The Economic Impact of FATCA and FBAR Terrorization

Why aren’t our governments more concerned about what the US is doing? Ignoring, for the moment, the legality, or lack thereof, why don’t the governments of our countries recognize that the terrorization of their citizens by the US has a far greater effect than just the immediate financial impact on an individual?

First of all, why don’t our governments see what the US is doing as terrorization? Is that too strong a word? I don’t think so, considering the impact of their policies, the statements of the IRS, and the media reports. The definition of terrorization, according to the Free Dictionary:  1. To fill or overpower with terror; terrify. 2. To coerce by intimidation or fear, or according to Merriam Webster: 1. To fill with terror or anxiety; 2. To coerce by threat or violence.  The word simply fits.

So, why don’t our governments see the overall impact this terrorization can have on their countries’ economies? It’s not just individuals that are financially affected if they must dip into their retirement savings, or take out loans against their houses in order to pay specialists or pay ridiculous penalties to the US. We all recognize that the financial stress has had a negative impact on our health, our relationships, our jobs, and our families. Why don’t our governments? 

Why aren’t the departments of Health, Finance and Occupational Health and Safety (or equivalents) of our various governments concerned?

Consider what I’ve found with just a little research:

  • financial worries are the number one cause of stress;
  • personal stress has a negative effect in the workplace;
  • the main reason for lost work hours is stress.

According to the Center for Disease Control, the most common diagnosis during a physician’s visit is essential hypertension, which is simply high blood pressure from an unknown cause.

The site WebMD says, ‘But too much stress can lead to emotional, psychological, and even physical problems — including heart disease, high blood pressure, chest pains, or irregular heartbeats. Reducing stress can help lower high blood pressure. ‘

A report published in Sep 2011 by the Health and Safety Executive of the UK government states:

  • Stress, depression or anxiety and musculoskeletal disorders accounted for the majority of days lost due to work-related ill health, 10.8 and 7.6 million days respectively.
  • The average days lost per case for stress, depression or anxiety (27 days) was higher than for musculoskeletal disorders (15 days).
    http://www.hse.gov.uk/statistics/dayslost.htm

According to Princeton University’s Isle.org, reported in May 2011,

A 2004 report by Carleton University associates financial stress with a decline in physical health, marital breakups, and long lasting effects on children.

  • …. can put one at increased risk for health problems including cardiovascular disease, arthritis, hypertension, and reduced ability to fend off viruses due to compromised immune functioning. They can also maintain (if not cause) major psychological disturbances including depression and anxiety.
  • Financial stress is also associated with declining physical health such as an increase in headaches, stomachaches, and insomnia. Again, it is likely that people with a great deal of financial stress experience high levels of depression and it is depression that is most directly associated with worsening physical health.
  • As financial stress increases, so does the likelihood of marital discord and breakup.
  • Financial stress also has a negative impact on how parents parent.  That is, as financial pressure mounted, children became more depressed and anxious, and began to feel less control over their lives.
  • Children of financially stressed parents tend to be more prone to mental health problems, depression, loneliness, and are more emotionally sensitive.
  • …a conservative estimate that anxiety, depression, and substance abuse costs Canadian businesses more than $11 billion per year in direct losses in productivity and an additional $22 billion per year in indirect costs, based on 1993 data. They note that these estimates do not include costs related to health care or social services.
    http://http-server.carleton.ca/~jmantler/pdfs/financial%20distress%20DSI.pdf

It seems clear to me that stress has a negative impact on the economy of a country, with more sick days being taken, an overall loss of productivity in the workplace, an increase in substance abuse, an increase in divorce rates and an increased load on health care and social services systems.

Even if they don’t care about us individually, after all, in Canada, for example, we’re less than 3% of the population who are directly affected, why don’t they recognize the broader financial impact? Is it that they don’t care?  Or is it simply that they’re afraid to stand up to the US?

37 thoughts on “The Economic Impact of FATCA and FBAR Terrorization

  1. @Ferfet: Thanks for reaching out to us. I hope our comments help to give you some peace of mind so you can focus your energy and attention where it needs to be. Please feel free to continue to learn and explore with us here, play quietly in the background or just take some time away to deal with much more important matters in your life. Take care.

    @Saddened: I know it’s been a long struggle for you. Thanks for providing support here to Ferfet. I hope your nightmare is soon over and that your Canadian citizenship happens soon. We will be rejoicing with you when that day comes. If I were you, I would make an appointment with US Consulate to relinquish the day you have confirmation of date of your Canadian citizenship ceremony.

  2. @Ferfet, I am sorry you are having to go through all this worrying. Believe me we have all been down this IRS road, It is a nightmare..But please just relax, if it hadn’t been for Blaze and others I would be 6 feet under. I had a horrible time with all this. I wish I had done nothing like many others told me, but I was scared and the lawyers, accountants made it worse and really scared me into filing..but what’s done is done. I am now in the system and don’t know what is going to happen next.. You really need to concentrate on yourself and your husband, that is all that matters. Really it is!!
    Listen to the wise and Don’t Worry About It..Do Nothing!!

  3. @all
    I can’t even begin to express how thankful I am .  You have helped me put this on the back burner for now.  Yes I will need a reminder now and again , So I have saved all your post .  Please don’t give up  this fight.   There are people like me that need you.  Thank you again. 

  4. @Forfet, my nickle’s worth is that I’m in agreement with the others here. I know it’s much easier to say ‘don’t worry about the IRS’ than to actually do it, but if you can, shove that worry down into a deep dark hole, and close the lid on it, at least for now. You’re going to need your strength for yourself and your husband, and that’s what you need to be thinking about right now. If the IRS in some weird way did find and contact you, you can worry about that then, but the chance is so small, I think you should put it away for now.
    Our hearts are with you, and wish you and your husband the best. If you need a reminder now and again, we’ll be here.

  5. @Ferfet
    I agree with Blaze and Cornwalliscal – DO NOTHING. The pension income that you report on your Canadian tax return was not earned by you. It was earned by your CANADIAN husband. I repeat what I said previously – it does not sound like your have enough income that the U.S. would even expect you to file a return. Do not worry about the small amount in your TFSA account.
    As vile as all of this is, regarding the U.S. going after their citizens who are living abroad, I do not believe they are interested in you. It is good that you are now a Canadian. You will be protected from any over-reach of the U.S.
    Take care of yourself and your husband and try to put this behind you.

  6. @Ferfet, Not only do we both have MS, we are both the same age.

    I don’t pretend to know any of the technicalities of income splitting of pensions. Someone else may be able to weigh in on that.

    Your situation around citizenship is different from mine and others who relinquished decades ago. However, in your situation, I still would do nothing relating to IRS. I don’t think they would bother coming after someone with no income in her own name.

    In the remote possibility that they did, in your circumstances, it would turn into a public relations fiasco for them on both sides of the border and they would get nothing out of it financially.

    Concentrate on your husband and yourself. I’m glad you’re getting support from family and friends.

    You can also count on support of folks here. You don’t have to climb your way through this maze alone.

  7. Ferfet. Do nothing. You are definitely NOT the kind of person the US is looking for. As someone else said, relax, look after yourself and your husband and forget this whole mess. Trust me, they are not interested in you, your bank will not report you and the Canadian gov’t will not allow the US to take any of your hard earned cash. Forget about it. Get on with your life. You have plenty on your plate. Good luck and God bless.

  8.  
    Sorry it has taken so long to  respond, but it has been a  terrible day.  My husband fell this morning, I had an appointment with my Neurologist, physiotherapist here, and the phone doesn’t stop ringing. Not  complaining about the phone though – Strong support from family and friends. 

    I have been a  Canadian citizen since February 2011.    I’m 61 years old and I have had MS for over 20 years.  We split my husband’s company pension on our Canadian return, but I do not need to declare this. My understanding is  IF my husband was a US citizen, then he would have to claim the full  amount to the IRS: 

    ((Pension Income Splitting
    In 2007, the Canadian Government introduced pension income splitting legislation which enables optional pension income splitting with a spouse.  In some cases, this can result in significant tax savings amongst spouses. 

    However, pension income earned by a US citizen is attributable and taxable to the person who earned it for US purposes.  Although US citizens filing a joint return may realize a similar result, splitting pension income is simply not allowed in the US.  As a result, the entire amount of pension income will be recognized by the recipient with only a portion of the tax that would otherwise have been creditable to offset the US taxable income to the extent that Canadian pension splitting is utilized.)))

    Twelve years ago (25 years living in canada) my father passed away and left me a small annuity  from his  life insurance policy.  That year, AND ONLY THAT YEAR SINCE LIVING IN CANADA, I filed an income tax form to the United  States USING my social security number –   balance owing zero!  The IRS sent me a letter advising me that I had been issued  a valid Taxpayer  Identification Number and informed me I was to visit my local Social Security office to OBTAIN a social security number or if I had a SSN to verify the information on my card.  After a phone call to the SSN office , we finally realized I had never   notified the social security office my married surname.      My next visit to the US , I went to the social security office and updated all the forms!!   (if i only knew then, what i know now)  I just recently received my Social Security Statement.  Total taxable from 1967 to 1974 $5800!  Social security benefits $0.  This is the only form I ever received from the IRS.

    So if I do not need to file a 1040, what about the $300 interest in the TFSA?    Forms that are required for my RRSP’s? FBAR?   I’m not planning to file any of these forms anytime soon. I just have too much on my plate right now.   It’s just that the panic  and stress set in again with their September announcement for low compliance risk  taxpayers.  

    Tomorrow afternoon we are back at the Cancer Clinic for another appointment.   IF the US treasury department wants to know what we have in our joint accounts, will they help pay our Canadian government my Canadian husband’s medical bills.  When  I think of this, it makes me so angry.  This whole thing is so wrong in every way.  

  9. @bubblebustin: The important thing we need to know about Ferfet is if she is a Canadian citizen and when she became a Canadian citizen. Did she do so with the intent of relinquishing US citizenship. If she did and it was before 2004 or especially if it was before 1986, she should have no obligation to IRS unless she decides to poke the Sleeping Bear.

    Even if she is still a US citizen. Ferfet says she has no income. I don’t think that qualifies as tax evading in anyone’s books.

    Right now, Ferfet’s focus needs to be on her health and that of her husband. Energy and stamina are always a huge challenge with MS. She can’t deplete her energy further by worrying about a foreign government’s draconian demands. On a financial level, Ferfet may need every penny she has for required services for both herself and her husband–not for accountants, lawyers or IRS.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Optionally add an image (JPEG only)