Liberty and justice for all United States persons abroad

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Category Archives: Issues regarding US persons abroad

An exile wants to give up U.S. citizenship and come home to South Korea

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Yoo Seung-jun, a 1990s South Korean pop star whose career came to an abrupt halt in 2002 after he renounced his citizenship — in what much of the public saw as a well-planned effort to avoid conscription — and was denied re-entry into South Korea upon his next arrival, recently asked to be allowed to restore his South Korean citizenship and to have the age limit on military enlistment waived so that he could belatedly join up. Yoo, who became a U.S. citizen, now lives in China. According to a Maeil Business News article, the government had a very negative response to that idea:

앞서 병무청 부대변인은 지난 12일 “국민들과의 약속을 어기고 본인 스스로 국적을 버린 외국인에 대해서는 논할 가치도 없다”며 “법에 따라 영원히 국적을 회복할 수 없는 것은 물론 입국 금지 해제도 고려 대상이 아니다”고 말했다. Previously, a spokesperson for the Military Manpower Administration had stated on the 12th that “there’s no value in discussing a foreigner who made a promise to the people of this country but then went and threw away his citizenship” and that “under the law, he’ll never be able to get his citizenship restored and he will not receive consideration for a lifting of the entry ban.”

Yoo’s next step was to appeal to the public. In a tearful interview last week in Hong Kong, Yoo got down on his knees and begged to be allowed to return to his country of birth, expressing regret for his past immaturity and stating that he wants to be able to accompany his son on visits to the country. (The Korea Herald has a partial translation of the video.) He then requested to meet with officials from the Ministry of Justice to discuss the possibility of restoration of citizenship; however, the Ministry of Justice was just as dismissive, says Money Today:

22일 법무부 대변인은 한 매체를 통해 “한 개인이 국적을 회복하거나 입국금지를 해제할 수 있는 방법은 없다”며 “입국금지령을 요청한 기관에서 해제 요청하는 것이 정상적인 법적 절차다. 개인이 요구해서 풀 수 있는 문제가 아니다”라고 단호한 입장을 밝혔다. On the 22nd, a spokesperson for the Ministry of Justice revealed that they were taking a firm position: “there’s no method to get permission to restore the individual’s nationality or to cancel the entry ban” and that “the cancellation request must follow proper legal procedures at the department which requested the entrance ban. This is not an issue which could be resolved by individual request.”

In a second interview this morning, Yoo broke down in tears and apologised again, but news reports are saying that Yoo or his assistants were heard using foul language and saying “now the articles will keep on coming” (지금 기사 계속 올라오네) in audio that was accidentally broadcast after the camera stopped rolling, and the public is now angrier than ever about Yoo after more than a decade of barely thinking about him. So things aren’t looking good for Yoo himself. But what about the millions of other South Korean emigrants?

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Reminder: “Solving US Citizenship Issues: Have You Received a FATCA Letter?”

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toronto 31may15
TORONTO
Sunday
May 31,2015
12 noon – 2 p.m.
$20.00
Carr Hall
100 St. Joseph St.
Toronto ON M5S 2C4
MAP
 
The “FATCA Hunt” – the hunt for U.S. persons (whatever that is) began on July 1, 2014 which was “Canada Day”. Although both the definition of “U.S. person” and whether one meets the definition is not always clear, the search has begun. The level of FATCA awareness has begun. Some organizations are actively warning people that “U.S. Personness” matters. The purpose of the warning is presumably to encourage people to ”come clean” and deal with their U.S. tax situations. In some cases, there is no particular warning – just a letter indicating that they are suspected to be a “U.S. person”. Often one must prove to the institution sending the letter that one is not a U.S. person.

We have recently learned that no Canadians have yet been reported by the CRA to the IRS. This will not occur prior to September 15 and is required by September 30, 2015. You may wish to keep track of a suit trying to prevent this information from leaving Canada
www.adcs-adsc.ca
 
WHO: John Richardson, B.A., L.L.B., J.D., is a Toronto lawyer and a member of the Ontario Bar.
Citizenshipsolutions.ca

ADMISSION: $20 per individual or $40 for a family up to four. Payable in cash at the door.
 
Hope to see you, your families and friends! Spread the word!
 
Information presented is NOT intended or offered as legal or accounting advice specific to your situation.
 

Does the USA have a Personality Disorder?

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We hear the word ‘narcissist’ a lot these days in articles and media. It has become a popular buzzword used to describe manipulative, controlling people who have an inflated sense of their own importance, a deep need for admiration, a sense of entitlement, and a lack of empathy for others.  According to psychcentral.com, in order for a person to be diagnosed with narcissistic personality disorder (NPD) they must have five or more of the following  symptoms:

  • Has a grandiose sense of self-importance (e.g., exaggerates achievements and talents, expects to be recognized as superior without commensurate achievements)
  • Is preoccupied with fantasies of unlimited success, power, brilliance, beauty, or ideal love
  • Believes that he or she is “special” and unique and can only be understood by, or should associate with, other special or high-status people (or institutions)
  • Requires excessive admiration
  • Has a very strong sense of entitlement, e.g., unreasonable expectations of especially favorable treatment or automatic compliance with his or her expectations
  • Is exploitative of others, e.g., takes advantage of others to achieve his or her own ends
  • Lacks empathy, e.g., is unwilling to recognize or identify with the feelings and needs of others
  • Is often envious of others or believes that others are envious of him or her
  • Regularly shows arrogant, haughty behaviors or attitudes

Most experts agree that narcissism exists on a continuum, with some people naturally being more narcissistic than others, such that the defining line between who has a full blown narcissistic personality disorder (NPD) versus who exhibits highly narcissistic traits is not distinct.  Essentially, to some degree, all of us have behaved narcissistically at one point or another.  Regardless whether we are dealing with full blown NPD or a highly narcissistic person, such individuals can cause a lot of pain and chaos in the lives of those they cross paths with.

 Psychologists and therapists say, watch out if you suspect you are dealing with a highly narcissistic person as their personality is typically fixed, and no amount of pleading, explaining or appealing to their non-existent empathy will change their behaviour unless something is in it for them.  Your best bet is to run far away and never look back if you can. If you are forced to deal with them on a regular basis, for example if such a person is your boss or your parent or your spouse, there are ways to make life less chaotic in terms of how you relate to them, but never forget that they are who they are, and will always be who they are.

Is the USA behaving like a narcissist with regards to its ‘US persons’ living outside USA?

Is USA’s insistence on unique to the world, citizenship based taxation (Eritrea doesn’t count), indicative of a grandiose sense of self-importance?

Is USA preoccupied with fantasies of unlimited success, power, brilliance, and does it believe it is ‘special’ and unique, to the degree that it can justify taxation on people who neither live nor work within the geographical boundaries of the United States of America?

Does the USA require excessive admiration by insisting that people who have lived entire lives outside the USA pay tribute to the USA in the form of taxation and the revealing of their so-called ‘foreign’ bank accounts, simply because they were born on ‘special’ US soil?

Does the USA reveal a strong sense of entitlement by insisting that all other countries in the world, at their own expense, hunt down their own citizens living in their own countries, just because USA says these people are its ‘US persons’?

Is the USA being exploitative of other countries by threatening them with economic sanctions if they do not hand over their US born citizens (and other ‘US persons’ as defined by the USA) to the USA?

Does the USA lack empathy for those it deems ‘US persons’ who are typically citizens of other countries living in those other countries, paying taxes already in those other countries, and who cannot live normal financial lives, cannot save adequately for retirement, and are burdened by having to marry two incompatible tax systems?

Does the USA show arrogant, haughty behaviour or attitude by presuming it is OK for it to be the ONLY country in the world(Eritrea doesn’t count) to impose citizenship based taxation, knowing full well that if ALL countries did this, the world would be a financial mess?

Even if FATCA and CBT are struck down, is it safe to remain a ‘US person’ living outside USA, or is your best bet to run to the nearest US consulate and renounce US citizenship to get the narcissist out of your life forever?

 

 

Cook v Tait 26: Help! What does this 1924 @USSupremeCourt decision really say?

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Since 2013 I have been working on a series of posts about the 1924 decision of Justice McKenna (see his biography) in the 1924 decision of Cook v. Tait. As you know, Cook v. Tait is always cited as the justification for U.S. citizenship-based taxation. You will find the series of posts here. My goal has been to explore and understand what is the history, basis, and rationale for “citizenship taxation”. Even if it was justifiable in 1924, it is hard to justify it today.

The problem is that although, there is agreement that Cook v. Tait stands for the legal proposition that U.S. “citizenship-based taxation” is NOT illegal, the reasoning in the decision is (in my opinion) very unclear. I have read the decision may times and to this day and have never felt comfortable that I really understand the basis of the decision (if there is one). Of possible interest is what appear to be a summary by a law student of what Cook v. Tait is about.

Interestingly, in 1925 a law review article was written by a U.S. law professor (the Michael Kirsch of 1925) about Cook v. Tait. You will find a link to a CBC interview with Professor Kirsch (along with a large number of valuable comments) at a previous post at the Isaac Brock Society.

You will find the decision in Cook v. Tait from the link in the above tweet.

I invite readers of this post to:

 

1. Take the time to read the decision (more than once).

 

2. Try to understand what exactly is the basis for Justice McKenna’s reasoning.

 

What I am looking for comments are answers to the following two questions:

 

1. What is Justice McKenna really saying?

 

2. What is his specific justification for what you understand him to be saying.

 

Please think carefully about this.

 

Here is the decision in Cook v. Tait may be found here.

Thanks to the comment by @Publius, you will find the most interesting arguments advanced by the lawyers here:

 

 

 

U.S. passport applicants without Social Security numbers

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To accompany his recent paper “Urgent Need for U.S. Citizens Residing Outside the U.S. to be Able to Obtain a Taxpayer Identification Number (‘TIN’) Other Than a Social Security Number” Patrick Martin has made several blog posts about the difficulties faced by U.S. citizen teenagers and adults attempting to obtain Social Security numbers from outside of the United States. I highly recommend the paper & posts to all readers here.

Mr. Martin also states that it is impossible for U.S. citizens to travel to the U.S. without an SSN. On its face, this looks like a reasonable conclusion from the warnings on the U.S. passport application form. State Department officials themselves do not seem to agree; in 2011, they told the Government Accountability Office that they did not believe then-current statutes allowed them to deny passports to SSN-less applicants. Nevertheless, the statutorily-authorised fine imposed in some cases for failure to provide a TIN — enacted to punish the diaspora — may deter U.S. passport applicants who lack SSNs, and a large proportion of such applicants are likely to be U.S. citizens in other countries.

A new bill may make the situation even worse, though it wouldn’t prevent travel to the U.S., “just” departure afterwards. Under Orrin Hatch’s “customs bill” (S. 1269/H.R. 644) which recently passed the Senate, not just people with significant unpaid taxes or tax-form-related fines, but also people who do not provide their SSNs, would be unable to obtain general-validity U.S. passports, only “one-way passports” limited for travel to the United States. This proposal, and others like it, directly resulted from State’s 2011 comments to the GAO. The SSN-related part of the proposal is new, and did not appear in the previous iterations of the proposal in the 2012 highway bill nor veterans’ jobs bills. It is not clear whether it would deny U.S. passports to people who never had SSNs in the first place. I will explore this in a separate post later on.

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Grief and the UnSuspecting ‘US person’

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Psychologists describe 5 stages of grief based on the Kubler-Ross model introduced by Swiss psychiatrist Elisabeth Kübler-Ross in her 1969 book, ‘On Death and Dying’.  Although originally ascribed to the emotional stages experienced due to death of a loved one, the model can also be useful to understand the responses to any subjective trauma that a person may go through, for example a relationship breakup, a job loss, or a ‘OMG! I am a US taxpayer’ moment.

The key here is ‘subjective trauma’.  Many ‘US persons’ know what it is like to have people roll their eyes, yawn, or wonder why we are so worked up, just because we discover we are subject to FATCA (what’s the big deal? You ARE an American!), or because we discover we are US taxpayers (if you don’t like it why don’t you renounce?).  Typically, we do not get the sympathy one would get if we had a serious illness, or lost our job, or divorced our spouse.

Non-US persons for the most part, just do not ‘get’ the ‘US person’ curse, because to be FATCA’d and CBT’d is not within the realm of normal human experiences. We are unique and special in the world that way – thanks to USA’s exceptional treatment of those it deems ‘US persons’. Nevertheless it IS traumatic for those of us who have lived most or all our lives in countries other than the USA, and who have never had a clue we were US taxpayers on our non-US income, to be FATCA’d and CBT’d.

The following are the 5 stages of grief as outlined in the Kubler-Ross model. Keep in mind that these stages are not necessarily linear. One day you may feel like you are angry beyond belief, and the next day you may feel that it just is what it is. Hopefully, at some point, most of your days will fall into the latter category.

Denial.

The first reaction to hearing one has a terminal illness, or their house burned down, or they are subject to the tax laws of a foreign country, is denial. This just CANNOT be for real. It makes no sense. This has got to be wrong. How could I have lived all these years and NOT known I was a US taxpayer? There must be exceptions for people like me who don’t live in the USA. They surely cannot be referring to ME.

Anger.

Once the initial shock wears off, anger follows. We want to blame someone or something. We may be angry at the doctor who gives us a bad diagnosis, at the driver who caused the accident, or at ourselves for not doing something to prevent whatever bad thing happened. We are angry at the Canadian government for not standing up for us, at our spouse who thinks we are over reacting, at our neighbour who doesn’t want to listen to our rants, at ourselves for not figuring out years ago that we were US taxpayers, or at the American government for acting like it owns us.

Bargaining.

This is the stage where we play games with ourselves, and with others, desperately trying to ‘work it out’ or ‘fix things’, so that we can go back to the way things were before. The person whose romantic relationship is at an end may promise to change their behaviour – anything to not have the relationship end. The dying patient may promise God he/she will be a better person or take better care of himself/herself – anything to not have to die. The newly aware US taxpayer searches for a way to work out their non-compliance: streamlined program? 5 years tax compliance catch-up? – just please don’t penalize me for my ignorance.

Depression.

Reality is setting in now. There is no easy way out. We are not going to bring our loved one back. Our job is gone forever. The relationship is definitely over. No matter which route we take to solving our ‘US taxpayer status’ we are going to pay – whether that be in taxes, compliance fees, penalties, loss of privacy, loss of US citizenship, or by being forced into hiding. It sucks no matter how you look at it, and this just makes us sad.  🙁

Acceptance.

Psychologists and grief counsellors say you are lucky if you get to this point. Many people get stuck in anger or depression for years or even a lifetime – the widower who becomes a recluse when his wife passes away, the mother who mourns a lifetime for the child she lost, the aspiring athlete who never made it to the big leagues and seems forever lost in his former glory years, the ‘hidden’ US person who cannot shake the mental chains of his unwanted ‘US taxpayer status’ even if he has logistically found a way to deal with it. The luckier people at some point accept the reality of what has happened and find a place to put it so that it does not interfere in their daily lives anymore. The widower finds peacefulness alone, or maybe finds new love. The mom, whose child is gone, remembers the happy times she spent with him/her and stops dwelling on what was lost. The US person, finds a way to deal with his/her own particular situation – stays hidden, or becomes tax compliant, or renounces – and moves on with his/her life.

 

How to banish a citizen: a two-step transaction

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On Friday, the State Department released one of the remaining missing sections of the Report of the Visa Office for Fiscal Year 2014: Table X, “Immigrant and Nonimmigrant Visa Ineligibilities (by Grounds for Refusal Under the Immigration and Nationality Act)”. For our purposes, this is interesting because of its statistics on two particular grounds of ineligibility which apply to emigrants: 8 USC § 1182(a)(8)(B) (“Draft evaders”) and § 1182(a)(10)(E) (“Former citizens who renounced citizenship to avoid taxation”).

The latter ground, the infamous Reed Amendment, is not known ever to have been enforced officially, though oddly enough this year’s Table X does not give us the number of determinations of ineligibility for a non-immigrant visa under the Reed Amendment: unlike in past years, the table entry is blank. It is not listed as a dash, which is used in the report to indicate that a particular ground of ineligibility doesn’t apply to non-immigrants; there’s simply no symbol in that row & column of the table at all. (The last time the report failed to include the Reed Amendment, in 2003, there was simply no row in the table at all; this time, however, the row is present, it’s just that the non-immigrant column is blank.) I have no idea what this might mean.

One thing Table X does show is the continued decline in enforcement of the former ground: only about half a dozen to a dozen people per year are being found ineligible for visas on draft-related grounds, and in recent years nearly all of them have been able to overcome their ineligibility upon review. However, despite Jimmy Carter’s pardon back in the 1970s, the number of people unable to overcome their ineligibility is not zero.

The ban on re-entry for people who left the U.S. as draft evaders or deserters is rooted in a much older Civil War-era law which stripped such people of their citizenship and made them ineligible for naturalisation. At the time, the U.S. had very few immigration controls, but by the 1920s, new immigration laws began placing barriers in the way of entry of all aliens ineligible to citizenship, presumably including draft evaders & deserters. These banishment provisions were made explicit in the Immigration and Nationality Act of 1952, and even survived the Supreme Court cases Trop v. Dulles in 1958 and Kennedy v. Mendoza-Martinez in 1963, which declared the nationality-stripping provisions for desertion and draft evasion respectively unconstitutional.

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Orrin Hatch’s passport revocation bill passes Senate

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According to a post on the Democrats’ Senate Floor Twitter feed, 78 Senators voted in favour of Orrin Hatch’s Trade Facilitation and Trade Enforcement Act (S. 1269), which includes the passport revocation provisions discussed yesterday: to revoke passports from people with US$50,000 of unpaid taxes & fines, or people who never obtained or do not provide a Social Security number.

In November 2014, American Citizens Abroad issued a position paper explaining why passport revocation is an inappropriate and dangerous means of tax enforcement. Patrick Weil, in a Yale Law Journal article, has detailed the long history of abuse of the administrative power to revoke passports. And, as stated here previously:

Due to the U.S.’ sharply harsher penalty structure on under-reporting of similar assets & items of income simply because they’re located in another country, it’s likely that a disproportionate number of victims of this bill would be U.S. citizens in other countries. Hatch is the chairman of the Senate Finance Committee and the most prominent Republican supporter of Chuck Schumer (D-NY)’s Ex-PATRIOT Act, another well-known emigrant harassment proposal.

The roll call on this “trade facilitation” bill (showing the votes of each Senator) was posted after I first wrote this; it shows that all 44 Democrats, 32 Republicans, and both the independents voted for the bill, while 20 Republicans voted against and 2 Republicans did not vote. The “yea” voters include not just traditional enemies of the diaspora like Chuck Grassley, Chuck Schumer, Jack Reed, and Harry Reid, but FATCA opponent Rand Paul as well.

Similar passport revocation provisions passed the Senate once before three years ago (in a highway funding bill) but got shot down by a competing House highway funding bill which coincidentally did not include any passport confiscation provisions. On the bright side, The Hill has predicted that this “trade facilitation” bill, too, will get nowhere in the House — though again, not due to any concern for the diaspora, but rather because of the bill’s controversial anti-currency-manipulation provisions (Title VII).

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