One year ago I had the pleasure of joining John Richardson, Tricia Moon and Bahmen Yazdanfar on That Channel.
Category Archives: Issues regarding US persons abroad
Voter Schmoter
A pair of Brit-based wonks have copped aether space on LSE USCentre for their views on — put on your seatbelt — how expatriate Americans are the most important voting bloc you’ve never heard of.
Go no further than this end-of-article paragraph lead-in:
Democrats Abroad and Republicans Overseas remain vibrant and ambitious organisations …
The whole piece is a hype front-end for a “report” (not read) titled America’s Overseas Voters: How They Could Decide The US Presidency In 2016.
The main use of this emission for Brock may be to serve as a piece of triangulation fuzz on recent ruminations about the appearance in the Republican party platform of language relating to extraterritorials.
It’s all about trying to scrape up every possible vote in what could become a weird and very tight contest? And once those votes are counted … well, that platform guff did whatever it was supposed to. Or not. Not to mention those rapporteurs.
More of the usual hypocrisy from the U.S. Treasury
In a recent talk (archived) at a Tax Policy Center conference on international corporate taxation, Michael J. Graetz of Columbia University relates the following anecdote:
In Europe, countries generally wanted to strengthen their source-based taxation. The Obama Administration, however, has been determined to strengthen its residence-based taxation of US multinationals. This led a key US Treasury negotiator to remark that, when he was participating in the OECD’s BEPS negotiations, he felt like everyone in the room wanted the US to pay for all the drinks.
That anonymous negotiator represents a country which taxes Canadian disability savings grants, French unemployment assistance, and Hong Kong stimulus payments — all funded by people paying taxes in those places and paid out to people who don’t live in the negotiator’s country. And he’s complaining about other countries wanting to tax economic activity which actually involves their territory (hardly the first time we’ve heard such complaints from one branch of the U.S. government or another).
Well, this is also the country that gave the world the Jackson-Vanik amendment and 26 USC § 891. No surprise there. Meanwhile, Fran Hendy reports that the OECD, rather than complaining about U.S. hypocrisy, has endorsed it — by tweaking its tax haven blacklist criteria so that the U.S. can refuse to participate in the Common Reporting Standard without being declared an “uncooperative jurisdiction”
Petros Principles (7): On unjust laws
(7) An unjust law is no law.
Commentary:
Lex iniusta non est lex has a long tradition going back to St. Augustine. The world’s greatest human rights heroes remind us that unjust laws are illegitimate.
Unfortunately, in today’s Western world, lawmakers, law enforcers, and victims need reminding that an unjust law is no law. People are essentially law-abiding often to the point of scrupulousness. Civil obedience has become second nature, since the majority of us ordinary people start with the assumption that government is benevolent.
The cross-border compliance condors have taken advantage of this essentially law-abiding character. They try to infect their clients with a kind of tax scrupulosity, a pathological guilt and fear that if they do not do exactly as told, the IRS will destroy them with taxes, fines, interest, and jail time–and it would be the client’s own damn fault because it was their duty as a citizen to keep up with the requirements of the IRS.
My writing at the Isaac Brock Society has often focused on the injustice of the laws and their application to expats. This articulation of the injustice has been of clear benefit to our readers, if only to confirm that it is the USA Federal Government that has become criminal and that their own innate sense of what is unfair was right all along.
Why is the IRS persecution of expats unjust? Here are some ways that have been explored over and over at the Isaac Brock Society:
- It is an assault on the tax bases of every country in the world via the Trojan horse of the diaspora of so-called US citizens.
- The taxes collected are for the benefit of Homelanders and not for those who are taxed.
- The IRS has spawned a parasitic industry of compliance condors who produce nothing but paperwork and are an economic drain to the countries in which they ply their illegitimate craft.
- The IRS has created innocent victims, not least of all those expats who went into the money laundering program for criminals called OVDP.
- Unjust laws have criminalized the failure to fill out forms (FBAR, 8938) for reporting innocent bank accounts.
- Unjust laws (FBAR, FATCA) attempt to force people to yield voluntarily their own privacy rights or force foreign financial institutions to violate local privacy laws.
- The IRS has violated the citizenship rights of thousands: forcing some to renounce US citizenship, and treating non-US citizens, against their will, as though they were US citizens.
- Extra-territorial taxation of US citizens in essence is a tax on the right to return. It is unjust to tax human rights.
- The IRS threatens expats with excessive fines that are not proportional to the infractions committed (such as the FBAR 300% fine of the value of unreported financial accounts).
- The US government has also forced many expats underground and into de facto exile. Many are now afraid to mention their origins in public or visit their native land to see their families.
Previous discussions:
Civil Disobedience, FBAR and Forms 8854 and 8938
California genocide and the Indian Tax Revolt of 1851
Fair tax, unfair tax: or When is it paying my fair share?
Burning down barns is not wrong because it is illegal; it is illegal because it is wrong
When law becomes a substitute for morality
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.
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.
Petros Principles (6): What is home?
(6) Home is where you live.
Commentary:
After the American Revolution defeated the British, the Loyalists to the crown fled–many of whom settled here in Ontario where I live today. The Americans seized their property in the US. The early Americans looked askance at those whose loyalties were stronger for their mother country than it was for the new homeland.
Now the situation is reversed and the USA requires Loyalist-like patriotism from its expats around the world. Yet I have found that the one of the major principles that has guided my actions in this IRS persecution of Americans abroad is that home is where I live–not where I come from. My instincts tell me to protect this community, the people who are near me.
American exceptionalism may require that I consider the USA my home. Indeed, sometimes when I passed the border, the US border guard would say, “Welcome home!” Each time I crossed the border, however, it felt less and less like home, and when finally I read about certain expectations that the USA had upon me and my family here in Canada, I realized that the USA had become foreign and hostile. My home is now here. It has been for quite some time.
Previous discussions:
Homelanders Abroad at American Expatriates Facebook Group
Homelanders Abroad are drawing lines in the sand
Who is the real Peter Dunn?
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.
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.
State Department employee ignorant of law, insults parents who want to get their 11-year-old a bank account
Vice magazine recently published an article by Serena Solomon featuring interviews with ex-U.S. citizens about their reasons for giving up citizenship. The article doesn’t question the government’s more absurd policies, such as the obscenely-high fee or the so-called “Billionaire’s Amendment” exit & gift tax (which actually applies even to thousandaires if they can’t afford to come into compliance before renouncing). However, the author generally seems to understand the issues at stake, and over on Reddit she’s doing her best to defend herself against the usual knee-jerk Homelander reactions (sample: “It’s not meant for everyone to be a part of the Greatest Nation in the World”).
The debate’s mostly over by now, but Reddit user BrassAge, who claims to be “someone who administers renunciations” (which is possibly true, given that s/he is a frequent poster on the Foreign Service Officers’ subreddit), felt compelled to revive the mostly-dead thread to put in his or her insulting and incorrect two cents (archived).
Doesn’t know the law, tries to nitpick about it
3) Serena, I wish you also would have mentioned that only dual citizens can renounce their citizenship — the Hague convention on statelessness compels the U.S. to decline renunciation requests if it would leave the renouncee stateless.
The U.S. signed neither the 1954 or 1961 conventions on statelessness, and 7 FAM 1215 says that the State Department “will accept and approve renunciations of persons who do not already possess another nationality”. (Maybe BrassAge thinks the prohibition against voluntary statelessness is a peremptory norm of international law and should thus bind the U.S. even without its signature, though that’s a giant stretch, and really not something I’d expect to hear out of the mouth of a U.S. government employee.)
But all that is neither here nor there: very few people voluntarily make themselves stateless anyway, and everyone Solomon mentioned in her article was already a citizen of another country, so it’s unclear why BrassAge is getting so agitated about this non-issue. (Maybe s/he’s one of the folks who’s been getting yelled at for all the mess caused by Harmon Wilfred’s renunciation.)
Insults people trying to conduct ordinary personal finance
Solomon mentioned on Reddit that “Another guy I spoke with has an 11 year-old daughter in Europe. She can’t find a bank to open an account for her because of her US citizenship.” (I’m disappointed that her editor apparently thought Eduardo Saverin was worth mentioning in the final article but this wasn’t.) Our State Department friend’s response to that:
2) The argument that an 11 year old can’t get a bank account strikes me as particularly weak. Outside of the Mary Poppins Universe, what children have independent bank accounts? Do they have independent income to fill those accounts, or do their parents want to use those accounts for their own purposes?
This reflects the usual Homelander view that “foreign accounts” are nefarious and used only for money laundering, drug dealing, and terrorism. Meanwhile, most Homeland financial institutions, including the State Department Federal Credit Union, offer accounts to minors as well, even if they have no “independent income” and just want to deposit birthday checks from their aunts. (Clearly, if U.S. laws cause minors to be denied an account in the country where they live, the solution is for them to open offshore accounts in the World’s Greatest Tax Haven.)
Tries to justify the world’s highest renunciation fee
4) For most people, the entire process takes about 6 months. The final interview itself is about 45 minutes, but there are months of legal review before the act, which is largely responsible for the high cost. After all, it seems silly to charge American taxpayers for legal hours spent reviewing the process of unmaking an American.
Seeing as changing your nationality is a human right, enshrined in Article 15 of the UDHR, it seems equally silly to put all these absurd make-work barriers in the way of people who don’t want any further affiliation with your country, which is why other countries don’t do it, and instead figure out how to get the work done more quickly and cheaply. For example China — recently lambasted by the American press as a racist violator of international law for its policy (analogous to the U.S.’ own policy) of not letting Hong Kong dual citizens use their foreign passports to travel to the mainland — lets you renounce citizenship for US$19 by mail. Taiwan charges $30. Chile lets you exercise your right to change your nationality for free.
This is hardly the most Orwellian thing that the State Department has said in the service of defending its indefensible fee — that award goes to the statement last year by Undersecretary of State for Management Patrick Kennedy claiming that all this nonsense “does not impinge, but rather protects, the right of expatriation”. (Imagine the reaction from Homelanders if the U.S. government started trying to “protect” the right to marry or the right of free speech in a similar fashion.)
That said, many Brockers have testified to meeting polite, efficient, and competent State Department officers on their big day — so let’s hope that after you’ve waited 10 months for an appointment, you get one of the good ones, rather than a rude, ignorant ultranationalist.
Petros Principles (4-5): Compliance condors harm
(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.
Commentary:
I have heard many expat stories. A clear picture emerges. Many of those who wish to do the right thing have paid dearly. In some cases, the victims pay little if any taxes, but large payments to their cross-border tax accounts and lawyers. In the most extreme cases, people have followed the advice of their cross-border lawyers and have entered OVDP “amnesty” programs. Those in amnesty programs have had not just money but years sucked from their life–what Just Me (Marvin van Horn) called LCUs (Life Credit Units).
On the other hand, I know some people who have done nothing: they haven’t renounced, and they haven’t complied. But above all, they have informed themselves rather than seeking the services of a wraith. This method obviously works best if (1) you are not on the IRS radar; or (2) you do not meet the income threshold (such as non-earning spouses of a non-US persons). For these people, it is life as usual. (I understand that in some European countries bank accounts have been closed–obviously if that bothers you, you will likely have to do something–i.e., renounce or return).
I heard once that standard operating procedure in the compliance industry when asked by a client how much this whole fiasco would cost, is to ask back: “How much do you have?”
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
About: Petros is the alias of the founding administrator of the Isaac Brock Society. He has created this series of Petros Principles as a means of communicating guidelines which he believes have helped him and others deal with the United States’ world-wide tax invasion.
Republican 2016 platform for FATCA repeal and against extra-territorial personal taxation (CBT):
“The Foreign Account Tax Compliance Act (FATCA) and the Foreign Bank and Asset Reporting Requirements result in government’s warrantless seizure of personal financial information without reasonable suspicion or probable cause. Americans overseas should enjoy the same rights as Americans residing in the United States, whose private financial information is not subject to disclosure to the government except as to interest earned.
The requirement for all banks around the world to provide detailed information to the IRS about American account holders outside the United States has resulted in banks refusing service to them. Thus, FATCA not only allows “unreasonable search and seizures” but also threatens the ability of overseas Americans to lead normal lives. We call for its repeal and for a change to residency-based taxation for U.S. citizens overseas.”
https://prod-static-ngop-pbl.s3.amazonaws.com/media/documents/DRAFT_12_FINAL%5b1%5d-ben_1468872234.pdf
Let’s add the comparison DNC platform
Here is the Hillary position
http://www.democratsabroad.org/our_candidates#Hillary
For The Hillary’s personal message, go to this Brock post
#FourthOfJuly #IndependenceDay Analysis: The Fastest-Growing U.S. State Lies outside its Borders
If there is a message from the RNC candidate Trump, we can compare it here
Petros Principles (3): Haste harms
(3) Haste is the devil
Commentary: In years circa 2009-2011, Barrie Mckenna of the Globe & Mail and other writers in major Canadian newspapers reported that the Overseas Voluntary Disclosure Programs were going to end and that people better hurry up if they want to “come clean”. Here is an example of the scaremongering that took place:
Petros Principles (2): Fear can hurt
(2) Fear makes the IRS more dangerous than it really is.
He sees you when you’re sleeping,
He knows when you’re awake.
He knows when you’ve been bad or good,
So be good for goodness sake!
Commentary: The IRS is not omniscient and omnipresent like Santa Claus. As much as the US government has tried to take away the privacy of expats, it has only very limited powers even with the betrayal of our local governments on FATCA. It is possible in many cases to work around these limited powers.
The first step in protecting oneself from the IRS stripping you of your universal human rights is a sober and realistic assessment of its true power. Many if not most of us who are living outside the USA are relatively safe because the IRS’s powers of seizure, subpoena, and liens are limited outside of USA borders. Moreover, the IRS has an insufficient audit and enforcement personnel to hunt the much bigger and easier game in the Homeland. Even if it could go after us, it would be an inefficient means of increasing revenue.
A better metaphor for the IRS is a roaring but toothless lion and not Santa Claus.
Inordinate fear of the IRS is dangerous because it has caused some people to lay down all of their normal defense mechanisms and like an innocent lamb to stand paralyzed before the toothless lion.
One of the major roles of the cross-border compliance industry has been to frighten their clients and the public about the IRS’s power, and the media has too often created panic by consulting the compliance industry as their principle experts for information on US expat tax issues.
Previous Petros Principles:
(1) What the IRS can’t know unless you tell them can’t hurt you.
About: Petros is the pen-name of the founding administrator of the Isaac Brock Society. He has started this series of Petros Principles as a means of communicating guidelines which he believes have helped him and others deal with the United States’ world-wide tax invasion.