They're Watching!

Yikes!  (I am saying that far too often these days!)
US News is reporting some pretty scary stuff about IRS High Tech Tools To Track Your Digital Footprints

The Internal Revenue Service is collecting a lot more than taxes this year–it’s also acquiring a Spyhuge volume of personal information on taxpayers’ digital activities, from eBay auctions to Facebook posts and, for the first time ever, credit card and e-payment transaction records, as it expands its search for tax cheats to places it’s never gone before.

IRS is no longer content to just have income, financial and banking information:

The IRS has brought in private industry experts to employ similar digital tracking–but with the added advantage of access to Social Security numbers, health records, credit card transactions and many other privileged forms of information that marketers don’t see.

Of course, they’re not shy to talk about it. In fact, they are bragging:

“Private industry would be envious if they knew what our models are,” boasted Dean Silverman, the agency’s high-tech top gun who heads a group recruited from the private sector to update the IRS.

The article does not say if their spy mission is restricted to US. Based on what we know, we have every reason to believe it is spreading around the world.
What the heck are they going to do with FATCA information?!?  Canada and other governments, Don’t Let US FATCA You!

29 thoughts on “They're Watching!

  1. Such wonderful news!
    And even if you do file and jump through all their hoops in a transparent manner you still get stiffed.
    I’m looking at a letter I received this morning from the IRS which says that I underpaid my 2011 taxes by 191.74 USD. Did I really underpay my taxes or was it something else? It was something else. From the letter I did pay the amount of tax owed but I miscalculated the penalties which include a 674.97 USD Failure to File among other things. I will be writing a post about this one in the next few days.

    1. How can you have a Failure to File penalty when you did file?
      This is on top of the fact they are already robbing you of money you received from the French government, which was meant to be tax free to you.
      You didn’t need this on top of chemotherapy, etc.
      I hope you have an understanding husband. I suspect most spouses who have no U.S. connection would be in a rage over this. I know I would be.
      In fact, I know of at least two situations where spouses have threatened divorce. Other marriages are incredibly strained. So much for the “family values” political agenda. Oh wait, that doesn’t apply to marriages outside of U.S.–especially when people have the audacity to speak French!

  2. @Victoria: “The hardest thing in the world to understand is the income tax.” (Albert Einstein)
    Einstein said that decades before a 72,000 page tax code, FATCA, FBAR and digital spying. What would he say today?!?

  3. Yeah, I was wondering the same thing. I mean they got the damn return so clearly I didn’t “fail to file.” I read the notice and the apply this penalty to all returns received after the due date. Another example of sloppy and confusing language.
    My husband is out of town so I’ll pay it and inform him after the fact. No, he won’t be happy but the upside is that it is starting to become crystal clear to him how his wife’s American citizenship comes with a couple of downsides. This is important because I have offered to renounce/relinquish and he has not been in favor of it.
    I’m lucky – he is a good man and we can talk about this openly. As you point out this is not the case for everyone.
    The only time I think he really blew up at me was a comment I made when we were with friends who asked how we got together. I replied, “Well, I had to kiss a lot of frogs before I found my prince.”

  4. @Victoria: How did you meet your prince? I understand if you don’t want to share that here, but it might make a good post for your own blog.
    @Everyone: I will not be playing in the Sandbox for a few days. I’m in the midst of moving from my home of 24 years to a condo. While I’m moving, my computer and netbook will be on vacation to be refreshed.

  5. @Blaze, good luck with your move!
    Several of the folks over at Isaac Brock are convinced the IRS is watching their site. I tended to think that was paranoia. However, it looks like I’m probably wrong, and that old saying holds true – it’s not paranoia if they’re really out to get you.
    “Paranoid? Probably. But just because you’re paranoid doesn’t mean there isn’t an invisible demon about to eat your face.”
    ? Jim Butcher, Storm Front

    1. We’ve actually been told they are. I would’ve been surprised if they weren’t. I suspect State reads it too. I don’t think they’re hacking into Brock and Sandbox, not that I’d know. I think they’re just keeping an eye on what’s going on. And if they are reading us, as far as I’m concerned, fine – I want our voices heard!

  6. @Pacifica777 – unfortunately I’m coming to the conclusion that not only doesn’t the US govt give a crap about what we think or feel, but neither does our Cdn govt. I hope I’m wrong. It certainly doesn’t hurt for them to be aware that there are many, many law abiding people who are caught in the fatca trap, and that we’re prepared to fight to the bitter end.
    So, read on IRS and State depts!

  7. @Outraged: Thanks for your wishes for my move.
    The move went well, but I was without Internet for a week (a long and frustrating story).
    It actually felt good not to be focused on FATCA, IRS, etc. for eight days.
    I think I am going to take a lesson from that. I plan to continue to actively play in the Sandbox, but I hope it will be less than in the past. A large part of the reason I moved to a condo from home ownership was to simplify my life. I need to carry that through in all areas.

  8. Blaze, I really have to concur with the observations in your last comment. I know that I don’t want to spend all of my Life Credit Units thinking about taxes and government. This week I worked in the garden, read some great books on the couch with my daughter (and may I highly recommend Margaret Atwood’s Payback), read some really trashy books too (finally picked up Wicked Cravings) and just tried to live in the moment.
    It made for a much better week. I think I’ll do the same next week and perhaps longer. Just call it “lightening up.”

    1. Victoria,
      I admire you for being able to do that. Since I became aware I was not compliant. My life pretty much stopped. I can’t get off my mind the possible horrible consequence that might happen if I get audited.
      I just can’t. I am obsessive compulsive about it. I like being in control, and I hate not being able to just fix the issue without risking even more. I am pretty depressed, and this has greatly impacted my family.

  9. @Blaze and @Victoria, I agree! I’ve cynically concluded that there is not going to be reform any time soon for Expats; I thus followed Phil Hodgin’s advice and ‘got out while the going was still semi-good.’ I still have two more complicated tax returns to complete, along with Fbar and the 8854; I will no doubt still owe my accountant several thousand pounds plus some double tax, probably; but now that I’ve received my CLN, I can see light at the end of the tunnel! 🙂
    It’s not been an easy decision but have concluded that it was the only way I could lead a normal life where I live. I will have lost over $50,000 in double tax, time off work, and professional fees; I will have to delay my retirement but at least money is replaceable. I am scarred but life has a way of carrying on! I am a survivor!!!
    I will continue to take an active interest in how things develop and am full of empathy; but my primary instinct is to survive in what is not always a fait world.

  10. @Monalisa, Congratulations! Yep, one very good reason to get compliant and stay that way for a couple of years is that inch by inch, you expand your options. I like the saying which goes something like any fool can yell at the wind but the wise man or woman adjusts the sails. 🙂
    Like you I don’t believe that reform will come anytime soon. I do not believe that ACA’s residence-based taxation will go anywhere. Best we can hope for are modest adjustments like getting them to agree that our bank accounts are local (and they are to us even if they are “foreign” to the US) and raising hell if they try to put more restrictions on renunciation.
    Doesn’t mean we shouldn’t keep talking about it or fighting against it but when I find myself getting obsessive compulsive about it, then clearly it is time to step back.
    That’s my ,02 on it.

  11. @Monalisa: Congratulations. I know what a difficult decision that was for you. I admire your fortitude and courage in making the decision that allows you to have a normal life again.
    @Chis: I know it is difficult to try to put this all aside and focus on other things in our lives. It may help to know at least one US judge has seen how truly awful International Robbery Society treats people.
    You may recall the thread we had here earlier about the elderly widow who inherited offshore accounts from her husband. She faced a penalty of $21.7 million on $43 million, plus back taxes. She also faced a possibility of jail time.
    A Florida judge called her situation “tragic.” He gave her less one minute of probation. He urged her lawyer to seek a presidential pardon. Then, he said, “If the government doesn’t join in that, it’s just spiteful,”
    Well, I think we all know how spiteful United States of Arrogance can be. But, it’s good to see a judge recognizing that publicly.
    I am not supporting anyone being a tax cheat or tax evader. But, the “spiteful” US government ignores many of the real tax cheats and pursues honest law-abiding people living elsewhere or new immigrants to US seeking to be honest responsible citizens.
    All I can suggest Chris is that you try to focus on other areas of your life and family. If you don’t, the IRS can rob you of your health and relationships as well as rob you of your money.
    I just returned from some time in US for my mother’s 90th birthday. As always, I breathed a deep sign of relief when I drove under the Canadian flag at the border. But, when I went into US, there were no boogeymen among the US border guards who saw my Canadian passport with a US place of birth and made no comment.
    My mother’s birthday was also the 40th anniversary of my becoming a Canadian citizen, so I had a dual reason for celebrating. I am going to continue to focus on the good things in my life.

  12. @Blaze, thanks for the kind words. I am glad you had a good time celebrating your mother’s 90th birthday. I hope she’s in good shape and can enjoy life. My grandma is 92. Her health is ok, but she doesn’t walk anymore, is totally dependent, and doesn’t have all her head… It’s sad to see her like that.
    Yes, the judge’s ruling was encouraging. But I was totally depressed and terrified to be audited, after I read the GAO report recommending the IRS to go after go forward and quiet disclosures. This year was my second year being compliant. and my last year to have to file FBARs since I closed my account. I hope to go back under the radar next year, when I won’t even have to check the darn box on schedule B. Also, next year my green card is due for renewal and I am pretty stressed out about it.
    I won’t sleep well for another 4 years or so, until the SOL for FBARs are over. I guess I am not very strong mentally. The hardest part being not being able to fix the problem without huge risks. It seems like GF was the right choice for me, but I won’t ultimately know for another 4 years or so.
    Thanks again for the support. It helps tremendously to know people who understand my fears. My wife doesn’t and treats me like I am paranoid.

  13. @Chris: This whole issue has strained a lot of marriages–from mild to treats of divorce. Your wife probably has US liberty rah-rah so deeply ingrained in her, she can’t even imagine the government would treat anyone honest in the way International Robbery Society is doing.
    It’s easy for me to say focus on other things. I don’t live in US, haven’t considered myself a US citizen for 40 years and I have a copy of my signed Canadian citizenship oath renouncing other citizenship.
    However, I hope being among friends here and at Brock is of some help. I find just reading Victoria’s posts on her blog help me to relax. I feel like I am gardening vicariously through her.

  14. @Chris,
    I understand your OCD and how awful it is to have your spouse think you’re just paranoid.
    USA and FATCA are on my mind daily too, ever since I found out I am a non-compliant US tax payer according to US. This whole thing is a nightmare I keep hoping to wake up from. My husband thinks I’m overreacting, and says he ‘gets the US’ – just that I am not who they are looking for. Yeah, right. We argue when I talk about the whole mess, so I try not to.
    Come here or to IBS when you need to talk to someone who gets it. You are not alone.

  15. @WhiteKat, thanks for your support. My wife thinks exactly like your husband. She thinks I’m overreacting, and that I am says not who they are looking for. I wished I had naturalized as soon as I could have.
    I am just terrified of the potential immigration consequences if I were audited – not so much financial. My account was small. I owed not that much in taxes on the interest, and even if they assessed non-willfull FBAR penalties and followed the IRM guidelines, it would be much less than inside OVDI.
    But I am afraid of being charged with filing a false tax return and being deported because of it. I read they deport quite a bit of people on the grounds of “moral turpitude”, and this would fall into that category.
    And my wife is really opposed to moving to another country.

  16. @Chris,
    The unknown, ‘what ifs’ are really hard to deal with aren’t they? This is especially true when those around you (spouses, family, etc) think you’re overreacting. My mom thinks like my husband, so I don’t talk to her about the ‘US thing’ either. The lack of family support actually makes the fear worse. Not only are you defending yourself against an ‘attack’ by a country you don’t live in, but are defending your own response to that attack to your own family. I know it stresses them out, when we are stressed, but a little support and some kind words of understanding would go along way.
    Anyway, hang in their Chris. I know its easier said than done, but try not to think about US and FACTA and FBARS, etc, etc, all the time. I hope you get your new citizenship soon.

  17. I won’t apply for US citizenship for another 5 years. I don’t want to do it until the SOL on the FBAR expires. In the meantime, I just hope that they won’t scrutinize my tax reports next year when I’ll renew my green card. I will be compliant for 3 years. I cross my fingers that it will be fine. But I might have to change immigration lawyer who told me to “fix the issue” before renewing the green card or applying for citizenship.

  18. I didn’t realize until your last post that you live in the US. I have a relative who recently moved to US and was unaware of FBARS; I made sure he knows now.
    This whole mess sure does test your patience. Having to wait years before things get sorted out, is trying to say the least.

  19. @Chris: I assume this is the GAO issue you were referring to.
    Instead of asking why so many new FBARs were filed from 2007-2010, GAO seems to be in sync with IRS that this can only mean they are all tax cheats. Could another answer be that IRS did not educate anyone about their obligations?
    Is anyone listening to honest Americans living outside US or new immigrants to US? Silly question. We know the answer to that.
    I can understand why you now have new anxiety Chris, but I hope you can somehow keep it in perspective and don’t let it control your life.

  20. Blaze, yes, that’s what I was referring to. Jack Townsend has a couple posts on it on his website, and it was mentioned at IBS as well.
    Looks like they’ll be going through these QDs and GF. It’s so depressing to see that the IRS commissioner responds right away to that report, agreeing to it, and ignores Nina Olson.
    Jack says that doesn’t change his point of view on the subject. From what I got from one of his latest comments, he even thinks that Go Forward might be the best choice for the right people (instead of QDs).
    I did not seek legal advice with him, as his entry price was pretty expensive, and I did not think I needed the full 2 hours of his time to explain my simple situation. I got advice from another experienced lawyer in the field who advised the GF. But the frustrating part was the range of answers I got which got me all confused and decided to do the minimal response. 2 advised OVDI (one of which told me I was a criminal and I did not have any other choice), 2 advised QDs, and one GF. And I stopped the legal fees there, choosing what I thought was the least risky for me. Time will tell if I was right.

  21. Not only are they watching, but they’re also listening. Or, at least they are watching talking and listening via phone records.
    I don’t know if anyone is reassured by the fact that the purported order “does not allow the government to listen in on anyone’s telephone calls” but relates only to “metadata, such as a telephone number or the length of a call.” The official said such information “has been a critical tool in protecting the nation from terrorist threats to the United States.”
    I fail to understand how monitoring how long teens talk to each other or how long a daughter talks on the phone to her mother in a nursing home helps prevent terrorist attacks. What I do know is that crack in the Liberty Bell gets bigger every day. In fact, I’m surprised the Liberty Bell is still intact.
    Civil liberties groups are not happy. “This is a truly stunning revelation,” said Elizabeth Goitein, co-director of the Liberty and National Security Program at the Brennan Center for Justice. “This suggests that the government has been compiling a comprehensive record of Americans’ associations and possibly even their whereabouts.”
    Why is anyone surprised? When they think they have the right to monitor all financial activity of anyone who chooses to live outside US, why does anyone think they wouldn’t want to keep close tabs on the phone records of all those good folks who do what they’re told and stay in US?

  22. Well, this isn’t exactly reassuring. Verizon turning over phone records to NSA is “nothing new…It’s been going on for seven years.”
    A couple of others have written reports on the implications of this. Sen. Mark Udall, D-Colorado, who serves on the Senate Intelligence Committee, issued a statement, “While I cannot corroborate the details of this particular report, this sort of widescale surveillance should concern all of us and is the kind of government overreach I’ve said Americans would find shocking.”
    Does anyone know what Senator Udall thinks of FATCA? I think most Americans would find it “shocking” if they knew about it and understood it.
    In fact, Senator Udall and Senator Ron Wyden wrote in a report: “As we see it, there is now a significant gap between what most Americans think the law allows and what the government secretly claims the law allows. This is a problem, because it is impossible to have an informed public debate about what the law should say when the public doesn’t know what its government thinks the law says.” Sounds like FATCA!
    Yet, both Democrats and Republicans support it. “Terrorists will come after us if they can and the only thing that we have to deter this is good intelligence to understand that a plot has been hatched and to get there before they get to us,” (Diane Feinstein, Democrat)
    This reporting “has proved meritorious because we have gathered significant information on bad guys and only on bad guys over the years.” (Saxby Chambliss, Republican)
    There is at least one voice of sanity remaining in US. “Is it just me, or is secret blanket surveillance obscenely outrageous?” (Al Gore)
    i wish we could get someone like Al Gore on our side to see how “obscenely outrageous” FATCA is for people living honest, productive lives outside of US.
    I just tweeted Al.

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