Cross-posted from USxCanada because of embedded perspectives of interest: Canada easy U.S. not; low threshhold for estate concerns; Canadian banks preparing to capitulate.

Carolyne Regan
Cross-border issues complex: proper planning saves fortunes in estate taxes
Windsor Star (1 Nov 2012)

http://www.windsorstar.com/Cross+border+issues+complex/7480168/story.html

“A very stable tax system in Canada” is contrasted with the U.S., where “changes can be very dramatic from one year to the next.” Estate planning is seen as required for assets “anywhere near” $1 million. “Canadian banks are becoming less hesitant to share information with the IRS.” This infomercial-tinged “special to the Star” relies on input from an accountant and an attorney whose contact information is listed at the end. No mention is made of severing ties to the United States.
 

Things seem to be really heating up there. More fror Haaretz.

http://www.haaretz.com/weekend/anglo-file/israeli-banks-demanding-to-see-u-s-citizens-tax-returns.premium-1.473899

The impression I get is Israeli banks are probably at this point violating Israeli law. It is interesting the different responses from country on this issue.

In a move that some tax lawyers are calling a blatant violation of customer privacy, two Israeli banks are requiring current and prospective account holders with American citizenship to furnish portions of their U.S. tax returns, Anglo File has learned. Those who refuse to do so risk having their applications denied or existing accounts frozen.

For several months, two Israeli banks – Bank Leumi and Bank Hapoalim – have required customers to sign a waiver authorizing the banks to review a series of financial disclosure forms. One such form is the Schedule B – which shows dividend and interest income, including the names of all financial institutions paying out dividend and interest income – and a supplementary form known as a Foreign Bank and Financial Accounts form, or FBAR, for Americans with at least $10,000 in foreign bank accounts.

Professor Allison Christians of McGill University has published in the July 9, 2012 issue of International Tax Notes an excellent article on FBAR and FATCA filing. Professor Christians has not only put a spotlight on the overreach of the United States through its required reporting of FBAR and FATCA by Americans overseas, but has also proposed a constructive legal solution to end this reporting requirement. All Americans abroad will be interested in reading this article.

Could a Same-Country Exception Help Focus FATCA and FBAR?

Allison Christians seems to have used quite a bit of actual common sense in coming to her conclusions / suggestions.  Perhaps a way for a Win:Win?  At any rate, a good read and, although reprinted from TAX NOTES INTERNATIONAL, JULY 9, 2012, p. 157, Volume 67, Number 2, July 9, 2012*,  I haven’t come across this before.  I may have missed it here at Isaac Brock.

*Tax Analysts 2012. All rights reserved. Tax Analysts does not claim copyright in any public domain or third party content.

The title of this column asked whether a same country exception could serve to focus FATCA and FBAR. The answer seems to be yes for pragmatic reasons, by allowing the tax administration to turn its ever-diminishing enforcement resources away from what is likely to produce an enormous data dump with few productive leads — getting some of the haystack out of the way in order to render the needle more visible.  The answer also seems to be yes for political and diplomatic reasons. FATCA and FBAR are either a rather nasty piece of arm-twisting, a bit of bad faith in the U.S. diplomatic relations department, or, worse, they are signaling a loss of faith in the pursuit of cooperation through diplomacy — a huge blow to the international tax regime as a whole. Carving out the bona fide residents who are using bank accounts to live their lives as residents and often dual citizens abroad could provide a means of backing away from either of these destructive positions.

Americans in Canada and their possible influence on the U.S. election.

http://ca.news.yahoo.com/blogs/canada-politics/americans-living-canada-could-difference-u-election-185401025.html

Cross-posted from the Franco-American Flophouse.  

Just Me thought it would be a dandy idea to post this here even though the video has already been circulated in the comments section.  This video is quite good and deserves wider circulation.  I received some wonderful mail in response to the post.  I was contacted by a few of what I would describe as Quiet Renunciants.  Their reflections started much earlier than mine but when I read about how they came to the conclusion that renouncing was the only sane option, I recognize my own thinking which is just a few steps behind theirs.  It’s both exhilarating and humbling – I need to be reminded on a regular basis that I’m not alone and that there’s nothing particularly special about my case, my angst and my anger.  

Another extraordinary resource passed along by Just Me.  The Life of An American Abroad is a twenty minute video that was filmed during a tax seminar earlier this year.

An actor plays the role of a very naive American who moves to the UK to study and work and who ends up falling in love,  getting a permanent residency permit, buying a house, getting married, having children, saving for retirement, and ultimately passing away in his host country.

Now if this person were from any other country in the world (i.e. not the U.S.) you know what we’d call him?  An emigrant/immigrant.  I find it very amusing that, for the most part, we don’t and I think that’s a problem.  As Camus once said, “Mal nommer les choses, c’est ajouter au malheur du monde.” (Calling things by incorrect names is adding to the misery in the world.)

As this American tells his life story, a panel of tax advisors is there to explain to him what he has to do to stay compliant with the U.S. worldwide tax and reporting regime (citizenship-based taxation).  To his horror (and mine) not one thing that he does in that life remains untouched by the IRS.  Well, perhaps that is an overstatement since he is allowed to eat, breathe, and eliminate waste without the U.S. government looking over his shoulder.  How generous of them.

I personally know many Americans who have experienced all the life events talked about this video and I think I’m on very firm ground here when I say that even the folks I know who think they are compliant, probably aren’t.

So I strongly urge everyone to watch this video and I mean everyone.

For those of you reading this blog who are not U.S. citizens or Green Card holders and who think this does not concern them, please think again.  You are indirectly concerned because many of your governments find the American system rather admirable (the French, for example).  Members of other diasporas ( French, German, Mexican, Brazilians and so on) would do well to be aware of how U.S. worldwide taxation works so they can fight efforts to have something similar imposed on them.  As for those of you who are married or contemplating marriage to a U.S. citizen, best to know what you’re getting into (or the merde you are already in).

For Flophouse readers who live in the U.S. and who are still under the impression that Americans abroad are making a big deal out of nothing, watch the video and ask yourself:  would you be willing to live like this? And what about your children who may one day wish to live and work abroad?  Do you want them to be captive citizens shut out from all the goodies associated with globalization, unable to take that great job in Shanghai or London because no one will hire Americans anymore or because the cost of compliance with all the U.S. requirements is simply too high?

And finally for my fellow Americans abroad, I’d like you to do something for me before you click “start.”  Find a quiet place, take a deep breathe, and relax.  You have options.  Not all of them will make you happy and some will require effort on your part.  What you do with this information is entirely up to you.  I fully understand and empathize with those who are renouncing.  There are others who are fighting like demons:  joining American Citizens Abroad and the Association of American Residents Overseas, writing letters, putting pressure on politicians,  voting this year against those lawmakers who are refusing to listen, and pestering the homeland media to get the story out.  And, yes, there are folks who are doing a Deep Dive and cutting all ties to the U.S., avoiding the U.S. embassy like plague-infested territory, not renewing their passports and so on.  I’m not sure the last is viable given the arrival of FATCA, and I wouldn’t do it, but it’s a big big world out there and surely some of them will succeed.

Wherever you are in this mess, the important thing is that you do the next right thing and I honestly think that the only wrong answer here is to kick back and pretend it isn’t happening at all.

There is absolutely no mention of how or if extraterritorial taxation will figure into how expats vote.

http://ca.news.yahoo.com/close-race-makes-waning-zeal-expat-vote-093828453.html

NZ To Negotiate FATCA Agreement With US
by Mary Swire, Tax-News.com, Hong Kong
29 October 2012

The New Zealand government has announced its intention to negotiate a Foreign Account Tax Compliance Act (FATCA) tax information agreement with the US.

More at:
http://www.tax-news.com/news/NZ_To_Negotiate_FATCA_Agreement_With_US____58009.html

As you folks know, the IRS decided that since I didn’t fill the first part of my Form 2555 out correctly, that I must owe them a bunch of taxes. And so they sent me a federal tax bill to my Canadian address, disallowing my Foreign Earned Income Exclusion (FEIE).  Today, at last, after several tries at sending them the properly filled out form, the IRS has decided that I don’t owe them anything after all.   I’ve only had to deal with this 2009 tax issue for quite awhile now–readers can retrace the multiple threatening letters and bills that I received from the IRS just by clicking the above link and the links in that link, and the links in those links.  The IRS has wasted its time with me.  I’ve been wasting my time.  I owed no tax.  Zero zip nada.  I am not a rich tax evader but a Canadian taxpayer and I renounced my US citizenship because I hate the hassles, the threats, and the intimidation that comes part and parcel with being an US person.

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