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Category Archives: Issues regarding US persons abroad

The Democratic Party and It’s Line: Dianne Feinstein on Tax Evasion, “Tax Avoidance,” never to realize or acknowledge “More US Collateral Damage”

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Below is a letter received by a “US Person Abroad” from US Senator Dianne Feinstein in response to a letter urging her support for Senator Rand Paul’s bill to repeal the most burdensome provisions of FATCA.

As pointed out,

“Clearly Senator Feinstein is simply towing the Democratic Party line to support FATCA and the Administration’s enforcement actions. Quite disappointing to say the least.”

———————————————————————————

Dear _______

Thank you for contacting me to express your concerns about the impacts of the foreign tax provisions included in the “Hiring Incentives to Restore Employment (HIRE) Act” (P.L. 111-147). I appreciate the time you took to write and sincerely apologize for the delay in my response.

As you know, the HIRE Act included a number of provisions, known collectively as the “Foreign Account Tax Compliance Act (FATCA),” that were intended to combat tax evasion by Americans holding investments in offshore accounts. FATCA requires U.S. taxpayers with over $50,000 of assets in foreign accounts to report information on their tax returns that is currently included in a Foreign Bank and Financial Account Report (FBAR). FATCA also institutes a 30% withholding rate on payments to foreign financial institutions. The principal exemptions from the withholding tax apply to interest on bank deposits, portfolio interest, and capital gains.

I understand your concerns that these provisions could negatively impact global investment in the United States and encourage foreign investors to divest from U.S. securities and holdings. While I share your belief in the importance of continued global investment, I am also concerned about the serious problem of tax avoidance. The Internal Revenue Service (IRS) recently announced an agreement with the United Bank of Switzerland (UBS) to collect back taxes and penalties from thousands of UBS customers found guilty of tax evasion. The IRS estimates that the average tax collections per case to be over $200,000, with individual cases of over $20 million in back taxes and penalties. Tax evasion penalizes all honest and law-abiding citizens, and the agreement with UBS underscores the continued need to enforce tax compliance.

To date, legislation to repeal the FATCA tax provisions has not come before the Senate for a vote. However, please be assured that I have noted your strong opposition to these provisions and will be sure to keep your comments in mind should legislation come before the full Senate.

Once again, thank you for writing. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841, or visit my website at http://feinstein.senate.gov.

Best regards.

Sincerely yours,

Dianne Feinstein
United States Senator

Seems Senator Feinstein and other congresspersons will ever label all ‘US Persons Abroad’ tax evaders.

IRS makes useless paperwork less onerous for U.S. Persons in one country

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Phil Hodgen has some good news for the Canadians in the audience:

Up to now the way to fix an unreported RRSP problem was by incurring brain damage, spending lots of money, or suffering through terminal uncertainty and fear. Or all of the above … Guess what. Things have changed for the better. I’m serious. We confirmed today in a phone call with Chief Counsel’s office that amended tax returns will be allowed with Form 8891 attached.

In other words, a seemingly pointless waste of paper the IRS issued to one taxpayer early this year may have unforeseen historical significance: it is quite possibly the last “late RRSP election” Private Letter Ruling that will ever be made.

While this is certainly good news for many people, I find myself rather underwhelmed. Treasury has enormous power under existing laws to issue regulations exempting pretty much any class of persons it wants from pointless international paperwork that is otherwise demanded by law. Canada introduced its Registered Retirement Savings Plans in 1957. It only took fifty-six years for the IRS to ensure there are reasonable procedures for dealing with late filings on this one type of financial product. (Got RDSP or RESP problems? Too bad for you!) And that was in the best case scenario: a country right next door with English as one of its official languages, the most common type of account in that country, and over a million migrants going in either direction who were hit by the whole mess.

You do the math: 190-odd other countries & territories, each with their own unique kinds of purpose savings accounts, most speaking languages other than English, and fewer than a million affected filers in each to lobby for change. How long will it be before U.S. Persons finally have the freedom to move to any country on Earth without incurring unreasonable paperwork requirements, and the folks in the District of Columbia can start figuring out what to do with all those non-filers who moved to Mars in the intervening centuries?

The @SenTedCruz Chronicles 2: Possibly the first US President born in Canada – Updated! – A comparison of two politicians – David Alward and Ted Cruz

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This post appeared on the RenounceUSCitizenship blog.

We know that Mr. Cruz plans to renounce his Canadian citizenship. The assumption is that this will be easy for him to achieve. This is because:

1. Unlike the United States, Canada views citizenship as voluntary membership in a political community.   The United States views citizenship as  as a form of “servitude” to the state;

2. The assumption is that Cruz was also born a U.S. citizen or will become a U.S. citizen. In other words, Mr. Cruz would have another citizenship to go to if and when he renounces his Canadian citizenship. Mr. Cruz better hope that Canada will simply accept his claim of being a U.S. citizen (without forcing Mr. Cruz  to prove his U.S. citizenship).

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Ted Cruz article. “Nothing Against the United States, (Until Now)” by Lynne Swanson in the Hill’s Congress Blog.

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On Maple Sandbox, Lynne Swanson (Blaze) wrote “Ted Cruz has ‘nothing against Canada.’ … Likewise, many Canadians born in US have ‘Nothing against United States (until now).'”

Lynne “tells Senator Ted Cruz he has nothing to fear from Canada for renouncing Canadian citizenship–unlike what happens in reverse” and explains why in:

Nothing Against the United States, (Until Now)” in the Hill’s Congress Blog,

The Cruz Chronicles 1: His Canadian citizenship is not in doubt. Is Senator Ted Cruz a US citizen?

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This post appeared on the RenounceUScitizenship blog.

Recent, shocking revelations regarding Texas Senator Ted Cruz! Ted Cruz is a Canadian citizen. Does this mean that he is not American or not completely American?  Could he be “UnAmerican”? The above tweet references an article that reports the release of a story  that …

Ted_cruz_certificate

… showed Cruz was born in 1970 in Calgary, Canada. His mother, Eleanor, was born in Delaware and was a U.S. citizen and his father, Rafael, was born in Cuba. Cruz had said in interviews prior to his Senate election that he is a U.S. citizen because his mother was born in the USA.

“Because I was a U.S. citizen at birth, because I left Calgary when I was 4 and have lived my entire life since then in the U.S., and because I have never taken affirmative steps to claim Canadian citizenship, I assumed that was the end of the matter,” Cruz said in a statement released Monday.

“Now The Dallas Morning News says that I may technically have dual citizenship,” Cruz continued. “Assuming that is true, then sure, I will renounce any Canadian citizenship. Nothing against Canada, but I’m an American by birth and as a U.S. senator, I believe I should be only an American.”

Cruz will have to explain in writing why he doesn’t want to be Canadian, fill out a four-page form and get clearance from Canada’s spy agency, according to Reuters. The process could take up to eight months.

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Two South Koreans who gave up green cards in 2012 not in Federal Register

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Recently I ran across a story from July 2012 about two Republic of Korea Army officer candidate school graduates who gave up U.S. green cards to receive their commissions; the hometown paper ran a brief human interest story about them, which I translated below. In contrast to the Homeland image of immigrants-turned-emigrants as either “ungrateful tax cheats” or “failures who self-deport”, they’re just ordinary young men who made their own choices about where they wanted to live as adults, choices which happened to differ from those of their parents.

Both men were in their mid-twenties and almost certainly qualified as “former long-term permanent residents” for U.S. emigration control purposes, but neither had their names published in the Federal Register as required by law. We’ve previously discussed several cases of South Koreans who gave up U.S. green cards to serve in the army, but this is the first case I’ve come across after the Federal Register list began claiming (in Q1 2012) that it includes green card holders.

Of course, we already know that nearly two thousand South Koreans gave up U.S. citizenship or green cards last year and that the vast majority did not appear in the Federal Register, but it’s good to have some concrete names to demonstrate this phenomenon. As far as I can tell, the problem may be that USCIS still doesn’t provide the IRS with enough information to distinguish “long-term former permanent residents” (nearly a decade-and-a-half after GAO first complained about the issue).

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FATCA linked with US surveillance operations and broader anti-privacy offensive

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From The Ludwig von Mises Institute, a well-researched article entitled FATCA and the End of Bank Secrecy by Cezary Blaszczyk, a graduate of the Faculty of Law at Warsaw University.  In reference to recent news about America’s wide-ranging online surveillance operations, Mr. Blaszcyk notes that:

Few, if any, of those commenting of late on such affairs mentioned that numerous nations across the globe actually acknowledged the U.S. government’s anti-privacy offensive months before by accepting its Foreign Account Tax Compliance Act (FATCA).

Blaszcyk demonstrates how little resistance there has been to FATCA from foreign governments, in particular from those in Europe, whom he implies should really know better:

It seems that there is little understanding that it was banking secrecy that helped to resist twentieth-century dictatorships and that high tax rates — not money havens — are responsible for tax evasion, as Prince Hans-Adam of Lichtenstein has pinpointed. Clearly the amount of information collected for the purpose of future tax investigation is enormous, leaving little place for human privacy and dignity. Most importantly, it raises a question as to who gave participating states a right to gather information on people that are not their citizens.

Comments are open and a few Brockers have already been actively posting there.  Here was my main observation, so far:

With reference to the article’s concluding sentence:

“Most importantly, it raises a question as to who gave participating states a right to gather information on people that are not their citizens.”

On the contrary, it should be noted that many US Persons ARE, in fact, citizens of these same participating states. As dual citizens, frequently “accidental”, they may have very little if any connection to their US place of birth. Therefore, the most egregious aspect of FATCA IGA’s is how a country would agree to gather information about their OWN citizens and willingly hand it over to a FOREIGN government – the United States of America. THIS is the greatest betrayal of all, for it represents an existential threat not only to individual citizens but to entire nations as they willingly forfeit their national sovereignty to appease the American Empire.

The US is engaged in a veritable world war of intimidation and treasury-raiding and it is winning without a single shot being fired. This callous, undeserving victor is laughing all the way to every bank around the globe.

USD, School of Law – Procopio International Tax — 2013 International Update: U.S., Mexico, Canada Cross-Border Tax Issues

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Some may want to keep an eye on this October 2013 conference in San Diego which will focus on Canada/US/Mexico. One of the panels will have the Canadian Taxpayer Ombudsman, the US Taxpayer Advocate (Nina Olson), and the Mexican Taxpayer Advocate. Moderating that panel will be Roy Berg, Moodys Tax Advisors in Calgary.

From the Canadian Taxpayer Ombudsman, Government of Canada Taxpayers’ Ombudsman — Upholding Your Service Rights:

Information for Canadian citizens that are subject to American tax laws

Counting the Uncountable: Overseas Americans by Amanda Klekowski von Koppenfels, University of Kent at Brussels Joe Costanzo, George Mason University

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Some of us (many of us?) may have been interviewed for this well-researched book and awaiting its publication.

Where Are Overseas Americans?
Who Are Overseas Americans?
Counting the Uncountable
How Many Americans Leave the United States in a Given Year?
Census Counts
Other Estimates
Counting Overseas Populations: An International Challenge

Dear Survey Respondents, dear Interviewees–

Thank you so much for your patience with me! Turns out book-writing is a long process. However, it’s nearly here! I’m delighted to let you know, if you haven’t happened across it already, that my book is listed on Amazon – although it’s not actually published yet.

… until the book is actually published, which is scheduled for January 2014. …

In the meantime, a colleague and I wrote this piece, which you might find interesting (the book expands on these points): http://www.migrationinformation.org/USfocus/print.cfm?ID=951

May 17, 2013

The migration debate in the United States — a country with a long history of immigration and currently home to around one-fifth of all international migrants — often focuses on the number of foreign born who enter and reside in the country. Much less focus is paid to Americans who live abroad. While small numbers of high-profile Americans such as Gertrude Stein, Ernest Hemingway, Richard Wright, or Josephine Baker have long captured the imagination of the American public for their adventures in Paris and elsewhere, there are millions more living lower-profile and very different lives.

The US government does not formally track how many Americans leave the United States, whether temporarily or permanently, meaning that one has to rely on estimates to get a sense of how many US citizens live overseas, in addition to the 289 million US citizens (out of the total population of 311.6 million) who live in the United States. As the Census Bureau reported to Congress in 2001: “No accurate estimate exists of the total number of Americans living abroad or of the other components of this population. At this time, we cannot estimate accurately the size of the universe of the overseas population.”

Despite efforts by American organizations and the US government to achieve more consistency, current estimates vary from 2.2 million to 6.8 million — a substantial range. This population’s size, characteristics, and distribution remain an enigma — as do their economic, political, and societal impacts both in the United States and abroad.

This article explores what is known about Americans overseas — common destinations, occupations, and motives for leaving the United States (and ultimately staying abroad) — and also examines the challenges of calculating the population’s size and distribution. It draws on a variety of sources, including the US Census Bureau, the US State Department, the World Bank, and a forthcoming study based on interviews conducted in 2011 with 115 Americans in Berlin, Paris, and London, and a survey with 884 respondents, based primarily in Western Europe.

As always, if you have any questions, please don’t hesitate to contact me.

My best regards,
Amanda Klekowski von Koppenfels

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Migration Information Source, ISSN 1946-4037
MPI · 1400 16th St. NW, Suite 300 · Washington, DC 20036
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source@migrationpolicy.org

South Korean diaspora policy and the thirty-five thousand U.S. green card holders living in South Korea

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From an article last week in a South Korean newspaper, I was able to get a lead on some statistics I’d been trying to find for a while: the number of U.S. green card holders who reside in South Korea without making declarations of permanent return (which would require them to cancel their green cards). I’m still working on gathering all the earlier statistics from government yearbooks, but after the jump I translated the article itself, which provides some interesting insight into South Korea’s diaspora policy and how they are reforming it to cut unnecessary red tape and adapt to the reality of a globally-mobile population.

To summarise: right now there’s more than thirty-five thousand green card holders who are recorded as living in South Korea, up by about 30% since they started keeping track in 2005. These are distinct from the 1,991 people who made declarations of permanent return last year; the latter had their green cards or U.S. citizenship cancelled and their residents’ registration restored, whereas the former still have green cards and so face certain restrictions on financial transactions and real estate purchases in South Korea.

A newly-proposed reform plan would remove the requirement to give up foreign permanent residence or citizenship in order to restore South Korean resident registration. This is good news for the Korean diaspora, though the reform plan probably also means that the South Korean government will stop keeping statistics on how many of its citizens give up U.S. green cards.

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