The Internal Revenue Service is pleased to announce that its highly successful campaign to bring non-resident United States persons into tax compliance has led to an unprecedented number of tax returns entering our processing center. However, due to recent budget cuts to our country’s tax collection service, and our inability to have predicted the current volume of returns, the IRS no longer has the available manpower needed to process US taxpayer’s returns in a timely fashion.

In our effort to maintain a consistent level of service for our customers, the IRS will now charge a processing fee to taxpayers whose tax returns originate in a foreign country. This fee will help defray the cost of the additional manpower needed in processing these returns.

Due to existing law, non-resident US tax persons currently yield little, if any, revenue for the US government. This fee shall remain in place until such time that Congress makes changes to our tax laws that currently allow non-residents to avoid paying into the US tax system.
– Tax Czar

Okay, not true, but doesn’t it seem like a natural progression in the current climate? It wouldn’t be much different from the US government’s decision to charge US citizens a $450 fee to cover the costs of their own renunciations. I am slowly starting to digest the reality of the situation: that if are not of benefit or value to the US, we are a liability by default.

I watched the videos that Tim posted (thank you, Tim, and thank you Euro2011Man who put the videos on YouTube). On the side, I noticed and watched the video that I am posting here. I so wonder how these women are facing their challenges with the US IRS, FBARs, FATCA. Did they know anything about all this when this video was made?

Once again, I thank all that is holy that my path took me to Canada. I do know, and this video brings it home, that if I had gone back to the US after my divorce in 1984, raising on my own one child with various expensive health problems and his sister, my story would be much different. With my son’s developmental disability, severe asthma and hereditary hemochromatosis and my own Crohn’s Disease, I am absolutely sure that I would have had to turn to social assistance to survive in the US — what are they but pre-existing conditions that would stigmatize and break us in the US. We have had nothing but the best medical care in Calgary, Alberta. It has not been a worry — the differences in how the two countries take care of its people is vast, a whole different mindset.

Instead, we are in Canada and I am thankful every day for that and will never take it for granted. I put in many long hours as an administrative assistant; I worked, scrimped and saved, paid taxes, was able to buy a house where my kids were raised and had a course of action for peace of mind that my son would, seamlessly, be looked after when I was gone. With the help of the Canadian Government and their innovative Registered Disability Savings Plan that my son, I slept well at night not worrying about my son’s future — I had it all figured out until I came to the realization of what is happening now. So, a glitch in the road.

I’ve survived many challenges and I will survive this — and I won’t leave this continuing administrative nightmare to the children I one day leave behind me. Thank you, Minister Flaherty and Canada, for taking the stand you have for protection of the rights of the persons from the US who chose Canada as their new home, as well as the “accidental Americans” who also make Canada their home.

I just told ‘outragec’ offline that I had always wanted to someday have a cleaning lady (person) seeing as it’s spring cleaning time. I should have used some of that savings for my wish — it would have been a drop in the bucket for what is now being spent to leave the US completely behind. Outragec’s reply — “oh, right I got confused! getting free of the US holds a much better return on your investment than a cleaning lady :)…..”

It is always good to take a moment to count our blessings, and I have many here in Canada (including the support and education I’ve gotten at the Isaac Brock site). So, I have just paused to do so.

I did benefit from the US economy and my parents paid taxes, served in the military, etc. during those years. I paid US taxes in my early working years there; my then-husband served four years in the Marines. It was my (our) right to choose where to live and that choice was Canada since 1969 — and I have no problem with the taxes I’ve paid here since then. Here, among other things, health care is a cherished right.

I don’t how these two things got attached together but I found an interesting letter from the Canadian Bankers Association to Flaherty AND a letter from the UK Ambassador to the US to Geithner. This is the first I have ever seen a foreign governments direct response to the US. Take a read.

http://www.clhia.ca/domino/html/submissions/Public_Submissions.nsf/3a76f4bf05a34de68525757e00638de1/8525758200701fa9852578490052b067/$FILE/Letter_from_FS_Council_reFATCA.pdf

I have no idea who put these on YouTube but they are pretty good. I know the first one was posted on January 3rd before I started posting here and has information that was not being commonly discussed at that time(IBS was just getting started although at the point Expat Forum, where I never posted but did read from was ongoing)

I found an interesting article on FATCA at Financial News this morning that for an “industry” publication is the first I get some sense that they are getting it. A couple of interesting quotes:

“Once countries have got the structure in place to comply with US Fatca, their governments won’t just say, ‘we’ll bear the costs of helping the US gather its tax and leave it at that’. Something will happen.”
That “something” will not be a repeal of US Fatca, Fleming said. The realistic options, he said, are either that every country develops its own version of Fatca, or that a “global Fatca” is developed, where every country has to disclose the assets of every other countries’ citizens under a common framework. He said: “There will have to be a ‘global Fatca framework’ – the alternative is even worse. We couldn’t operate on the basis of 27 Fatcas in the Europe Union, say.”
The significance is enormous, he said: “It will be a global tax system. It is impossible to comprehend how you maintain national tax integrity under such a system; how you get to a global Fatca is an immense challenge.”

A few points they seem to be making:

Many in the financial industry are increasingly taking the view that FATCA and any copy cat legislation is going to be an overriding issue for the rest of the decade.

In closing the authors state that they in fact think the US is playing a “long game” of trying to determine the world’s taxation model.

Unfortunately this article now seems to be pay-walled, but you can sign up for a free four week trial.

http://www.efinancialnews.com/story/2012-03-27/fund-managers-predict-global-fatca

Cross posted from RenounceUScitizenship

The IRS has proudly trumpeted OVDP and OVDI as successes. Both programs were understood to be attempts to go after “big time tax evaders”, “whales”, U.S. residents who were using “offshore bank accounts” and entities to hide income from the U.S. Treasury. That has been the conventional wisdom up until now. Of course, these programs also have had “well known” and “well documented” side effects. Specifically the “collateral damage” suffered by U.S. Green Card holders and U.S. citizens living abroad. But, of course as good Americans, we understand that this “collateral damage” is  understandable, completely appropriate, and a necessary incident of good citizenship. To put it simply: A good American citizen or Proud U.S. Green Card Holder, should be prepared to suffer this “collateral damage”. Your “collateral damage” is your “Contribution to America”. Continue reading →

“Just because Canadians have money in a foreign bank doesn’t mean they aren’t paying taxes on it.”

Come to think of it, just because U.S. citizens living abroad have foreign bank accounts, it doesn’t mean they are avoiding the payment of taxes!

You will have to click on the link to see the video:

http://www.ctv.ca/CTVNews/TopStories/20120325/canadians-taxes-liechenstein-120325