[Editor’s note: This post clears up the issue of whether 8854 is required for people receiving backdated CLNs: If your expatriation date is before 2004, the rules are different]
In this post, I want to point out a clear contradiction both in the logic and the wording of the instructions for Form 8854. This is a follow-up post to the question posed by USX about who must file the 8854. Continue reading
Cross posted from ExpatAmi
On 04/03/2012, the Social Security Administration wrote that when I retire at the age of 67, I’ll get a mighty monthly Social Security benefit of $495, partially in exchange for the time spent serving loyally in the United States military. If I was 67 today, then this benefit would enable me to afford to rent the cheapest one bedroom apartment in San Francisco for only $370 per month, according to WalkScore, and have $125 left over for food, drinks, electricity, health care, transportation, taxes, clothing, etc.
This would be the case if there was no expat penalty, also known as the “Windfall Elimination Provision“ (WEP). On WEP, the Social Security Administration writes:
If you work for an employer who does not withhold Social Security taxes from your salary, such as a government agency or an employer in another country, the pension you get based on that work may reduce your Social Security benefits… The Windfall Elimination Provision primarily affects you if you earned a pension in any job where you did not pay Social Security taxes and you also worked in other jobs long enough to qualify for a Social Security retirement or disability benefit.
[Editor’s note: This post clears up the issue of whether 8854 is required for people receiving backdated CLNs: If your expatriation date is before 2004, the rules are different]
(This comment from yesterday, buried at the end of an ancient thread, may have gotten lost in the perpetual flurry. So I repeat it here as a posting in its own right.)
Nobody has yet convinced me that any person who now relinquishes or renounces is not required to file Form 8854 to satisfy the IRS.
This official document says that 8854 applies to anyone expatriating after 16 June 2008.
And this official document says at 2.A — unless I can’t read — that for practically all of the Brock crew, unless you have already done the US consulate thing, you have not expatriated yet. Backdate that precious CLN to 1776 if you want, but when did you actually visit the US consulate?
Continue reading
A headline from the morning news caught my attention:
“June 13 (Reuters) – Honda Motor Co Ltd said on Wednesday it will recall about 50,000 Civic small cars in the United States from the 2012 model year for a potential driveshaft assembly issue that could lead to loss of engine power. “
It occurred to me that there are more mechanisms in place to notify a consumer of an issue effecting product safety than the US government uses in informing its citizens abroad of their duty to pay US taxes. What if manufacturers were to leave safety recalls to foreign media, or to print it in mouse-type on the last page of a document that a consumer may or may now renew every 10 years, or adopt a laissez faire regard for the law that leads to sellers of the product not informing purchasers of an important safety instruction? Yet the US government continues to punish its citizens by way of onerous penalties and threats of exile for neglecting to report forms that these otherwise law-abiding citizens could not have reasonably known about, and continues to make little in the way of effort to facilitate.
Cross posted from RenounceUScitizenship
To the readers of the Isaac Brock Society blog. I recognize that many of you are no longer U.S. citizens. As a result, the November 6 Presidential Election may have no direct effect on your lives. Nevertheless, as citizens of other countries you have a clear interest in stopping the U.S. plunder of other nations through citizenship-based taxation. Therefore, I suspect that citizens of all free nations have an interest in putting an end to citizenship-based taxation, FBAR, OVDI and FATCA to harm other sovereign countries. Although, Barack Obama is not the architect of citizenship-based taxation, his administration has used it in new ways to harm other sovereign nations.
Last night the Economist Magazine ran an online debate, on the issue of whether Barack Obama should be re-elected president. The debate allowed live comments. There were a total of 92 “registered” comments. Of the 92, approximately 7 were attempts to comment that never became comments (unless the absence of a comment was intended to be the comment). In any case, of the 85 substantive comments approximately 7 were from U.S. citizens abroad. The agony of U.S. citizens abroad is real. Their pain can be heard. The simple fact is that the Obama administration has made life for U.S. citizens abroad a life of agony. In order to spread the word, I created a number of tweets which link to the cries of anguish. Here they are:
Continue reading
I came across an interesting article on IPolitics.ca about a deepening mystery about Canadian’s holding bank accounts in Liechtenstein. I linked to article below but its behind a registration wall so I copied and pasted the most intriguing passage [Editor’s note: I’ve rerouted the link through google and so the entire article should be available]:
The mystery surrounding Canadian owners of offshore accounts in a secretive bank in Liechtenstein has deepened with the discovery by the Canada Revenue Agency that nearly half the names it was given are not the real owners of the accounts, iPolitics has learned.
CRA’s probe has determined that 51 of the 106 names it received of account holders in the LGT Bank in the tax haven of Liechtenstein “were not the true beneficial owners for the account.”
“With regards to the 51 cases that were not the true beneficial owners for the accounts, the CRA has determined, through audit actions, that they do not have any tax obligation in relation to the information obtained,” explained Philippe Brideau, spokesman for the Canada Revenue Agency. “However, the CRA has taken actions to determine the true beneficiaries and has taken audit actions to ensure compliance with the Income Tax Act.”
Brideau said further details are protected under confidentiality provisions of the Income Tax Act.
I am going to put out the supposition that whoever the “real” owners of these accounts are they aren’t Canadian and furthermore the real owners of these account are residents of a certain other country to the south and the premise of FATCA just got blown out of the water. (The information CRA got was stolen by a disgruntled bank employee so even the bank didn’t know who the real owners are). What is interesting is these “51” people appear to be free and clear as a matter of Canadian law so if a certain other’s countries Justice Department wants to do what it normally wants to do its going to have to pick the same type of fight with Canada that is currently ongoing with Switzerland over club “51”. I am going to post this over at Jack Townsend’s blog to see what he thinks of it.
Mystery deepens around Canadian accounts in secretive offshore tax haven
Interestingly there were four account holders outside of the 51 that were fully compliant and 22 that were partially compliant.
Weigh in here. Does Obama deserve to be elected?
This is a moderated debate that is in the opening remarks phase. It will run to closure on June 20th, so there is time to weigh in on his actions which are impacting Americans Abroad so negatively.
Here is the comment I just quickly added. I tried real hard not to be too long! 🙂
Cross posted from RenouceUScitizenship
Warning!! If you don’t want to read this whole post, but want only to understand the bottom line, read this comment. – Furthermore, if you care about your fellow man, spread this information far and wide!
US uses #americansabroad to exact tribute from other nations http://t.co/OEcQnQa7 and #PFICs + http://t.co/exmmMlFC #FBAR #FATCA #OVDI
— U.S. Citizen Abroad (@USCitizenAbroad) June 13, 2012
As I finish this post I note that our very own Petros has written a wonderful post on the same theme. I begin by borrowing from his post where he notes that:
I have maintained that the actions of the United States government in recent years, reaching across borders to exact tribute from subjects who live within the jurisdiction of other sovereign countries, are hostile acts; this extra-territorial tax crack-down is potentially a casus belli. In earlier epochs, nations went to war in order to exact tribute. We are witnessing the United States presiding over the destruction of the world order which it was instrumental in creating after the end of World War II. It is only a matter of time before the nations realize that the United States has attacked them on several fronts in this financial war. Perhaps journalists will be the last to know, as most of them still seem to have a man crush on President Obama.
Exactly 200 years after the war of 1812, the U.S. appears to be on the attack again. How? By sending its citizens to other countries and then “exacting tribute” from them in a way that harms other governments.
Interestingly, this week, the following comment was on the ACA Facebook page:
I say with every ounce of facetiousness I can muster up: Every government of the world should stop letting Americans come to reside in their country. Eventually the ones that have slipped in before the draw bridge was raised will die off, leaving each country sanitized of these toxic elements. No more punishment for leaving the homeland, no more drain on anyone’s resources trying to hunt us down. Citizenship based taxation, the sacred cow of stupidity.
The author is correct. Countries must protect their sovereignty. Therefore, U.S. citizens should be banned from immigrating to any other country. U.S. citizens are a threat to the fiscal stability and sovereignty of any country. There are a number of reasons: including the inability of U.S. citizens to participate in normal financial planning and other vehicles of self reliance. I intend to do a series of posts exploring this theme. Today (as we get to the June 15 tax filing deadline) I offer you the “PFIC Edition”. Continue reading
The Commissioner of the IRS, Congress, the President and the US courts are to thank for the “Last in Time Rule”, which essentially enables the United States to dishonour every tax treaty that it has ever made. Senior Circuit Judge WILLIAMS wrote this summary of the case (William David JAMIESON and Judith A. Jamieson, Appellants v. COMMISSIONER of INTERNAL REVENUE Service, Appellee):
William David and Judith A. Jamieson are United States citizens who lived in Canada in 2003, earned Canadian income and paid Canadian taxes on that income. On their U.S. income tax return for that year, they claimed foreign tax credits of $95,132 against their reported U.S. tax liability of $96,429, resulting in a net U.S. liability of $1297. They did not compute any alternative minimum tax (“AMT”) liability under 26 U.S.C. § 55, noting on their return their position that a tax treaty between the United States and Canada precluded any such liability. The Commissioner of Internal Revenue rejected this position and, applying 26 U.S.C. § 59(a)(2)’s limit on foreign tax credits for AMT purposes, calculated that the Jamiesons owed $6078 in alternative minimum tax.
I’d like to talk to someone in BC — on the record, which means I would use your name — for an article I’m preparing for BC Business magazine on the FATCA nightmare. I know this would be a leap, and fully understand if no one wants to front up. I stayed anonymous for quite a while myself on this. But I need a real story/anecdote to get this piece moving. My email is don_whiteley at telus dot net, anyone who thinks they could do this drop me a note and we’ll have a conversation first, just to make sure you’re comfortable. My deadline on this is June 28th (and I’m away next week).
DW
