Donna-Lane Nelson is a co-plaintiff with me in the Republicans Overseas U.S. FATCA/IGA/FBAR lawsuit.

The July 14, 2015 Complaint states that: “…Fearing that she would eventually not be able to bank in the country where she lived, she [Donna-Lane] decided to relinquish her U.S. citizenship. She did so on December 11, 2011 at the U.S. Consulate in Bern, Switzerland. The decision to relinquish her U.S. citizenship was not easy, but ultimately she felt that she had to choose between having the ability to access local financial services where she lived or be a U.S. citizen…”

Donna-Lane, a novelist, has published a murder mystery (“Murder in Schwyz“) which includes a description of the harm caused by FATCA:

“…At home, Brett’s marriage is in deep trouble, but he doesn’t want a divorce. He wants the best for his two daughters and he is also trapped because Swiss banks are closing the accounts of Americans. He has put every asset in his Swiss wife’s name. A divorce will leave him with nothing.”

A novel that includes FATCA harm is, I think, a first.

 Now — Eric in Switzerland (see complete response below in comments) tells us about the Switzerland FATCA Fact:

“It might be a novel but it sure isn’t fiction.

I could write a short book myself about lives turned upside down here in Switzerland. My elderly parents (American father/ Swiss mother) had their account shut down for a time by UBS. My American sister who only lived in the US until she was eight years old and her successful French husband went through FATCA hell in Geneva until she renounced out of desperation on their lawyer’s advice. FATCA wanted her French husband to cough up “back taxes” for the sin of sharing an account with his American wife…but you guys know all this.

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U.S. expats come up short on many of the U.S. Bill of Rights. But their is some progress on of them, albeit one which much of the expat community doesn’t aggressively pursue–the 2nd amendment right  “A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.”

At issue, is whether a U.S. citizen has an equal and non-limited right to be armed while that U.S. citizen is in the U.S.   The first discussion is that of an expat who holds a valid 2nd address in the U.S. The second discussion and case is related to an expat who has only a legal residence outside of U.S. The second case digs past a right which could be artificially be limited by the citizen’s uses, be it for sport or for self defense.

It’s not necessary for expats to enter into arguments as to whether this right is right or wrong, especially as this right is not shared in most of the countries where expats reside. In an effort to stay out of arguments as to whether this right is good or bad, just think of it as any one of any rights which might be granted by a constitution, which however is not afforded to non-resident citizens. Perhaps one could have a constitutional right to SuperSize Big Gulps, which may not be all that good for you or your family, but indeed it is a right which you might have to indulge in a product available to other resident U.S. citizens. The post is simply to point out only one effort to gain equal treatment for expats under the existing Constitution and its amendments.

RIGHTS FOR NON RESIDENTS

More relevant to most readers is that federal law effectively blocks the purchase of a firearm in the U.S. by a U.S. citizen living abroad with no residence in the U.S.

The federal ban is the subject of a long-running Second Amendment challenge, currently captioned Dearth v. Lynch. The most recent published opinion in that case, from June 2015, denied the government’s request for summary judgment and remanded the case for trial.

In the arguments (whose language and logic is partially understandable), it was established that the plaintiff indeed had no options available to him as a U.S. citizen to bear arms in the United States. The case looked at his potential ability to import a weapon, which he could not. It also looked at the various state/federal laws that may have allowed him to have firearms for sporting purposes, but the court found that there was no documented method of purchasing firearms for other legally valid purposes (self defense). It also appears to throw out any thoughts that it is  states that should be the plaintiff, and it finds that there indeed states which do not prohibit non-resident purchasers, but it is indeed federal law that prevents the plaintif from purchasing the weapon for which his constitution states should not be limited,

The case illustrates that indeed, it has been fully possible for a combination of state and federal laws to prevent the exercise of non-resident citizens from exercising their Constitutional rights. Also, that the possibility of seeing the proper court does exist if one has access (including financial) to lawyers with sufficient expertise. It also points out the long road necessary to even reach a court which might make a decision.

http://caselaw.findlaw.com/us-dc-circuit/1705364.html

Animal Farm – Wikipedia, the free encyclopedia// //

(Again, this author does not enter the argument as to whether the 2nd amendment is a good right or a bad right.)

The United States Government uses, on average, $54 million per year to locate its expat U.S. citizens and their assets in the bizarre government expat-locator program called FATCA.

FATCA, the Foreign Account Tax Compliance Act, was designed to locate  9 million U.S. citizens residing overseas and their assets.

Indeed, there is also a quantity of U.S. citizens who have savings and investments overseas, and also a U.S. immigrant population whose assets might remain in their country of origin. However, the greatest population of persons sought in the FATCA program are the 9 million U.S. expats. With respect to the 9 million, those quantities are nearly negligible, and it is quite accurate to say that the population that FATCA seeks to locate is approximately the 9 million U.S. expats. And the Obama rollout of FATCA pointed out that it was Americans overseas that were the object of FATCA.

$54 million / 9 million = $6 of costs to locate each of the U.S. citizens overseas.

Q: What value does America put on its expats? A: 6 bucks a piece. #FATCA

Republicans Overseas (RO) has brought forward a lawsuit against the United States Department of the Treasury, United States Internal Revenue Service, and United States Financial Crimes Enforcement Network over FATCA, IGAs, and the FBAR.

In the back and forth of the litigation, the US Government continues to argue that none of the plaintiffs have any “standing” or have suffered any harm that is relevant for legal/litigation purposes. This is the latest (September 15, 2016) response of the Jim Bopp RO team to the the Government’s arguments. See the link.

A bit of text From the response brief:

“In pre-enforcement challenges, as here, plaintiffs are not required to violate laws to challenge them. One may comply with a statute though deeming it unconstitutional and challenge it as being an unconstitutional burden. See, e.g., Davis v. FEC, 554 U.S. 724 (2008)…”

“The Government says it has never sought to impose an FBAR penalty against Zell [who is also the attorney in the Israeli FATCA lawsuit] (Opp’n 65), but the Government has nowhere eschewed enforcement, so the provision is not moribund and pre-enforcement challenges allow one to challenge provisions before enforcement begins. He reasonably fears enforcement for noncompliance. (Am.Compl. ¶¶ 130, 132.)”

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U.S. tax laws, politics pushing more dual citizens to renounce citizenship

The lovely Trish Moon spoke to Jeff Lee of the Vancouver Sun. Still, he managed to interview some condors too. Alas.

Somehow Jeff Lee found someone who is thinking about renouncing because of Donald Trump and thus blames him in part for the spike in renunciations.

[SEPTEMBER 27, 2016 UPDATE: “The Hill” today picked up on the upcoming House Oversight Committee hearings on FATCA. Obviously the fight will be challenging and there are lots of reasons to complain and be skeptical about an attempt by some U.S. Congresspeople to kill FATCA — note the tax compliance pundit in the Hill article who justifies FATCA because Treasury has spent a lot of money on it — but the FATCA hearing will happen despite the naysayers.]

Recently, Representative Mark Meadows introduced a bill in the U.S. Congress (complementary to a similar bill in the U.S. Senate) to repeal FATCA.

Witnesses are now being sought who have been significantly harmed by FATCA and are willing to testify at the Congressional hearing on FATCA in Washington D.C. Details on timings, length of testimony etc. are to be worked out. If you are interested in testifying please send Keith Redmond an email at: FATCA_Testimonials@outlook.com

Although a focus is FATCA, if you have been significantly harmed by U.S.-imposed citizenship-based taxation, which is enforced by FATCA, please also consider testifying at the hearing.

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I thought the results of the Israeli court case deserved their own post.

According to the report, the judge in this case has determined that our expectation of privacy in the modern world is limited. Therefore, Israel must comply with the United States FATCA demands and perform the transfer to the U.S. of the (excuse me) private financial information of Israeli citizens living in Israel just because they have some sort of nominal association with the U.S.

The issue that was completely missed in this case was discrimination, a shocking oversight considering the historical background of the judge’s nation. I hope that Mr. Arvay in his prosecution of the Canadian lawsuit will stress this point heavily. Regardless of whether or not privacy must be held as a limited “right” in modern society, it should be equally limited and not more limited for some citizens than for others. As it now stands in Israel, Canada and every other country in the world, those deemed by the United States to be Americans have even greater limitations placed on their privacy than any other members of their populations.

That is the issue. That is the injustice. That is the wrong. That is our cause.

We’ve only just begun to appreciate how differently U.S. citizenship/taxation law affects Americansabroad, based upon their country of residence. This is perhaps the most bizarre I have come across so far; dual citizenship denied on account of apartheid (i.e., a white South African could be dual at birth but not a black South African).

NB: Please be sure to read the response of Mr. Ferszt to this post on the citizenshipsolutions site

cross-posted from citizenshipsolutions dot ca

Introducing this “guest post”

This guest post is written by Dominic Ferszt of Cape Town, South Africa. I first became aware of Mr. Ferszt when, in October of 2014, his post: The Accidental Tax Invasion” was published in Forbes. I have discussed various aspects of “citizenship-based taxation” with him since. I am very pleased that he has accepted my invitation to write this “guest post” for publication at Citizenship Solutions. His post exposes an aspect of “citizenship taxation” and the S. 877A U.S. expatriation tax that has not (as far as I am aware) been discussed before. Those who did NOT acquire “dual citizenship” at birth because of discriminatory laws (example British and Canadian laws saying that citizenship could be passed down from the father but not from the mother) will find this post extremely interesting and relevant.

Without further ado …

Apartheid and the Accidental Taxpayer

How the United States Congress has passed legislation which imposes a tax obligation in accordance with the discriminatory policies of foreign nations; and how this might offer a glimmer of hope to millions around the world who feel unjustly targeted by FATCA or the IRS.

By Dominic Ferszt, Cape Town

In 2010, the United States Congress passed FATCA, or the Foreign Account Tax Compliance Act. Since that time, anyone with a bank account outside the U.S. has suffered some consequence.

FATCA requires all financial institutions outside the USA, notably banks and insurance companies, to review their records to identify possible evidence that customers may be U.S. taxpayers. Once identified, the financial institutions are required to report certain financial information; ultimately to the IRS.

This seemingly simple task has proven to be a complex compliance exercise costing the banks billions of dollars every year; and such perpetual expenses inevitably reflect in our bank fees. Perhaps the more brazen face of FATCA has been the requirement, by millions around the world, to go into a bank and sign a form declaring to the U.S. government (under penalty of perjury) that they either are, or are not, a U.S. taxpayer.

However, there is one group of people, likely numbering in the millions, whose lives have been unexpectedly and disproportionately shattered by the passage of FATCA. Some call them ‘Accidental Americans’, but what they have in common is some formal connection with the United States which they long ago abandoned. Perhaps they were born in America to foreign parents or overseas to U.S. parents, perhaps they studied or worked there in their youth, perhaps they emigrated long ago. Many of them do not even speak English. The problem they all share is that they (unknowingly) carried with them a perpetual obligation to pay U.S. tax after they returned home; unless they had performed some obscure and punitive expatriation process known only to a few U.S. tax scholars in ‘white shoe’ law firms. These individuals continue to be U.S. taxpayers (regardless of where they live in the world) because they are U.S. citizens. In the case of ‘foreigners’ who, under U.S. law, inadvertently acquired citizenship at birth, their tax obligation is arguably discrimination based on “national or social origin” or “birth” as articulated in the Universal Declaration of Human Rights.
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