Liberty and justice for all United States persons abroad

The Isaac Brock Society

Why IRS conduct may contribute to establishing “Reasonable Cause” for failure to file Mr. FBAR

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Two solitudes – To “OVDP” or to NOT “OVDP”

To OVDP:

To NOT OVDP:

When it comes to the “compliance dilemma”, the thinking seems to be:

“To OVDP or to NOT OVDP” – Note the Isaac Brock press release on OVDP 2012 Continue reading →

Presidential Commission Sought on U.S. Expatriates

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Interesting New York Times article by Brian Knowlton which includes the following quote:

The growing pressures on American expatriates stem largely from two events: the Sept. 11 terrorist attacks, which led to new United States Treasury Department regulations aimed at cracking down on money laundering and on the use of the international banking system by terrorist groups; and the financial crisis of recent years, which similarly brought a crackdown on Americans exploiting banking secrecy in countries like Switzerland to avoid paying taxes.

But as a result, and with the Internal Revenue Service devoting substantially more resources to its overseas operations than before, many ordinary expatriates say tax filing has become onerous and many banks are wary of doing business with them.

 

 

 

 

2,158 Koreans gave up U.S. green cards or citizenship in 2011, says South Korean government report

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A recent article in a Korean American newspaper, referring to newly-published statistics from South Korea’s Ministry of Foreign Affairs and Trade, has revealed that the number of Koreans cutting off their ties with the U.S. reached an 11-year high last year: 2,158 Koreans gave up U.S. green cards or citizenship in 2011. Very clearly, this is larger than the Federal Register number for the same year — and of course, the Federal Register includes people of all nationalities, not just Koreans.

Keep in mind that the Federal Register is only supposed to cover citizens and “long term residents”, those who have had their green cards for more than eight out of the past fifteen years, so some of those 2,158 were not supposed to show up in the “name-and-shame list” anyway. That said, this article is another piece of evidence to add to the ones we already have that the Federal Register grossly understates the number of people ceasing to be U.S. Persons. I’ve translated the article and various background materials below.
Continue reading →

More FATCA Fallout: Miami’s international banking clients move money to protect financial privacy – DATCA impacts

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The Miami Herald had this story in the Sunday paper.  (Hat tip to Roger Conklin)

Under new IRS disclosure regulations, details about U.S. bank accounts held by foreign nonresident depositors could be shared with their home governments. As a result, bankers say hundreds of millions of dollars have left Florida since April.

What is interesting to me about this story is this:  While they talk about the global crackdown on tax evasion, and reference the history of UBS, and the IRS voluntary disclosure program, there is no mention of FATCA anywhere.  Not sure if that is intentional, or if the journalist doesn’t understand the connection between FATCA, and this domestic effort which I call DATCA (my shorthand).

As Christophe pointed out here, Congress recently voted to delay this IRS regulation.    So, the battle is becoming more public, and wonder how long this will remain non political in this silly season.

For the likes of Debbie Wasserman Schultz , Chair of the Democratic National Committees, she is now in a tough place.  She voted for FATCA, and then voted to delay DATCA,  the IRS reciprocity fall out of her first vote.  Ah, sweet irony!  🙂

I continue to record the history of  this developing story here

US Bank Denying Americans Services for being “US Persons”

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I called GE Money Bank AG today and was informed that they do not provide banking services to Swiss citizens in Switzerland who are considered to be “US Persons”.  GE Money Bank is a division of GE Capital which is a unit of General Electric, “an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States”.[1]

You are hereby confirming that you are a non-US person, i.e. that you are not a US citizen (sole, double or multiple nationality), that you do not possess resident alien status (for example because you are in possession of a Green Card or because you have regularly resided in the USA in the current year and the previous two years) and that in accordance with the provisions of US tax law you are the beneficial owner of the assets held by you and of the income generated by those assets. Insofar as a double taxation treaty exists between the USA and your country of domicile as a client, the bank will in principle accord you, as our client, a reduction of the US withholding taxes on income from US sources. In such a case, the bank is entitled to ask you to produce additional documentation.
GE Money Bank Savings (see info button to the right of “confirm that I am a non-US person.”)

Other banks that I have called so far who refuse to provide banking services to Swiss citizens in Switzerland considered as being “US Persons” are:

  • GE Money Bank (US bank.  Doesn’t finance mortgages, but refuses to provide banking services to Americans)
  • Raiffeisen (might finance Swiss citizens who live in the States)
  • Bank Coop
  • AXA Bank
  • Migros Bank (unless the minimum account balance is $250’000 or the mortgage is above $700’000)
  • NAB
  • Valiant Bank AG
  • Rothschild Bank AG (probably not, but unsure)
  • SwissLife (investment products, mortgages)
  • Hypothekarbank Lenzburg (see signature on every web page)
  • Swissquote Bank
  • FinanzZentrum Jungfrau AG
  • Vontobel (Doesn’t finance mortgages, but US persons are prohibited from accessing the web page)
  • Bank Sarasin, under the condition that the mortgage is matched with assets (US persons are prohibited from accessing the web page)

Banks which are stated that they were undecided are:

  • Bank Thalwil (as of 28.08.2012, but US persons are prohibited from visiting their web site)
  • Bank Linth (conditional, but their web site states that investments and other transactions are not for US persons)
  • Alpha Rheintal Bank AG (only accepts regional customers, including maybe US persons)
  • Julius Baer (refuses to provide financial services to  US citizens, but I need to inquire on mortgages with dual citizens)

Banks which provide Swiss citizens in Switzerland banking services regardless of the fact that they are considered as being “US Persons” are:

  • Basler Cantonal Bank (refuses to provide financial services to  US citizens)
  • Vaud Cantonal Bank (waives foreign account fees for Swiss citizens living or working abroad)
  • Aargauische Cantonal Bank (closing the accounts of US persons)
  • St. Galler Cantonal Bank (closing the accounts of US residents)
  • Zürcher Cantonal Bank (does not finance mortgages for Swiss citizens who live in the US)
  • Credit Suisse (refuses to provide financial services to  US citizens)
  • Hyposwiss Privatbank (As long as W9 is completed)
  • UBS (Baden branch, but American citizens are being denied banking services)
  • Postfinance (does not provide credit to Swiss citizens living in America). It’s partners, Valiant and Münchener Hypothekenbank don’t want US persons.
  • SwissLife (insurances)
  • AMFIE (according to CERN)
  • Credit Mutuel in St. Genis-Pouilly (according to CERN)

Those denying banking services to Swiss citizens have no official statement of such.  They are acting upon recent internal instructions which they will not release to the public.  I was told that SwissLife has an official statement on the matter, and I found one on a mortgage application:

The customer is not a “US-Person”.  That means, he/she is not a US citizen (single, double or multiple citizenship), that he doesn’t have the status of being a foreign resident (“resident alien”) , has (for example the possession of a “Green Card” or any regular stay in the USA in the current year or last two years).
SwissLife Mortgage Application

Both the US embassy in Bern and the Swiss Department of Finance stated that the action taken by the banks is legal and advised one to communicate the matter with US representation.  After being informed that US politicians are not responding to Americans abroad, the US embassy in Bern recommended contacting the ACA lobby.

 

The US government writes that it is a federal crime to deny a US person a mortgage because of their national origin, and yet the US government is forcing this federal crime upon US citizens as a result of citizenship-based taxation.

Korean Americans who gave up U.S. citizenship and joined the South Korean military

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There are many reasons to emigrate from the United States; love, career, and study are just a few among them. And for just as many different reasons, some people find that once they’re overseas, their ideal path naturally leads them to the point where they choose to give up U.S. citizenship. Below, I’ve translated some South Korean media coverage about a less-common career choice for ex-Americans: the Korean military.

The first article is from earlier this month and discusses people who are in the most recent Federal Register list, while the second is from a few years ago. Don’t hold your breath for them to be featured on NBC Nightly; they’re too busy scouring the lists of ex-citizens for rich people so they can keep screaming the tiresome narrative that people giving up U.S. citizenship consist solely of “wealthy investors leaving the United States to avoid the estate tax”.
Continue reading →

Moby Guest Post: Patriot Act s361b – The Missing Congressional Reports on IRS FBAR Compliance Efforts

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Moby was the first publicly reported Opt Out of the 2009 OVDP.   He has been very generous in sharing his experience, and has been an inspiration to others who have had to battle the fear of what draconian penalties the IRS ‘might’ apply outside of the OVDP.  We all believe the IRS FAQ examples are hyperbolic maximums by intention to strike fear into non complying hearts, but until tested, you really don’t know.  Moby basically turned down the “in lieu of” OVDP penalty, called their bluff, and won!  If you are not familiar with his story, I would strongly encourage you to read it as originally reported on January 25th here and updated on March 10th here .  Since the last post,  he has been at work on a FOIA request related to IRS FBAR compliance improvement efforts, and asked me to share his findings.  What follows is his report. Continue reading →

When one passport isn’t enough — CNN article about dual nationality

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In this article, tax issues are mentionned, but no word about the life destroying effects of FBAR, FATCA and double taxation on Americans living abroad.

Also, the mention of Kenya as a country that doesn’t allow dual nationality is wrong, since the new constitution voted in 2010.

When one passport isn’t enough, by Maria LaMagna

John Baird vs Chuck Schumer

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http://www.niagaraadvance.ca/2012/07/27/baird-rejects-us-nexen-concerns

 

Key Quotes:

 

A senior U.S. senator has called for a hard line on a state-owned Chinese company’s takeover bid for Canadian oil company Nexen, but Foreign Affairs Minister John Baird refuses to be pushed into anything.

“Decisions about the Canadian economy or about our economic relationship with China will be made in Ottawa, not in Washington or in New York,” Baird said on Friday.

His comments come after Sen. Chuck Schumer — a top New York Democrat — wrote to the U.S. treasury secretary about China National Overseas Oil Corporation’s (CNOOC) proposed $15.1-billion takeover of Nexen.

Schumer says Nexen’s operations in the Gulf of Mexico — U.S. territory — account for about 10% of its business, so any takeover by a foreign buyer would be subject to review.

Baird says he has “great respect” for Schumer, but doesn’t know if the U.S. can block the CNOOC-Nexen deal.

The minister also refused to link the Nexen takeover to securing greater access to the Chinese market.

“Obviously we’d like to see less trade barriers, more trade, more free trade that is unencumbered,” he said.  “We will continue to pursue that independently of this decision.”