Category Archives: Issues regarding US persons abroad

A twitter friend tweeted this article this morning. It is refreshing to hear a non-expat source describe our feelings so well. Kind of like enjoying comfort food on a long, dreary rainy day. Of course the site has a motive for taking this position (investment in precious metals, –Hi Chears! ), but thought you might enjoy anyway.

Excerpts (all emphases mine):

It isn’t for tax reasons that all expats are renouncing their citizenship, for sure, but it is telling that as the July 1 deadline looms for the full implementation of FATCA (the Foreign Account Tax Compliance Act), renunciations are sharply on the rise.

The IRS is literally chasing Americans away from their homeland.

Few other countries treat its citizens living abroad as terribly as America does. It is like we have some sort of vendetta against them. Expats are not using our roads. They are not using our schools. They are not being protected by our military. On what possible basis would they owe taxes to the United States if they are living and earning wages abroad? There is no justification, just that the government thinks it can get away with this, so it’s the law. And it’s getting worse.

Continue reading →

March 27, 2014 “Congressional Research Service Report for Members and Committees of Congress” entitled “Reporting Foreign Financial Assets Under Titles 26 and 31: FATCA and FBAR”

Summary
All citizens of the United States as well as U.S. resident aliens are required to report their worldwide income for U.S. federal income tax purposes. However, where foreign assets are involved, this is an area in which taxpayers, knowingly or unknowingly, may fail to comply with the law.

There are numerous information reporting requirements involving foreign assets that may assist the Internal Revenue Service (IRS) in recognizing a failure to report foreign income; however, both taxpayers and tax preparers may not be fully compliant with filing these forms. Again, this may be more a matter of ignorance of the requirements than any intent to skirt the law.

Neither the reporting requirement imposed by the Foreign Account Tax Compliance Act (FATCA) nor the Foreign Bank Account Reporting (FBAR) imposed by the older Bank Secrecy Act directly involves reporting income for tax purposes. Instead, each involves reporting the existence of financial assets or accounts located outside of the United States. Although in some cases the same accounts or assets may be reported on each information-reporting form, both forms may be required. Failure to file either form if required may result in significant penalties, in some cases amounting to the entire balance of the unreported account or more. Continue reading →

Glad to post, Em:

Overseas Americans Week – Recap from AARO

As we tune in, thanks, Victoria and AARO — especially videographer, Mathieu.

In how many ways should CANADIANS who are deemed US citizens have US law take precedence over Candian law? Will it be only about US taxation and financial reporting to the US of those deemed US Persons in Canada — or will it extend to what passport we use to travel to other countries, perhaps firearms laws, capital punishment laws, etc.?

Just how many of our rights under the Canadian Charter of Rights and Freedoms will you vote away now that you determine it OK that Canadian financial privacy of deemed US Persons is no longer their right as you condone discrimination by US national origin? I ask because of the following that appears on the Toronto US Consulate web site:

Another question on dual nationality: Is it okay to travel outside of the U.S. on my other passport?

“While the U.S. does not prohibit dual nationality, Americans must comply with U.S. laws (e.g. federal and state taxes, selective service, and foreign assets control) regardless of their location. Thus, a dual citizen who travels to Cuba on a Canadian or other passport, may violate U.S. law and be subject to criminal or civil penalties.”

As Kathy asks:

I wonder if all those bankers and Conservative MPs would be happy to have our duals going to Cuba for a winter vacation being charged as criminals. They’re US citizens, so they have to follow US laws even if they’ve spent their entire lives in Canada, right? That’s what they said about filing US taxes. So I guess we can assume that they’re OK with Canadian duals not traveling on a Canadian passport? And we can assume that they’re OK if a Canadian dual travels to Cuba on a Canadian passport and then is charged as a criminal by the US?

George comments and poses questions to ask Canadian MPs:

Will Canada enforce the US restriction on travel to Cuba of a Canadian Citizen, resident in Canada, with “clinging US nationality,” who travels on holiday to Cuba with his/her Canadian passport?

I would like to suggest a letter writing campaign bringing this to the attention of various MPs and asking if Canada will enforce this ban and aid the US Government. The reason is that it will flush out the sovereignty question.

Must you have a CLN to travel to Cuba on your Canadian Passport?

Or can you travel to Cuba on your Canadian Passport if you have a reasonable explanation of why you do not have a CLN despite having relinquished your US citizenship?

If you have an unambiguous place of birth in the USA can you travel to Cuba on your Canadian Passport at all?

I received this from “Disgusted” who, for some reason, isn’t able get a comment to take at Isaac Brock:

Ottawa slyly expanding its power to invade our privacy

…Bill C-13 is the child of C-30, which was abandoned by the government after previous public safety minister Vic Toews said his Liberal critic could “either stand with us or with the child pornographers.”

Unlike C-30, C-13 does not require service providers to hand over personal information to police without a warrant, but it allows them to do so, which, in practical terms, is the same thing.

This will provide legal cover for what they are already doing. Last month the privacy commissioner reported that in 2011, government agencies requested data from telecoms and social media companies more than a million times.

What kind of data? The government won’t say. Conservative MPs recently voted down an NDP motion to make public the number of warrantless disclosures from telecom firms. When asked about this in the House, Public Safety Minister Steven Blaney and Justice Minister Peter MacKay give misleading answers, blathering on about warrants when none are required and giving assurances that contradict the legislation. This week, Revenue Minister Kerry-Lynne Findlay joined with them in disingenuity when she responded to a question in the House about a clause buried in C-31, a massive budget omnibus bill.

The bill will allow Canada Revenue Agency officials to give taxpayer information to police if officials have “reasonable grounds to believe” that certain offences have been committed. Continue reading →

UPDATE: May 22, 2014
Laura Frost (Canmroe) comments on this article “I was born in Saskatoon to a Canadian father and a mother who was a U.S. citizen. Previously, I was denied U.S. citizenship because my mother had not registered my birth before I was 18. Now that money is involved, I am a U.S. citizen for taxation purposes.

As I just heard this on CBC, The Sunday Edition: Welcome to the World on Online News — is this the death of serious journalism?, Molly found and commented on a Calgary Herald

“Egregious privacy breach attracts little attention” by Karin Klassen, Calgary Herald, May 16, 2014

Meanwhile, almost under the radar, except for a pocket of people trying desperately to raise the alarm, outrageous legislation has passed, enforceable in July, that directly affects the privacy of Canadians in the worst possible way. While indignant tweets were a flyin’ over whom precisely is allowed to read on my newsfeed that one of my friends needs help with diaper rash, we endured with barely a peep this egregious invasion of the privacy of actually important information.
…
Every country has a problem with this legislation; Stephen Harper, however, has handed over the ransom, possibly some argue, violating the Constitution. Canada is the last of the G7 countries to agree, but agree it did in a big way, by letting the Canada Revenue Agency be the middleman. (I suppose this was to avoid the banks getting a bad name, but also ostensibly to assure Canadians they are being violated by a not-for-profit organ.) Continue reading →

I urge one and all to watch this important and revealing look at the most powerful rogue state in history:

http://www.pbs.org/wgbh/pages/frontline/united-states-of-secrets/

United States of Secrets, Part Two, will air on Tuesday, May 20th.

This series dissects, with chilling precision, just how far the United States has strayed from its Constitutional and moral center, especially since 9/11. There appears to be no law or Constitutional amendment which cannot be safely dispensed with in the name of those who died on that fateful day. Any true patriots who perished in those towers must surely be rolling over in their graves by now.

While the NSA’s massive domestic and international electronic surveillance campaign, dubbed “The Program”, was initiated by the Bush-Cheney White House, it has not only continued under Obama, but has flourished, for it is now enshrined in law. In the larger context provided by this documentary, FATCA may be seen as just one more layer of a pervasive, persistent, global information dragnet that is truly Orwellian. By any objective measure, this monstrous technical and legal system provides the very foundation for an inevitable one-world surveillance society.

The would-be heroes of this story include not only Edward Snowden, but an unlikely cast of NSA insiders, who agonized about the removal of all remaining privacy and due-process safeguards, and who ended-up like all good American government whistleblowers: having their front doors rammed-in by FBI SWAT teams. A cautionary tale, to be sure.

This is not even the already sick and dying America I remember as a ten year old kid by the late 60’s. This is something even more evil and dangerous. This is a nation that has not only completely forgotten its founding principles, but which continues to cloak itself in hypocritical, pious rhetoric while simultaneously destroying every last vestige of democratic freedom for its own people, and for the entire world. We are indeed mere roadkill on America’s unstoppable journey to a vastly greater version of hell.

Watch the program, and weep.

As Bill C-31 winds its way through the Canadian parliamentary system, those who defend the  FATCA IGA legislation buried within 300+ pages of the omnibus bill it is hidden in, respond to the cry of the victims, by repeating the message, ‘Well, you might win a Charter Challenge, but if you do, it will hurt ALL Canadians’.

Should the estimated one million Canadians, deemed ‘US persons’ by a foreign nation,  and their family members feel guilty about actively opposing this deal with the devil?  Should they all just shut-up, and take one for the team?  After all there are 30-something million other Canadians who are not affected by a FATCA IGA with the USA, who could care less, or so it seems.

Are Canadian citizens, deemed ‘US persons’, asking their fellow Canadians too much by insisting they risk their economic well being in exchange for the rights and freedoms, and economic well being of the ‘US persons’ in their midst?

Do  Canadians want to live in a country where the majority is protected – until it’s not – at the expense of others who find themselves in the cross-hairs of a foreign nation through no fault of their own?

Has Canada become a mockery of a country with a reputation for high standards of human rights and freedoms?

Has Canada never been what many thought it was, with those deemed ‘US persons’, the first to be disillusioned by the reality that none of us are free, and  none of us are protected, as is evidenced when a bigger power comes knocking and demanding tribute from those it illegitimately considers its own?

NorthernStar, in an email she shared with me, writes the following comment with regard to an article written by Don Cayo published at the Vancouver Sun:

I refused the offer.    and I got off lightly….
Continue reading →

Don Cayo, a reporter for the Vancouver Sun (and has covered some of our issues in the past) has jumped on the bandwagon, criticizing us for mounting the charter challenge. His source, Warren Dueck is a CPA/CA located in British Columbia. (More of his viewpoint is available on his blog).

If you think a policy requiring our government to give such personal information to a foreign taxman won’t withstand a Charter challenge, Dueck concedes you may be right. But if you think this would be a good thing, he disagrees.

The problem is that if our institutions won’t — or can’t because of privacy laws — give the IRS what it wants, 30 per cent will be withheld from all U.S. transactions.

“This would be a devastating result for Canadian financial institutions and their customers who exchange hundreds of millions of dollars daily with U.S. individuals, businesses and other entities,” Dueck wrote to clients.

Ditto if you tell your bank to buzz off when it asks about your citizenship, except you’ll shoot only yourself in the foot by subjecting only your own earnings to withholding.

Dueck says there’s little chance any money withheld by the IRS could be applied against Canadian tax owing, and the only way for you to get it back would be to file a U.S. tax return, then wait for months for it to be processed.

Ottawa has been accused of selling out by agreeing to this, but once again Dueck disagrees. Without the agreement, he said, financial institutions would still face a no-win choice of either providing information about clients or having earnings withheld. And, while the agreement excludes earnings on such things as Registered Retirement Savings Plans, Registered Retirement Income Funds, Registered Educational Savings Plans and Tax-Free Savings Accounts, there’ll be no such exemptions if court challenges succeed in overturning the agreement.

Some of the Brocker SWAT Team (Special Writers and Authors) have already commented on the blog.

What do you think?

Hat tip to Tim for finding the article.