Monthly Archives: December 2011

FATCA and FBAR make U.S. born children virtually unadoptable for non-U.S parents

I’ll have to admit I had not thought of this. Although it is clear that FATCA and FBAR have combined to make non-U.S. citizens reluctant to have any kind of financial relationship  with a U.S. citizen,  a new problem has surfaced. In hindsight this is perfectly obvious. A British Columbia adoption agency  is disseminating information which explains what happens if a U.S. citizen is adopted. The agency states that:

“Whether your child lives in Canada as an American citizen, or unless and until they eventually renounce their American citizenship, they must file tax returns every year (if they have income), and if they have any qualifying financial accounts must file FBARs every year.” Continue reading


Obama unites world against the U.S.

Do you remember a time when Barack Obama was considered a unifier? He is the most divisive figure in U.S. politics. He has also managed to:

unite the world against the U.S.

– turn five million U.S. citizens living  in other countries against the U.S.

In another superb post, Daniel Mitchell of the CATA institute explains why: Continue reading

Stop citizenship based taxation – Repeal FATCA

Sad but true!

“U.S. citizenship-based taxation is unique in the world and recent related actions undertaken by  the IRS and Congress are literally destroying the community of Americans residing overseas and will consequently do irreparable damage to U.S. competitiveness in world markets.”

American Citizens Abroad

The FATCA controversy, which is part of the destruction of Americans residing outside the U.S., has hit the U.S. domestic media. It’s about time. On December 26, 2011 the following article “Law To Find Tax Evader Denounced” appeared in the New York Times.

The article is an excellent exposition of how the Obama government is trying to force “foreign” banks into becoming spies for the IRS.  The East German “Stazi” will be resurected. The article describes the purpose of FATCA as follows: Continue reading

Tax compliance for U.S. citizens living outside the United States

The United States of America – A Nation of Forms

The meaning of U.S. citizenship

As it stands, there are a number of normal investments  prohibited to U.S. citizens living abroad. U.S.  citizens living abroad will likely find it much more  difficult to find an accountant or tax prep person to help them  with their taxes. There are at least three reasons:

 1. Paid Tax Preparer Registration Required – Effective for  the 2011 tax year, the IRS is requiring all “paid tax preparers” to register with and pay a fee to the IRS. For many this will require the taking of an exam.

(Whether this can be applied to preparers outside  the U.S. or not, it will certainly reduce the number  of  people  willing to take this on.)

 2. Professional liability – Who would  want the risk of making a mistake? I  know at least one Canadian CA who will not take American clients. Who would want the problems? In addition to  the 1040, there is the problem of the FBAR, the new 8938 form, the appropriate RRSP election form, and a  host of possible  other forms (see below).

3. Too much work for too little money – The work  is so substantial that, that I expect the minimum fee will be in the range of $1000 (for somebody who has no assets or issues). Although this I small change for some taxpayers, it is clearly too expensive for most taxpayers.

Continue reading

Loyalists in the American Revolution – Liberty’s Exiles – Updated with a comment from Schubert

Liberty’s Exiles – Maya Jasonoff

History is always written by the victors. The American Patriots were a little like George W. Bush. When it comes to the British:

“You are either with the Patriots or you are with the British”

In an earlier post I noted that not all the residents of the colonies wanted to break ties with Britain. Those who wanted to keep ties with Britain were called Loyalists. Given the persecution of American Citizens abroad, I have become interested in the lives of the Loyalists during the American Revolution.

The truth is that the Patriots were NOT an overwhelming majority. In fact it is not clear who were the true patriots. Were those who opposed the British the patriots? Were those who supported the British the patriots?

Who were the True Patriots?

In fact, the early colonies came within one vote of agreeing to something close to the British North America Act. Would you like to have a Loyalist during the American Revolution? If you knew what they had to endure, the answer would be no.

I cam across a fascinating book (just walking around a bookstore) titled “Liberty’s Exiles” by Maya Jasanoff. I read the first chapter and was hooked. Then I came across the video of the author herself. This video is worth an hour of your life. Continue reading

This is fantastic – Geithner tax penalty waiver offends the rule of law

Obama argued that Geithner should not be penalized for a mistake that is commonly made. Of course Geither knew about the income that he failed to report. Virtually nobody knew about FBAR.

When it comes to assessing penalties, the first question obviously is:

“Who is the person?” In America today the Goddess of Justice is not blind. The Goddess of Justice is winking.

CBA suggest Canadian banks may close accounts of U.S. citizens – The Time To Fight Back is Now!

It would appear that the Canadian Bankers Association has joined with the IRS in declaring war on U.S. citizens. If anybody imagined that all of this was a nightmare and that you would wake up and the world would be the same – it won’t. It is absolutely essential that U.S. and dual Canada U.S. citizens organize to do (at a minimum) the following: Continue reading

Must Read – First IRS attacks U.S. citizens living abroad – Now attacks Californians

Robert Wood explains the “John Doe” summons here:

This is an excellent article written by Daniel Mitchell of the Cato Institute.

Update on the IRS FS for U.S. citizens and dual citizens living outside the United States – No additional relief for Canadians

The world as of December 18, 2011

This is the third post about the treatment by the IRS of U.S. citizens and dual citizens living in Canada.

The first post was written on December 2, 2011. It reported on Barrie McKenna’s article in the Globe and Mail and Ambassador Jacobson’s statement (which was really a continuation of his remarks on October 18, 2011 in Ottawa). The focus was on the possible waiver of tax and FBAR penalties for U.S. citizens living outside the United States.

The second post was written on December 9, 2011. It reported on the information in the IRS Fact Sheet for U.S. Citizens and dual citizens living outside the U.S.

This third post – December 18, 2011 is providing an update to the first two posts. I will consider additional information that has become known this week. Continue reading

The true value and purpose of an FBAR

Came across this comment:

Anonymous said…
“The data on a FBAR is utterly useless to any sensible law enforcement official and/or any known regulatory agency. In contrast, the ABSENCE of a FBAR or better yet: a demonstrably willful failure to file it – is of enormous potential value to the US Treasury because it allows the opportunity to extort wealth from and/or otherwise coerce its citizens.”

This comment neatly sums up FBAR in a nutshell. The only FBAR form of value is the one that is not filed.

I’d go further, and suggest that filed FBARS are actually worse than useless because there is a cost to processing them. The cost drain of this pointless busywork is likely to worsen considerably in future as the IRS begins to pull in hundreds of thousands of new ordinary 1040 returns from overseas, all of which have a big fat zero dollars owing on the bottom of them because of the FEIE and/or tax treaties.

There are plans to mandate electronic only FBARs from next year. I predict something similar soon for *all* US tax returns filed by overseas filers, and perhaps domestic also, as the IRS struggles to contain ballooning processing costs, with little to no additional revenue, caused by their recent jihads.”

The FBAR has created a new class of historian called the FBAR Historian.