Category Archives: Issues regarding US persons abroad

A new video advertorial from CNS Business in the Cayman Islands takes us to the retail front line of the rapidly-metastasizing FATCA compliance industry and shows us how it’s done. A good-sized group of prospects Cayman-based US Persons were invited to a free seminar last week at the Caribbean Club entitled “Navigating US Tax Requirements and Strategic Methods of Coming into Compliance”. Attorneys from Caplin & Drysdale, a DC-based law firm specializing in “the tax controversy area” co-hosted the event with Ham, Langston & Brezina LLP, a multi-service accounting firm based in Texas.

As the story reports:

“There’s no longer the option of ‘I reside in this small island country – no one will find me’

Right now the message I deliver is FATCA is changing all of that and just because you’ve had an account here for 20 or 30 years without issues doesn’t mean you won’t get a letter in the mail. We’ve had clients in Cayman, as well as a host of other countries, receiving these letters,” stated [Caplin & Drysdale attorney, Dianne Mehany].

“It’s becoming harder and harder to hide and you really want to be ahead of the situation. You don’t want the IRS knocking on your door. There are options for you to come forward and come into compliance now before they come to you because once they come to you, it’s a very different conversation,” added Caplin & Drysdale attorney, Zhanna Ziering.

Both attorneys explained they are not trying to scare anyone, but want them to understand there are criminal and civil penalties if you don’t come into compliance.

Heady days indeed for FATCA compliance firms – their oyster truly is the entire world.

Of course, others are not so enthusiastic about the kind of help these firms are pitching. Comments are open and here was the first one:

Just disgusting that our government should be aiding and abetting these greedy parasites. Especially when you remember that many of the “Americans” living here are American only as a matter of law. They were born in the USA to Caymanian parents and have never lived or worked in the States.

And the beat goes on…

Since relinquishing my US citizenship in 2011 and shedding the most toxic aspect of my life here in Canada, I now worry about another kind of toxicity. Let me explain: For about ten years I’ve dealt with two nagging and debilitating conditions: peripheral neuropathy and tendinopathy. It came to a head in November 2012 when Cathy asked me to put some carriage lights up on our garage and I twice fell off the ladder, missing the last rung and falling on my butt, and I also missed a step on the way to the garage and fell on my face. This was the result of the growing issue of peripheral neuropathy–not able to tell where my feet were causes loss of proprioception. So I went on a low carb high fat diet (LCHF) and lost 40 lbs, and most of the neuropathy went away. But then in the Fall of 2013, I started having the relapses of tendinopathy which were worse than anything I’d had before–quadriceps, achilles, IT bands, rotator cuffs, neck, toe, elbow tendons–even today, I’ve had to use crutches since last Wednesday and medicate myself (ibuprofen) for throbbing pain in my right foot. This has caused me to cancel an academic trip to Switzerland planned for next week.

In October 2013 I was searching for a dietary solution to my tendon problems and I learned that Cipro, an antibiotic in a class called fluoroquinolones (FQs) is the likely culprit of both my tendinopathy and my neuropathy, as well as several other problems (dysbiosis, weight gain, etc.). In 2008, the year after I stopped my last dosage, the FDA issued a black box warning for tendinitis and tendon rupture for Cipro. I now belong to a group of people called “Floxies” because FQs (Levaquin, Cipro, Avelox, etc.) all have the stem “flox” in their scientific name. On Facebook there is Fluoroquinolone Toxicity Group with over 3000 members, many of whom are suffering much worse than me. Despite these problems, Cipro and other FQs remain a very well-prescribed drugs as doctors hand them out as though they were candy for sinus infections, traveler’s diarrhea, and other common ailments, when FQs should only be used for life-threatening bacterial infections when other antibiotics have failed.

Agency Capture

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I once got trapped in enemy minefield w/ no good choices -getting hit w/ #FATCA felt like that says Bopp plaintiff http://t.co/8TauWmjamr

— ADCSovereignty (@ADCSovereignty) March 11, 2015

US Army major in 1st Iraq War = plaintiff in Bopp suit-forced 2 choose:: USC or arduous penalties http://t.co/6WYdc16xQ7 #FATCAMarriage

— Patricia Moon (@nobledreamer16) March 11, 2015

Rand Paul pushes repeal of #FATCA despised by Americans living abroad http://t.co/RxZ5kCSvhG via @washtimes Plaintiff in Bopp suit named

— ADCSovereignty (@ADCSovereignty) March 11, 2015

“Introducing Major (ret.) Roger Johnson: Major Johnson is the first Republicans Overseas FATCA lawsuit plaintiff and RO Worldwide Vice President for Eastern Europe. He served in the First Gulf War and received a Bronze Star for valor. As a combat veteran, he wrote a blank check made payable to “The United States of America” for an amount of “up to and including his life.” Now he is fighting for all expats’ constitutional protections and the pursuit of happiness.“

FatcaFantastic! What a great choice! Can hardly imagine the American public dissing him as a traitor or tax cheat.
 

 
Phil Hodgen stands high among the few tax/law “professionals” in the U.S. expatriation sector that I have respect for. Hodgen has just shared this precious pearl:

        The real risk is uncertainty and fear.

If you wish, go on to read the whole classic answer that is distilled into this pure nacre.

The coda, also a quotation:  In the long run everyone pays the price.  Sauve qui peut.
 

I am sure a lot of Brockers will remember how horrifying it was to listen to this video referred to in this post. I remember thinking it couldn’t possibly be real and assumed at first, that it was a spoof. It was really that bad.
 

FATCA Citizenship Taxation https://t.co/ZLnXRhBwHs – excellent discussion by one of those #Americansabroad

— U.S. Citizen Abroad (@USCitizenAbroad) March 9, 2015

 
The above tweet links to a video made by a young man studying in Germany who apparently has heard the Turks and this is his response. He obviously has a much better grip on the facts. Interesting to see a young person’s reaction to this dilemma. Worth a listen.
 

With only short-term memory, you can recall that Eric warned us about the danger of old laws (such as CBT or FBAR) lying on the books: “Reed Amendment, Logan Act: why worry about unenforced & unenforceable laws? ”

https://isaacbrocksociety.ca/2015/01/16/reed-amendment-logan-act-why-worry-about-unenforced-unenforceable-laws/

Do you remember laughing at Ronald Reagan, when he said: “Freedom is never more than one generation away from extinction”  I do.

And I remember having some thoughts of dismissing Eric’s article, too. (although those only lasted about 0.25 seconds)

Well, all it takes is a little sheeple-driven bipartisan politics to make it happen, and now it is happening.

http://petitions.moveon.org/sign/impeach-and-prosecute-1.fb47?source=s.fb&r_by=12648917

It’s objective is for one side of the political spectrum to go after the other side of the political spectrum.

However, the Logan Act is not directed at political leaders, it is directed at guys like Logan himself, who is pretty much like you or me or any of the organizers of the citizens abroad groups.

There is no better way to spread propaganda, than to have propaganda spread itself. A petition such as this can come at any time and enforcement of the Logan act could begin at sunrise of any day.

Just look at your own facebook page and see how many times you have seen this petition. I’ve seen it twice so far.  It has 42,078 signatures so far.

A mirror petition is now up on Whitehouse.gov

https://petitions.whitehouse.gov/petition/prosecute-john-boehner-violation-logan-act/phgwC0r0

All it takes is a little hate (of one party or the other) to have laws like the Logan Act enacted.

In a new “Special to the Financial Post” advertorial that makes Barrie McKenna look like Woodward and Bernstein, über compliance condor Max Reed attempts to reassure “American citizens in Canada” that they have nothing to fear, except perhaps some red-herring nightmare of IRS goon squads swarming across the border to seize their homes.  It is a tour de force of utter nonsense and, sadly, another disheartening example of what now passes for journalism in Canada.  Here are a few tidbits, displaying all the comforting factuality of a PMO press release:

Don’t panic, American citizens in Canada: The IRS is not coming to seize your house

To get on the IRS’s good side, take advantage of the amnesty program called “Streamlined Foreign Offshore Procedures” (which you can find on the IRS site). It will help you catch up on overdue tax returns without fear of penalties.

U.S. citizens in Canada are only subject to U.S. federal tax. (The Canadian taxes you pay are credited against your U.S. taxes.)

Unless you have U.S. source income, you will not owe anything.

The deadline for filing a return in the U.S. is April 15, but can be extended to June 15 for those outside the U.S.

Intriguingly, this is just part one of a spring series of helpful articles for “One million American citizens in Canada.”  It is difficult to imagine just how much more useful advice Max Reed can offer than he does in his first instalment.

Comments are wide open.

http://business.financialpost.com/2015/03/06/dont-panic-american-citizens-in-canada-the-irs-is-not-coming-to-seize-your-house/

If you have information about how FATCA will affect green card holders in your country, or a question about FATCA and your green card status, or an experience to share, please comment here.
The idea for this thread comes from News, who posted the following FAQ from Canada Revenue Agency’s website, regarding FATCA and Green Card Holders, as a comment on the “Terminating a Green Card” thread.

Canada Revenue Agency:  Information for individuals with accounts with Canadian financial institutions

“I hold a U.S. green card. How does this affect my tax residency?
If you are a green card holder (that is, a lawful permanent resident of the U.S.), the U.S. considers you to be a U.S. resident.
However, if you are a resident of Canada for tax purposes and do not hold U.S. citizenship, you should not identify yourself as a U.S. person to your Canadian financial institution.”

I am happy this morning to cross-post today’s ADCS-ADSC blog entry…

“Repealing “Citizenship Taxation”: The difficult we do today, the impossible takes a little longer”.

which starts out with:

The Alliance For The Defence of Canadian Sovereignty is prosecuting a lawsuit against the Government of Canada. The lawsuit is for the purpose of “striking down Canada’s FATCA IGA”. The Canada FATCA IGA lawsuit is providing citizenship leadership and FATCA education for the world.

The primary purpose of FATCA is to enforce U.S. “citizenship taxation”. In reality, U.S. “citizenship taxation” is taxation based on the immutable characteristic of “place of birth”.

Although “citizenship taxation” may have always been U.S. law it has NOT always been U.S. practice. In fact, the U.S. made no attempt to enforce “citizenship taxation” until sometime after the 2008 financial crisis. The reasons for the enforcement are not entirely clear, but the enforcement of “citizenship taxation” has been a “life altering” event for Americans abroad. For Americans abroad, “citizenship taxation” is NOT a theoretical concept.  It is a reality that impacts on virtually every aspect of their lives. It directly affects their career opportunities, their retirement planning and (for those Americans with an “alien spouse”) their marriages. This has led to cries of anguish and pleas for change. It has led to a huge surge in the “relinquishments” of U.S. citizenship. On March 2, 2015 I participated in a session for U.S. citizens in London. A comment about the about the session and the recent enforcement of U.S. citizenship taxation included…

I would add that it was evident that some people at the meeting have suffered significant mental anguish, either now or in the past. These are good people, who had tried as US citizens to do the right thing, but who have been stymied by rules and complexities of the IRS code which, to paraphrase John, “no rational person would ever have suspected or guessed would remotely be true”.

I find the damage to mind and body to be one of the most heart-rending things about this whole mess. Someone wrote to me recently, “So I’m not alone in my panic!! Yeah, there’s been plenty of sleepless nights. Just can’t get it out of my head.” Many reading have had that experience.

I am waiting for the day that someone in government finally notices and apologies, perhaps admitting, “We tortured some folks.”

…

In the short term, the implementation of FATCA will exacerbate the “pain”. On the other hand, the “pain” may be the necessary impetus for change. In order for there to be “change”, there must be some discussion and analysis of the issue. In order for there to be analysis, there must be awareness of the problems of “citizenship taxation”. That’s the reality of what has been unleashed by FBAR, FATCA, PFIC, CFC and the whole “Alphabet Soup” list of provisions which have changed the lives of Americans abroad.

The good news is that awareness of “citizenship taxation” is growing. The awareness is “growing” largely because of the efforts of Americans abroad (including those who identify as Americans abroad and  “accidentals” who simply do NOT regard themselves as Americans). The following groups (working independently) have been responsible for this awareness:

…

John Richardson also introduces a new voice in commentary by Professor Daniel Shaviro:

9. It is encouraging to see that “citizenship taxation” is being considered in law school classes. Two recent examples include:

A. The tax policy and law workshops at the Peter A. Allard School of Law – University of  British Columbia. On Friday February 27, 2015, Professor Ruth Mason discussed her recent paper on “citizenship taxation”.

B. The Tax Policy and Public Finance Colloquium and Seminar run by Professors Daniel Shaviro and Alan Viard of NYU law school. On Tuesday March 3, 2015 Professor Ruth Mason was in attendance to discuss “citizenship taxation”.

Professor Daniel Shaviro commentary on the Ruth Mason presentation – March 4, 2015

Professor Shaviro’s perceptions of “citizenship taxation” (based largely on the Mason presentation) appear as a separate blog post here.

His post identifies (and categorizes) many of the “theoretical concerns” of “citizenship taxation”. He begins by saying:

Yesterday at the colloquium, Ruth Mason discussed her paper, Citizenship Taxation.  I enjoyed reading it enough to conclude that I may want to write about this topic as well.  (I generally agree with the paper, but it’s a rich topic and perhaps a fruitful area for me to deploy some of my interests and approaches.)

His post contains 10 interesting points. I would like to identify what I consider to be the most interesting and important two…

The John Richardson, ADCS-ADSC Co-Chair and Legal Counsel, ADCS-ADCS entry ends by saying:

U.S. “citizenship taxation” is a problem for:

1. The individuals affected by it.

2. The countries where U.S. citizens reside which are required to accept the capital outflows inflicted by “citizenship taxation”.

In 2009 few would have imagined that the problems of “citizenship taxation” would be given the attention that they are today.

As they say in the Marines:

“The difficult we do today. The impossible takes a bit longer.”

Keep up the great work! Keep the faith!

John Richardson

 
INNSBRUCK

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— U.S. Expat Canada (@USExpatCanada) March 2, 2015

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VIENNA

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— Patricia Moon (@nobledreamer16) February 27, 2015

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BUDAPEST

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— ADCSovereignty (@ADCSovereignty) March 5, 2015

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