Chapter 22: To share or not to share” – Should a U.S. citizen share a bank account with a “non-citizen AKA alien spouse?

This post features an interesting Facebook discussion. The reality of life for many Americans abroad is two-fold:

1. It is common for Americans abroad to marry non-U.S. citizens;

2. Americans abroad are (with few exceptions) required to report to U.S. Financial Crimes (Think Mr. FBAR) bank accounts that they either have signing authority over or where they can control the disposition of the funds.

The reality is that, in the case of joint accounts, this means that the U.S. citizen will report the bank accounts of the spouse to the U.S. Government. Different people have different views of this.

The Facebook discussion referenced in the above tweet is very interesting.

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Chapter 16: Most “Form Crime” penalties can be abated if there is “reasonable cause”

This will be the shortest chapter. I am certain that after having read Chapter 15 about “Form Crime” and the possible penalties (usually $10,000 a form”) you will want to know how get “Form Crime Relief”.

Speaking of $10,000 – the “Standard Form Crime Penalty”

It is important for you to know that:

– “reasonable cause” does exist as a defense; and

– If you were truly ignorant of the form (who wouldn’t be?) then you it may work for you.

First, “Form Omissions” are generally what the IRS would call “Delinquent Information Returns“.

Second, what’s “reasonable cause” anyway?

Remember, …

Many “Form Crime” penalties can be abated based on “reasonable cause”.

Chapter 13: “Married filing separately” and the “Alien Spouse” – the “hidden tax” on #Americansabroad

Marriage is a difficult relationship. That said, there are two kinds of marriages that have particular difficulties resulting form the “circumstances of a U.S. birth”.

Type 1 – A U.S. citizen married to a non-U.S. citizen

Type 2 – A non-U.S. citizen married to a U.S. citizen

(Yes, they are the same.)

I call these kinds of marriages an “FBAR Marriage“.

The problems of the “FBAR Marriage” begin with filing a tax return at all. They continue from there.

(Both the U.S. citizen and the alien need to fully understand the problems that U.S. citizenship will cause in various aspects of the marriage! Perhaps specialized pre-marriage counselling is desirable. )

See the posts referenced in the following two tweets.

Chapter 9: Receiving U.S. Social Security – #Americansabroad and entitlement

Introduction:

The above tweet references the following comment on a Wall Street Journal article:

Social Security is a separate program that people “pay into” every year. In return for “paying in” the U.S. agrees to “pay out” when he reaches a certain age. How is his citizenship or residence in any way related to that?

Self employed Americans abroad (unless they live in a country with a “Totalization Agreement”) are required to pay the Social Security Tax ON INCOME EARNED OUTSIDE THE UNITED STATES. Surely you would agree that they should receive the benefits even if they live outside the United States.

How is it that the “U.S. provided a livelihood” for him? Maybe he provided a “livelihood” for Americans. Maybe he “put food on the table of American families”.

Your comments remind me a little bit of President Obama’s “You didn’t build that that …”

Finally – “never getting citizenship …” There are many reasons people don’t acquire U.S. citizenship. In some cases they are citizens of countries that don’t allow dual or multiple citizenships.

This man worked. He paid into the system. He should be presumptively entitled to the benefits.

Listening in … An interesting Facebook discussion …

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An identification of and “breakdown” of the issues …

 

General rule …

In general, Americans abroad are eligible for U.S. Social Security and eligible for having their payment sent to their country of residence. Nevertheless, because it’s the United States of America, there are always issues …

Understanding the issues …

The U.S. Government Social Security Site – Start here

This post includes a number of tweets which will reference you to “third party posts” about U.S. Social Security. Nevertheless, I strong recommend that you begin with the Official U.S. Government Social Security site. This site includes a specific “International Section“. Obviously it will always remain current. In fact, I urge you to make the Official U.S. Government site your most important “stopping point”. The site even includes an amazing tool to determine your entitlement to benefits.

An introduction:

Let’s break the “issues” into the following categories:

1. As an American Abroad, are you entitled to U.S. Social Security at all?

2. What if part of my working life was in the United States and part of it was abroad? – The impact of “Totalization Agreements”

3. As a U.S. citizen abroad, does my country of residence affect my entitlement to U.S. Social Security?

4. What if I renounce U.S. citizenship. How does that the fact that I am no longer a U.S. citizen and am now a “Non-Resident Alien” affect my entitlement to U.S. Social Security?

You become a “Non-resident alien”. Your eligibility for benefits is determined here:

See also:

Taxation of Social Security Benefits Received

5. Okay, great I am receiving U.S. Social Security payments but am living outside the United States. How are these U.S. Social Security payments taxed by the United States and/or my country of residence?

In general:

In Canada:

6. How much U.S. Social Security do I receive anyway? I have heard that there is a “Windfall elimination provision”. Is that true?

Yes it is.

http://www.ssa.gov/pubs/EN-05-10045.pdf

See here:

EN-05-10045

 

 

Judge Rose dismisses @FATCALawsuit: rules that “case is hereby TERMINATED” – Any harm NOT caused by USG but by foreign banks!

cross-posted from ADCSovereignty blog

Chronology of events …

On July 14, 2015, a post at the Isaac Brock Society, detailed the pleadings in the @FATCALawsuit. In late summer, @FATCALawsuit brought a motion for a preliminary injunction to enjoin the effects of FATCA on Americans abroad. The Obama administration defended the “injunction application” (in part) on the basis that any harm to Americans abroad was the result of “self-inflicted wounds“. The application was brought before Judge Thomas Rose of the United States District Court for the Southern District of Ohio, Western Division, at Dayton. On September 30, 2015 Judge Rose denied the plaintiffs application for an injunction. On April 25, 2016, Judge Thomas Rose terminated the @FATCALawsuit brought by Jim Bopp and organized by Republicans Overseas.

The complete decision may be read here:

FATCAlawsuitdismissal

An early response is here:

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Continue reading Judge Rose dismisses @FATCALawsuit: rules that “case is hereby TERMINATED” – Any harm NOT caused by USG but by foreign banks!