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.
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.” Also included were a number of videos.
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.”
Citizenship Taxation - Theory vs. Reality 