Category Archives: Issues regarding US persons abroad

Update!!! September 1, 2016

Read the article referenced in the following tweet:

Outraged by Apple's tax dodge then https://t.co/PEjnAz6TIL

— U.S. Citizen Abroad (@USCitizenAbroad) September 2, 2016

You will find comments from Schumer, Levin, and Paul Ryan.

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From the EU:

Irish tax rulings to Apple are illegal state aid. Effective taxation as low as 0,005 pct. #Apple has to repay up to €13 billion unpaid tax.

— Margrethe Vestager (@vestager) August 30, 2016

From the Jack Lew:

Jack Lew believes that the EU Apple tax decision means that EU is taxing income that ought to be taxed in the USA https://t.co/jmGkhhRYVQ

— U.S. Citizen Abroad (@USCitizenAbroad) September 1, 2016

On the hypocrisy:

https://twitter.com/SophieintVeld/status/770897743569117185

Oh my God! #YouCantMakeThisUP!

Have a look at the above video.

In the world according to Lew:

The idea that Apple’s European profits, should be taxed by Europeans, is to reach into the U.S. tax base!!! Only the United States should be able to impose taxation on U.S. companies.

Is this guy really this mentally challenged, or is he just “Paid the big bucks” by Obama (who is his intellectual “equivalent” (to pull a word out of the FATCA IGAs) to spew this hypocritical BS?

Has it not occurred to this member of the “Homelander Elite Corp”, that the whole purpose of the U.S. tax system is to dip into the legitimate tax base of other nations, and transfer the revenue and capital of other nations to the U.S. Treasury?

What does he think the effect of: PFICS, CFC rules, Subpart F, foreign trusts, the taxation of capital gains on Canadian homes, the taxation of RDSPs, etc. is?

Does he not understand that CBT enforced by FATCA is a declaration of war on other nations?

If you watch this interview, you are left with the impression that he actually believes what he is saying.

Leaving aside the issues in Europe, does this “person with blinders” not understand that the behavior of Apple and other companies is a direct result of the U.S. tax system, which features the highest corporate tax rates in the world? The policies that are forcing DNA citizens to renounce have parallels that are causing Corporate citizens to renounce/invert.

Does he not understand the the U.S. tax system directly discriminates against U.S. companies in favor of the companies of other nations?

And he goes on again about the “retroactive nature” of the EU decision:

This coming from the guy who wants to impose retroactive PFIC taxation on the mutual fund investments of Americans abroad.

This coming from the guy who heads the agency that will NOT commit to the view that the U.S. “Exit Tax” rules should not be imposed on Americans who relinquished U.S. citizenship prior to 2004.

These people are deserving of nothing but contempt, ridicule and scorn.

The sooner they are put out to pasture the better it is for the world.

Well, at least the EU tried to instill some reason in him …

Very good meeting with Secretary of the Treasury Jack Lew on the European economy and transatlantic cooperation. pic.twitter.com/XiQBa6STAg

— Margrethe Vestager (@vestager) July 13, 2016

E.U. Commissioner on Apple Ruling https://t.co/oCec8um5zD via @nytvideo

— U.S. Citizen Abroad (@USCitizenAbroad) August 30, 2016

Today the E.U. ruled that the “tax deal'” that Apple negotiated with the Government of Ireland violated the E.U. prohibition on “State Aid”. Understand that this decision was NOT about taxation. It was about the Government of Ireland giving a benefit to one company (zero tax) which they wouldn’t give to other companies. It just so happened that the benefit given was a generous tax deal.

Anxious to characterize the E.U. decision has a “tax related decision” (probably because the United States perspective is that EVERYTHING is about taxation), the Obama Treasury commissioned a “White Paper” which was released on August 24. (You can read it below.) The “White Paper” is evidence of a standard of hypocrisy which should be an embarrassment for even the administration of Barack Obama. One of the objections (among many) was that (assuming that this is about taxation, which it actually is not) the E.U. was engaging in “retroactive” tax enforcement.

White-Paper-State-Aid

See the following from page 15 of the Obama Treasury White Paper:

III. The Commission Should Not Seek Retroactive Recoveries Under Its New Approach

Where State aid involves impermissible subsidies provided through the tax system, the Commission requires the Member State to recover the amount of tax that, in the Commission’s view, should have been imposed in the first place. These amounts can be significant, since the Commission can require recovery for up to ten prior years, with interest for the period the illegal aid is granted until the aid is recovered.

In Fiat and Starbucks, the Commission has ordered the Member States to recover the allegedly unpaid tax with respect to prior tax years.

Because the Commission’s approach in the State Aid Cases is new and was not foreseeable by the relevant companies, recovery of past allegedly unpaid tax would constitute retroactive enforcement of a newly adopted approach to State aid.

With no indication of the Commission’s new approach, U.S. companies have been receiving transfer pricing rulings from EU Member States for decades and had no reason to doubt their legality. Under these circumstances, recovery of past allegedly unpaid tax would be inconsistent with EU legal principles and the Commission should void retroactive enforcement.

As I read the complaint of the Obama Treasury, I thought that …

III. The U.S. Treasury Should Not Seek Retroactive PFIC Penalties Under Its New Tax Treatment of Americans abroad

Where the investment in mutual funds involves impermissible tax deferral provided through the retirement planning system, the U.S. Treasury requires the American living abroad to pay the “interest charge” imposed on investing in a non-U.S. mutual – the amount of tax/interest that, in the Treasury’s view, should have been imposed in the first place. These amounts can be significant, since the United States Treasury can require recovery for many years dating back to 1986, with interest for the period that the illegal mutual fund was owned until the interest is recovered.

In Streamlined and OVDP, the IRS has ordered the taxpayer abroad to pay the allegedly unpaid interest charges with respect to prior tax years.

Because the U.S. Treasury’s approach in the treatment of Canadian (and other non-U.S. mutual funds is new and was not foreseeable by the taxpayers abroad, recovery of past allegedly unpaid tax and interest charges would constitute retroactive enforcement of a newly adopted approach to IRS treatment of Canadian mutual funds.

With no indication of the IRS’s new approach, U.S. citizens living abroad have been investing in non-U.S. mutual funds purchased from non-U.S. mutual fund companies for decades and had no reason to doubt their legality. Under these circumstances, recovery of past allegedly unpaid tax, interest and penalties would be inconsistent with fair tax principles and the U.S. Treasury should avoid retroactive enforcement.

There’s hypocrisy, extreme hypocrisy and the Obama administration!

Karen is organising a group to take anti-FATCA/CBT action in Australia and has launched the website Let’s Fix the Australia US Tax Treaty!

The mission of Let’s Fix the Australia/US Tax Treaty! is to press for amendments to the Australia/US Tax Treaty and the FATCA IGA to eliminate discrimination against a subclass of Australian citizens that is also disadvantageous to all Australians. We plan to gather the voices of those impacted, including Australian-only family members, and highlight the obligation of the Australian Government to defend its sovereignty and protect Australians against US extraterritorial law.

The purpose of Let’s Fix the Australia/US Tax Treaty! is twofold:

First, to encourage affected Australians to write to their elected representatives to lobby for change on the Australian side of this equation. Australia has signed two agreements with the US that allow this to continue: the Double Tax Agreement (Tax Treaty) and the FATCA IGA. The Tax Treaty was last amended in 2001 and does not provide for US recognition of the tax-advantaged status of superannuation. There are other portions of the treaty that guarantee the double taxation of dual citizens resident in Australia. Our Australian government must put pressure on the US to come to the table an re-negotiate the Tax Treaty.

Second, to serve as an educational resource for both the affected dual citizens trying to understand how the Tax Treaty affects them AND to help educate our elected representatives on the problems caused by Australia’s capitulation to one-sided US demands.

The Australians have been very active and this is a great new development.

Regarding this new website, JC commented on another thread:

In Australia we are out to make some “noise.” On the Day Roy Berg presents to the Tax Institute of Australia seminar on superannuation, on US taxation and Australian Superannuation, a new website aimed at the injustices has been launched:

Best wishes for making lots of “noise” and effecting much needed change!

Let’s Fix the Australia US Tax Treaty!

"I complied with human rights-violating U.S. renunciation rules — and this leaves a bitter taste." https://t.co/H5qRkzhxxq

— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) August 24, 2016

Click on the link in the above tweet to see the complete discussion.

The bottom line is that Dr. Stephen Kish – Chair of the Alliance For The Defence of Canadian Sovereignty and plaintiff in the Bopp FATCA Lawsuit, has formally renounced U.S. citizenship. He performed this act in Iceland which is the final resting place of Robert James Fischer – one of the most famous and well known cases of U.S. citizenship relinquishment.

Bubblebustin says:

Thank you Calgary411 for posting this for me.
 

As some of you already know, I heard back from Canada’s Revenue Minister, the Honourable Diane Lebouthillier, as to whether my Canadian banking information had been sent to the CRA in last year’s FATCA IGA information reporting.

As it turned out, three information slips were reported from two different investment firms where I had signed a W-9 at some point. None of my other bank accounts where I had not signed a W-9 were reported although one of my bank’s managers knew I was a USP. She retired before it came time to report that account. It’s good to know that the CRA isn’t being extra helpful to the IRS by providing information slips on bank accounts that it is aware of through Canadian tax reporting – yet.

The letter contains a contact number for the Director with the Canadian Competent Authority Services Division others may find useful in trying to get straight answers when having to deal with FATCA.

-Bubblebustin

CRA letter

Thanks very much, Bubblebustin,  for sharing with other Canadian Brockers your CRA Letter (linked above)!

There’s a lot of hurry-up-and-wait in litigation. The legal team does work (a lot!) during the less visible periods of a case, but there’s not much news at such times. We’re in one of those periods now.  So, thanks very much, Ginny, for this comment that you made last night (and thanks to Canoe for suggesting we make a separate post of it):

“Hello friends and supporters.   I am just popping in again, while you carry on with your discussions about whomever will end up POTUS at the end of the day or whatever topics get your blood pressure pumped, to remind you that:

The Three Amigo Plaintiffs and the diligent ADCS committee members are still working every day in the background on (y)our litigation. We have never lost our focus nor have our great lawyers.

For those of you who are still keeping the faith with us, thank you. Because during these months leading up to the upcoming US election, we are concentrating on what needs to be done at our end to get it done here in Canada!

We appreciate how patient you have been waiting for updates while we press on preparing on your behalf. Don’t ever think we have forgotten you because you are our motivation and raison d’être.

Now back to your regular channel.

As always, best to you all.”
Ginny

We have to remember that United States law code only applies to little people like you and me, but not to big important people like Hillary Clinton:

This is an illustration of Petros Principle 12: The criminals are in DC.

Kinds of Trolls

Typical trolls:  These are people who troll for the fun of it. Perhaps they get their  jollies out of contradicting others on social media. Perhaps they enjoy arguments with people they disagree with. Perhaps their personal ideology compels them to find people to contradict, like a vegan in a meat-eaters group (yes, I’ve seen this).

Spammers:  Spammers are robots or people that leave messages in social media. They post click bait to spread malware or to bring traffic to a website or a product that they are trying to promote. Most often spammers never engage in the discussion, though their comments are designed to look like they are actually interacting with your content: “Hey great post! Thanks for the help.” Or, “Sorry you don’t know how to write. I could give you some pointers to make your website better.” Our spam filter discards hundreds of these messages everyday, but a few manage to get through

Condors:  One type of troll is a real person who is dropping by to let people know that he’s got a book for sale or he’s available for business. At Isaac Brock we get compliance condors who are essentially fishing for business. We have had cases where readers here at Isaac Brock have engaged the services of such an expert, only to inform us later that they felt ill-served. So generally, we have mixed feelings about people from the compliance industry: in some cases, they may share arcane knowledge that might be useful for the purposes of this blog. On the other hand, we cannot vouch for their services, and we recognize in some cases these people are able to get what amounts to free advertising at Brock. We have never received a penny from a condor in the form of payment, commission or kickback. The same was not true at the Expat Forum, where compliance condors had to pay to play. At the Expat Forum, however, the condors began to control the agenda, and the forum moderators removed several threads with thousands of comments. Isaac Brock, by contrast, has never received any funding from advertisers, and we only rarely censor comments, and we almost never remove posts.

Astroturfers: The main distinction between the typical troll and the astroturfer is the lack of transparency.  Astroturfers troll with a hidden agenda. So for example, a pharmaceutical company may pay an astroturfer to visit social media to defend their products. At Isaac Brock Society we have had cases of astroturfers–one confirmed case, but only because the condor who posted with a second identity lacked the sophistication to use a second IP address for his alter ego. The alter ego of this compliance condor came on to reprimand Petros for his hostility against the condor in an attempt to generate sympathy for himself. Those were in the early days of the Isaac Brock Society. From that day forward, we have been suspicious about astroturfing and have tried to learn more about the phenomenon.

Modus Operandi of trolls especially astroturfers

The astroturfer doesn’t have to use anything approaching a real argument and it is perhaps counter-productive to engage the main points of the original post. It suffices to sow discord and doubt. Sometimes, an astroturfer can take a  know-it-all approach while always resting on conventional opinion, attempting to discredit the author through accusations of extremism, lack of knowledge or expertise, or mental instability (such as accusing the author of anger). Because the astroturfer sometimes relies on conventional wisdom, an air of paternalism will replace actual rational debate.

Astroturfers also use multiple identities because one of their main goals is to make it look like their views arise from the grass roots. Hence the name astroturf–it is a fake grass roots movement. Indeed, Adam Bienkov writes:

As reported by the Guardian, some big companies now use sophisticated “persona management software” to create armies of virtual astroturfers, complete with fake IP addresses, non-political interests and online histories. Authentic-looking profiles are generated automatically and developed for months or years before being brought into use for a political or corporate campaign. As the software improves, these astroturf armies will become increasingly difficult to spot, and the future of open debate online could become increasingly perilous.

Who might be astroturfing at Isaac Brock?

Since we do not require that people provide a real name or even a real e-mail address, it is absurdly easy for an astroturfer to assume an alias, create a persona, and begin to post comments. We allow this because it permits people who are intimidated by the IRS to feel the courage to comment. But it isn’t paranoid to believe that astroturfers are also coming to Isaac Brock to sow discord and doubt. We are a true grass roots movement which is challenging the triumvirate of  government, finance, and compliance industries. In my own posts in particular, especially by setting down Petros Principles, I have questioned the legitimacy of the triumvirate. Hence, it is in their financial interests to monitor and even astroturf at Isaac Brock Society. We are talking about industries with very deep pockets.

Conclusion

We must always be on our guard. Astroturfers do not reveal their conflicts of interest.  Since astroturfers may go to elaborate lengths to create fake identities, we must be suspicious of those who challenge the core of our approach–especially when it is a first time poster (though there may even be some who have been with us for a long time). We should be sophisticated when using social media and never allow astroturfers to sway our opinions.

In my view the burden of proof is on the person who has the alias. I am suspicious of anyone who comes onto this blog for the first time just to contradict me. Therefore, if someone talks like a condor, the burden of proof is on them to prove that they are not one–at least for me. Obviously others have shown that they think that they can trust anyone who comes onto Isaac Brock  to contradict Petros–and that Petros shouldn’t expect such people to have to prove themselves. However, anyone who wishes to attack me should at least be as transparent as I am–my blogging alias is a thin veneer over a real person.

Petros Principle 12: The criminals are in DC

Psalm 10.1-2 (RSV)

Woe to those who decree iniquitous decrees,
and the writers who keep writing oppression,
to turn aside the needy from justice
and to rob the poor of my people of their right,
that widows may be their spoil,
and that they may make the fatherless their prey!

Psalm 94:20-23 (RSV)

Can wicked rulers be allied with thee,
who frame mischief by statute?
They band together against the life of the righteous,
and condemn the innocent to death.
But the LORD has become my stronghold,
and my God the rock of my refuge.
He will bring back on them their iniquity
and wipe them out for their wickedness;
the LORD our God will wipe them out.

Commentary:

Often people assume that FATCA was about catching wealthy Homelanders who were putting their money in offshore accounts to avoid paying taxes. But in the above video, it comes out of the horse’s mouth what FATCA is all about by design–“far reaching steps to catch overseas tax cheats”–not tax cheats who have their money overseas–the adjective “overseas” modifies the noun “tax cheats”. The manner in which FATCA has been implemented has shown that the intention was always to snare innocent so-called Americans abroad.

Democrats Abroad have attempted to get a same country exemption for expats, but the regulators have not simply been slow to make it happen but have stonewalled. So we should please stop saying that the intention of FATCA was to catch Homelanders putting their money in banks abroad. The intention has always been to catch innocent people.  Moreover, the repeated petitions to find relief from FATCA and FBAR have fallen on deaf ears, showing that the US government is run by sociopaths who have no empathy for the people they are destroying.

One reason that an unjust law is no law (PP7) is because it will punish innocent behaviour. So a person living in Canada who works, opens bank accounts, invests in investment vehicles, who owns a personal corporation, who abides by the Canadian tax code, is an innocent person, full stop. That person is not a “tax cheat”. Thus, FATCA is itself a crime because of its criminalization of innocent behaviour.

Psalms 10 and 94 (cited above) show that it has long been recognized that evil rulers can create unjust statutes which criminalize innocent people. The Psalms invoke God himself to deal ever so severely with such wicked rulers. In several comments on my last post, a certain Jay said that lying to authorities is unethical. In his view, expats must only fill out good faith forms to the IRS. And yet doing that very thing has exposed not a few innocent people to the full brunt of bad laws and has turned them into victims. Evidently, Jay’s ethics do not conform to  this ancient traditional view of law. In my view, Petros Principles are an ethical response to unjust laws, by providing wisdom by which innocent people may protect themselves and find the least bad solution in the face of laws designed to criminalize them.

The true criminals are the makers and enforcers of laws like FATCA. Such people cannot withstand scrutiny. The following documentary, Clinton Cash,  sheds light on a criminal couple in DC who have gamed the system to make for themselves hundreds of millions. And such people have the audacity to come after my meager savings?

Previous Discussions

Human rights trump money: Why We must say no to FATCA
Ignorance is an excuse in the case of FBAR
The Real Intent of #FATCA: You are not “Collateral Damage” — You are the Target

Previous Petros Principles:

(1) What the IRS can’t know unless you tell them can’t hurt you.
(2) Fear makes the IRS more dangerous than it really is.
(3) Haste is the devil.
(4) Those most hurt by the IRS’s persecution of expats have engaged the services of cross-border compliance condors.
(5) Those least hurt have done nothing.
(6) Home is where you live.
(7) An unjust law is no law.
(8) Don’t feed the beast.
(9) Do the minimum in trying to achieve the least bad outcome.
(10) Lying to prevent a crime is a virtue.
(11) Cynical derision of Homelanders is healthy.

About: Petros is the alias of the founding administrator of the Isaac Brock Society. Petros Principles are guidelines that have helped him and others deal with the United States’ world-wide tax invasion.