Category Archives: Issues regarding US persons abroad

A new article by Jessica Meek in Risk.net’s Operational Risk and Regulation examines how credit unions worldwide are being squeezed in the FATCA vise – whether they try to avoid it or not.

Credit unions wish Fatca ‘did not exist’

Fatca compliance burden stretching further

Credit unions will struggle to implement the US Foreign Account Tax Compliance Act (Fatca), warns Michael Edwards, vice-president and chief counsel at the World Council of Credit Unions (Woccu).

The regulatory burden associated with Fatca and the intergovernmental agreements (IGAs) intended to enforce it at a government-to-government level mean that credit unions are hoping that Fatca will be repealed, Edwards says.

“Credit unions around the world would prefer it if Fatca did not exist, mostly because of the regulatory burdens associated with complying,” he says. “Even on the US side, even though the Fatca statute never mentioned US banks or credit unions, in order to collect information to share with the foreign governments that are going to be signing or have signed IGAs to implement Fatca, US credit unions and banks are likely to be subject to the same reporting requirements as foreign ones.”

read more

From James Jatras, for post at IsaacBrockSociety and Maple Sandbox:

Theo Caldwell says this will be in the print version of the NP tomorrow.

FATCA = Canadian complicity in US spying. It’s a great angle!

Theo Caldwell: Say No to Washington’s Surveillance State

CANADA’S COMPLICITY IN THE US SURVEILLANCE STATE – THEO CALDWELL, NATIONAL POST

In Canadian political debate, accusing one’s opponent of advocating “American-style” policies used to be the equivalent of launching a nuclear missile.

snip

Much has changed in recent years, however.

snip

From banking to taxes to travel to personal communications, Canada has signed on to the most appalling excesses of America’s growing surveillance state. The rationale is usually found among the catch-all phrases deployed to justify today’s creeping totalitarianism: the “War on Terror” or “keeping us safe” or the “War on Drugs” or “money laundering” or “tax evasion.”

 

I just created a new page of links to articles to facilitate our SWAT (Straight Words and Truth) Team in finding current media and blog articles that are open for commenting.   Thanks to Em for the suggestion.

When you come across such an article, you can mention in the permanent page’s thread — or simply on any thread, as we’ve been doing all along, and I’ll copy the link to the permanent page.

You can locate this page in the Sidebar under the Take Action! header

Another cross-post from Maple Sandbox: Abolish FATCA Petition from Replublicans Overseas Now Online

The actual link to this Petition is: https://www.abolishfatca.com/live/

I, a person who has now officially renounced and am no longer a US citizen, have signed and sent my *online signature* for this Petition. In my comment, I cited that my son, with a *mental incapacity*, and others like him, are “entrapped” into a *supposed* US citizenship and absurdly affected by this.

Note that you do not have to be a Republican or *even like them* to sign this important petition.

Note also that anyone who is not “IRS Compliant” and is afraid to sign this (because of more US-induced intimidation) should NOT sign — that is, unless you are so very, very angry about extra-territorial FATCA combined with US citizenship-based taxation and how it affects you, your family, your sovereign country and its very treasury. There is, of course, a risk of disclosure for you (a service of the US campaign of FEAR instilled into us).

From Republicans Overseas re privacy concerns:

We understand your concern. I knew political motivated reprisal since I grew up in Communist China. Each time I spoke up, the regime could make me to disappear in the night and my parents to pay for the bullet. When several RNC members and I founded this worldwide political organization called Republicans Overseas, one of our goals is to protect our overseas American citizens from the fear of political motivated reprisal like the IRS targeting tea party groups. We believe when you are organized and speak as one voice by voting, you bring the political cost to the equation of the IRS reprisal.

For your privacy concern, we offer an overseas American petitioner or a tea partier petitioner in this country to select a button which allows us to only use your initials and country or state on your petition when we publish all petitions and deliver them to Congress. Also we will only allow the third parties such as friendly but objective media organizations not government agencies to audit our petitions by a secure sampling process. This gives this petition drive more political credibility. Finally, no government agencies would take a possession of those signatures and addresses.

This method of petitioning is much safer for you than getting signatures on a street corner to put a ballot measure on a November election ballot. In the second case, the State Secretary of State Office would require the Chief Petitioner to submit all signatures with names and addresses for sampling. In this case, the State Secretary of State Office would take a possession of all petition signatures sheets. Nobody knows who is going through those sheets and copying them in the night.

I hope my email puts your concern for reprisal at ease. Thank you for contacting us.

Sincerely,

Solomon Yue, Jr.
Chief Sponsor of the RNC Resolution to repeal FATCA
Vice Chairman and CEO
Republicans Overseas

https://www.facebook.com/republicansoverseas

The Canadian investment firm Canaccord Genuity Wealth Management claims it is an “IRS withholding agent”.

What does this mean?

Anyone?

IRS CompliantForever has entered an excellent post at Maple Sandbox. I am again cross-posting from there: Can Cross-Border Tax Professionals Prepare U.S. Tax Filing Return For Impoverished Canadian Brad Smith For Only $300?

IMPORTANT UPDATE, February 3, 2014:
WhiteKat, a close friend of Brad’s, is helping him contact Brain. Here is WhiteKat’s comment on behalf of Brad (Brad’s comment seemed to be blocked at TaxConnections.com for some reason) — and my reply: http://taxconnections.com/taxblog/cbc-distorts-fatca-facts/#comment-1027

WhiteKat
February 3, 2014 at 9:27 am

Mr. Mahany, Brad Smith asked me to post this because he seems to be blocked from your site. Can you help him please! Changed by the TaxConnections.com Administrator to: “Mr. Mahany, The gentlemen you spoke with earlier asked me to post this. Can you help him please!:

“Brian, I called the two tax firms you recommended, but both quoted me three-four times your estimated $300 filing cost. I have practically no income and just a bit of savings. I’m getting seriously scared. I want to pay my fair share and even though I live in Canada I fear that IRS will arrest me and put me in jail.

These companies tell me that it will cost me a LOT of money to file past returns even though I owe no tax! Something is really wrong here. No way I’m a tax crook. I have hardly any money which is not my fault. What can I do? Brain, PLEASE HELP!”:

“Brian, I called the two tax firms you recommended, but both quoted me three-four times your estimated $300 filing cost. I have practically no income and just a bit of savings. I’m getting seriously scared. I want to pay my fair share and even though I live in Canada I fear that IRS will arrest me and put me in jail.

These companies tell me that it will cost me a LOT of money to file past returns even though I owe no tax! Something is really wrong here. No way I’m a tax crook. I have hardly any money which is not my fault. What can I do? Brain, PLEASE HELP!”

Reply

calgary411
February 3, 2014 at 9:39 am

Although many will not relate to Brad’s situation, there will, in fact, be countless so affected.

As McGill law professor, Allison Christians, points out in blog post “Citizenship-Based Taxation and Taxpayer Rights Don’t Mix”:
“It is another to say to other countries–and much less individuals in other countries–if people who live in your country have US status AS WE DEFINE IT, you are harboring potential criminals and you must help us find them and enforce our claim over them even if your government also claims them and even if our claim conflicts with your government’s own law.” … which is more “entitled USA” hogwash and US collateral damage to Brad and so many others, in the process destroying individuals and families.

*************************************

Recently, Mr. Brian Mahany on a TaxConnections Worldwide Tax Blog discussed costs of filing U.S. tax returns for duals living abroad and took issue with some statements on tax preparation fees made by Allison Christians in a CBC article.

Here is the CBC “Myth,” according to Mr. Mahany, followed by the Mahany “Fact”:

CBC “MYTH”: The annual cost of filing U.S. taxes can be “astronomical,” tax expert Allison Christians notes. Accounting firms estimate the cost of filing personal U.S. taxes can be anywhere from $500 to several thousand dollars.”

Mahany “FACT”: “I suppose if I were Bill Gates or Warren Buffet, the cost to prepare my tax return might be in the thousands. There are many very qualified CPA firms and expat tax services that prepare returns for dual nationals, including FBAR filings, for about $300. [We don’t prepare returns but can certainly send you to folks who do.]”

http://taxconnections.com/taxblog/cbc-distorts-fatca-facts/#.Uu6BlD1dWE4

I was also intrigued with Mr. Mahany’s statement that the U.S. has special rules on “trusts” such as RESP, RRSPs, and TFSAs, implying that these should be easy to deal with.

Several commenters took issue with Mahany, with one saying:

“Please, show me a competent accountant that will do a US tax return for $300 when RESPs. TFSAs, and Canadian mutual funds (outside of a RRSP) are involved. There is no such animal.”

I decided to pursue this question and asked Mr. Brad Smith, who might or might not be a composite character, to follow up with Mahany on this inexpensive $300 tax service. Brad is a 27 year old single Canadian resident and Canadian citizen living in Toronto who just discovered that he is a U.S citizen. Mr. Smith insists on entering into IRS tax compliance in order to pay, as he says, his “fair share”. He is unwilling to file returns on his own and refuses to renounce his new-found U.S. citizenship.

I selected Brad as he has a very simple tax situation: very low self-employment income ($19,000 annual), a single share of a Canadian mutual company (value $100), and $200 in a Canadian tax free savings account (TFSA).
Continue reading →

George has another excellent comment that must be posted. Here it is:

Morning Brockers;

Its good to read of your efforts in educating others: (Report #1 AND Report #2 AND Report #3). Those in attendance will tell others and so forth.

I made a list of what is probably all the steps we have gone through on our own paths. I am sure there are differences but in general terms.

Journey, one step in front of the other.

1.) Decision to leave the homeland. Face possible concern and ridicule from friends and family in homeland.

2.) Apply for all the visas and other requirements to be a properly documented immigrant in your new land. Concern from homeland friends and family grows, they whisper about us.

3.) Spend years learning language, customs and become assimilated into your new home. Your allegiance is slowly transferred to your new home. Friends and family in the homeland think of you as the crazy relative locked up in the basement. They are somewhat embarrassed about us but figure we will come back saying what a mistake it was and how bad the health care system is and we ran away from the health care death panel.

4.) After a certain number of years you realize that you are no longer X but you have become Y. You fill out countless papers to be naturalised/registered as a new citizen. Christmas cards from the homeland are very light this year. 

5.) The Big Day! Just like new immigrants to the USA are fully expected to become completely loyal to their new land, we/you do the same thing in our new land. Some of us in accordance with US Code as ordered changed by the US Supreme Court, intend that this action to be a relinquishing act.

Remaining proud to be an American, now proud to be a ______ Citizen, but no longer a US Citizen.

Or for others remaining proud to be an American, now proud to be a ______ Citizen, but no longer a US Citizen at least in respect to where you are living in accordance with the Master Nationality Act.

Christmas cards from the homeland grow in abundance because your homeland is where your heart is and that is where you are and your friends who are fellow citizens realize this. They no longer ask you if you are a tourist or when are you going home, didn’t you hate that. Or the question, are there things you miss?

6.) Carry about our lives in our home country. As a Citizen of X, living in X, I have only one citizenship recognized by Country X. You are calm, happy and at peace, probably the happiest you have ever been.

7.) At some point realize that our former country has established new laws or re-interpreted old ones that have absolutely no comparison to those in the countries of our sole allegiance or for some primary allegiance. Our newish countrymen look at us cross eyed when we explain what happened, they do not believe us.

8.) Panic, Fear, Health Problems

9.) Resolution. You realize that you are Canadian or French or _______, that you are not a US Citizen and have never acted like a US Citizen since becoming Canadian, French or German. Psychologically you are free at last, start sleeping again.

10.) Decision time. Do you appease those to the south (N/E/W)? For some it will make clear sense to get a CLN. For others it may look outright foolish to get a CLN. For some it will be a mixed bag.

11.) Final Sadness. All of us out of respect to the place we were raised in, or where we have family, or of a place we really never had ties but dreamed of it as that shining place on a hill, have great sadness that US Citizenship has become something that people want to get rid of like gum on a shoe. A place where when learning you might be a US Citizen is like a doctor telling you that you have a destructive disease. A place where you have become afraid to even visit again.

12.) Conclusion. Those with a CLN have some security but remain wondering if Congress or the Supreme Court will change the rules again and give them their citizenship back, something they do not want back. We have seen the rules changed too many times, fool me once shame on you, fool me twice shame on me.
Continue reading →

Another important document, US Joint Congressional Committee published report, from George:

Hello Brockers, another little ditty to download before they take it away;

This is part of a joint congressional committee published report. Others can probably dice this up better, but it might be nice to have in the file. Better yet, send it to your MP as a report to Congress pointing out that having a Certificate of Loss of Nationality (CLN) is not written into US Law. My guess is that would be the final breaking of the Expatriation Act 1868.

“There is no obligation for an individual to obtain a CLN or otherwise notify the Department of State of relinquishing ones citizenship.”

From part of a US joint congressional committee published report “84-288-GPO-CPRT-JC5-2-03-7-2, B. Aquisition and Loss of Citizenship”

Cross-posting from Maple Sandbox, resulting from George’s comment at Isaac Brock:
Dual Citizenship: “Paramount Allegiance-Predominant Claim”

See: http://www.state.gov/m/a/dir/regs/fam/07fam/ (shown in list of links as “-080 DUAL NATIONALITY [111 Kb])”

Over at Brock, George posted some information from U.S. Department of State on dual citizenship which is very useful to us. It says:
From the US Dept of State, 7 Fam 080, the formal and OFFICIAL US Position.

“b. It is a generally recognized rule, often regarded as a rule of international law, that when a person who is a dual national is residing in either of the countries
of nationality, the person owes paramount allegiance to that country, and that country has the right to assert its claim without interference from the other country.”

AND

“e. U.S. Policy on Dual Nationality: When a U.S. citizen is in the other country of their dual nationality, that country has a predominant claim on the person.

So, there we have it. Even the United States says we owe our “paramount allegiance” to our country of residence. That is exactly how most of us are living our lives.

Our countries of residence have “the right to assert its claim without interference from the other country.”

So, why aren’t Canada, France, Switzerland, New Zealand, China, Russia, Brazil and India telling the U.S. to just FATCA off? Our “paramount allegiance” is to those countries and those countries have a “predominant claim” to us.

I have just included this information in my Canadian citizen submission to New Zealand.

Update on my previously buried comment from information I received from Terry McBride, Saskatoon, SK’s The StarPhoenix. I am moving this to its own post. There is input here from James Jatras, including the comment:

Repeal FATCA

This hits the nail right on the head. Now that the Republican Party has officially endorsed FATCA repeal, momentum is shifting. National governments should not sign IGAs and subject themselves to an American law that even the US Department of Justice admits has no legal authority over them, and can only be backed up with the threat of reprisal — the 30% sanction. Most of all, Mr. Green is right, institutions that stand to save a lot of money if FATCA is repealed have the ability to affect the outcome: “The prospect of FATCA’s repeal is quite realistic. If institutions help educate and inform the American public and Congress, there’s a good chance Fatca can be delayed and perhaps – I hope – eventually repealed.” If banks, credit union, pension funds, stock and hedge funds, spent a tiny fraction of the money they’d spend for FATCA compliance on securing its repeal, that goal is achievable.

We’ve also seen Allison Christians’ input to a letter to Justin Trudeau, Canadian Liberal Leader:

It is one thing for the USA to say to individuals across the planet: if you have status under our law you must follow all of our laws no matter where you are. It is another thing entirely for Canada as a nation to voluntarily, with no compensation except the conditional promise of removal of a threat of economic sanctions, assist the United States in globally rounding people up to force them to comply with its patently untenable and unjustifiable position. Such assistance fundamentally conflicts with a universally recognized (and far more just) jurisdictional claim based on actual residence, which Canada practices along with the rest of the world.