A recent U.S. Senate Finance Committee study failed to issue any recommendations to address the intolerable treatment of the 8 million “U.S.Persons” (and their families) living abroad. One noted tax-lawyer implied that the Working Committee “is willing to state that these concerns need to be considered however,is not yet willing to say there is a crisis.”
The U.S. Senate Finance Committee response to expats: “NOT a Crisis”
Our response: “See You in Court”
and ROA Description of Each Plaintiff
In addition to Senator Rand Paul, you will note some familiar names of plaintiffs–including Dr. Stephen Kish and Daniel Kuettel.
It’s been a long time coming, but finally someone is challenging FATCA, FBARs and the IGAs in U.S. Courts–including requesting an injunction. UPDATE JULY 15, 2015: You can read actual Complaint
Tricia Moon has responded on Jack Townsend’s blog where he suggested U.S. Senate did not listen to submissions on citizenship-based taxation because they “are not yet willing to say there is a crisis.”
Tricia’s words are powerful. I post them here with her permission.
I came to know of the situation involving expats in late 2011. At that time, this blog was one of the only places to come for reliable information. I was much too frightened to be anything more than a lurker. I had never been one to participate online or engage in any sort of “cause.”
I renounced in 2012. The only way for many of us to deal with the anger and feeling of betrayal was to fight back. A completely American trait. I have lived in Canada more than 33 years and came due to marriage. I am an original “Brocker” and am the
Secretary-Treasurer for the Alliance for the Defence of Canadian Sovereignty.
ADCS-ADSC put together a massive submission to the Senate Finance Committee; a total of 7 separate parts. See: (https://app.box.com/s/yn25x1gk….
The comments and stories of American expatriates is nearly 200 pages, demonstrating real-life circumstances of people affected by the U.S. hunt for ”tax cheats.” See:
& videos: https://vimeo.com/citizenshipt… ).
Needless to say, the lack of any real, substantial indication of change for American expatriates is deeply disturbing. As I understand it, there was a total of 347 submissions to the International Working Group. Seventy-five percent of the submissions are from individuals. On top of the dismay created by the SFC’s insignificant “nod” to the plight of expats, now we hear that those 260 submissions (compared to the estimated 7.6 million expats abroad), indicate this is not a crisis and therefore, it’s perfectly reasonable for the U.S. government to sit on this until they recognize one.
Surely, one can understand that this is much more than a “numbers” game. Not all of those 7.6 million are adults. Not all of those people speak/write English well enough to feel comfortable making a submission. Not all of those 7.6 million know they are about to be
exposed by FATCA. And many are probably still too frightened to say anything with their name attached to it. It must be understood that the number of submissions speak for thousands more. In no way can the number of submissions be a sole factor in determining the depth of the problem.
As to whether there is a “crisis”, I ask that the following be considered:
Ø more bank accounts being closed; France is now the focal point
Ø cancellation of mortgages continues
Ø U.S. taxation of tax-deferred accounts (in countries of residence)
(in Canada two types of accounts are matching grants by the Canadian government; this amounts to a tax directly on the Canadian people)
Ø capital gains taxation on principal residences in countries where no capital gains tax is imposed (and no interest for mortgages is deductible as it is in the U.S.)
Ø unwarranted insistence that accidental Americans with no meaningful ties to the U.S. other than birth are liable for exactly the same tax and information reporting requirements as Americans who lived in the U.S. for decades
Ø inability of parents/guardians/trustees to renounce for those unable to form intent
Ø disproportionate cost involved in tax compliance (compared to Homeland Americans)
Ø disproportionate information reporting requirements (compared to Homeland Americans)
Ø the undeniable psychological effects including:
§ destroyed marriages
§ people with serious stress, anger and depression, some are suicidal
§ people terrified they will never be able to cross the border to care for elderly parents, etc.
§ people humiliated by the requirement to report their legitimate financial accounts to FIN CEN
§ people labeled as “traitors” etc for trying to protect their “alien” families by renouncing/ relinquishing
I would like these committees to ask the people who HAVE been affected, “Was this a crisis for you and your family?” Or would they say to such people, “I’m sorry but unless there are thousands upon thousands of you writing to the Committee, your misery doesn’t matter.”
They have, in fact, just said exactly that.
There have been endless letters, emails, visits to Washington, forums, information sessions, media coverage, a large presence in cyberspace etc etc etc. It is abundantly clear:
The US government could care less about the American Diaspora and as far as they are concerned, it is perfectly acceptable to simply let this continue.
This situation is incomprehensible. The long, long history of no enforcement of these requirements, nor due diligence of any kind.
The misapplication of FBAR, designed to be applied to resident Americans with foreign accounts. The hideous situation of OVDP 2009 and FAQ#35.The horrible penalties that were inflicted on those who tried to come forward and “do the right thing.” Ratio of penalty for tax owed: 10th percentile (“minnows”) -129%;
90th percentile (“whales”)- 4.17%.
Douglas Shulman’s endless threats and humiliating manner. Douglas Shulman’s arrogant attitude that he need not respond to a TAD.
The outrageous extra-territorial behavior of the US requiring all other countries of the world to pass laws to break their own privacy laws or else a 30% sanction applied.
The absolute myth that expats have any real representation in Congress with the reality that this is indeed “taxation without representation.”
And then there is Mr. Schumer: “Nearly 10,000 people in the last 10 years have renounced their citizenship. Not a single one has been penalized. They will be.”
It must be remembered (and matters very much), that the majority of expats are law-abiding and tax-compliant where they live. Where is the need for all this demeaning treatment? Did it ever occur to someone in Treasury, the IRS, anywhere, that they might just let us
know and ask first? There would always have been time later for all the punishing.
This seems endless and is nearly the last nail in the coffin. For those retired or close to it, there is virtually no chance of change in their lifetime. Wait another 30 years? Even 20 will not cover it.
And many more will look at this and say “It’s time to get out.” There really are no options for these people.
In Cook v Tait, the standard (and very tired) justification for citizenship-based taxation, Justice McKenna writes:
“In other words, the principle was declared that the government, by its very nature, benefits the citizen and his property wherever found and, therefore, has the power to make the benefit complete.”
I don’t see it. I just don’t see it.
And our answer to the U.S. Government, as stated many times after the release of this report is:
“See you in court.”
I was reminded of a post that I wrote on this very topic during the 2011 Canadian Federal Election campaign (prior to FATCA and President Obama’s FBAR Fundraiser). You may recall that the Harper Government went into this election with a minority government. The reasons that he won a majority government exist today. The reality is that the Conservative Party of Canada – led by Stephen Harper has an excellent chance of retaining their majority government. That’s the price of the “first past the post” electoral system.
The “First past the post electoral system – How does it work and how does it encourage non-representative democracy?”
"First the post explained" – How to win a majority governement with a minority of the votes http://t.co/4H1XJe40IB – Think about it!
The video in the above tweet explains how the “First past the post system” works.
The “Conservative Government” of Prime Minister is extremely unpopular. Yet, it has a “majority government”. How can this be? If you watch the video in the above tweet, you will see an explanation of how “First past the post” works. Continue reading →
There is a post at ADCS that a U.S. lawsuit against citizenshhip-based taxation is coming in the United States.
The following is a cross-post from ADCS.
#CBTLawsuit – First report of Senate Finance Committee brings citizenship taxation lawsuit one step closer
Posted on July 8, 2015 by adcsovereignty
As reported at the Isaac Brock Society, the “International Taxation Committee” has released it’s report on tax reform. In spite of the fact that more than 3/4 of the submissions were from Overseas Americans, the committee, acknowledged, but failed to address the intolerable treatment of Americans abroad.
As barely, a footnote, the Committee ended with:
F. Overseas Americans
According to working group submissions, there are currently 7.6 million American citizens living outside of the United States. Of the 347 submissions made to the international working group, nearly three-quarters dealt with the international taxation of individuals, mainly focusing on citizenship-based taxation, the Foreign Account Tax Compliance Act (FATCA), and the Report of Foreign Bank and Financial Accounts (FBAR).
While the co-chairs were not able to produce a comprehensive plan to overhaul the taxation of individual Americans living overseas within the time-constraints placed on the working group, the co-chairs urge the Chairman and Ranking Member to carefully consider the concerns articulated in the submissions moving forward.
What does this mean?
At a bare minimum it means that:
1. The “International Committee” views its purpose as dealing with “corporate interests” and not “individual interests”.
2. The “International Committee” views DNA Americans as less important than “Corporate Americans”.
3. The “International Committee” has acknowledged the urgency of the situation “for the international taxation of individuals, mainly focusing on citizenship-based taxation, the Foreign Account Tax Compliance Act (FATCA), and the Report of Foreign Bank and Financial Accounts (FBAR).”
Remember that many of the same submissions that were sent to the “International Committee” were also sent to the committee focusing on “Taxation of Individuals“. It’s difficult to see how the issues of individual Americans abroad could not have been addressed further by that Committee. Yet, it appears that the issues of Americans were not even mentioned.
In other words, the only mention of the taxation of Americans abroad appears in the above excerpt from the “International Group”.
In terms of where to go from here …
1. There will (in the very near future) be a lawsuit launched in the United States against the most egregious aspects of U.S. TAX policy, as they relate to ALL PEOPLE deemed to be “U.S. persons” who reside outside the United States.
2. The lawsuit is likely to, in addition to issues of taxation, include issues related to the “forced imposition of U.S. citizenship” on people who do NOT regard themselves as U.S. citizens or “U.S. persons”. Can the United States deem people to be “U.S. persons” when they believe that they are not?
3. The lawsuit will NOT be run by or through the “Alliance For The Defence of Canadian Sovereignty” (which will “stay at home” dealing with our FATCA lawsuit). It will be run by and funded by a different organization.
4. We hope for the support of all the various groups deemed by the U.S. Government to be “Americans abroad”. “If Americans abroad do NOT hang together, they will hang separately“.
Evaluating your personal situations …
It’s obvious that “U.S. citizenship abroad” lies somewhere between “difficult and impossible” (depending on your personal circumstances). The report from the “International Committee” suggests that the “plight of Americans abroad” is NOT likely to get better soon. This reality raises the obvious question of whether it’s safe to retain U.S. citizenship in a FATCA and FBAR world.
P.S. Here are the report from the International Committee and all the other committees.
The International Tax Bipartisan Tax Working Group Report
The reports from all the Committees are here.
The Individual Tax Bipartisan Tax Working Group Report
The Business Income Bipartisan Tax Working Group Report
The Community Development & Infrastructure Bipartisan Tax Working Group Report
The Savings & Investment Bipartisan Tax Working Group Report
The International Tax Bipartisan Tax Working Group Report
It is very clear that the collectively the Committee does not understand the urgency of tax reform in general. As goes taxation, so go civilizations. The greatest threat to the survival of America is NOT external. It’s the Internal Revenue Code of the United States.
I do not personally have any additional information about this lawsuit.
You can see access John’s links by going to the ADCS site.
An Accidental American in France has written a letter to U.S. President Barack Obama lawyer to lawyer pleading for Accidentals to be freed from unwanted U.S. citizenship.
His letter was posted (with personal identifying information removed) by Keith Redmond on Facebook.
The story is all to familiar to us. It continues to boggle my mind how U.S. legislators can read these and continue to FATCA the world.
Introduction – The role of judges in a democracy with constitutionally protected rights
In “Message in a bottle (or from my basement)” I discussed why “freedom” and “democracy” are not the same. I also described the differences between constitutionally protected rights, common law rights and legislative rights. The message was:
Constitutionally entrenched rights are necessary to protect certain minority interests from the tyranny of the democratic process. Canada’s “Charter of Rights” is a set of “constitutionally entrenched rights”. The effectiveness of a Charter of Rights is determined by the interaction of three groups of people: First, the general public
Yes, individuals must have the courage to stand up for their rights. They must have the conviction to use the courts. I recognize Gwen Deegan and Ginny Hillis as courageous Canadians. They are strengthening Canada’s Charter of Rights by pursuing litigation against the Government of Canada. It doesn’t take a hero. But, it does take courage. The truth is that:
All Canadians will benefit by our FATCA lawsuit initiated by Gwen Deegan and Ginny Hillis. Second, the legal profession
The fact is that most lawyers are absolutely useless when it comes to defending individual rights. Absolutely useless. There are exceptions. Obviously our lawyer, Joe Arvay has a long history of Charter litigation and is an exception. We are proud to have him as our litigator in our FATCA lawsuit. Mr. Arvay has made a huge difference in the lives of Canadians.
But, speaking of lawyers who have made a difference, I can’t resist mentioning Toronto lawyer Rocco Galati – who Globe and Mail journalist Sean Fine, recently referred to as “the unofficial opposition“.
Third, the judges and the courts
Courageous plaintiffs and principled lawyers are not enough. The protection of individual rights requires a strong independent court composed of judges who are INDEPENDENT of the government. Few people realize how important judges are. Few people realize that the most “enduring” things that governments do is to appoint judges. Governments can leave their legacy through their judicial appointments.
The Harper Court – Prime Minster Harper has appointed 7 of the 9 judges on the Supreme Court of Canada http://t.co/mvfZZ7tGK3
cross-posted from Alliance for the Defence of Canadian Sovereignty
With all the abuses of late, of the Harper government (Bills C-23, C-24, C-31 & C-51), it’s no small wonder Canadians are looking to the Charter of Rights and Freedoms as the only way to protect ourselves.
I came to Canada in January 1982, right when the Charter was being drafted. I had no idea really, what it meant; I couldn’t conceive of the idea that Canada up until that year, did not have a Constitution. But being new and caught up in trying to adjust and so on, I paid virtually no attention to what was going on. Little did I realize how important this Charter-thing would become in my own life some thirty-plus years later.
And at the time the Charter was being written, John Richardson was totally immersed in the whys and whats and how the Charter should be applied; this post is a testament to how much it has influenced his life, long before the IGA came to town.
by John Richardson
"Protection of fundamental rights for minorities even in a democratic system is part and parcel of modern democracy." http://t.co/BuTk2wtCUf
@Bubblebustin @Petros @US_Foreign My criticism of the Federal Council applies to every government that accepted an IGA and did not protect its bone fide residents and citizens. Protection of fundamental rights for minorities even in a majority-rule democratic system is part and parcel of modern democracy. These leaders shirked their responsibility, and that goes for all of the countries. And it goes for the entire government. For example, even if it was Widmer-Schlumpf who was in charge of the negotiations, it was up to the entire Council to ensure that what she did would not violate constitutional rights. We can sing “They don’t really care about us” referring to all the other governments as well. We’re too risky to stand up for, so they think, but if many of them had, it would have held.
Freedom and democracy are NOT the same thing
There are many who equate a democratic society with a free society. This is incorrect. “Democracy” is a mechanism to exercise the power of government. If unchecked a democratic form of government (based on voting and possible majority rule) can restrict the most basic and fundamental rights of a minority. A Charter of Rights exists to ensure that, with respect to certain fundamental values, the majority cannot use the political process to undermine certain rights of a minority group. The Harper Government used their majority in the political process to deny rights to one prevalent minority group – those with a U.S. place of birth. Those who doubt this should watch the videos of what took place in House Finance Committee hearings on FATCA. The FATCA IGA and Bill C – 31 demonstrate the importance of a Charter of Rights
The familiar video referenced in the above tweet is an example of the political process in a DEMOCRACY overriding the liberties/freedoms of a minority group. Most of you have seen this video. I suggest you watch it again.
This video demonstrates how the DEMOCRATICALLY elected Government of Canada simultaneously:
1. Stripped one specific group of people (based on he immutable characteristic of place of birth) of it’s constitutionally protected rights in a way that;
2. Then imposed mandatory discrimination on that specific group of Canadians, PURSUANT to DEMOCRATICALLY enacted laws.
3. Allowed the Charter rights of individual Canadians (AKA people) to be overridden by the desires of Canada’s banks (which do NOT have Charter protected rights); and
4. Surrendered the sovereignty of Canada to a foreign government.
(Although beyond the scope and intent of this post, this also raises issues of the “first past the post system” which in many cases leads to “majority governments” with a minority of the vote. But, I will leave that for another day.) Continue reading Message in a bottle (or from my basement): Why a Charter of Rights is necessary to protect freedom from democracy→