No Crisis? “See You In Court.”

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:
(https://app.box.com/s/yn25x1gk…
& 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.”

11 thoughts on “No Crisis? “See You In Court.”

  1. Great comment, Tricia.

    I have long believed that the only way to move the CBT issue was through the courts.It is somewhat surprising that there has been no serious challenge to CBT in recent times.You would think that it would be worthwhile for some big fish out there to contest an IRS assessment.

    Perhaps it will be a small fish that drives the stake through the heart of CBT. Small fish do have their day in court.

    https://www.facebook.com/ClaytonPOstingAttorneyAtLaw/posts/583768111757009:0

  2. @Keith Big difference this time around: we got the technology and communication to speed remedy of injustices, and there are some highly exceptional and highly pissed off Americans and others out for a fight for American principles (such as against taxation without representation) on our side.

  3. Excellent comment by Tricia and thank you, Lynne, for posting it.

    I read the report and was flabbergasted that the only issues adressed were those of the minority of submissions (international tax as applied to multinational corporations). The other 75% (international tax system as applied to human beings) were thrown a small bone in the final paragraph which gently urged the working group to look into the matter.

    I’ve worked with AARO for a few years now. I’ve supported ACA’s efforts as well. I went to Washington for Overseas Americans Week with an AARO/FAWCO delegation in 2014. I note that ACA has a presence in Washington and has been lobbying non-stop for RBT. I also note that Dems abroad did their own Washington “door-knock” not long ago.

    Those efforts to work within the system are worthy but have not, to be brutally honest here, advanced matters one iota. Here we are well into 2015 and neither ACA nor AARO can point to even one small victory which might give us hope for change. Instead, as the senate report shows, we are still stuck pleading for the powers that be in the US to “consider” our plight and place our issues on the agenda.

    What Gerard said. Politesse and deference are not getting us anywhere but there is so much fear that if we raise our voices above a whisper, someone from a 3-letter agency will make our lives hell. The court cases are my only hope these days and that is where I am putting my support.

  4. Often social movements need to offer those in power a carrot to choose as a motivator for redress vs. the stick of protest, legal action, unpleasant PR, etc.

    The unwanted attention and bad PR we bring to the abuses of US extraterritorial CBT/FATCA/FBAR, and the legal actions are part of the necessary corrective stick in this case. But what is the “carrot” that the polite cap in hand camp thinks is one which would motivate the US enough to respond? I see no evidence of any such motivation.

    The ” we are your best volunteer US ambassadors abroad” approach doesn’t seem to be working. Certainly one would think that in countries like Canada and the UK (Mexico has highest #s in world of USPs ) where there is a substantial critical mass of those deemed USpersons that the US is harming, the USambassadors approach might encourage it to become motivated to reconsider the growing opposition from those outside the US.

    The support that the Democrats and Obama courted overtly in 2008 via their platform specifically naming Americans ‘abroad/overseas’ as a group of special interest was never mentioned again – and we were never mentioned in 2012. Those abroad who funded the Democrats on their tours of Europe (ex. hosted by Hollywood actors with Swiss estates!) weren’t really true US citizens abroad – they were people temporarily sent or temporarily living there in my opinion). The fundraising efforts outside the US will continue, but they’ve decided that it isn’t even worth the effort to pretend that they care what those ‘abroad’ think or need.

    Nope, the US didn’t give a rat’s behind to the effect on its closest allies and neighbours of imposing the very same one size fits all FATCA that it designed for the rest of the globe – which was the intent of FATCA from the beginning. The US designers of FATCA did not ever intend to even have individual IGAs – that was a Treasury idea (still arguably outside its purview and power to enter into agreements directly with other countries) created to get around the very real existence of significant legal/governmental impediments to FATCA’s implementation in the laws of the rest of the world .

    So, the “we are US ambassadors abroad” argument doesn’t seem to hold any sway. Wonder how the rising mass of anger, resentment, renunciations and other public and private opposition that FATCA and CBT/FBAR enforcement has engendered is viewed by the US?

    What “carrot” can ACA, AARO, FAWCO and others possibly offer the US government that would make it accede to even modest adjustments to the abuse it has extraterritorially heaped on us in layers?

    I can’t see one myself. Perhaps no carrot exists. Perhaps only the stick will do.

  5. May I add one more thing? Why aren’t the photos, along with the e-mail contact addresses, senate office telephone numbers and other contact details (where available) posted prominently at the top of this website, so that all can see who were the “brains” behind the FATCA monstrosity, who drafted it, who pushed for it and who voted for it. That will put this whole debacle into perspective and make the faces behind the “crime” public? Fighting laws is nebulous and vague, while fighting those responsible, if by nothing more than naming and shaming them, is doing a service and informing all as to who has caused their misery.
    The principal creators and initiators behind FATCA are:

    Former Senator Max Baucus (Montana) Currently the U.S. Ambassador to China
    Senator Charles “Charlie” Rangel – US Representative of New York’s 13th Congressional District
    Former Senator Carl Levin (Michigan)
    Senator Harry Reid (Nevada)
    President Barack Obama – who signed FATCA into law and has repeatedly justified its existence

    Why aren’t these individuals, the people behind FATCA, shown at the top of your site, with their photos, titles and links to their offices, if nothing more than as a means to educate others who are the people behind the law? Most probably don’t even know who is responsible. How can you fight against something if you can’t put a face to it? Laws are made by people and people are accountable and we shouldn’t forget that, ever!

  6. Thank you so much for making this post of Tricia Moon’s reply on the Jack Townsend blog. It speaks volumes, from the heart — the real and accurate back story of exceptional U.S. abuse of those who have left the homeland.

    Gerard, you speak for many of us here also, as we don’t understand why there is not the mass outcry by *US Persons Abroad*.

    quote
    What amazes me most, and also amazes all of my personal and professional friends, all of them non U.S. persons, is how obedient and conforming the organizations supposedly representing the interests of U.S. citizens abroad are. With all that has happened, and especially now, subsequent to the Senate Finance Committee’s “report” on tax reform, paying nothing but contemptuous lip service to the plight of US citizens abroad, it should be more than obvious that U.S. Citizens abroad are of absolutely no relevance for lawmakers and legislators in Washington.
    unquote

    Thank you, Lynne, Tricia and Gerard. You speak for so many who have no voice.

    If no one else does, may I cross-post at Brock? Thanks again for this!!!

    • Never mind. I will cross-post at Brock this heart-felt post that needs more viewing.

      Thanks again for all of it, including the comments — and Steve Klaus’s comment at Jack Townsend’s blog.

  7. @Gerald: What a deplorable situation for you and for so many others.

    It is despicable that U.S. Congress refuses to do the right thing.

    Democrats Abroad are a joke. I do not know if Republicans Abroad even exist any more. Republicans Overseas is taking their time about their lawsuit.

    ACA and AARO are failing miserably in their efforts to make a difference.

    Governments around the world are bowing to U.S. Extortion.

    Deep pockets have refused to help fund the Canadian lawsuit.

    Little people are funding the lawsuit and speaking out.

    Do you have any ideas for some concrete action to make a difference? Does anyone else?

    • Yes, I can think of several things, starting with naming and shaming all those members of Congress who drafted, advocated and voted for FATCA. While I fully support your excellent legal action, I personally think that more would have been achieved, and faster, had the considerable sum of money that was raised, been used to take out ads, print flyers and create websites targeted at the constituents in the districts where those responsible for FATCA are Senators, Congressmen, etc. and where they seek reelection. If they would suddenly see repeated information campaigns, directed at their constituents, in their very own states and districts, calling attention to the fact that they were responsible for a law that will hurt US exports, business and global commerce, I am sure that there would be an immediate reaction. The problem is that, as good as a law suit may be, it lets all of those responsible for creating the FATCA monster off the hook. Nobody, probably not even those on this blog are able to name the Senators who drafted and fought for the implementation of FATCA. They have been given a free pass and that was not the right strategy. The local media in their districts should be bombarded with facts and horror stories as to what their elected representatives have brought upon fellow law abiding US citizens, or accidentals born or living abroad. It must be relentless. Those responsible, including those that voted for the HIRE Act must be held accountable and not allowed to hide and have a lawsuit simply attack the law. No, those that created and gave birth to the monster must be identified and shamed in front of their very constituents, so much so, that they will have to justify their actions in order to be reelected, or better yet, fight to overturn FATCA when they feel the heat as to what consequences on their own political careers may suffer as a result of their stupidity in having supported FATCA may cause them.
      Certainly, the $500,000 that was raised for the law suit could have been used in a very targeted and precise way against those responsible and perhaps with better and faster results than with a law suit.

  8. As a former U.S. citizen, who renounced just in order to survive, as my four non-U.S. business partners gave me an ultimatum, either get rid of your U.S. citizenship, which was contaminating our totally German business and subjecting our company’s accounts to U.S. Treasury and IRS scrutiny, or you must sell your shares and leave. This all started upon the advice of our German bank, who said that they wouldn’t deal with our accounts if there was any American/’U.S. Person’ involvement? Not to mention the personal impact on my mortgage, on my bank closing all of my investment accounts and everything else that every reader here knows all too well.
    What amazes me most, and also amazes all of my personal and professional friends, all of them non U.S. persons, is how obedient and conforming the organizations supposedly representing the interests of U.S. citizens abroad are. With all that has happened, and especially now, subsequent to the Senate Finance Committee’s “report” on tax reform, paying nothing but contemptuous lip service to the plight of US citizens abroad, it should be more than obvious that U.S. Citizens abroad are of absolutely no relevance for lawmakers and legislators in Washington. Yet, the attitude of all of the organizations supposedly looking out for and fighting for the rights of US citizens abroad has been to follow a very respectful path of presenting the case for change, as if they were dealing with a fair democratic system, that respects equal representation and justice. They look ridiculous, all of them! When I read that Democrats Abroad have been trying to push the “bandage” fix of ‘Same Country Exception’ for more than four years, with no result, I say that this is absolutely pathetic. When I see American Citizens Abroad sending endless delegations to Washington, year after year, and even opening an office there, only to see the interests of overseas Americans relegated to a footnote, with no action proposed n the recent Senate Financial Committee report, I would think that they should be embarrassed and ashamed, as they should be. It has taken the group Republicans Overseas over one year to formulate an intended lawsuit, which has been postponed endless times, with a “promise” to file it next week, I say that they too have not approached this in the right way. Too much damage has been done in the interim.
    What astonishes all of my “foreign” friends is how passive, obedient and fearful U.S. people are of their government, especially when confronted with such outright injustice, literal extortion and destruction of their financial wellbeing and that of their families and business partners. Even the ever law abiding Germans wouldn’t put up with any of this and they would probably, en masse, as one lawyer friend told me, simply refuse to cooperate with any of this Byzantine filing of forms and endless intrusions into their privacy and that of their families and business partners. They would collectively refuse and file class action suits against the authorities behind these injustices worthy of a fascist totalitarian regime. Perhaps the Germans understand better than the Americans what this sort of thing leads to, when a society becomes so beaten down, so subservient, so fearful of authority that it complies with the most horrific and undemocratic “laws” and is unable to unite and simply say NO, collectively. Until Americans fight to recover some form of democracy and fairness, the ravages of FATCA will be but one in a coming litany of similar such abuses. To continue believing that they are dealing with democratic institutions and that reason and fairness will prevail is nothing but a naive attitude that will lead them nowhere, as we can now see with the recent Senate Finance Committee report.

    • This entire issue is a national disgrace. Americans have always had to fight for justice however. Remember, something so outrageous as slavery and human chattel and bondage was legal law and on the books in the United States for 246 years!!! Even though slavery was abolished and laws relating to it were overturned in 1865, the United States still, even today, is still under the influence of its dark and evil past as witnessed by the endless murders of unarmed black citizens by the police, by the disproportionate incarceration rate of blacks in U.S. prisons and the very recent, not even a week ago, finally removing the Confederate flag, the symbol of the upholding of slavery, from government buildings.
      Why do I speak about this? In order to draw attention to the fact that injustice and the perpetuation and acceptance of injustice, on a very large scale, is something inherent in the U.S./American system and psyche. It took the Civil War and nearly one million dead and wounded to abolish slavery from law, yet it continued, and still continues in different guises today. FATCA compared to slavery is not as abhorrent, but no less of an injustice and likewise, as we see, it will not disappear so easily under the institutionalize do American system of (in)justice.

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