On Friday, November 7th, I attended the Remembrance Day ceremony at the elementary school where I live. I wore my ceremonial dress, as requested, and joined a couple of veterans who were also in attendance. During the singing of “O Canada”, for the first time in my life, I felt really conflicted. After 30+ years as a law enforcement officer in Canada, during the singing of our national anthem, it started to really hit home that the current Canadian government does not consider me to be a Canadian.
Category Archives: Issues regarding US persons abroad
“Quiet Disclosures” Creeping Their Way Back In?
An interesting reference to a pay-walled issue of Tax Notes Today{2014 TNT 216-3 (11/7/14)} on Jack Townsend’s blog:
“Regarding so-called quiet disclosures — when taxpayers file amended returns and delinquent foreign bank account reports without coming in through the offshore voluntary disclosure program or the streamlined program — Best [senior adviser to the deputy commissioner (international), IRS Large Business and International Division] said, “The IRS recognizes that a quiet filing is a choice that the taxpayer has.”
But Best added, “We would prefer that taxpayers come in through one of our programs so that we have tracking mechanisms, information gathering mechanisms set up, but ultimately it’s up to the taxpayer.“
Solving U.S. Citizenship Issues – Information Session Toronto, Sunday Nov. 30, 2014
Presenter: John Richardson, B.A., L.L.B., J.D., is a Toronto lawyer and a member of the Ontario Bar. Citizenshipsolutions.ca
When: Sunday, November 30, 2014, 6:30 – 8:30 pm
Where:Carr Hall, St. Michael’s College, U of T, 100 St. Joseph St., Toronto ON M5S 2C4
MAP
Admission: $20 individual or $40 for a family of up to four people. Payable in cash at the door, please (to cover costs). Hope to see you and your families on November 30. Spread the word!
This session will feature a very special guest speaker!
The IRS made changes to the “Streamlined Program” (a “relaxed” way for delinquent U.S taxpayers to catch up with their U.S. tax and information reporting forms) on June 18 of this year.
Further guidance was given on October 08. Snowbirds in particular, face a potential conflict. It is commonly misunderstood that anyone can stay in the U.S. for up to 180 (actually 182 or less) days per year without any tax consequences. In fact, the manner of counting days is subject to a complex way of computing the total number and of course, there is a form to be filed in the event one is over the limit. In the same manner many expats have been caught off guard with respect to filing tax and information returns, snowbirds who are unaware of the correct procedure are at risk.
Should one be so unfortunate as to be cast into the U.S. taxation net, the Streamlined Program might appear to be a way out. Even better, recent IRS indications are that they will presume that those outside the U.S. were non-willful non-filers, which will eliminate penalties. What could be better? However, in order to qualify for the non-U.S. residence status, one must not have spent more than 35 days in the U.S. for the past three years. The Catch 22 is in order to qualify for the U.S. resident version of Streamlined, one must have filed U.S. tax returns for the previous 3 years.
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American Solipsism (i.e., American Exceptionalism)
A Canadian dies and arrives at the Pearly Gates. St. Peter greets him and says, “Hey, would you like me to show you around before I take you to your eternal mansion?”
The Canadian says, “Well, I’ve lots of time. Why not?”
So St. Peter takes him up a path to the right of the Pearly Gates and after about a kilometre, they come to a long row of gigantic mansions. And he began to call each by name, “This is where the Belgians live, and that is where the Australians live, and that one is for the Russians—and that one’s for the South Africans.” And he continued like this for quite some time, and finally he came to a house with a large red maple leaf displayed prominently in the front. St. Peter said, “Here, finally, is your eternal mansion.”
Then, the Canuck queried St. Peter with a puzzled expression, “So far you’ve shown me a lot of mansions. I am just curious. I lived in Canada and our closest neighbor was the United States. Where do the Americans go? You haven’t shown me their mansion.”
Then, St. Peter grimaced and said, “Do you really want to see their mansion?”
“Oh yes,” replied the Canadian.
So St. Peter led the Canadian back the other direction. They retraced their steps all the way back to the Pearly Gates, and there they took the path to the left of the gates and walked about four kilometres. Then appeared in the distance, a solitary mansion on a hill. At that point, St. Peter stopped, turned to the Canadian, and with a pleading voice requested, “Please, once we’re there, you can say “hello” and everything to the Americans. But for heaven’s sake don’t mention the other mansions. The Americans don’t even know they exist.”
Reminder – Solving U.S. Citizenship Problems – Info Session – Tues, Nov 11, 2014, Niagara Falls ON
Where: McBain Community Centre – Room A – 7150 Montrose Rd., Niagara Falls, Ontario L2H 3N3 MAP
When: Tuesday, November 11, 2014, 8:00 – 10:00 pm
Admission: $20 individual or $40 for a family of up to four people. Payable in cash at the door, please (to cover costs). Hope to see you and your families on November 11. Spread the word!
FATCA and Extra-territorial Taxation
FATCA and extra-territorial taxation
Generally the question of whether one is a “U.S. person” (citizen, Green Card Holder, resident, substantial presence test) is determined under U.S. law. FATCA has the effect of enforcing the taxation of “U.S. persons” who reside outside the U.S. By changing the definition of “U.S.
person”, the U.S. can increase the number of “U.S. persons” residing in other countries. FATCA – by identifying “U.S. persons” – is the enforcer of extra-territorial taxation. The combined effect of “U.S. person” taxation and FATCA is that the U.S. can increase or decrease its tax base in other countries. If more people are deemed to be U.S. persons the tax base will increase. The FATCA rules make clear that the U.S. and only the U.S. will define what is a “U.S. account” (held by a “U.S. person”).
Interestingly the IRS has offices outside the U.S. (London, Frankfurt, Paris and Beijing). As FATCA becomes fully operational, one wonders whether the IRS will establish more “Local Office(s) Internationally”. FATCA is likely to make the IRS a “U.S. export”.
The U.S. is gradually expanding the number and kinds of people that it deems to be taxable “U.S. persons”. Leaving aside the question of “citizens”, it’s important to realize that U.S. “residents” (which can include people who do NOT reside in the U.S.) are taxable “U.S.persons”.
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FATCA: An Introduction for Americans to the “Worst Law Nobody Has Ever Heard Of”: Part IV – Conclusion
Solution
This article was written in response to a request for a step-by-step explanation of FATCA that would help Americans understand what it is all about. I would like to conclude with an illustration similar to the one with which I began. If you were born in California but moved to Massachusetts in your 20s and lived there the rest of your life should you have to pay state taxes to California until the day you die? If you lived in Denver at one time and then moved to Atlanta should you have to keep paying municipal taxes to Denver for the rest of your life? Your answer to both questions, I’m sure, would be a resounding, “No! That’s ridiculous!” Of course it’s ridiculous and so is having to pay taxes to a country in which you no longer live. Continue reading
From Japan T, new Brock “commenter” who is both pleased and horrified that he has something to add to this discussion…
This new post very well illustrates a lot that is in John Richardson’s presentation posted HERE.
Before that, however, it may be best to let you know a little about who I am. I am an American citizen who has lived most of my adult life in Japan. My spouse and our toddler are Japanese. I became aware of this problem around two years ago when applying for a new passport. There were statements on the application that I knew to be illegal. Searching into that issue lead me to your website and, well, you’ve been there, you know the rest.
This is today’s summarization, asking for input, corrections, etc. from other readers here. He says “Tear it apart.”:
Here is a summary I came up with from memory. My notes are unavailable to me while on the trains and subways of Tokyo, when I have time post.
Tear it apart! Any inaccuracies correct. I need this as spot on as possible. Continue reading
FATCA: An Introduction for Americans to the “Worst Law Nobody Has Ever Heard Of”: Part III
Who Does FATCA Affect?
The short answer is: just about everybody. At the top of the list are those who carry U.S. indicia and who live outside of the United States. In Canada these are estimated to represent approximately 3% of the Canadian population. Add to that their spouses and family members with whom they share accounts and a much larger figure is indicated (perhaps, as has been suggested by some, as great as 12%.) Publicity about FATCA has served to educate not only “overseas US Persons” about CBT (citizenship-based taxation) and FBAR (Foreign Bank Account Report) but also those who employ them or otherwise associate with them. US Persons are being asked to vacate positions with signing authority. Some couples are reconsidering marriage plans and getting divorced due to the understandable unwillingness of non-US spouses to have their personal and financial information shared with the government of a foreign country. Banks, particularly in Europe, are refusing services, including such basics as mortgage renewals, to “US Person” customers. The list of abuses is lengthy and I refer you to the reference links that I provide in Part IV. Continue reading
War of 1812 Heroes Commemorated
A press release today, from The Department of Canadian Heritage, announced the official inauguration of the War of 1812 Monument on Parliament Hill:
The monument commemorates the 200th anniversary of the War of 1812 and recognizes the courage and bravery of those who successfully defended their land in the fight for Canada. In the midst of terrible loss and conflict, the victory won during the War of 1812 helped ensure that a strong and independent Canada was able to be established in North America.
Two Hundred years later, in a perverse twist of irony, a new generation of heroes continues the fight to protect Canadians’ rights and freedoms, and to defend the sovereignty of our country from the extra-territorial overreach of the USA’s Foreign Account Tax Compliance Act.
Sadly, most Canadians are completely oblivious to this latest US attack and are unaware that our elected government representatives have quietly surrendered on our behalf.
The press release can be read here: http://www.digitaljournal.com/pr/2314932