Accidental Americans (And Others): Do Nothing!

Backing up the above tweet, Keith Redmond posted the following on Facebook:

Dear Members: I just had a lengthy, robust call with an individual who spent 25 years in upper management with the Department of Treasury IRS Criminal Investigation. He confirmed what I thought about the IRS. There is more bark than bite. He stated that there are many, many Americans overseas ho have no business in entering the US tax system and that Accidental Americans UNDER NO CIRCUMSTANCES should enter the US tax system. He confirmed that there are MANY US tax pros who prey on Americans overseas and Accidental Americans through fear and falsehoods. (e.g. you will get arrested, etc.). Any US tax professional who pushes and scaremongers these individuals to comply are not professionals and should not be used! He confirmed that the IRS is NOT going to go after you in your country of residence (most especially if you are a citizen of that country) and the IRS is NOT going to arrest you at the US border. The IRS does not have the resources to do this plus they go after those who have committed a crime not the average American overseas. He stated that Americans overseas need to not succumb to the fear. Excellent conversation and I am glad my views have been validated.

This reflects what I have long believed. Unfortunately, there is still the nightmare of FATCA to deal with. In some countries, anyone born in the US cannot even get bank accounts. We are treated as criminals just for banking where we live.

I asked Keith how his contact explains and justifies this.

Keith replied:

He can’t. He finds the whole situation abhorent…

14 thoughts on “Accidental Americans (And Others): Do Nothing!

  1. PatCanadian


    “It does not look like VanCity has taken the local client base approach ..”

    Unfortunately you are quite correct. Things have changed. I visited Vancity and spoke with them. Their LCB status has been abandoned. They upgraded their computer system recently for CRS and FATCA. Check out Brock for posting and comments on this. I let Vancity manager know my “disapproval” regarding this matter. However, I wouldn’t advise anyone to confront them without a CLN. I think this is happening with other credit unions as well.

  2. PatCanadian

    @Lynne Swanson

    ” I don’t understand why all credit unions didn’t go for Local Client Base. They all meet the standard as I understand it. Yet only VanCity and a few others seem to have taken that option.”

    No, I don’t understand it either. Perhaps I’ll find an opportunity to inquire about this. I’m not as brave as you are going totally public. However, now that I’ve renounced I don’t mind speaking up about some of this FATCA stuff. In my area here in BC, some credit unions take the Vancity route and some are totally FATCA compliant, reporting any US person that comes under their radar.

    1. nobledreamer-Tricia

      Thanks for updating on this Al. Will get the word out on Brock, etc.
      I will be a lot of people are going to be upset.

  3. diharv

    So I went through one nervous breakdown , and spent nearly $30000.00 in accounting fees and US taxes to enter the system , become compliant for five years and then relinquish and exit the system and feel 100% free for the first time in years , all for nothing ? I suspected as much . The lack of mainstream news articles on this subject in the last two years has led me to believe that all this scaremongering put out by the US govt and the compliance industry was just that , all bark , no bite and nobody from the US is going to come into a foreign country and seize all your assets. Sometimes I feel foolish that I fell for it all , hook , line ,and sinker , that I squandered the equivalent of three fabulous family tropical vacations on it , my family’s money, not to mention the stress and time wasted spent reading for hours online this site , IBS and expat tax forums. Oh well , I guess I can say I bought peace of mind , but it did take a piece from me permanently. Kind of ironic that those of us who complied have suffered the most while those that do not know or care live in bliss. I envy them.

    1. PatCanadian

      I’m sure the stress and money spent have been horrendous.

      ” Kind of ironic that those of us who complied have suffered the most while those that do not know or care live in bliss.”

      I know “US persons” who live under the radar. Some suffer endless fear and anxiety. They have no closure. It’s very hard to say what the right path is under these circumstances. We all have to figure what the best path is for us individually. No easy choices with FATCA.

    2. Lynne Swanson Post author

       Yes it seems those who fell for the compliance scam were hit the hardest.  I refuse to go anywhere near a US tax lawyer or accountant, the IRS or a U.S. Consulate.  There have been no consequences for me, despite how visible I have been publicly.

      i know an elderly widow who has spent thousands of dollars in accounting fees to Price Waterhouse to tell the IRS she owed them nothing in taxes.

      Canada Trust asked her where she was born.  When she told them Ohio, they referred her to Price Waterhouse who iterrorized her to become compliant.

      I pleaded with her not to do it.  She became a Canadian citizen in 1974 when it was determined that she relinquished U.S. Citizenship.

      Canada Trust and Price Waterhouse did not bother to tell her that.  Instead they convinced her she was a criminal who could go to prison if she did not file.  Needless to say, it caused massive stress and sleepless nights for her.

      I don’t know how these people sleep at night.  Unfortunately, it is responsible, honest people who are not sleeping.

    3. PatCanadian

      Whether one “renounces” or “does nothing”, I agree with not consulting a US tax lawyer or accountant if possible with one’s circumstances. Also putting funds in a credit union like Vancity which will not report on Canadian residents. I never consulted a US tax lawyer or accountant, doing all tax forms myself. Although I did attend John’s information sessions which were a tremendous help. Never heard from the IRS. Never paid a US$ in taxes and now collect US Social Security. Pay back for the renunciation fee. But again it really depends on individual circumstances and risk tolerances which are all different.

    4. Lynne Swanson Post author

      @PatCanadian:  I don’t understand why all credit unions didn’t go for Local Client Base.  They all meet the standard as I understand it.  Yet only VanCity and a few others seem to have taken that option.

  4. WhiteKat

    With all the craziness that is USA, to be an ‘American living in Canada’ could become more and more of a curse as time goes on. And not just with regard to what the USA might do to ‘its persons’ living on the north side of its border, but also with regard to what fellow Canadians may do (or fail to do) with respect to those ‘Americans living in Canada’.

    Canada having a shared border with the USA, has a ‘special’ relationship with the ‘land of the free’. As a Canadian from birth with a US birthplace, having grown up in a Canadian twin city, I’ve often felt an undercurrent of resentment from fellow Canadians when it came to ‘Americans’. At one point, I even feared my grade 4 teacher and classmates would discover my ‘Americanness’ as history lessons often included an impassioned speech about how terrible the USA was.

    Although Keith Redmond and others are correct that the compliance industry acts unethically in its scaremongering, particularly with regard to scenarios that don’t mesh with current reality – nothing good can come from being an ‘American living in Canada.’ And it could get a lot worse as tensions with our ‘best friend’ mount. For some, including ‘accidentals’, depending on their own personal risk tolerance along with other factors (ex. complexity of finances), it may well be the right choice to enter the US tax system with the sole purpose of renouncing US citizenship in as cleanly a manner as possible.

    For those who would love to renounce US citizenship, but are truly stuck in that they cannot afford the costs associated with doing so, they’ve little choice but to continue to hide in the corner in the hope that they will not be noticed.

    1. PatCanadian

      “With all the craziness that is USA, to be an ‘American living in Canada’ could become more and more of a curse as time goes on.”

      Funny you should mention that WhiteKat. Recently I’ve had discussions with my “all Canadian” neighbors. We talked about the US elections and Donald Trump. When I told them that I had renounced and become 100%Canadian, they were very understanding and welcoming. I explained the US tax situation to my neighbors in simple terms. The disdain for the US craziness IS becoming more and more apparent. Although, I’m sure with a good explanation, most people would get why some need to stay under the radar.

  5. WhiteKat

    A bit off topic for this post, although I expect that ‘accidentals’ would be more likely to identify.

    I have the impression from comments I’ve read at various ‘US Person’ related sites that some people in the anti-FATCA/anti-CBT group (US persons, ex-US persons, sympathizers etc) believe that it is wrong, mistaken or perhaps even self-serving not to support the motto that “CBT is the root of all evil”.

    However, it is quite possible to agree that CBT is a human rights abuse, and yet not see CBT as the root source of all problems for all people deemed ‘US persons’ living outside the USA.

    It may be that from one’s own subjective viewpoint, CBT is(or was) the root of the problem, but to force that perspective on all other ‘US persons’ is in itself rather opinionated, particularly as it ignores the fact that not everyone is OK with being forced into being classified as a ‘US person’ or values US citizenship in some way. I kind of liken it to the slave owner who beats his slaves. Are you are going to tell the slave that the fact that his master beats him is the root problem, rather than the fact that he is a slave?

    Many of us, having been through this FATCA witchhunt, have lost all innocence with regards to any illusions we might once have had that we can trust the government where we live to protect us, or that the government of the USA would never attack us. As such, some have come to the conclusion that US citizenship is nothing but a curse which to hold onto can only result in the risk of more harmful things happening. With that perspective, RBT is not a cure, as CBT is not the disease but rather a symptom of the REAL affliction which is US person-hood. To think this way is not to be selfish; it is not taking away from, nor forcing something onto, anyone else.

  6. WhiteKat

    A popular Brocker crafted a carefully worded letter to her Congressman recently and included her letter as part of a comment at IBS under this same titled post which is cross-posted at the IBS site (where I no longer have author access, nor can comment).

    Excerpts from this letter written by the well-loved and respected Brocker include:

    “I feel that it is extremely discriminatory against those of us who pay taxes to the US and maybe even unconstitutional, as all US citizens are expected to pay US taxes. The IRS should be relied upon to assist in the collection of those taxes and to treat similarly situated taxpayers the same. …

    Am I stupid for paying US taxes, when I know of many Americans living abroad who don’t pay US taxes but continue live as as Americans without having to renounce their US citizenship, enjoy a life without US taxation because the IRS doesn’t enforce US law? …

    Could I have avoided paying a large chunk of my retirement savings, save thousands of dollars every year in compliance fees and still not suffer any repercussions because the IRS itself has created their own tax avoidance scheme for some Americans, which is a lack of enforcement? ”

    All I can say is, “wow”. Words escape me, like hot air from a balloon.

  7. Lynne Swanson Post author

    There was really good discussion going on at that post on Facebook. However, Keith has closed comments and reposted because of threats.

    Here is what Keith posted:

    I am reposting my posting of yesterday. The comments are turned off due to the threats I have received from the US tax compliance industry including threatening turning me in and putting me in jail. Yes, it is incredible! And this IRS agent actually states below publicly. The US tax compliance industry does not want a threat to their American overseas, Accidental Americans, Canadian Border Babies cash cows.

    Keith then posted a follow up comment:

    The US tax compliance industry continually states to Americans overseas, Accidental Americans, and Canadian Border Babies: ‘It’s the law.’ If Jim Crow laws were still on the books, what would their position be? “It’s the law”? Yes? No? It is a question to contemplate.

    In terns of “It’s the law,” there are all sorts of laws around. For exanple, one of the dumb laws in Pennsylvania requires Any motorist driving along a country road at night must stop every mile and send up a rocket signal, wait 10 minutes for the road to be cleared of livestock, and continue.

    I drove on rural Pennsylvania roads for 45 years. Not once did I stop and send up a rocket signal. I never saw anyone else send up a rocket signal either. I suspect anyone who did would be arrested.

    I did obey other Pennsylvania laws–i.e. I never slept on top of a refrigerator outdoors (not even indoors where it appears to be legal!). I never caught fish with dynamite or with various body parts (not even with my mouth–which is legal).

    In terms of the American IRS laws, they are foreign laws. Both my accountant and my lawyer agree with me that I have no obligation to adhere to a foreign law.

    I Do Nothing. I will continue to Do Nothing. I will continue to suggest to others that they Do Nothing.

    I have been fairly high profile on FATCA and CBT. I write, post, blog and tweet under my real name. I am easy to find. IRS could find me quite quickly if they wanted to. I have not heard a peep from them. I don’t think I ever will. But a U.S. lawyer and Price Waterhouse tried to convince me differently in 2011. I’m glad I didn’t listen.


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