Category Archives: IRS

Open Letter to Obama, Lew, Werfel and Levin

Last week, Lynne Swanson (aka Blaze) wrote an open letter to Flaherty, Mulcair and Trudeau.  This week, I wrote a Open Letter to President Barack Obama, U.S. Treasury  Secretary Jack Lew, IRS Acting Commission Daniel Werfel and Senator Carl Levin. 
This is posted at The Money Guide.
In the letter, I ask:

Why do you want to FATCA me?

I assure them:

I am not a myth. I am not a tax cheat.


I then give them information about the “illicit activities” in my bank accounts–condo fees, electricity, charity donations, groceries and entertainment.
Because they are such poor money managers, I give them some financial tips.
I conclude by advising them to get their own house in order. And:

Leave me alone!


Canadian Protections Against Uncle Sam

Uncle Sam MoreCanadians, Uncle Sam wants you. Actually, he doesn’t want you. He wants your money. Uncle Sam thinks he has the right to know about your money which was earned, saved, invested and taxed in Canada just because you were born in his country.
In Canadian Protections Against IRS, Lynne Swanson (aka Blaze) outlines some of the protections Canadian citizens and residents have against the IRS.
This was written in response to a couple of articles in The Money Guide advising Canadians of their obligation to IRS and recommending filing “before it is too late.”
I intentionally did not focus on the options for filing in this article.  That is covered elsewhere in The Money Guide. Instead, I chose to focus on the protections and some of the FATCA issues (but with a different approach than in the Financial Post article).
I gave links to Maple Sandbox and Brock in my submission. However, this was not included in The Money Guide Post. Instead, they linked to an their Tax Guide For US Citizens Living in Canada.
This article was posted as Guest Poster, but Lynne Swanson’s information is at the end.

Beanie Babies, Hyatt Heiress and IRS

Beanie Babies are now “US persons.”  Uncle Sam is mad at Beanie Babies.  Good old Sam has grabbed $53.6 million in FBAR penalties for $885,000 in taxes owed.
In IRS vs. Beanie Babies, Beanie Babies creator Ty Warner agreed to pay $53.6 million in restitution for his Swiss bank account of $94 million.
I do not support offshore tax evasion, but does this seem extreme to anyone else?  Maybe it’s just a drop in the bucket when your net worth is $2.6 billion, but Ty could still face prison time.
Here’s what the U.S. Attorney said:

“Regardless of wealth, everyone must pay taxes on all of their income, not just the amount they choose to report. Such conduct invites federal prosecution.”

On the other hand, Hyatt Hotel heiress Penny Pritzker Understated Income by $80 million in income to IRS due to an “inadvertent clerical error.”  Penny’s punishment?  She was appointed Secretary of Commerce.
Here’s what a White House senior adviser said:

“I think she’ll be extremely effective in leading trade missions around the world and helping U.S. companies develop those contacts that will lead to contracts back here in America.”


We Are Not Tax Cheats

Here is an article We Are Not Tax Cheats from the Financial Post by Lynne Swanson (aka Blaze). (The editor added Dual and American to the headline, but everything else seems to be exactly as I wrote it)
This article says:

If China, Russia, Mexico, Iran or Eritrea were demanding Canadian banks and other financial institutions submit private financial information on Canadian citizens and residents to those countries, there would be outrage.
If Canadian banks were spending millions of dollars preparing to develop systems to report information on Canadian citizens and residents to those countries, there would be outrage.
If the Canadian government were “actively seeking a solution that both countries will find agreeable,” there would be outrage.
If Canadian media were calling Canadian citizens and residents born in those countries “tax cheats,” and advising them to “come clean,” there would be outrage.
Yet, up to one million Canadians of American origin have lived that nightmare for two years with no resolution.

It also says:

The government refuses to tell us if it will sign away our rights.


We need Canada’s Finance Minister Jim Flaherty to insist that Canadian banks follow Canadian laws. We need Minister Flaherty to reassure Canadian citizens and residents that Canadian laws will not be changed for a foreign nation.
Most importantly, we need our elected officials to tell the United States that Canadian laws are made in Ottawa, not in Washington. We must not allow the United States to FATCA Canada.
We deserve no less than Canadians born in China, Russia, Mexico, Iran, Eritrea or elsewhere.


"Nothing Against Canada." Nothing Against United States (Until Now)

Ted Cruz has “nothing against Canada.”  Likewise, many Canadians born in US have”Nothing against United States (until now).the hill
Here is an article by Lynne Swanson (aka Blaze) which appeared on the Congress blog at The Hill today.
This tells Senator Ted Cruz he has nothing to fear from Canada for renouncing Canadian citizenship–unlike what happens in reverse

Senator Cruz, Canada respects your decision to renounce your Canadian citizenship. When it is granted, I assure you Canada will not stalk you for information about your private finances and will not demand taxes or penalties from you.
Senator Cruz, will you and your Congressional colleagues do the same to protect Canadians and others around the world from outrageous demands of IRS and US Treasury?


Carl Levin: FATCA For Law Enforcement, National Security

I had posted this earlier in another thread, but I think this letter from Carl Levin to IRS is so significant, it needs a thread of its own. levin
In Obama’s 2009 press conference on FATCA, he credited Carl Levin for being one of the masterminds on FATCA for combating  offshore tax evasion.
In 2012, Carl Levin wrote a letter to IRS, demanding (page 11)

Although FATCA is structured to address offshore tax abuse, offshore account information has significance far beyond the tax context, affecting cases involving money laundering, drug trafficking, terrorist financing, acts of corruption, financial fraud, and many other legal violations and crimes. Given the importance of offshore account disclosures, FATCA guidance and implementing rule should create account FATCA forms that are not designated as tax return information but, like FBARs, may be provided to law enforcement, regulatory, and national security communities upon request. FFIs are not, after all, U.S. taxpayers, and will not be supplying tax information on behalf of their U.S. clients; they will instead be providing information about accounts opened by U.S. persons. The U.S. Supreme Court has long held that bank account information is not inherently confidential but is subject to inspection by law enforcement and others in appropriate circumstances. Foreign account information is too important to a wide range of civil and criminal law enforcement and national security efforts to be designated as tax return information bound by Section 6103’s severe restrictions on access.

Why bother with a warrant or surveillance when you can simply declare someone a “US person” and FATCA them?!?

FATCA: A Simple Premise Gone Terribly Wrong

Here is FATCA:  A “Simple Premise” Gone Terribly Wrong
This was coauthored by Lynne Swanson (aka Blaze) in London, Canada and the hillVictoria Ferauge (aka Victoria) in Versailles France and was published today in The Hill Congress blog.
In the article, we ask

President Obama and members of Congress, how did the “simple premise” of “cracking down on illegal tax evasion and closing loopholes” become an attack on financial lives and personal integrity of millions of people living outside United States, their banks and laws and constitutions of their countries of residence?
Is this how “common sense measures” will “restore fairness and balance in the tax code?”

In reporting on how complex, costly and convoluted FATCA has become Victoria and I also ask:
Mr. President and Members of Congress, is this what you intended?


FATCA: IRS Troubles Go Global

Thanks to Saddened for sending me this fabulous find. IRS Troubles Go Globalglobe trouble
The author gets it!

As would be expected, this regulation, which is U.S. financial imperialism of the worst sort, is causing great resentment among foreign governments, financial institutions and citizens, as well as Americans living and working abroad. It is very costly for foreign financial institutions to administer, and puts their executives at risk for both civil and criminal penalties for any failure to administer the law as the IRS may wish.

It seems he knows about Maple Sandbox and Brock.

Many Canadians, for good reason, are upset about these impending regulations, and there are groups in Canada who have said they will bring Canadian constitutional suits against the government under human rights violations if Canada signs on to the Foreign Account Tax Compliance Act.

Austrians are resisting too.

Austria is being forced to give up much of its traditional financial privacy, in part, because of the actions of the IRS and U.S. Justice Department. Many here in Vienna remember well losing their freedoms first to the fascists and then to the communists, which is one reason they have so resisted the efforts to destroy their financial privacy.

It seems folks in US might finally be waking up.

Americans are now learning that once tax authorities have the ability to peer into their bank accounts and to monitor their financial affairs, these authorities will abuse this power, and an essential freedom is lost.

Let’s keep up the pressure!


ACA: IRS Systematically Targeted Overseas Americans

Here’s a report from Geneva Lunch published today: IRS Targeted American Citizens Overseas:  IRS Systematically Targeted Overseas Americans

American Citizens Abroad (ACA) has provided evidence “of the arbitrary and questionable IRS (US tax office) management of the Overseas Voluntary Disclosure Programs” (OVDP) to members of three US Congressional committees working together to investigate IRS abuses, ACA said Tuesday 4 June.
The Geneva-based international group says that the 2009 OVDP in particular was “extremely prejudicial to Americans living overseas who sought to become compliant with their taxes due to errors or omissions under the OVDP. Believing they could come back into the system by simply filing the appropriate paperwork and paying any outstanding tax burden, these individuals were later told they would be hit with a standard penalty of 20% of the highest value of their bank accounts over a five-year period.”

Jackie Bugnion calls it entrapment to hit people with ruinous penalties.

“There is no question that the IRS targeted Americans living overseas,” says ACA Director Jackie Bugnion. “By luring them into the OVDP in a form of entrapment then hitting them with ruinous penalties based on the overseas assets, instead of using the discretion which was within IRS purview for benign actors, the IRS treated ordinary, hard-working Americans like criminals. Most of the unreported accounts were pension funds and basic financial accounts used for living expenses and were not being used to hide assets.”

So, does anyone think this will get the same kind of media and Congressional attention that Tea Party is currently getting?

Corrupt, narcissistic politicians – our saviours?

Here, in Canada, we’re in the middle of a political scandal, where some Conservative party senators appear to have tried to scam the system and claim housing expenses which they shouldn’t. And on top of it, the Prime Minister’s chief of staff gave one of them the money ($90,000Can) to pay it back so that the investigation would stop (hmmm, ulterior motive there?). Of course, the senators are saying that the rules weren’t clear and that they just made a mistake. And yet the one who was given the money actually said he took out a bank loan to pay it back. He appears to be piling lie upon lie.
What concerns me, apart from the basic dishonesty, is how divorced from the rest of us these people are. We’re talking hundreds of thousands of dollars in false claims.
For crying out loud, $90,000 is a LOT of money to most of us. How many of us could come up with that to GIVE to a co-worker to help them out of a debt?
Almost daily I see and hear things that remind me that our society has gone deep diving into an ocean of narcissism. It’s becoming a world of ‘me first’, of ‘I deserve to have whatever I want’, of ‘what I want is more important than what you want’. Continue reading Corrupt, narcissistic politicians – our saviours?