What if the US wants you returned to the Homeland? The conventional wisdom is that there is not much the US can do if you are not within their borders. This is a complicated question. There are at least two issues:
Assuming a violation of U.S. law, under what circumstances will an extradition treaty provide for extradition to the U.S.?
As one U.S. tax lawyer writes:
This traditional viewpoint is changing, however. With increased globalization, strong revenue pressures being felt worldwide due to economic downturns, and encouragement of global cooperation by such international organizations as the OECD and the Commonwealth Secretariat, the various nations are evidencing more of a willingness to pull together when it comes to fiscal matters. The present trend is clearly to include tax offenses in extradition treaties. (see e.g., US-France Extradition Treaty at Article 2(6)). In addition, a large number of mutual assistance treaties and/or executive agreements covering international tax enforcement cooperation, particularly tax information exchange agreements, have been signed. More will undoubtedly follow. As a result, the likelihood of success for the US government to obtain extradition for tax crimes is decidedly becoming more favorable.
What facts would allow the U.S. to assert jurisdiction over conduct that occurred entirely outside the U.S.?
Chief Justice MacLachlin writing for a unanimous court said:
[34] In these cases, the record shows that the Minister properly considered and weighed the factors relevant to the situation of the appellants. With respect to the appellants’ first concern, the Minister found that the “negative impact of [their] actions, when considered in concert with the alleged actions of [their] many co-conspirators, would have been felt in jurisdictions outside of Canada”, implicitly including the United States (A.R., vol. I, at pp. 54 and 60). Additionally, it seems clear on the facts alleged here that the conduct described is connected in one way or another with the use of e-mail accounts, companies and bank accounts based within the United States. With respect to the appellants’ second concern, the Minister considered whether prosecution should proceed in Canada and concluded that this factor did not negate extradition.
http://scc.lexum.org/decisia-scc-csc/scc-csc/scc-csc/en/12769/1/document.do
Yes, you read right. In December the Supreme Court of Canada, in a unanimous decision refused to interfere with the decision of the Minister of Justice to extradite a Canadian citizen to the U.S. The conduct alleged did NOT occur in the U.S. A U.S. email account (Hotmail, Gmail, Yahoo, or another email account like that) was used as the basis of the jurisdiction over the conduct of this person. In case you missed that, the U.S. is saying:
If you use Gmail, we have jurisdiction over you!
Now, I don’t know anything about the facts or the allegations in this specific case. Therefore, I am not taking a position on what the accused did or did not do. For those interested, an overview of the story is here.
Asserting jurisdiction based on the use of email accounts, domain names, location of internet servers, etc.
Jurisdiction and the use of email accounts – Avoid using Hotmail, Gmail, Yahoo mail, Outlook, etc.
Leaving aside the issue of what this person may or may not have done, the assertion of jurisdiction based on the use, in Canada, of a U.S. based email account, (have any of you ever done this?) is problematic. Since the enactment of the Patriot Act, U.S. email accounts have NOT been private. See here for a frightening confirmation of how Google monitors your online activities. The U.S. government has the right to look through them. In other words, there is no right of privacy when using U.S. email accounts.
Jurisdiction based on the use of domain names – Avoid the use of .com and other U.S. domain names
I have previously written about the U.S. extraditing a U.K. citizen to the U.S. based on the use of .net domain name. The relevant facts were:
The U.S. government brought criminal charges against a U.K. resident and are attempting to extradite him to face these charges in a U.S. court. The U.S. alleges that he ran a site that did NOT contain “pirated U.S. movies”, but rather linked to sites that DID contain pirated U.S. movies. According to the article in the Herald Tribune”, the U.S; initially asserted jurisdiction over a person in the U.K. because the domain name, TVShack.net, was registered in the U.S.
General efforts of the U.S. to regulate the internet
As you know, the U.S. has been aggressive in attempts to regulate the internet. Much of this attempted regulation has been in the context of SOPA (“Stop Online Privacy Act”). The point is that this is one more attempt to extend its jurisdiction into other nations.
The rise of #offshore email and hosting accounts
It’s seems obvious that if you do NOT want to surrender your privacy that you should avoid any U.S. connected digital communication. This may not be possible. But, awareness of this is beginning. I have noticed some suggesting that it is wise to have both non-U.S. based email and non-U.S. based web hosting. In addition, some hosting companies are now aggressively advertising the fact that they offer “offshore web hosting“.
Non-U.S. email accounts will deprive the U.S. of some access to your information
As you know the United States of America is:
– is an “information seeking missile”
The purpose of FBAR and FATCA is to …
Provide the U.S. with information that is outside of its jurisdiction. In other words, the U.S. has no legal right to the information. Therefore, by threatening “life altering” penalties, the U.S. forces its citizens to provide this information to the U.S. government.
If the contents of bank accounts is important, then the contents of an email account would be even more valuable.
You heard it here first:
The next information return that the U.S. will require is the:
“Foreign Email Account Report” – FEARBar for short!
Congress will (like FATCA) unknowingly pass the general legislation (slipped in as part of a Hiring Act) and authorize the IRS to specify the contents of the return. What an Orwellian World!
FEARBar coming to an information return near you!
U.S. Persons Abroad - Members of a Unique Tax, Form and Penalty Club 