SOLVING U.S. CITIZENSHIP PROBLEMS
INFORMATION SESSIONS
 
VANCOUVER Wednesday, August 5, 2015

6:00 – 8:00 pm – $20.00

1010 Richards Street (corner of Richards & Nelson)

Vancouver BC V6B 3E4 MAP

Please enter via the rear of the building.

What individuals are U.S. taxpayers? Who is a U.S. citizen?

I have never heard of these requirements! What determines the income that must be reported to the IRS?

I am only a snowbird! Why does this affect me?

What costs are involved in renouncing U.S. citizenship?

WHO: John Richardson, B.A., L.L.B., J.D., is a Toronto lawyer and a member of the Ontario Bar.
Citizenshipsolutions.ca

Hope to see you, your families and friends! Spread the word!

Information presented is NOT intended or offered as legal or accounting advice specific to your situation.
 

NEXT INFORMATION SESSION:
Toronto,
Sunday, August 30, 2015
1:00 – 3:00 p.m.

Goat Rodeo:
A chaotic situation, often one that involves several people [or organizations], each with a different agenda/vision/perception of what’s going on; a situation that is very difficult, despite energy and efforts, to instill any sense or order into.

I don’t think there’s a much more apt expression for what is happening right now in the larger FATCA / FBAR / CBT universe. The calm-before-the-storm waiting game of the last few years is now clearly giving way to frenzied activity and veritable verbal warfare across multiple organizations and web sites around the globe. The big-picture dots of this reality have not yet been fully connected into a single post and thread, so that’s why I’m starting this one.

In no particular order, here are some of the latest developments to consider:

1. The ADCS summary trial is poised to begin next Tuesday, August 4th. Even now, the Canadian Government is wheeling out their propaganda machine to fight our lawsuit in the court of public opinion as well as in the Federal Court in Vancouver. One of the first targets of their inevitable smear campaign is our legal counsel, Joe Arvay, via a Conservative Party soapbox piece published in today’s Globe and Mail. And, as I write this, news that the Canadian federal government, “…may seek an adjournment of the summary trial scheduled to be heard on August 4-5,” as reported in the ADCS thread.

2. Mirroring the Canadian Charter Challenge is last week’s filing of the James Bopp / Republicans Overseas Action FATCA lawsuit whose seven plaintiffs include Rand Paul and Stephen Kish.

3. Republicans Overseas reports on the US Federal government response to their motion to expedite a Preliminary Injunction:

On July 22, Republicans Overseas Action and the seven Plaintiffs asked the District Court to expedite the consideration of the request for a preliminary injunction to give the Court adequate time decide the matter before some of Plaintiffs’ sensitive account information is reported to the IRS at the end of September. The government’s response is to say that shortening its response time would be too burdensome and that it needs even more time to respond. Normally, they would have 21 days to respond, and we’ve only asked to have that time shortened by a week. The federal government instead has asked the Court to delay the suit and give them 60 days to respond to Plaintiffs’ request for a preliminary injunction—three times the amount of time to which it would normally be entitled! The truth is that the Plaintiffs are the ones playing catch up in this case. The government has had nearly five years to consider the constitutional underpinnings of FATCA. They should not be allowed to complain now that they need more time to understand it when American citizens’ constitutional rights are being pushed aside.

4. Democrats Abroad has published a couple of trash-talk pieces here and here condemning the Bopp/RO suit. So far, every one of the 22 comments on the DA Switzerland piece has been uniformly opposed to DA’s positions on FATCA and Same Country Safe Harbor (SCSH), which has also been referred to as SCE (Same Country Exception).

5. Democrats Abroad has doubled-down on its SCSH campaign by re-igniting its FATCA Reform 1000 letters sign-on campaign, apparently completely ignoring the frustration of its dwindling constituency, as exemplified by one of the comments:

Most of us will not support this. Same country exemption is a diversion from the issue. It will enable you to try and tell people that you have done something. 90% of us see right through this and want nothing to do with this. Full repeal of FATCA and CBT is what needs to be done. Anything else is a distraction. Time for the democrats to join the rest of the world and use the world standard tax practice of residence based taxation (RBT). Why does the party of “progress” want to hold onto an outdated, civil war era tax policy that all other countries have abandoned?

6. Republicans Overseas is also pushing back on SCSH and the letter writing campaign:

By delaying the Motion for Preliminary Injunction, it gives DA time to push for the Same Country Safe Harbor (SCSH) exemption

DA is asking expats to write 1,000 letter to Congress to support SCSH by pressuring Treasury Secretary Lacob Lew and IRS Commissioner John Koskinen to selectively enforce FATCA based on expats’ accounts in one foreign country or more than one foreign country. DA knows better than that. This is lawlessness because neither Secretary Lew nor Commissioner Koskinen have the constitutional authority to amend or selectively enforce FATCA without a vote in Congress to amend the law.

7. Meanwhile, other organizations have apparently chosen to hitch their wagons to the increasingly-maligned Safe Harbor campaign, including FAWCO (Federation of American Women’s Clubs Overseas) and AARO (Association of Americans Resident Overseas), though the latter has posted a position paper calling for the replacement of CBT with RBT. American Citizens Abroad has remained rather low-key, focussing on its own, rather convoluted RBT proposal and partnering with the University of Nevada via its ACA Global Foundation on a research study about the effects of FATCA on American citizens living abroad. Other groups, such as American Expatriates, appear to be inundated by a confusing and often contradictory array of opinions from across the political spectrum, though the same thing can often be said of IBS.

8. The Trump factor. Will his brand of demagoguery help or hurt our cause? Here is a quote from his most recent advertorial for his own book:

America has become the world’s “dumping ground” for everyone else’s problems. A “whipping boy” for other countries as we sink further and further into the debt of no return.

Trump warns of so-called leaders willingly giving our jobs to foreign hands and further crippling the economy. Literally taking future opportunities from our children and grandchildren.

Meanwhile those same leaders feed America’s looming debt beast — an $18 trillion tab — with foreign aid and terrible negotiations.

And what then do we get for extending our wealth to help a legion of other countries? Lack of respect. We’re the “laughingstock” of the world.

These are just a few examples of how fragmented and confusing the landscape has become, and just how far away US Persons are from achieving any kind of consensus about how best to fight back against FATCA and CBT. The dominant “camps” now emerging are, predictably, identifiable largely along traditional party lines, but with some important exceptions. On one hand, “Safe Harbor” has crystallized into the Democrats singular take-it-or-leave-it proposition. On the other hand are the lawsuits in both the US and Canada, initiated by an increasingly diverse mix of Republicans, disaffected Democrats and untold numbers of other supporters who have no allegiance to any US party. In the case of Canada, our battle is dishearteningly with our own Canadian government, which has lowered itself to becoming a mere proxy for the US. Nevertheless, when it comes to the issues of FATCA, FBAR and CBT, it would appear that the most dominant fault line now starkly divides an increasingly out-of-touch and disingenuous Democratic Party with, literally, everyone else on the planet.

Same Country Exception. A letter writing campaign “exempting” one from FATCA reporting has now been kicked off. If one can show that one is tax compliant, one won’t be reported. In this case, one needs only to send a different piece of paper to the IRS that declares that one is same-country exempted. Sounds Good. Is it?

We’ll look at the details. But first, let’s look at something that came along, albeit at a much slower pace–the Social Security number. Since it’s not the prime point, I won’t claim to have researched its history fully, let’s just talk about it from my own memory. And, remember that the course of history need not be planned in advance. However, it can be expected to morph itself to a known end.

Social Security came about as a forced savings system for one’s retirement. The payments after retirement were well publicized, and the incoming payments were accepted by legislation in the houses. In order to keep track of the payments, identification was required for the first time in America. Lots of people complained, that identification was not part of the American ideal. It was a huge transition, for which we dismiss today as “conspiracy theories”. Many of us have a Social Security card which is overlayed with “not to be used for identification purposes”. This didn’t last very long. In fact, long before my first card was printed, the Social Security number was indeed used on tax forms and not just on Social Security.

During the early 80’s, judicial and legislation determined that no one could require you to supply your social security number to them (loans, credit cards, universities, whatever)–however, those institutions need not issue you their services if you don’t cough up your number. The Social Security number has morphed into most everything. In Europe, the government number is used everywhere. Anyone can require that you hand it over. In many countries, the birthdate is ingrained in the number. You have to cough it up for almost anything, including discount cards at the store.

Trying to keep it short, the Social Security number morphed from something with a real need into something used everywhere. Now, with FATCA, globally. Remember that something starts and with or without fore-planning, it morphs into mainstream.

Now, we are being offered Same Country Exemption. Safe Harbor (another Orwellian name which has a background in other areas). You have a safe harbor, if you prove to your bank (by attaching your 1040 IRS document) that you are US-tax compliant. (An individual residing in a foreign country could elect, but would not have to elect, to have an account treated as a “Same Country” Account by providing an election to the relevant FFI (such as, the individual’s bank) and attaching a copy to his or her regular Form 1040 or Form 1040NR. The FFI would then be relieved from the requirement to treat the account in question as a US account and to process and report information with respect to it.)When you do this, your bank will not FATCA report you. You will also then be allowed to not file your form 8938. It does not mention that you would still be required to file your FBAR.

Let’s begin with why this might be a benefit. If you’ve already crossed all your T’s and dotted your i’s, why would you care if you were being reported? If you are filing a paper with the statement that you are only same country, what is the difference between that and just sending in the firetrucking 8938?

Q: Does Same Country Exemption eliminate the FBAR? A: No. Q: Does it eliminate the penalties? A: No. So, now we’ve reached the point of “who cares” and Safe Harbor. But it gets worse.

If you want to take advantage of Same Country Exemption, you need to SEND YOUR PRIVATE AND PERSONAL TAX FORMS TO YOUR LOCAL BANK. Your bank will then make a determination of whether your IRS 1040 is good, bad, or needs to be whistleblown. This would be the first instance where a 1040 tax return might be reviewed by an external source. (Go back to the Social Security example).

Do you want this? But, Safe Harbor is voluntary. When you write to your Congressperson, you support that you can voluntarily submit your private and personal 1040 form to an institution. When your Congressperson reads your letter, he sees that you support voluntary submittal of your personal 1040 form to an institution. He reads thousands of letters of persons who support voluntary submittals of 1040 forms to their institutions.

What does your legislator learn from this? He learns that thousands of persons support the idea of submitting their private and personal 1040 forms to their institution. People will gladly show their private information to an institution. WELL, IF SO MANY THOUSANDS OF PERSONS WOULD VOLUNTARILY SUBMIT THEIR PRIVATE TAX FORMS TO A 3RD PARTY, THEN THOSE SAME PERSONS WOULD NEVER COMPLAIN THAT THEY WOULD BE FORCED TO SHOW THEIR PRIVATE TAX INFORMATION TO A THIRD PARTY. And if they don’t they wouldn’t mind being banned from using that institution.

Do you really want your bank to judge your 1040? Why not your grocer? Why not your gardener? Why not bring your 1040 to the singles bar and paste it to your forehead? Why not send a copy of your 1040 along with your passport application (oops, it looks like that already might be required according to the transportation bill).

So, hurry up and write a letter to your Congresscritter and tell them that you support Same Country Exemption. At the same time, ask them to inform all of the bank employees to close their eyes while they strip search you in the bank lobby.

Addition:

BE CAREFUL WHAT YOU ASK FOR. And be careful about what others are asking for– remember that a few hundred people will be supporting DA/ACA/AARO/FAWCO SCE as-is. That proposal could affect you.

By all means, write the letters. Be specific about what is needed. Be specific if something is not objectionable and what is definitely objectable. Make sure that you discuss your opinion about the specific issue of giving your bank your personal tax records, in both cases of mandatory or non mandatory.

Noted: (The “Same Country” Exemption, sometimes referred to as “Safe Harbor” Rule, is the product of collaborative work among several groups representing Americans abroad. A detailed description was prepared by ACA and draws upon ideas and work of the other groups – which ACA greatly acknowledges. ACA is solely responsible for its content. This paper (attached) was drafted by Charles M. Bruce, Legal Counsel, ACA….)

Per bubblebustin and badger discussion:

I don’t recall ever seeing it before either. It was apparently written 7 months ago by lenxdart. Other links associated with this writer lead to Marylouise Serrato of ACA.

I thought by posting it here, it could potentially add to the debate Pink Jelly’s attempting to initiate over how homelanders perceive the benefits of US citizenship.

(Note: **See below for Pink Jelly’s request for a post, included in this one – It’s not the roads! A plea for stronger arguments against Citizenship-Based Taxation .)

https://www.penflip.com/lenxdart/aca-cbt-proposal-book

As a child I heard my dad use this expression , “Everyone and his brother”–to say that a large amount of people will be at a certain store at a certain hour, so we were going to go at a different time.

I had to relinquish my US citizenship in 2011. I have told my sisters. One of my sisters is politically active. Neither give a rat’s tush about what has happened to me. Both are democrats. My brother doesn’t give a damn about politics and doesn’t vote. He gives less than a rodent’s hiney about my problems since he not infrequently has his own concerns with the IRS, as do all Homelanders.

Can we be surprised that the Senate Finance committee downplayed the 347 submissions regarding FATCA, most of which came from “US citizens” abroad? If we cannot get our brothers and our sisters to write to their representatives, Congress will dismiss our pleas out of hand. But how do we mobilize the members of our own family. My own experience, and what I’ve heard from others, is that our families care a little about our situation than Barack Obama cares for his own brother living in Kenyan poverty. So how do we mobilize people who think we are crazy or have their own problems and no time to put into lobbying their government on our behalf. I believe it can’t be done–but perhaps others have more empathetic brothers and sisters. I certainly don’t have siblings who empathize with my situation;  apparently, neither does George Obama.

Barack Obama’s ‘half-brother discovered in Kenya, living on a dollar a month’

This article on the need for funding U.S. highways shows just how far Congress will go to claim revenue neutrality while still spending money. Instead of raising the gas tax and charging people who use the roads for maintaining them it is easier for Congress to raise taxes on people who can’t fight back.

This is the same poor thought process that gave rise to F.A.T.C.A.. Instead of paying to help veterans by looking to savings in money that was being spent on the wars in Afghanistan and Iraq it was decided that the money would come from a constituency that had nothing to do with rusbank.net the problem but conveniently also couldn’t fight back and who no one would defend, EXPATS.

Congress keeps finding increasingly absurd ways to avoid raising the gas tax

One buzzin’ Brocker, Bubblebustin, doesn’t give up easily.  Here’s the report I got by email.

There’s been a small development on the Canadian Bankers Association front that came about from a series of letters I initiated between Ms Drew-Lytle, their Director of Media Relations and Communications, and myself.

 

Brockers may remember Ms Drew-Lytle when she communicated with us here: https://isaacbrocksociety.ca/2012/07/16/canadian-bankers-association-maura-drew-lytle-responds-to-the-isaac-brock-society/.

 

I persuaded her to revise the CBA’s FATCA consumer info page (http://www.cba.ca/en/consumer-information/40-banking-basics/597-fatca-and-the-canada-us-intergovernmental-agreement-iga-information-for-clients-) to better reflect the options available to a Canadian banking customer should they fail to be in possession of a CLN or other documentation that might prove they are no longer a US citizen, OR, never were one.

 

My intention was to have the CBA include a direct reference to a “reasonable explanation” in their answer to FAQ “How do banks determine which accounts have to reported to the CRA?”, provided in the “Guidance on enhanced financial accounts reporting” (http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/gdnc-eng.pdf).  Instead, she provided a link to the guidance itself and agreed to change the wording on their answer to no longer deny the possibility of a “reasonable explanation” in all cases. Her reason for doing so, she said, was so the CBA wouldn’t have to revise its info page should the IGA change.

 

I also hoped the CBA would take the important initiative in providing our banks with guidance to determine what a “reasonable explanation” is (instead of leaving it up to individual bank employees to decide) but she said that’s the CRA’s job, not theirs.

 

The old wording on up the CBA’s website read:

Canadian Bankers Association

How do banks determine which accounts have to be reported to the CRA?

Under the IGA, banks are required to review new and existing client accounts to look for any indication that an individual may be considered a U.S. person. Indicators that someone may be a U.S. person include U.S. identification used to open an account or a U.S. address associated with the account. Your financial institution may ask you to self-certify that you are not a U.S. person by providing additional documentation. If you choose not to provide this additional documentation upon request, your financial institution will be required to send your account information to the CRA which may share it with the IRS.

For more information on financial institution requirements under the IGA, visit the CRA website:

http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtn

 

The new wording is:

How do banks determine which accounts have to be reported to the CRA?

Under the IGA, banks are required to review new and existing client accounts to look for any indication that an individual may be considered a U.S. person. Indicators that someone may be a U.S. person include U.S. identification used to open an account or a U.S. address associated with the account. Your financial institution may ask you to self-certify that you are not a U.S. person by providing additional documentation. Depending on the situation, if this additional documentation is not provided, your financial institution may be required to send your account information to the CRA which may share it with the IRS.

For more information on financial institution requirements under the IGA, visit the CRA website:

http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/ndvdls-eng.html

http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/gdnc-eng.pdf