Category Archives: Issues regarding US persons abroad

@VLJeker This is one more way that the USG is putting the lives and security of #Americansabroad at risk – opposite of protection from USG

— US Taxation Abroad (@TaxationAbroad) September 15, 2014

 
I was recently attempting to explain FATCA, FBAR and U.S. taxation practices to a friend. After deciding that I was NOT fabricating a story, she remarked:

“It’s unjust! It’s inhumane! I didn’t choose where I was born!”

(Fortunately she was not born in the U.S.).

The truth is that issues of FATCA, FBAR and citizenship-based taxation are more “citizenship problems” than tax problems.

Incompatible tax systems create problems for people subject to both tax systems.

Incompatible citizenship laws create problems for people who have dual citizenship.

U.S. tax lawyer, Virginia La Torre Jeker has just published a fascinating post where she describes the problems of “incompatibility of citizenship”. Ms. Jeker describes the problems where a country:

1. Does NOT allow dual citizenship; and

2. Makes it a criminal offense to have dual citizenship.
 
I quote from her insightful post:
 

Not only are many desperately struggling to become US tax compliant, many GCC nationals are becoming quite concerned that their government will learn they hold a prohibited “second” nationality. Under FATCA, foreign financial institutions must agree to verification and due diligence procedures – meaning they must be on the look-out for customers, owners or beneficiaries evidencing any “US indicia”. They must identify and report directly to the US Internal Revenue Service or to their own government via an intergovernmental agreement (IGA), information on US account holders. FATCA will help expose GCC nationals who hold US citizenship by a financial institution’s transmission of that information directly to the home country government agency responsible for gathering information under the IGA. America, in its quest to root out tax cheats, has now put many of its own innocent citizens in a very perilous position.

This fear of detection seems particularly acute right now in the Kingdom of Saudi Arabia. In Saudi Arabia, Saudi citizenship can involuntarily be lost if a Saudi citizen obtains a foreign citizenship without the prior permission of the Prime Minister. See Articles 11 and 13 of the Saudi Arabian Citizenship System.

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http://www.usatoday.com/story/todayinthesky/2014/09/12/us-customs-preclearance-coming-to-more-european-airports/15505645/

The United States reportedly is asking five European countries to set up preclearance checkpoints at airports for customs and immigration. The expedited checkpoints for foreign travel are now available only in Canada, the Caribbean, Ireland and United Arab Emirates.

The Guardian newspaper in England reports no formal request has been made yet. But U.S. authorities approached England, France, the Netherlands, Germany and Sweden about setting up the checkpoints, according to the Guardian.

UPDATE Robert Wood has posted this today here. This is an excellent opportunity for us to bring this to public attention. Please go over and comment!

“The Business of Life” http://t.co/Dcl7rlqzyj

— U.S. Expat Canada (@USExpatCanada) September 10, 2014

Some Brockers who have been around a long time have likely seen this before. However, given the recent events such as greater focus on “Accidental Americans” (Ginny & Gwen as plaintiffs on the ADCS-ADSC lawsuit), and the attempt to get the IRS to relax the rules against the same, (ADCS-ADSC retention of Mr. Jim Butera, Partner, Washington D.C office of Jones Walker LLP, to explore legal options) this letter is especially compelling.

This message is written by a Canadian businessman to his son at the time of his high school graduation. It is a perfect example of what all parents with dual US/CDN children should be aware of and discussing with their kids before they begin to acquire money and assets. It was originally posted here and is re-posted with permission.

*****
The Isaac Brock Society recently featured a discussion about how and when to advise young people about the potential problems of U.S. citizenship and whether they should consider renouncing U.S. citizenship. As parents, teachers, mentors and friends we should pass on to our young people the benefits of our (in varying degrees) knowledge, wisdom and experience. We do this because we want to equip them with the skills they need to make the best life decisions that they can.

The books: “Letters of A Businessman to His Son” and “Letters of A Businessman to His Daughter“, by G. Kingsley Ward, are wonderful examples of this principle. They are chock full of practical advice and thoughts on – the only business that really matters – “The Business of Life”.

I have been inspired by Mr. Ward. Here is the letter (with many factual modifications to protect the young person in question) that I wrote on the occasion of that young person’s High School graduation.

“Letter of a Canadian Businessman to his Dual U.S./Canada Citizen son on the Occasion of his High School Graduation”

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Excellent visibility for ADCS in this new article by Robert Wood in Forbes.  Comments are open.

http://www.forbes.com/sites/robertwood/2014/09/09/canadians-attack-u-s-expat-rules-decrying-accidental-americans/

The Alliance for the Defense of Canadian Sovereignty (www.adcs-adsc.ca) sounds a little like a new world militia or a trade group promoting maple syrup. Actually, it’s neither, and American legislators may soon learn that too well. The organization has lawyered up, hiring a Washington D.C. lawyer tasked with exploring legal options to reverse the practices of the United States government. Why?

Because the U.S. government is making it downright difficult for Canadians that are also ‘Accidental Americans’ from freeing themselves of the burdens of U.S. citizenship. Accidental Americans include those born in the U.S. but who left at a young age to live permanently abroad. The organization claims they have no meaningful ties to the U.S. but are stuck with a lifetime of U.S. taxation on their non-U.S. income. Ouch!

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As usual, Alex Newman provides a very well-informed and annotated update on the current state of affairs with FATCA and CBT in an article for The New American.

While he focusses on the efforts of the RNC and Republicans Overseas to repeal FATCA and CBT, Newman also underscores the need for all opponents of these destructive policies to join-together in a bi-partisan repeal effort:

GOP Votes to End Tax Regime That Is Crushing Americans Abroad

Democrats and propagandists in the establishment press initially tried to frame the Republican efforts to stop FATCA and citizenship-based taxation as a scheme to protect “the rich” and “tax evaders.” The half-baked tactic failed spectacularly, however — especially because those suffering the most are poor and middle-class Americans who cannot afford armies of lawyers and accountants. The group Democrats Abroad, stuck in a Catch-22, is now on defense, trying to walk a fine line between not alienating the millions of embattled Americans abroad while also not criticizing their party’s handiwork too vociferously. It recently accused the GOP of pandering for votes, noting that no bill to repeal FATCA has been introduced in the Republican-controlled House. The media has remained almost entirely silent on the latest GOP resolution.

Republicans, though, say the effort to ease the burdens imposed on Americans abroad and to boost the U.S. economy should not be a partisan one. “Republicans Overseas would welcome the DNC and Democrats Abroad to join us by adopting a RBT resolution, incorporating it in its national platform, building political support for a RBT legislation, and introducing a tax reform package to replace FATCA and CBT with RBT in order to end double taxation for 7.6 million overseas Americans,” Republicans Overseas said in a statement. “Doing what is right and just for expats should be bi-partisan.”

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In an article for the Vancouver Sun, Douglas Todd explores the ambiguities of life and self-identity for what he calls “Ameri-Canadians”.  I have long maintained that Canadians of American origin are Canada’s largely “invisible minority”.  Now, post-FATCA, we are being forced to reconsider not only our relationships with two different nation-states but also within our communities, our families and our very souls.  Todd covers an equally wide scope in his thought-provoking commentary:

Millions of Americans in Canada downplay links to Uncle Sam

With the Canadian government’s decision to comply in July with a Washington tax crackdown on “U.S. persons” around the world, many Ameri-Canadians are feeling rising anger, fear and even hatred toward their powerful country of origin.

That said, the self-identities of Americans in Canada have been more ambiguous than they tend to be for members of more visible immigrant groups, long before the U.S. began its notorious attempt to catch tax cheaters through the Foreign Account Tax Compliance Act, better known as FATCA. The U.S. is the only major country to tax based on citizenship, not residency.

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Chère communauté d’Isaac Brock,

Après un long délai causé par les difficultés de recrutement de bénévoles francophones au début de notre démarche, nous avons finalement notre site internet ADSC en français !

Je dois remercier les bénévoles qui ont gracieusement offert leur contribution : vin-de-table, Shadow Raider et, plus particulièrement, Living to Renounce, qui a apporté toutes les modifications finales suite au remaniement du site anglophone, et qui s’est assurée de l’exactitude de la traduction par un correcteur d’épreuves.

Si vous avez des questions ou commentaires à nous formuler en français, vous pouvez les publier ici et nous tenterons d’y répondre.

Nous espérons que ce site va permettre de mieux faire connaître l’enjeu au Québec et ailleurs au sein du Canada francophone.  Vous pouvez consulter le site ici :

ADSC Accueil

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Hello Brockers,

After a long delay, due to the difficulty of finding Francophone volunteers back when we started this endeavour, we finally have a French ADSC website! I must thank the volunteers who came forward: vin-de-table,  Shadow Raider and most especially Living to Renounce, who made all the final changes after the English website was rewritten and had a proofreader go over it afterwards for accuracy.

If you have questions or comments in french you can make them on this post and we will try to answer.

We hope that this site will now be able to make the issue better known in Quebec and the rest of Francophone Canada. Please check it out here:

ADSC Home

“TaxConnections” asks “Shall I Stay or Shall I Go?”

Besides first determining if you are indeed a U.S. citizen, some further self-analysis is necessary.   Anyone, and I mean anyone, should comprehend what is in store for “Americans Abroad” reading this and listening to John Richardson’s interview with CHQR News Talk 77, Dave Taylor, in Calgary, AB:

When it comes to FATCA, there are four kinds of *Americans Abroad*

…there are really four kinds of U.S. Taxable Persons abroad. Each one of them has his own set of problems.

…

They can be grouped as follows:

File U.S. tax returns?     U.S. tax compliant?  What is their problem?

Yes                                               Yes                    Inability to live normal life*

Yes                                               No                     Subject to penalties for mistakes**

No                                                Yes                    Don’t have any income***

No                                                No                    OMG moment is coming****

Dave Taylor got it and summarized:

It’s unbelievable that the US Government is going after people who in many cases, for decades, have not considered themselves to be Americans, American citizens, but indeed Canadian citizens, for money they don’t owe. It’s unbelievable the US Government has the audacity to think it has a claim on the assets of those people. It’s incomprehensible THAT THE HARPER GOVERNMENT IS PLAYING RIGHT ALONG. So we will watch this story because I think it’s a gross violation of rights and miscarriage of justice.

This analysis / summary of the absurdity and injustice for *US Persons Abroad* should be understandable to anyone who reads it or listens to the interview.

Whether *anyone* would include US Congresspersons whose job should be to understand and make reasonable effective change in legislation is debatable. Why is that?