Category Archives: Issues regarding US persons abroad

Interesting Article:

http://www.amazon.com/National-Security-Government-Michael-Glennon/dp/0190206446/ref=sr_1_1?ie=UTF8&qid=1413856139&sr=8-1&keywords=double+security+and+national+security

http://www.bostonglobe.com/ideas/2014/10/18/vote-all-you-want-the-secret-government-won-change/jVSkXrENQlu8vNcBfMn9sL/story.html

IDEAS: Why would policy makers hand over the national-security keys to unelected officials?

GLENNON: It hasn’t been a conscious decision….Members of Congress are generalists and need to defer to experts within the national security realm, as elsewhere. They are particularly concerned about being caught out on a limb having made a wrong judgment about national security and tend, therefore, to defer to experts, who tend to exaggerate threats. The courts similarly tend to defer to the expertise of the network that defines national security policy.

The presidency itself is not a top-down institution, as many people in the public believe, headed by a president who gives orders and causes the bureaucracy to click its heels and salute. National security policy actually bubbles up from within the bureaucracy. Many of the more controversial policies, from the mining of Nicaragua’s harbors to the NSA surveillance program, originated within the bureaucracy. John Kerry was not exaggerating when he said that some of those programs are “on autopilot.”

#FATCA: A Taxing Law Made by a Whole Bunch of Zeroes.

A new US tax law raises only $9,000,000,000 for the USA.  However the world pays $200,000,000,000 to implement that tax law. That means that 9 zeroes were made by 11 zeroes.

The 2010 Congress’ HR 2847 Jobs for Mainstream Act, a domestic jobs bill, was funded by the Foreign Account Tax Compliance Act (FATCA).  FATCA’s mechanism is to force all of the world’s banks to identify their resident customers who might be suspected of being dual US citizens or US green card holders.  The law takes advantage of US’ globally-unique taxation system, which is allowed to tax any dual citizens or US visa holders even when such persons do not reside in US.   The only two countries of the world practicing this type of taxation is US and Eritrea.  To better understand this method, envision being born in Iowa and paying lifelong taxes to Iowa even while living in Georgia or Ohio.

Of course, there is limited relief to this taxation.  A dual citizen living in Sweden, via the use of a complicated set of forms, might be able to offset most of the US taxes with exclusions and credits for having paid Swedish taxes. Unfortunately, his Swedish pensions and Swedish unemployment benefits could still be taxed by USA. He could also be subject to self-employment taxes and (if qualified) could also not escape the Obamacare tax upon the rich.  FATCA will make its revenue gains by ensuring that dual US/Swedish citizens in Sweden are identified so as to pay taxes upon their income not taxed by Sweden.  And so forth.  Country-by-country and instance-by-instance, FATCA would enable further IRS revenue by identifying previously-unidentified US dual citizens throughout the world.

Australia’s study determined that FATCA would cost its banks $1.065 billion USD, or $42.12 USD per capita. Hence, its recommendation was for the Australian government to absorb some of FATCA’s implementation costs, by signing an Intergovernmental Agreement (IGA) with the US Treasury Department.  With the IGA,  it was determined that its banks costs would be reduced by more than half—from $42.12 USD to $20.46 per capita. Canada and UK have also absorbed some of the banks implementation costs, so that their banks are only burdened with $26.02 and $25.28 USD per capita.  These three countries verify each other’s calculations, in being able to transfer more than half of their bank’s implementation costs into each country’s own administration.

Up to half of the world’s governments have signed IGA’s.  Even China, Russia, Kosovo, and UAE have agreed to collect and store FATCA’s identification of US persons within their countries.  As a result, we can see that about half of the world has reduced it’s banks’ implementation costs from $42.12 to as low as approximately $22 US. Even though these IGA’s are not all the same, this could succeed to bring FATCA’s global bank burden down to as low as $221 billion USD.

FATCA is a law created by specialist US accountants with specialist FATCA competency.  As such, FATCA’s implementation is primarily by very-high priced compliance firms.  There are few discounts available in lower income countries.  There are few lower-cost specialists outside of the developed world.  It would be difficult to say that FATCA-implementation cost reductions might be possible in low income regions or in non-IGA countries.

It might also be said that low income countries have fewer banks for their populations and fewer banks trading in US investment products.  If these banks could succeed to stay out of US investments, indeed, the global FATCA implementation costs might be reduced somewhat.  Another possible reduction might be that, although the 2010 Congress intended for the entire world to implement FATCA, many developing countries can not or will not implement FATCA.

There is no other analyses available showing other than an $8.5-8.9 billion USD FATCA revenue benefit over a 10 year period. Round that up to $9,000,000,000—9 zeroes.  However, with the analysis in this article, it shows that the FATCA implementation costs have been reduced from $291 billion to $221 billion.  FATCA has then been shown to globally lose $212 billion dollars net.   Rounding down, we see that FATCA is made by $200,000,000,000—11 zeroes.

FATCA was created by a whole bunch of zeroes.

All rights reserved

This is a guest post—submitted by a fan. For reprints-contact the blog.

http://samuelclemmons.wordpress.com/2014/10/16/fatca-a-taxing-law-made-by-a-bunch-of-zeroes/

Calculations and sources found at the blog, in the comment section.

Barrie McKenna has been following an ongoing battle between Canada and the US.

A WTO appeal panel ruled that a U.S. law that requires grocery stores to list the country of origin on meat products discriminates against Canadian and Mexican livestock.

The Conservative government warned that it will strike back with punitive duties unless the U.S. ends the “blatantly protectionist” regulations, which its says are costing the North American cattle and hog industry more than $1-billion a year.

“Canada will be watching this situation closely to ensure U.S. compliance in accordance with the WTO’s clear ruling,” Trade Minister Ed Fast and Agriculture Minister Gerry Ritz said in a joint statement. “We will continue to fully assert our rights to achieve a fair resolution to our concern, including seeking authorization to implement retaliatory measures on U.S. agricultural and non-agricultural products if and as necessary.”

Ottawa has already identified 38 target products for retaliation. The list includes U.S. cattle and hogs, as well as a number symbolic products, including California wine, Vermont maple syrup, Florida orange juice, ketchup and breakfast cereal.

So the issue is the country of origin on the labelling of meat. Discrimination against Canada. The Conservative government is hopping mad and willing to protect the meat industry but will do nothing to protect its own citizens and permanent residents (who pay taxes and according to Hon. Sinclair Stevens, are fulling entitled to the protection of the Charter of Rights and Freedoms). It will however, engage in a trade war for cattle and pigs.

Ottawa is willing to slap on some sanctions in this disagreement but it never seemed to occur to them to respond in a similar fashion when Washington decided to put a crippling sanction on the financial industry. FATCA has been estimated to also cost $1 billion per year. Same issues, same cost.

I find it incredibly ironic that Canada will choose “symbolic products” to target. “Punitive,” “country of origin,” “discrimination” and “asserting our rights.” Sound familiar?

This system will be fully functioning by spring of 2015. US persons should be fully informed of this procedure by that time.

Follows is information about events which should be considered versus your personal safety. It is up to each individual to determine if he/she is comfortable with this situation in these locations. This is not new information–this system has been developed during the course of 4.5 yrs in conjunction with the US Treasury and these governments.

If you are a US citizen, please be aware that many unstable governments have been deputized to hold your most personal and private information, such as your social security number, local identity number, bank asset values, bank account numbers, address and telephone number.  Please be aware that there are little (if any) demands as to how this data shall be stored and communicated.

This is valid for any “US person for tax purposes” who is identified in any country of the world. A US person can be a US citizen, a holder of a US visA (“Green card”), a US-owned business, and any family member or business who might be sharing financial resources and financial signature authority with a US person.

Intergovernmental Agreements (IGA’s) have been made with a large number of foreign governments, who have been enabled, entrusted, and deputized with critical personal information about all US persons.

Some sensitive countries to note are Armenia, Hong Kong, Iraq, Nicaragua, Moldova, Paraguay,Taiwan, Algeria, Azerbaijan, Bahrain, Barbados, Belarus, Cabo Verde, China, Colombia, Croatia, Cyprus, Dominica, Dominican Republic, Georgia, Grenada, Guyana, Haiti, India, Indonesia, Kosovo, Kuwait, Malaysia, Panama, Qatar, Saudi Arabia, Serbia, South Korea, Thailand, Turkey, Turkmenistan, Ukraine, United Arab Emirates, Uzbekistan

You may discuss this issue with your US embassy. However, please be aware that it was the embassy that implemented this and negotiated this.

Some background information follows at the address where this is originally posted

http://bancdelasteroideb612.wordpress.com/2014/10/20/important-personal-security-information-for-us-citiziens-us-green-card-holders-and-their-families-located-in-sensitive-regions-regarding-fatca-and-igas/

or

http://bit.ly/1yRmw15

Please do your best to spread this information via all communication channels, such as facebook, twitter, and letters to Congress.

For those that remain as active US citizens, a sample letter to your Congressperson can be copy-pasted from this:

I received a phone call this afternoon from a concerned Brocker asking if I’d seen the discussion at Isaac Brock about whether it was ok to lie to the bank on the various self-certification forms. Specifically he asked my opinion about the ethics of lying. He said of course that the nuns at his parochial school said one should never lie, not even to save the world! But of course, as a theologian, the story of Rahab the Harlot came to my mind. She lied, and for that both Jews and Christians consider her a great heroine. Here is the main story of her boldfaced lie (Joshua 2.1-6; RSV):

1 And Joshua the son of Nun sent two men secretly from Shittim as spies, saying, “Go, view the land, especially Jericho.” And they went, and came into the house of a harlot whose name was Rahab, and lodged there. 2 And it was told the king of Jericho, “Behold, certain men of Israel have come here tonight to search out the land.” 3 Then the king of Jericho sent to Rahab, saying, “Bring forth the men that have come to you, who entered your house; for they have come to search out all the land.” 4 But the woman had taken the two men and hidden them; and she said, “True, men came to me, but I did not know where they came from; 5 and when the gate was to be closed, at dark, the men went out; where the men went I do not know; pursue them quickly, for you will overtake them.” 6 But she had brought them up to the roof, and hid them with the stalks of flax which she had laid in order on the roof.

Now the New Testament remembers Rahab in Matt 1.5, as a great-great-great-great etc. granny of King David and Jesus; and as a woman of faith in Hebrews 11:31: “By faith Rahab the harlot did not perish with those who were disobedient, because she had given friendly welcome to the spies.” James 2.25 also says, “And in the same way was not also Rahab the harlot justified by works when she received the messengers and sent them out another way?”

So it would seem that the Bible, as one the great foundational texts of both law and ethics in the Western world, has no problem with lying under certain circumstances. She lied to save the lives of two men who would soon become her new compatriots. Moreover, she’d seen that God was with the Israelites and Joshua, and she thus knew her city, Jericho, was doomed. So to protect herself and her family she decided to relinquish her Jericho citizenship under INS 349 (a) (7)–and become a daughter of Israel. She exercised her universal human right to change nationalities.

Yes, the King of Jericho would have severely punished her if he had found out her lie. And the homelanders of Jericho would have considered her a liar, traitor and tax cheat. But they didn’t write the history of the battle. Rahab had to do what was best for her family, and for that both Old and New Testaments praise her.

Hard times create unconventional heros.

This week I had a chat with a kind donor to our Canadian FATCA IGA lawsuit. She is a Canadian citizen who has lived in our country for more than four decades.

I asked her (as I now ask many) to predict what Canadians will do when the FATCA law identifies them and turns them over to a foreign country.

This Canadian told me how she will respond when her neighborhood bank turns her over to the United States Internal Revenue Service. She said:

“First time visitors to the “Isaac Brock” and “Maple Sandbox” websites are regularly advised to “Read, read, read before you take any action” when you discover that the IRS wants you.

Generally good advice, I would say, except that I would change the channel a bit and say “Read, read, read, and then take NO action“.

I would strongly urge people to read, read, read, and then take the time to live with the injustice, the absurdity, the absolute moral bankruptcy of FATCA before they commit themselves to any course of action.

Live with the feelings of unfairness and discrimination that surround FATCA; let the oppressiveness of the situation really take hold. Then take a deep breath, and another, let the fear subside, and then let the outrage and anger come forth and “Just say NO”.

We all know that the whole premise of FATCA (Citizenship-Based Taxation) is fundamentally wrong, so why do so many of us so readily agree to participate in a system that is “wrong”? Fear, anxiety, expediency, whatever?

When I am faced with a really complex situation that is impossible to figure out, and FATCA would be one of those, I try to pare things down to fundamental principles that let me see things more clearly. Really, in my mind, FATCA is no different from the scenario of the school yard bully.

The Harper Canadian Government should have stood up to the U.S. bully’s threat of sanctions and said “No”. It didn’t.

Canadian banks and financial institutions should have refused to become agents of the IRS. They didn’t.

Our Members of Parliament should have challenged the government to address issues of sovereignty, privacy, and equality of ALL Canadians. By and large, with a few notable exceptions, they didn’t.

So now it’s my turn; it’s my turn to stand up and say “No”. And I will.

I will refuse to fill out any “foreign” tax information forms, I will refuse to give my financial institutions any information on place of birth, and, if necessary, I will lie with an absolutely clear conscience.

I will refuse to let the bully play in my yard.

I realize that this is a course of action (or inaction) that might make some people feel uncomfortable. But, speaking personally, I feel much more uncomfortable being forced to do things that I know are wrong, and I know that FATCA is wrong.

It’s just wrong, plain and simple. So I’m not doing it.

I am now, and will remain, willfully non-compliant. End of story.”

I just received an e-mail from a strong Francophone supporter of ADSC from Quebec.

The article is in french but her point is that “we” don’t seem to have the same privacy rights as do traffickers of contraband tobacco.

I know that at least one tax professional firm feels that Canadians who have “obligations” to file an FBAR, and willfully do not, are criminals, but it is really difficult for me to argue that the level of “criminality” is quite the same as that of contraband tobacco traffickers. Others of course might disagree.

Here is her email (reproduced with permission):

“Good morning Stephen,

There was a very interesting article in La Presse this morning, not about us, but about the CRA. I tried looking for a similar article in The Gazette or online, but could not find anything.

Apparently, Canada Revenue Agency has been trying to block Montreal Police from accessing documents about suspects in a Tobacco contraband fraud case. These people are suspected of cheating the federal and provincial governments. The CRA has refused to cooperate and has asked the courts to be exempted from complying.

“D’abord, les avocats fédéraux soutiennent que les renseignements fiscaux obtenus des contribuables dans le cadre de la Loi sur l’accise ne peuvent être transmis à la police tant qu’elle n’a pas obtenu le dépôt d’accusations criminelles.”

Loosely translated, this means, “First, federal lawyers argue that the tax information received from taxpayers under the Excise Act can not be transmitted to the police until criminal accusations have been made. “

“L’ARC affirme aussi que les renseignements demandés font l’objet «d’un haut degré d’expectative de vie privée», mais là encore, le juge de paix s’est dit en «total désaccord», puisqu’il s’agit d’informations d’ordre commercial plutôt que personnel.”

Again, loosely translated, “The CRA also says that the requested information is subject to ” a high degree of expectation of privacy ,” but again, the Justice of the Peace said he was in “total disagreement “, since the information is business related rather than personal information.”

Wow… I don’t even know what to think about all that. People suspected of crimes in Canada have an “expectancy of privacy” but US persons don’t…

Criminal accusations must be made before financial information can be shared, but in our case, financial information can be shared with a foreign government.”

Yesterday I saw a “planning ahead” question relating to taking into account US citizenship of a prospective spouse before your marriage in a country outside the US (and perhaps even within the US if you as a couple or a family would ever plan to live in another country than the US). Due diligence is better before walking down the aisle than finding out about how you will be caught up in matters of US citizenship-based taxation afterwards. A couple planning a wedding will not find this at all romantic or may not think that it would matter, but they will one day be glad they planned ahead — whatever the decision about the actual marriage. Good financial planning is necessary to protect your assets going into a marriage, as well as those resulting from joining financial accounts with your US spouse-to be. That prompted me to remind persons of another important area in which to think and plan ahead:

We would not readily think about what happens as we or a family member age with an unfortunate mental incapacity caused by aging, by stroke or some accident that results in a brain injury. I have often considered how I could possibly cope with the complexity of U.S. tax compliance, to say nothing of the continued and increasing costs for help with that compliance year after year, if I had not renounced my U.S. citizenship.

From: 7 FAM 1290 MINORS, INCOMPETENTS , PRISONERS, PLEA BARGAINS, CULTS AND OTHER SPECIAL CIRCUMSTANCES (CT:CON – 4 49; 03 – 25 – 2013 ) (Office of Origin: CA/OCS/L)

U.S. Department of State Foreign Affairs Manual Volume 7 Consular Affairs
7 FAM 1290

(U)7 FAM 1293 MENTAL COMPETENCY
(CT:CON-407; 06-29-2012)

a. Because loss of U.S. nationality occurs only when a would-be renunciant or person signing a statement of voluntary relinquishment has the legal capacity to form the specific intent necessary to lose U.S. nationality, cases involving persons with established or possible mental incapacity require careful review. This includes mental disability, mental illness, developmental impairment, Alzheimer’s disease, and similar conditions. It may also include cases of substance abuse.

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