This is a desperate time to be a U.S. expat. An “ignorant and arrogant” U.S. Congress (to use the language of American Citizens Abroad) along with Carl Levin, Barack Obama, Timothy Geithner and Douglass Shulman are destroying the lives of American citizens who happen to live outside the United States. It is difficult to describe the state of sheer terror that U.S. expats are living under. The bottom line is that the U.S. is threatening monetary penalties which, if implemented, will force U.S. expats to liquidate their assets (homes, RRSPs, etc.) and pay the IRS. U.S. citizenship is such a liability that there will be a number of marriages (which are already on shaky ground) that will end because the non U.S. spouse will not want to be reported to the IRS. Would you want to be married to somebody if it meant that all of your financial information would go to the IRS? To understand the exact reasons and the how this came about, I encourage you to read other parts of this blog. But, the “bottom line” is what it is.
Before reading this article, you read the following comment and the replies to it. Then read the comments in general. Thanks to the Globe and Mail (including the Globe editorial “Get the IRS taxman off the back of innocent Canadians”)and Barrie McKenna for continuing to report on a truly horrible thing that is happening to U.S. Canada dual citizens who live in Canada (and U.S. expats around the world).
Below is the link to this comment – it summarizes the basic problem here. It also explains why:
1. Americans have no practical choice but to renounce U.S. citizenship; and
2. The United States is morally bankrupt. The issues of FBAR, FATCA, OVDI and the like are:
– far more than tax issues
– far more than privacy questions involving FBAR and FATCA
– far more than frightening people into the recent OVDI program
– far more than questions involving the right of the U.S. to force foreign banks to report on their customers to the IRS
– far more than the question of the U.S. trying to apply its laws to other countries
The behavior of the United States raises profound moral issues. The U.S. has moved away from its constitutional roots. It is a vicious unprincipled debt ridden bully. Eritrea is the only other country in the world that levies taxes based on citizenship. In relation to its expat citizens, it is hard to distinguish the behavior of the U.S. from the behavior of Eritrea.
As frightening a time is this is for U.S. citizens in Canada (and they are terrified) you should remember:
You are living in Canada and most of their money is in Canada. Your worst case scenario is that you may not be able to return (and I not minimizing that). Look at the bright side – you and your money are outside the U.S.
The Government of Canada will not enforce FBAR penalties (they are not covered by the tax treaty).
Furthermore, the Government of Canada – deserves thanks – for raising these issues with the United States Government. The efforts of Minister Flaherty and Canadian MPs (mostly in the NDP caucus) have been fantastic.
Have a look at this comment to Mr. McKenna’s article which explains the tax, moral and family issues involved. (Note that I have added some links to the comment.)
” I am one of the Americans who are renouncing. It has nothing to do with “taxes” It’s because I am a stay at home mom *some high roller!* whose Canadian husband makes ALL of our income. Under this new legislation I would be reporting HIS income under FBAR with stiff fines and penalties for not reporting on him. If he were American I could see it, or if I made any American income here or had money to report. I don’t. Further they can also go into our children’s RESP’s even if those children are not American. This has put many people in Canada in the position of choosing the well being of their Canadian spouse and children OR remaining a citizen of the U.S. That’s a choice no one should have to make but, thank you Carl Levin and the U.S. congress that’s where we are.
Someone down thread laughably blamed “Hillary Clinton” lol…CONGRESS passed the “Hire” legislation and Obama signed it into law. State dept. *Hillary Clinton* cannot write those laws nor pass them and has nothing to do with domestic policy. It was Carl Levin and his band of insane congresscritters plus Obama signing this into law that caused all this mess to happen and no one else. Let’s put the blame where it belongs because you can thank Levin for it.
This isn’t about “taxes” most of us owed no taxes to them at all. It’s about fines and penalties they drummed up that are so draconian as to be punitive. In some cases which could put older ex pats into poverty should they fully enforce it. Now we get to live with the fear of what will happen when we try to cross the border to see our loved ones in the U.S. This is some of the most ill thought out, harmful and hateful legislation I have ever seen in my life time. I will not soon forgive it but, I’ve got no choice I have got to renounce as my family cannot afford these fines and penalties, nor can we afford fancy tax attorney’s every year as the rich they so badly want to catch CAN DO. So it’s really only hurting the middle class and poorer ex pats such as retired folks.
I find the embassy’s explanation for the “group meeting” laughable. They’ve never had to have one before…the average was five per year renouncing and now they’ve had twenty two in a week and more to come I assure you.”
Link to Comment:
Americans in Canada driven to divorce from their country
OTTAWA— From Wednesday’s Globe and Mail
Published Tuesday, Nov. 08, 2011 7:32PM EST
Last updated Tuesday, Nov. 08, 2011 8:52PM EST
The U.S. citizenship ceremony is an iconic rite of passage for immigrants.
Would-be Americans gather to pledge allegiance to the Stars and Stripes. There are cheers and often tears, patriotic speeches, sometimes music, and plenty of flag waving.
Now, a small but growing band of Americans in Canada is doing it in reverse – gathering en masse to begin the process of becoming un-American.
To read the complete article click here.