Tag Archives: cost of irs compliance

Chicken soup for the immigrant soul – Getting a good night sleep for less than $10,000

It’s no secret that U.S. Green Card holders and immigrants have been among the biggest victims of OVDP and OVDI. For countless immigrants, the “American Dream” has turned into the “American Nightmare”. Imagine coming to a country – let’s call it “Form Nation”. Imagine not being told about the tax and reporting laws of  “Form Nation”. Imagine  not knowing about Mr. FBAR and then being told that you were a criminal and that the only way out was to pay up. Imagine, being told that you were a criminal according to the laws of a country AND LIVING IN THAT COUNTRY. Imagine trying to seek help from the “cross border professionals” who told you that you must go into OVDI (and pay them lots of money for the privilege).  U.S. tax compliance is very expensive. Understanding FBAR penalties is import in making the OVDI decision. As bad as the situation has been for U.S. citizens living abroad, I suspect that the situation is far worse for the immigrants. What are they do do? For the most part they want to be in the United States (although after hearing their story, I suspect fewer and fewer people will want to immigrate to the U.S.). Like U.S. citizens living abroad, the lives of Green Card holders are also being destroyed.

I thought the following part of a thread should be made into a separate post. It illustrates the nightmare facing Green Card Holders. But, it also demonstrates how the Isaac Brock Society has become a real help to people in distress. What follows is certainly “Chicken Soup for the Immigrant Soul”, but it also delivered as a very nice “Good Night” story, helping this person get the good night’s sleep that he or she so craves. This thread is proof that a “good night’s sleep” can be had without spending $10,000.

What follows shows that  the “Isaac Brock Society is coming of age!” Continue reading

Accidental U.S. citizenship – does it stay with you for life?

Introductory comment added June 1, 2013.

This is an incredibly important issue for the reasons given here.

Since the Obama/Geithner/Shulman assault on U.S. citizens abroad began, I have observed people attempting U.S. tax compliance when they are NOT U.S. persons. The following post is neither fun nor all that interesting. Remember, for those unlucky to have it:

“U.S. citizenship is a problem to be solved.”

You may not need to solve it at all!

Hang in for a long read.



Once upon a time  people wanted to be a U.S. citizen and were proud to be a U.S. citizen. That changed in 2011 when the IRS began to “hunt” U.S. citizens in all corners of the world. This affected many people who were and are paying huge taxes in “high tax” jurisdictions and did not know that they were also required to file U.S. tax returns.  People were also introduced to Mr. FBAR. Mr. FBAR is a particularly nasty guy who had the potential to subject them to huge penalties.

And just when you thought you had seen and endured it all the U.S. enacted FATCA. With the advent of FATCA – America’s Berlin wall: Continue reading

Looking for Mr. FBAR – In Search of FBAR Fullfilment and Consciousness

“FBAR  – One Small Step For Man, A Giant Step For Mankind!”

All great advances in civilization spawn new industries. FBAR has spawned “FBAR Lawyers”, “FBAR Historians” and “FBAR Scholars“. When history is written, 2011 will be remembered as the “year of the FBAR.”  In 1983 Time Magazine made a computer the “man of the year”. Perhaps for 2011, the FBAR should be regarded as the “man of the year”. In 2011, tax lawyer Phil Hodgen, recognized the importance of FBAR in an excellent post titled:

What had God Wrought – FBAR Edition

Mr. Hodgen explains how something that started as part of finding tax cheats in Switzerland is now impacting Ambassador Jacobson’s  “70 year old Grandma” in Canada.

All kidding aside, the FBAR  is likely to spawn a new type of  “therapist”. Yes, it will be called the “FBAR Therapist“. Read further and you will see why. 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

IRS Issues Information for U.S. Citizens or Dual Citizens Residing Outside the U.S.

"Known unknowns and unknown unknowns"

On December 3, 2011 the Globe and Mail reported that the there would be possible waiver of tax and FBAR penalties for U.S. citizens living abroad. (On December 8, 2011 the Globe continued the story.) Once again – the directive was “sit tight” – information would be released by the end of December. Well, some (and there are surely more to come) information has been released. They apply to U.S. Citizens or Dual Citizens Residing Outside The U.S.

Is this welcome news or is it merely a restatement of the law and a further warning? In the online world, one can find a pundit to support any perspective.  The third party commentary varies from the:

Continue reading

Possible waiver of U.S. tax and FBAR penalties for U.S. citizens residing abroad

Subject to the "unknown unknowns"

Thanks to Barrie McKenna of the Globe and Mail for this article and to his support on this important issue during this most difficult time for U.S. citizens residing in Canada and the rest of the world. Thanks also to Finance Minister Flaherty and the MPs who have supported Canada/U.S. dual citizens during this time.

On December 7, 2011 the IRS posted a Fact Sheet providing information about this issue. I have written some commentary about the Fact Sheet here.

I recently predicted that the IRS treatment of U.S. expats would become a diplomatic issue for the U.S. The December 2011 announcement by Ambassador Jacobson, concerning the IRS and U.S. expats,  suggests that this is true. Continue reading

OVDI Collateral Damage – U.S. immigrants

A moment ago I posted about the effect of OVDI on U.S. expats. This post will highlight the effect of OVDI on U.S. immigrants. My heart goes out to this person. He thought by immigrating to the U.S. he was coming to the home of the free. He thought he was coming to “that great citadel of freedom and justice”. Here is a summary of his experience. Note that his life is not OVDI related work. Continue reading

Exit tax triggered by renouncing U.S. Citizenship

You need to find one!

More and more U.S. expats are voting with their feet and opting to renounce U.S. citizenship. Renouncing your U.S. citizenship may or may not make sense for you. If you are considering renouncing your U.S. citizenship, the question that most people ask before taking any step is:

“What are the tax consequences of renouncing U.S. citizenship?”

The following is an excerpt from a comment on the Americans Driven To Divorce article on the Globe and Mail site:

“And for the correction: the definition of “wealthy” is based upon total assets and having paid and average of $150,000 of tax over the past 5 years ( not annual income ). Since most do not trigger that threshhold, the entire process is really not that burdensome at all.”

Do you see any mistake(s) in this? I believe that there are (is). Continue reading

Open letter to Mitt Romney

Dear Presidential Candidate Romney:

I am writing this open letter to you because I believe that you will be the next President of the United States of America. I respect you for your commitment to public service. I respect your patriotism. I am aligned with you when you say that “you will never apologize for America”.

I want to alert you to an issue that may force you (for all practical purposes) to have to “apologize for America”. Of course, you can change this. Although I am certain that your commitment to public service will continue irrespective of whether you become our next president, I do believe that you are America’s best option to guide the country for the next eight years. I support you. You have repeatedly said that you would “never apologize for America”. Continue reading

The psychic, financial and life costs of complying with the Internal Revenue Code

Click here to read comments about this video.

This video suggests that the compliance cost of filing taxes is $1000 per person per year. As an expat, you need to file all of the other forms. Your financial cost will be much more. But, don’t fort the stress and anxiety. What about the problem of even finding a tax professional who can do this?

In the beginning, the U.S.A. was a nation of laws. Now it is a nation of forms!

The question is simple: do you want to spend your time paying people to help you fill out forms or do you want a life?

U.S. Citizenship – It’s time for it to go!