me to relinquish my United States citizenship.  A significant percentage of my income is “unearned” income.  I’ve tried to come up with a zero return based on my Canadian taxes paid (Foreign Tax Credit) but the Form 116 is hopelessly complicated and I cannot do it myself.  The year 2010 was perhaps my first really good year as an investor, and so I’ve never had to have a Form 116 done for me, since my US income tax was always zero based on the FEIE and the personal exemptions.  I have decided that it is actually impossible to be an investor of any kind as a United States person living in a foreign jurisdiction, even a high tax region like Canada.  Here are some of my reflexions in trying to do my 2010 taxes: Continue reading →

Author’s note:  While I was able to get TaxAct to work for me for the 2011 taxes, 2010 is another story.  I think Tax Act probably works fine as long as the taxpayer doesn’t have too much unearned income.

My new Canadian accountant has declined to help me create self-prepared tax return.  I found that if you go to this IRS site, there was a number of free software programs. I chose TaxAct, because it included the following features:

• Adjusted Gross Income: $57,000 or less, and
• Age: between 19 and 55, and
• Live in any state or U.S. Citizens and resident aliens with foreign addresses

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Jack Townsend writes on the recent conviction of Aristotle, “Rick” R. Matsa on 22 counts of fraud and obstruction of justice related offenses, including witness tampering and making a false statement.” Jack highlights the part about FBAR charges in the government summary:
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Thanks to Deckard1138 for recording and uploading this segment.  Used with permission.

Thanks also to Pacifica for the transcript of the interview.