Category Archives: Issues regarding US persons abroad

We appreciate that someone of your stature will have the media grab your story and write about the absurd (resident for taxation purposes) consequences for anyone who was born an *Accidental American* or anyone who made a choice to move outside the USA for work, for adventure, for falling in love with another country and someone from there, deciding to remain to raise their family and give their allegiance and tax dollars for services and benefits.

Thank you for letting the world know the absurdity of the consequences of US Citizenship-Based Taxation law as *US Persons* are game in countries that practice Residence-Based Taxation law, we who have some US-definition of *US Person* or citizenship, as our countries have signed intergovernmental agreements (IGAs) with the US that allow US FATCA law to override our own countries’ laws.

Perhaps will be mentioned the others who will also be affected, including those who are considering becoming permanent residents of the land of the free, those seeking US green cards, so they will make their decisions with full knowledge of both pro’s and consequences of US CBT.

Boris Johnson ‘intends to renounce US citizenship’

Good luck to you as we read of your way to freedom as your “commitment is, and always has been, to Britain”.

…and Forbes, Robert Wood, comments open: Savvy London Mayor Boris Johnson Paid IRS, Is Now Renouncing U.S. Citizenship

Update: new article and Brocker comments at The Economist, February 21, 2015 The long arm of the IRS: An Englishman’s home, The mayor of London renounces his American citizenship

Tim has provided the link to the hearing yesterday in Washington DC, with Jim Butera representing the Florida Bankers Assn against the Treasury Department.

Separate post.

I found the level of expertise to be quite amateurish. That the judges were asking the plaintiff and defendants for their opionions. And the defendant’s answers are quite ridiculous.

Also, here the Texas bankers discuss the case here.

http://www.texasbankers.com/TABC/TABCNews/Florida_and_Texas_Bankers_Associations_to_Continue_Efforts_to_Protect_Foreign_Depositors.aspx

First of all, an incredibly important and successful day with regard to the video submission to be made to the Senate Finance Committee. I heard every single moment and the effect of each of the speakers was amazingly powerful. Each participant had a different and substantive angle that addressed the issues expats face. What was so marvelous about it was that it all balanced beautifully without any conscious effort to make it do so.

We cannot wait for this to be compiled and distributed. Stay tuned!

The written testimonies and harvested comments are coming along.

The focus of all this is to demonstrate the harm done to #Americansabroad by the U.S. Government. On June 15, 2013, a meeting was held in Toronto which was designed to allow those affected to speak freely, to express the harm they felt from the actions of the US, without any fear of being recorded, photographed etc. The shared and dominant reaction that day was fear and terror. What is interesting now, is to read the comment of a non-US person, completely unconnected to the issue had to say about it. See below. The contrast today? Anger and defiance!

June 2013 – Obama’s IRS and the effect on U.S. citizens abroad

What follows are the observations of a non-U.S. citizen of a meeting of U.S. citizens abroad who have been traumatized by the IRS. This is simply incredible. It explains why many U.S. citizens abroad live in a state of terror, trauma and fear. What do they fear? They fear the government of that “great citadel of freedom and justice” – the United States of America.

I have always been under the impression that many people sacrifice their lives, families, etc. in order to get into the USA and become American citizens; and I never imagined that anyone who has this “privilege” is willing to do anything and everything to renounce their U.S. citizenship.
Recently, I met a group of people in Toronto who were claiming that they have been traumatized by the Internal Revenue Service (IRS) and its rules. My understanding from this rule, The Foreign Account Tax Compliance Act (FATCA), is IRS requires US persons to report their financial accounts outside of USA.
At first glance this issue didn’t seem to be a problem with this issue, and the first question that popped up in my mind was, why are these so called “US citizens” having problems complying with their civic duties; after all, Canadian citizens are also required to report their income, gains, losses, and assets to Canada Revenue Agency (CRA).
Then, I realized that the IRS and some US officials are working with foreign governments and financial institutions to become a vehicle to disclose private and confidential financial information of their American citizens and clients to the IRS. Now, I am thinking, why should Canadian tax money subsidize collection costs of a foreign agency? Don’t we have enough challenges in Canada that need immediate attention?
However, the momentum of this meeting changed drastically after just a couple of minutes, when the first attendee stood up to introduce herself, giving her reasons to be there, instead of enjoying the beautiful and pleasant weather, that Saturday morning.
A mature lady from the front row stood up, and said that she left US in the sixties, and has been in Canada, her new home, ever since, and she obtained her Canadian citizenship in the early nineties. She and her husband, who passed away a couple of years ago, considered themselves as good citizens, who paid their taxes, obeyed the law of the land, and raised their children with the same values.
She seemed to be very upset, apprehensive, and afraid of her future in her retirement years.Apparently, she has been notified, some time within the last three years, that she must comply with the new US rules, and is about to lose her life savings, which by the way were earned in Canada, by her and her late Canadian husband over the last forty years to IRS, because she was born in United States of America.
The second lady introduced herself and said that she came to Canada about 35 years ago, worked here and raised her family. She emphasized that all these years, she has been in compliance with IRS and its rules and regulations. She and her Canadian husband invested in a mutual fund over years in Canada. She broke down in tears just after a minute, as she described that recently she also has learned about rather confusing FATCA rules that could drastically affect her family in her retirement years.
The rest of the attendees followed suit and one by one described their circumstances and expressed their emotions in different ways, a few cried heavily, some were very angry, and many were extremely attentive and laser focussed, grasping as much information as they could that could help their situations.
These strangers, who have never met each other in the past, started to bond with each other, engaging, sharing their experiences, describing the circumstances they were in, offering the knowledge they have obtained in the last few short years, etc. for 6 continued hours under one roof.
In my short life I witnessed many people from many walks of life who cried in public for different reasons: loss of health, loved one, home, asset, career, passion, etc. However, it was painful to observe experienced grown men and women succumb to the pressure of “what if IRS does…., what will happen to me and my family.”
Probably FATCA was originally designed for those are involved with offshore tax evasion, and recover unpaid federal taxes, however, watching these people and their suffering tells me that there has not been sufficient consideration in recognizing different scenarios, or communicating with the public. I guess when there is a fire, wet and dry burn together.
We live in a violent world, and violence manifests itself into a variety of shapes and forms. Some of us are born to survive and some are here to fight with those who abuse their power. Either way there is a hefty toll has to be paid: financially, emotionally, and socially. Those who have the privilege of designing and deciding on policies that affect a significant portion of population should consider how their actions contribute to human progress.
Then there is the question of how much value a government allocates to patriotism. All these attendees expressed their genuine devotion to the idea of America and being American patriots, However many of them seriously consider the option of renouncing their citizenship, mainly because of the shortcomings of the present US administration. Neither money, nor force can replace the value of loyalty of citizens to their land and identity.Can a government afford to lose its most valuable assets – Its citizens!

On a different note, Tim has provided the link to the hearing yesterday in Washington DC, with Jim Butera representing the Florida Bankers Assn against the Treasury Department.

A research project undertaken by James Eastman-Timmons, an MA student from Carleton University in Ottawa, has been expanded to include volunteers from across Canada. Interviews can be done via phone, and I believe James is hoping to have all interviews completed by the end of this month. I have participated and encourage others to do the same. Following is an invitation from the researcher:

I am looking for current and former American­-Canadian dual citizens residing in Canada to participate in a study. The study is on the extent to which current American-­Canadian dual citizens consider their status to be inconvenient or burdensome. This study also examines whether former American-­Canadian dual citizens (and are now Canadian citizens only) perceived their status to be inconvenient or burdensome, and whether this perception influenced their decision to renounce (give up) their US citizenship. The study will also explore how current and former American-Canadian dual citizens feel about the US tax laws. The researcher for this study is James Eastman­-Timmons, an MA student at Carleton University, in the Sociology & Anthropology department.

Individuals interested in participating in this study, will participate in a 60 minute interview. During this time participants will be asked questions that are designed to determine the perceptions of American and Canadian citizenships and American­-Canadian dual citizenship status. These questions will also examine what former and current American-­Canadian dual citizens consider to be the benefits and burdens of this status, what their experiences are with filing U.S. tax returns, and what their sense of identity is; that is, whether they identify as American, Canadian, or both American and Canadian. Former American­-Canadian dual citizens will be asked questions intended to determine why they have renounced their U.S. citizenship, and current American­-Canadian dual citizens will be asked questions intended to determine why they have chosen to maintain this status.

If you choose to participate in the study you do not have to answer questions or discuss sensitive financial information, and you have the right to withdraw from the study at any point in time, for any reason up until February 28th 2015. All efforts will be made to ensure that the identity of all participants is protected. All individuals who participate in this study will remain anonymous in the final research project, and their responses will be non-attributable to them. By participating in this study, you will be able to share your dual citizenship stories and raise awareness about the potential financial insecurities and other difficulties that may be associated with this status.

This project has been reviewed and cleared by the Carleton University Research Ethics Board. For questions regarding ethics, the REB may be contacted at 613-­520-­2517 or ethics@carleton.ca. For those with further questions/concerns, the researcher may be contacted by email at: jameseastmantimmons@cmail.carleton.ca

Sincerely,
James Eastman-Timmons

Don’t believe the hype about expat Americans ditching their passports, by Tim Fernholz.

Often “journalists” will write about those who renounce their citizenship without ever speaking to someone who has renounced. They react in anger at a perceived threat: filthy rich ungrateful Americans ditching the most precious citizenship in the world. Tim Fernholz is no exception. But I challenged him and he responded that I should have people email him at tim@qz.com .

@IsaacBrockSoc @FedupUSExpat please, ask them to e-mail me at tim@qz.com

— Tim Fernholz (@TimFernholz) February 13, 2015

http://www.svt.se/nyheter/regionalt/vastnytt/svenska-banker-letar-efter-amerikaner

(hit the right button on the picture two times, and you come to a video with English text)

The article says:

Tinna’s mother became pregnant at the ship to America, and Tinna lived in the US its first three months. Now she can owe the US Internal Revenue thousands of dollars.

1962 had Tinna dad got a job as a visiting scholar in New Haven, United States. He took his family and on the way there was Tinna’s mother pregnant.

– They were bored on the boat, and nine months later I came, says Tinna who currently works as a teacher at Lerum’s high school.

She shows a photo of him and his proud big sister, and a telegram that his father sent when she was born.

– Rejoice Kristina is born, it says. After three months, we went home.

From Moodys Gartner Blog, Roy Berg, February 11, 2015: US proposes relief for some who renounce US citizenship: Is FATCA a motivating factor?

The details of the Proposal, and the chances of being given the effect of law, while interesting, are less so than the Administration’s motive for advancing it. Politicians don’t get re-elected by winnowing away their constituency base or enacting legislation that has the effect of raising tax (even in small measures). Normal people, even politicians, behave rationally so there must be a reason for the Proposal. Could the Proposal play a small part in a more subtle strategy that might involve foreign opposition to FATCA and IGA-partner domestic legislation?

• Some Canadian dual citizens who wish to renounce US citizenship may qualify
• Will the Proposal become law, and is the back door unlocked?
• Termination of United States Citizenship
• Why would the Administration propose relief to people who wish to renounce US citizenship?
• Is there another motive to relieve these dual citizens from tax and filing obligations?
• Conclusion – Regardless of the Proposal’s chance of being given the effect of law, the Administration’s motivation for bringing it forward, or the narrow class of individuals to whom it would apply, the Proposal is positive step. It is evidence that the unenviable predicament faced by dual citizens living abroad has been heard in Washington, DC and there may be the political will to affect change. Change may come quickly or not at all, but it will never come until there is understanding of the issue. The Proposal is an indication that understanding may be taking hold.

**************

See, related:

Eric’s February 3, 2015 post, “Obama FY2016 budget proposes limited relief for accidental duals-at-birth who give up U.S. citizenship”

and

Analysis from Virginia La Torre Jeker JD, February 5, 2015, “Relief for Accidental Americans: Obama Administration’s 2016 Revenue Proposal“.

and, one more, to keep analysis (so far) all together in one post:

The 2015 Obama budget proposal for “dual citizens” cannot be implemented without Congressional approval

Part 1 – The Obama 2015 Budget Proposal – Change you can believe in?
Part 2 – My thoughts on this part of the Obama budget proposal
Part 3 – Differing perspectives on exempting a “sub-group” of “technical U.S. citizens” from the compliance and tax horror which is part of the U.S. “Tax responsibilities of expatriation“
Part 4 – Can this Obama budget proposal be implemented by Treasury without Congress?

From Dr. von Koppenfels:

[See pdf’s: Univ Kent study brief and US citizenship renunciation Kent study summary]

Dear all,

As promised, here (are) two documents – cut and pasted to go here, so I hope they don’t look too strange with the formatting – that summarize the initial findings of my research from the survey “The US and You”, to which some of you may have responded. Many respondents (thank you!!) took the time to write extensive comments, and I am still working my way through those (400 pages) of data. Producing a more in-depth analysis of that may take some months, but I’ll post that eventually as well.

For now, here the initial results. And thank you to all survey respondents!!

Best,
Amanda

 

11 February 2015
New Survey Shows US Citizenship Renunciation Intentions Not Linked to Income

BRUSSELS, Belgium (11 February 2015) – Figures released by the US Treasury Department show 3,514 US citizens renounced their citizenship (also includes long-term residents who gave up their residency) in 2014; this is the highest figure ever, up over 2,999 in 2014.

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