Category Archives: Issues regarding US persons abroad

 

TORONTO Sunday, May 31, 2015
12 noon – 2 p.m. – $20.00
Carr Hall, 100 St, Joseph St.
Toronto ON M5S 2C4 MAP
 
 
NEW!
 
VANCOUVER Wednesday, August 5, 2015
6:00 – 8:00 pm – $20.00
Further details TBA
 
 
Have you received a FATCA letter or been warned of the consequences of being a U.S. person?
 

Why am I getting letters from my bank all of a sudden?

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.
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Nina Olson, US Taxpayer Advocate: 2014 Annual Report to Congress

The Annual Report to Congress creates a dialogue at the highest levels of government to address taxpayers’ problems, protect taxpayers’ rights, and ease taxpayers’ burden.

The report identifies at least 20 of the most serious problems facing taxpayers and offers recommendations to fix them. Some of the issues, like tax reform and IRS’s need to expand its various taxpayer services, affect virtually every American taxpayer. Others, like the Alternative Minimum Tax, refund delays, and tax-related identity theft, impact large groups of taxpayers.

The Taxpayer Advocate Service (TAS), led by the National Taxpayer Advocate, is your voice at the IRS. Some of the problems discussed in this report were first identified when taxpayers came to TAS for help in resolving problems with the IRS.

TAS is an independent organization within the IRS. The National Taxpayer Advocate delivers this report directly to the tax-writing committees in Congress (the House Committee on Ways and Means and the Senate Committee on Finance), with no prior review by the IRS Commissioner, the Secretary of the Treasury, or the Office of Management and Budget.

Download the Executive Summary
Download Volume One
Download Volume Two: TAS Research & Related Studies

… also includes links for specific sections of the report.

Thanks to Neill for this link, which I’m putting into this post, with related comments.

Neill says
January 14, 2015 at 11:23 am
Taxpayer advocate mentions the raw deal earlier OVDP victims had (me):

http://www.taxpayeradvocate.irs.gov/2014-Annual-Report/full-2014-annual-report-to-congress/

Offshore Voluntary Disclosure (OVD) Program Inequities. The report describes the evolution of the OVD program and the disproportionate penalties it says were often imposed, particularly with respect to unrepresented taxpayers. The IRS changed the streamlined program in 2014 in ways that allow many taxpayers to pay lower penalties. However, the new rules do not allow taxpayers who already had entered into closing agreements with the IRS at higher penalty rates to amend those agreements. Therefore, taxpayers who are the most deserving of leniency because they were the first to acknowledge they had failed to comply with foreign account reporting requirements ultimately are paying substantially greater penalties than taxpayers who waited until later to acknowledge their noncompliance. Among other things, the report recommends that the IRS revisit this decision.

Neill says
January 14, 2015 at 11:45 am
The TAS section of OVDP is very reasonable. What they propose could ease the burden of a lot of people (new balance limits indexed to inflation). Changing the closed agreements isn’t going to happen given what we know from the OVDP doc dump. They wanted the money and drove people with uncertainty (that did exist) to accept the deal.

calgary411 says
January 14, 2015 at 12:21 pm
Thanks for the link, Neill. This should be a post.

Two areas (so far) to review for importance to US expats are the sections on Taxpayer Rights and Legislative Recommendation #6 (that you’ve identified), FOREIGN ACCOUNT REPORTING: Legislative Recommendations to Reduce the Burden of Filing a Report of Foreign Bank and Financial Accounts (FBAR) and Improve the Civil Penalty Structure.

Charl has also identified: Robert Wood’s latest at Forbes: National Taxpayer Advocate Slams IRS Offshore Programs & FBAR Penalties, Demands Change

As you know, I refused to fill out a W-8BEN for Scotia iTrade. First, I received a letter. Since then, I missed a phone call which I never returned. And now I’ve received at least two e-mails.

This video, with numerous screen shots from the Isaac Brock Society, explains why refusing to fill out bank paperwork increases the compliance cost for the bank, and effectively thwarts efforts of the banks to come into compliance with FATCA regulations.

Congratulations to the Isaac Brock Society!

A reader here at Brock has approached me with the suggestion of instigating a Human Rights Complaint at the European Court of Human Rights (ECHR). This reader was aware of my involvement with the United Nations Human Rights Complaint against the United States and its policy of citizenship-based taxation which was filed in August 2014. That Complaint is still awaiting discussion at the UN but I am of the firm belief that our issue must be driven home in every possible forum available to us.

In Europe the ECHR is such a forum. The process by which one makes an “application” (the ECHR term for “complaint”) is described in English in a video tutorial available at the right hand side of the web page. The video can also be viewed in other languages.

The process is daunting and not for the faint-of-heart. The United Nations process was a cakewalk in comparison. However, the matter we face as an international community is of the gravest concern and there may be Brockers who reside in EU-member countries who may wish to take this fight to their governments. Continue reading →

Sweden banks, according to an agreement with the Swedish government administration, have begun to map out Swedes according to the place of birth and original nationality.

Nordea bank is currently the most visible bank performing these operations.

The Nordea banking app for mobile phones has been reported to lock up for users, until they answer questions about their birthplace. The app follows up with a question asking what other passports the user has.

Currently, the app allows the user to put off answering the questions until later, but it is not stated as to how long the questions may linger before Nordea requires an answer.

These questions are related to questions required by USA under FATCA, the “Foreign Account Tax Compliance Act”. It assumes that any “US person” living in Sweden is living there in order to avoid taxation. Any person living in Sweden and banking in Sweden must prove to their Swedish bank that they are not living in Sweden for the purpose of avoiding taxation.

Now, Sweden likes to be seen as being politically correct–especially when it is not politically correct……….

https://bancdelasteroideb612.wordpress.com/2015/01/09/sweden-begins-discriminatory-profiling-its-citizens-by-country-of-birth-and-by-national-origin/

or, the short link

http://bit.ly/1DtU3Rb

This is cross-posted from the Alliance for The Defence of Canadian Sovereignty website.

 
Welcome to 2015. On January 5, 2014 incoming Chairman Orrin Hatch of the U.S. Senate Finance Committee said:

National Review Online OpEd: It’s Time to Rebuild the Tax Code

Seven guiding principles for comprehensive income-tax reform.

Everyone agrees that the American tax system is broken and in need of reform. It stifles job creation, innovation, and competitiveness. It’s counterproductive, confusing, and a serious drag on the economy. Simply put: Tax reform is no longer an option but an obligation.

With the start of the new Congress, Washington has an opportunity to rebuild the tax code in a way that will spur economic growth, jump-start job creation, and once again restore prosperity to the American people.

To achieve this goal, however, the White House must get in the game and start to lead. This means putting smart policy ahead of poll-tested talking points and working with Congress in good faith. It also means accepting principles established by Congress to lay the foundation for true reform.

The most important principles were those followed by President Reagan nearly 30 years ago when Congress last acted to overhaul the tax code: economic growth, fairness, and simplicity.

Tax reform should promote growth in the economy and reduce economic distortions. It must eliminate the uncompetitive nature of the code and reduce disincentives to work, entrepreneurship, savings, and investment.

Tax reform should reduce tax expenditures to broaden the tax base and simultaneously lower tax rates. A broader base coupled with significantly lower tax rates is the foundation of what would be a much fairer tax system.

We also need a simpler system. Tax reform should reduce complexities in the tax code to lower compliance burdens, increase efficiency, and free up resources for productive activities, including job creation.

While these three principles will be vital to congressional tax-reform efforts, the demands of a 21st^–century global economy will require even more, most notably: permanence, competitiveness, promotion of savings and investment, and revenue neutrality.

In today’s world, permanence and competitiveness are key. The code’s lack of certainty hurts job creation, stifles planning, and inhibits economic growth. Permanence would make our code reliable and predictable for American households and businesses.

We need a tax system that no longer threatens to change from year to year, and we need a tax code that is internationally competitive. Tax reform should substantially lower the corporate tax rate and move us to a territorial tax system, with base erosion protections, to ensure that American job creators are on a level playing field with their foreign competitors.

A tax overhaul should also promote savings and investment, which provide fuel for growth. Many aspects of the current U.S. income-tax system discourage savings and investment, which ultimately hurts long-term growth.

Lastly, tax reform should embrace the principle of revenue neutrality. If we’re scouring the tax code looking for ways to squeeze more revenue to fuel government spending, we’re not reforming the tax code, we’re raising taxes. It’s as simple as that. Tax reform should not be used as an excuse to raise taxes on the American people. Any such effort is a needless distraction.

In fact, those who believe that the American people are currently undertaxed should look at historical trends. According to the Congressional Budget Office, federal revenues already exceed historical averages and will remain that way for the foreseeable future. Congress should deal with the problem of excessive federal spending, but it shouldn’t look to tax reform for even more revenue.?

These seven principles should serve as the guideposts for any and all tax-reform efforts. Any serious idea should link back and be relevant to at least one of these seven principles. The best ideas should embrace all of them.

The 114th Congress is set to begin, and I’m hopeful that a path to real bipartisan tax reform will take shape. I plan to help move the conversation forward in the coming weeks and months by engaging with members of both parties and unveiling additional steps.

True success will take more than just talk. It will take hard work, commitment, and, of course, bipartisan compromise. The challenge before us is clear.

— Orrin Hatch is the senior senator from Utah and the incoming chairman of the U.S. Senate Finance Committee.

I believe that Senator Hatch is serious. His statement on January 5, 2015 is a reinforcement of his December 16, 2014 speech in the Senate where he outlined 7 Principles For Tax Reform. His speech included:

“In the coming weeks and months, I plan to reveal additional steps.  I plan to involve many of my colleagues on both sides of the aisle, particularly those who will be joining me on the Senate Finance Committee.  My hope is that, as this conversation continues, a path toward real bipartisan tax reform will begin to take shape.  Of course, it’ll take more than just a talk and discussion.  It’ll take hard work, commitment, and, of course, compromise,”

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