Obama Responds to OVDI Concerns, or NOT!

I have been in contact with a victim of the current IRS OVDI who is living in Europe. I have been asked to share some details of this person’s situation plus a copy of a recent letter that has been received from President Obama. This was written in response to a letter sent to the White House petitioning for redress of the current IRS OVDI program for minnows.

As a preface to that letter, what follows is an Executive Summary of the situation I am writing about. I have been asked to share this, while maintaining anoymity which I am respecting.

Personal Profile:

Dual national resident outside of US ~25 years.

Lives in a high tax European country.

No family or friends left in the US.

No contacts with Americans in country of residence.

6 days spent in US in last 6 years – transit only.

Only ties left to the US are emotional – from a childhood spent there.

Filing taxes faithfully for all the time out of the US thinking they were done correctly.

Posterchild for Nina Olson’s statement in the 2011 Taxpayer Advocate Report to Congress: “The complexity of international tax law, combined with the administrative burden placed on these taxpayers, creates an environment where taxpayers who are trying their best to comply simply cannot.”


‘I filed my taxes faithfully in both the US and my country of residence for all those years. Never had any problems with either country until I realized I may have made an omission in the US taxes and failed to file the required FBARs. I wanted to correct it and pay any taxes if owed. I did not think I owed anything. Taxes owed to the U.S, over 8 years, were de minimis. I was even entitled to some refunds that I never got because I had no clue about them.”

OVDI Participant:

Joined upon advice from a U.S. tax practitioner as the ‘only option’ when client sought advice about FBAR compliance problem. Has already been charged big fees to produce nicely bound documents to send to the IRS. Attorney now wants client to sign the 906 when it arrives. The advice being given is to just pay the OVDI penalty which, after practitioner fees, doubles the compliance cost. Estimated fees for attorney to handle the Opt Out would be as much or more than the current OVDI penalty.

Reason petitioner is sharing this information:

“I want to contribute to the effort to raise awareness of the unjustness of the treatment in OVDI. We should not go it alone. There are many of us who have been affected, and we can contribute our voices to help each other. The Isaac Brock Society and Jack Townsend blogs have been important information sources that have helped me to realize that there are others like me out there. If other people had not been public about their suffering and experience, I would probably still be thinking I was the only person in the world who had made a paperwork foot fault.  I would still be thinking I deserved to be indebted to the IRS for the rest of my life for that failure.

Thank you for what you all have contributed to help me see that I am not alone. “

Reasons petitioner wrote Obama:

Wanted to highlight to President Obama the suffering that OVDI was causing normal people, and point out the need for a better way of handling “minnows” to make compliance easier.

“I was gullible in that I still believe that the ‘little people’ can make a difference. I believe that politicians might listen even if you are not a Big campaign contributor. I believe in mutual respect between government and citizens. I don’t want my belief to turn into a past tense.”

What was expected from Obama:

“I wanted some recognition that there are U.S. citizens overseas.  I was looking for some statement of what President Obama was going to do to address the issue of innocent overseas citizens who had entered OVDI and were being treated as criminals.”

What was received from Obama:

This is the letter.  You are welcome to click on the link below and read it yourself. What you think?

Obama Answer April 18

How was the letter perceived by petitioner? 

“Honestly, I did not expect anything more than some standard response, but this response makes me feel worse than if he had not answered at all. At least I still had some hope when I did not receive an answer. What I got was a bland, previously composed political statement. It does not address any of the concerns I expressed.”

My (Just Me) Opinion:

This appears to be a 100% re-election campaign statement. It is nothing more than “principles”, with no specifics and only vague promises. Even the first two lines are crafted to apply to anyone writing about any “tax” issue.  In my opinion, some staff person looked at the letter and then selected from the menu of pre-programmed form letters prepared for the campaign. I would bet, that every response sent out from Obama on any issue from now until Election Day will be framed around a campaign issue. I would further wager, that this is SOP in the White House for both parties.  Very disappointing, but sadly not unexpected!

A Request:

If anyone else has written President Obama (or even a Congress person) and got an answer back that was as unsatisfactory as this one, I would ask you to share it here.  I think the reality is, all we are going to see is campaign related responses from now until November, rather than anything that indicates that a petitioner’s pleas were heard.  I hope there are some examples that prove me wrong. 🙂


91 thoughts on “Obama Responds to OVDI Concerns, or NOT!

  1. Well, if we wants to “sell products stamped with “Made in America” all over the world,” he’d be better off not deterring Americans from going abroad and making sales.

  2. @just me: good post. The White House response was totally unacceptable and was clearly a canned letter written by a staffer. Your contact should be advised to write again respectfully and say why the letter was unresponsive and why it appears as though the White House does not seem to be listening.

  3. The White House doesn’t even appear to be listening to people at the highest level of government from Canada. I don’t know what their deal is.

  4. I am revolted by every aspect of this. This guy has been filing his tax returns all these years. He has been f*** over by yet another one of these so called “cross border professionals”. I am not sure who is more dangerous – the IRS or some of these lawyers.

    But, the most disgusting aspect of this is the letter from Obama. It is obviously a form letter – but the more important aspect of this the white house doesn’t even have a form letter for those who live abroad – that’ who significant they are.

    Here is somebody we should get in touch with. Professor Maurice Williams in BC entered OVDI, paid a lot of money and apparently wrote Obama. He teaches in BC and should be quite easyy to access. Would be interesting to know whether he ever got a response and so what it was.

    Here is a link to a post that I wrote where he is interviewed:


    Calling Calgary411?

  5. Very disappointing – obviously canned response 9642-B. Wonder if there will be anything coming out that is as obvious and audacious as Obama’s 2008 campaign promises to Americans abroad. Maybe they’ve decided to just ignore expats this time around, even at the risk of not getting their votes. Can’t wait to hear what happens after ACA’s visit.

  6. The president doesn’t come off looking very serious. Imagine that. The president does not seem intellectually curious, whereas Pete the Planner gets it? Pete the Planner for president.

  7. Not much of a response at all. He totally ignored our problems and once again reiterated the partiotism position. I no longer live in that community and my interest are not aligned with those who live in America. I don’t need to make a donation nor do I want to.

  8. As always, I’m intrigued by so-called advisors who tell people that entering the VDP is the only option. As for the nonresponsive response, how many of us would really have expected better?

  9. Does anyone seriously think that Pres. Obama would have seen the original letter? of course not. Some lowly staffer opens the mail, chalks up another mark in the ‘complaints about unfair taxes’ column and hits a button to send out a response. There are probably hundreds of complaints about unfair taxes a day. We need to work through our governments, organizations such as ACA and CBA and individuals with some influence such as the TAS. By the way, does anyone know of any follow up to M. Wente’s ‘crosshairs column?

  10. IRS employees at the higher levels involved with international compliance issues have their email address and telephone numbers publicly listed on the IRS website. I dont know whether that means it is appropriate to contact them directly or not. Or is TAS the only appropriate channel that taxpayers are expected to go through?. If writing to them directly is OK, can that be an altenative route to shed more light on the situation?

  11. @All.

    I have a slightly different view and perhaps an idea worth pursuing.

    The fact that the White House responded at all gives the IBS an opportunity to use the response as a vehicle to further publicize the issues facing expats and the inequity of citizenship based taxation in general. You now have a letter from the President dated April 18, 2012. It is in effect, and invitation to dialogue with him. What if the IBS board were to respond to the WH as follows:

    “Dear Mr. President:
    Thank you for your letter of April 18, and to respectfully suggest that you that your letter was not at all responsive to Mr. XXX’s letter to you of [date] in which he detailed for you, a glaring inequity affecting seven million voting Americans living abroad who find themselves potential victims of the unintended consequences of a law you approved regarding their tax obligations……

    [explain the problem]
    [don’t make the IRS the issue]
    [offer a solution]
    [dont disrespect him or the Office]

    Perhaps a closing with the suggestion that it would be nice to hear in his acceptance speech for the nomination of his party at the DNC convention in Charlotte, N.C. in September, one sentence in which he acknowledges the problem and pledges to do something about it if he is elected again in November.

    It might also be a good idea to send a copy of the letter to:

    Ms. Olson
    Cong. Carol Maloney
    Democrats Abroad
    Senators Levin, Baucus and a few others.
    Mr. Romney and some other top Republicans
    Selected Canadian officials.

    This the way the game is played in Washington. If he doesn’t respond in a few weeks you can write to him again and cc everyone again to let the world know that you are not going to go away and the problem is going to keep getting worse if it is not addressed.
    Thoughts? Comments?

  12. I got exactly the same letter after writting to the White House about the plight of Americans Abroad.

    I am a Democrat and want President Obama to be re-elected. I have contributed to his campaign. I said this in the letter. I asked him to take a look at the Tax Advisor Repport 2011. I said that I wished he has the absentee votes of all Americans Abroad. I even mentioned that the Republicans are doing this, trying to get their votes. I identified myself.

    This was the letter I got back.

    My interpretation is that the Democrats (my party) don´t know what to do with this since this is a part of President Obama´s government. I don´t know how the Democrats Abroad are going to handle this. Just curious.

    Changing subject it seems to me that it dangerous to hire an US Tax Lawyer to advise you…My God… my sleep is gone and my personal and professional life is a mess. I think about these issues 24/7.

  13. @Anon: it is most appropriate to contact the IRS officials if their contact information is readily available. These people are working for us. I can tell you that you will not likely a get a response but your message will not be deleted either. The bureaucratic response will be to forward it up the chain of command until it gets to the office of public affairs or someone else responsible for writing a monthly report to the IRS leadership which says in effect, “we are continuing to receive an increasing amount of communication from members of the Isaac Brock Society. Is the Service doing anything at all to help these people?”

  14. @Calgary411 – Yes, I think it would be great for to contact him. I thank you for your tracking down the woman in Sask.


    My thinking on this (whether right or wrong) is that all channels should be explored at the same time.

    I like the idea of IsaacBrockSociety writing directly to Obama. I don’t think that individuals have a chance. Also, IsaacBrock is beginning to elevate its profile a bit. I think that your suggested content is on the right track. I like the idea of copying the people you suggested because it makes it clear that everybody is at least being apprised of this issue.

    The trick is to initiate a dialogue. Furthermore, although the letter should be supported by ACA and others, the more idividual groups that are making this an issue, the better.

    Interestingly, Obama has begun drawing attention to Romney’s Swiss bank accounts.

    “Sam Stein, Barack Obama Campaign Attacks Mitt Romney Over Swiss Bank Account (Huffington Post 4/9/12), here.

    “I asked Warren Buffet in a meeting we had recently, ‘Have you ever had a Swiss bank account?’ He said, ‘No, there are plenty of good banks in the United States,'” Durbin said.

    “So I started asking people: ‘Why do you have Swiss bank account?’ One, you believe the Swiss Franc is a stronger currency than the United States dollar. And that is apparently the decision the Romney family made during the Bush presidency. And secondly, you want to conceal something. You want to hide something. Why would you have a Swiss bank account instead of one in the United States? I would like to … ask the press to really press some of these questions, the obvious questions. When is the last time a presidential candidate for the United States had a Swiss bank account? I think the answer is never.”


    Romney is going to have to deal with the issue of the complexity of his finances. I actually believe that contacting Romney is a good idea. He will be able to leverage IsaacBrockSociety to show how the IRS, Levin and Obama are essentially mistreating anybody and everybody with an offshore account. For reasons that I have previously given I believe that Romney is actually the best hope to do something about citizenship-based taxation.

    Anyway, good idea. I think that we need to begin working on the letter or letters. This will require patience, focus and perserverance – attributes that the Isaac Brock Society has demonstrated in abundance.

    Your inside experience in Washington would be invaluable in this context.

  15. @markpinetree,

    It is so disappointing and a kick in the gut to get these impersonal “form or photocopy letters” from our government representatives in whatever country. It is obvious when what we have set out / the questions we have asked are glaringly not mentioned or responded to — ‘a one size fits all letter to anyone who painstakingly writes and asks questions on the subject’ does not an effective communication make.

    Should we not expect more of the people who ask us to elect them into whatever office, including the President of the United States?

    @30 Year IRS Vet,
    Thanks for your suggestion and view on how things are accomplished in Washington, using the non-responsive letter from President Obama as a springboard.

  16. @Chester12…

    Of course a WH staffer responds. I noted that in my opinion. I would have hoped for something a little more focused than just a campaign policy statement, but understand the game right now. Maybe something to direct the petitioner to some staff office that deals with tax issues. That is what my Senators have done when I wrote them.

    @30 year Vet…

    Excellent idea(s). So, who at Isaac Brock wants to be the spokesman for all to do this? I am pretty sure that the petitioner is going to follow up as you suggested in your first post.

  17. The Obama Reply – another excellent example that he doesn’t have a clue, and neither do his minions. “Taxes – OK, here’s our standard response.” You would have hoped someone had the audacity to actually read the letter. He’s been spouting this nonsense about changing the tax code for four years – never did a thing to change it, not even against the rich he likes to beat up. But who is going to bail out the country from his stupid spending? As far as the WH is concerned overseas Americans ARE the rich, which is why they’re doing this to us! Vote Republican and stop the madness!

  18. Patrick Hale said: “But who is going to bail out the country from his stupid spending?”

    Haven’t you heard, they’re going to tax the world according to Biden.

  19. @Patric…

    Welcome aboard Mate. 🙂 I try not to be partisan. I voted Republican before and got invasions of preemption, doubling of the national debt, unfunded new entitlements and financial melt down. Hard to know what to do now. I would like to think that “This time they will be different.” Maybe there is a 3rd party candidate that I can waste my vote on…

    Anyway, thanks for joining the conversation. You have a lot to offer to the understanding of how America got into its current mess!

  20. @at All.

    The petitioner should ask IBS to respond on his behalf.

    Actually, his facts are good but there may be a composite, very simple fact pattern you can craft and represent to the whole world as a “very typical situation for many of our readers.”

    The worst thing you could do is give an example which is too long, makes the reader think too hard, and doesn’t make the reader see in just one page of writing, why it is absurd for the US government to expect a third generation Canadian family who think of the United States as often as Antarctica, to prepare and file a tax return with the IRS simply because someone in the family had an American ancestor.

    That is as much a “no-brainer” issue for anyone and more importantly, if you win that issue, you will have opened the door for a whole new set of common sense rules and exceptions for expatriates abroad, EVEN IF you cannot change the law on citizenship based taxation.

    You should carefully define what you want and focus on something you can reasonably achieve and NOT ask for something like the repeal of FATCA, keeping Canadian banks from sharing electronic data with the world wide banking community, or the lynching of the IRS Commissioner at noon on Inauguration Day in Washington in front of the IRS National Office at 1111 Constution Avenue. 🙂

    The IBS board should circulate a draft response amongst themselves and then post it as a draft on the IBS web site for comments before it is sent to the WH.

    Definitely include ACA as a cc. There are probably a dozen other organizations or people who should be copied.

    In MHO (my humble opinion) it should not be more than one page long although the cc page is likely to add a whole page 2. It can be simultaneously delivered to every one electronically the day it is mailed, but it should be a real letter on Isaac Brock Stationery perhaps including that cool logo you have with Isaac Brock at the battle of Niagra. It should be mailed to the White House at 1600 Pennsylvania Avenue NW, Washington,D.C 20224(?) with a return receipt requested.

    No long rants. No one in Washington reads them. They are dismissed and trashed. Be passionate about the cause but try not to be emotional.

    While it sounds like most IBS readers are Republicans, you have a lot of Democrats out there and the letter should really avoid committing to one side or the other.

    As Renounce and Just Me have indicated, with Petros’coup on the Peter Dunn Show, (you should indeed take him up on his offer to help with letter) the Isaac Brock Society is elevating its profile onto the world scene. There is a real opportunity here to lead the fight for tax justice for americans abroad, and certainly be the leading voice from Canada in the dialogue with Washington to actually make the government be responsive to the citizenry.

    I would be happy to donate my time to the Isaac Brock Society board of directors if I can be of any help should you decide to go ahead with the White House letter initiative.

    Respectfully submitted
    Thirty Year IRS Vet

  21. Wow, thanks so much for your generous offer, Steven Mopsick. The professionals who have contributed to Isaac Brock are another of the legs holding us up and keeping us focused. With your help and backing in what we are fighting for, we are stronger. We do appreciate it.

  22. @30 year IRS vet – A few of us are probably wondering, what powers of collection does the IRS actually has abroad? And what hoops do they need to go through to collect? Is it a long winded process that has to go through the foreign court system concerned?

    It’s my impression the IRS does not have the usual tricks available to it inside the US such as liens on property or attachments on pay. The most they can do is go to a foreign court under MLAT and get a judgement similar to a credit card company which you don’t have to pay in the end.

    Can you elaborate? I suppose this would be governed by the tax treaty signed by the country concerned. However there must be a common thread to this situation.

  23. @30 year IRS vet – One other question…there are those such as the ACA that believe all efforts should be put into a repeal campaign of FATCA and lobby for repeal of citizenship based taxation (although they claim because of there charter they have to be “pro-American” and not seen as supporting efforts against the US Government.

    However I’m of the belief it’s worth putting legal roadblocks in foreign countries against the IRS especially with respect to dual citizens. Dual citizens have discrimination rights in their own countries and why should the IRS be able to bypass these laws?

    If you were a dual citizen would it be more effective to lobby for change in Washington, hedge your bets and lobby Washington while at the same time throw legal roadblocks in the way of the IRS overseas, or as a dual citizen lobby your foreign government where you reside solely.

    What do you think?

  24. Thanks for that information, usxcanada, on Professor Williams.

    @renouncecitizenship and All,

    I have just sent an email to “mauryw” regarding this thread. I’ve asked if he could give an update, preferably on this thread, regarding the response that he may have received from President Obama or The White House. Professor Williams powerful letter can be viewed here:

    PS – I’d personally like to communicate to him on the subject of “Accidental Americans” (our innocent sons and daughters who have never had anything to do with the US and are still entrapped).

  25. @All,

    And, I’ve just received this very prompt reply from Professor Williams:

    “Thanks for your e/mail. I wish I could write and say that I had a nice personal response from Pres Obama but alas, no response whatsoever. I wrote a follow-up letter some weeks later but that too went unanswered. The only response I received was a forml-type letter from Sue Saarnio, Minister Counselor for Economic Affairs at the US embassay in Ottawa, Jan 31, 2012.”

  26. There are bunch of different ways to go about this.

    I wound argue in the context of Canada the US Canada Treaty on Double Taxation is actually the most important law in question. If the treaty between the US and Canada was like the 80 or so other treaties Canada has ratified(One outstanding question I still have is whether the OECD Model treaty actually truly prevents taxation based on citizenship. I am for now assuming it effectively does) then the US would be unable to tax based on US Citizenship. Thus the Canadian government should pressured as to why they are accepting these terms for the US which they don’t accept from any other country. I’ll note whenever a treaty comes up for periodic negotiation the Department of Finance in Ottawa usually puts out a RFQ for information from Canadian residents who have issues with the tax laws and tax treatments of the other country.

    I agree with Steven that FATCA is a bit of a secondary issue. However, I noticed for example HM Treasury in the UK indicated they will put a Request for Comments by the start of summer indicating possible approaches to under UK law to implement the US-EU5 FATCA agreement. If I lived in the UK as a US Citizen I would submit a letter to HM Treasury at the time going over the overall unfairness of the current treaty arrangements between US and the UK involving taxation of US Citizens living in the UK. I also suspect if Canada is forced to make similar legislative changes to implement FATCA it will open up to opportunity here to make a political case against the past negotiation stances of the CDN govt regarding US Canada Tax Treaty negotiations.

  27. @John

    After reading your comments above more thoroughly and given that I know you live in the UK I would definitely recommend contacting HM Treasury and HMRC this summer during their FATCA RFQ and I would go as far as to request a personal meeting with them in London(I have no idea whether you will get it but I am certain that all the big banks effected are going to get multiple meetings with HM Treasury over FATCA).

  28. @John

    I may have to spoken to soon as whether they would be public consultations on FATCA by HMRC. Here is the exact wording from Budget 2012.

    Information powers – The Government announced on 8 February 2012 that it has agreed to work with the governments of France, Germany, Italy and Spain to facilitate exchange of information between financial institutions and the US Internal Revenue Service for the purposes of the US Foreign Account Tax Compliance Act (FATCA), which aims to combat cross-border tax evasion. HMRC will consult with the financial institutions affected about how this can be done, with a view to legislation in Finance Bill 2013.

    There does not appear to be any request for PUBLIC consulation. However, I would still consider contacting HM Treasury on the the subject.

  29. Further from Professor Williams, which I am posting in its entirety.

    Sorry. My computer is acting up and it sends off letters before I am ready.

    Anyway, the only thing Sue at US embassy said which was of any consequence was to reiterate the info from the IRS of Dec 7, 2011, which didn’t really address any of our issues. It closed with the usual platitudes that she hoped this info would be useful.

    I’ve written all sorts of letters including Rick Mercer (suggesting a rant) and Margaret Wente — but the same from them. No response. It’s quite frustrating.

    As you have probably picked up I am most conerned about all our children who have no links to US but are required under all the IRS provisions to file, et al.

    Please feel free to use any of this — and if you want to post it on the blog please go ahead. I sent a blog some time back about the concern for our kids, but only had one reply. I was quite disappointed — and surprised that no one seems that concerned about our children — even those of us caught up in the OVDI, IRS nightmare.

    I’ve attached a copy of my second letter to Obama if you are interested. I suspect that among other things my letters were too long for anyone to take the time in Wash to read. Professor Williams — Obama letter Nov 2011

    I think you have read David Jolly’s (NYT) article about our situation — it was posted on the blog. I’ve also been in touch with a reporter from the Herald Trib in Paris; he’s writing a story which I suspects will also be quite favorable. We’ve had several conversations. I’m not sure when the story will appear but it is active (I just received an e/mail today).

    I’m happy to help in any way — just at the moment I’m bogged down marking papers, et al for the end of term.

    Thanks again for your letter. I empathize with you and your accidental American son. And I wish us all good luck.

    Cheers & best wishes, Maury

  30. @Tim – here in the UK it’s against the law to discriminate banking services by “place of birth” this is where I think it’s going to become problematic. Also foriegn born US citizens get off the hook because the banks have no effective means to tell one type of US citizen from another.

    As for the big 5 intergovernmental approach, the big 5 have no idea themselves how to do this and I think it’s trying to help the US save face on poorly thought out legislation on the US’s part.

    The implementation of FATCA will differ from what the US wish list has on it. All I’d like to achieve to is have data on dual citizens restricted and turn the clock back to the way it was before leaving it to the US expat whether they wish to disclose to the IRS or not.

    I think this is achievable. I know you’re risking the fines etc, but at least the IRS is being starved of data.

    Now if the US wants to hassle people at the airport by turning those Homeland Security goons into tax collectors, I can’t stop that. However what I can hopefully do is shut off the flow of information.

    I think there will be more global exchange of information but not on the scale the US would like. The US can’t change one basic fact, they’re the only ones using citizenship-based taxation, and will always cause more work for everyone else – so why should other countries have there FFIs and governmental agencies spend all that time and resource when in return they receive very little back including the US for that matter. The pot of gold the Levin and Grassley thinks exists is not there.

  31. @all- I remained convinced that the only thing that will get the U.S. to change its policy on extraterritorial taxation is for the other nations of the world to do what the U.S. does which is to take unilateral action. FATCA is not a side issue at all. It is the last nail in the enforcement of extraterritorial taxation.

    If all of the countries that currently have tax treaties in place with the U.S. were to bar U.S. immigrants and exchange students from those who are allowed in then it would be up to the U.S. politicians to explain to their constitutents why they can’t go to where they want to go. I know that many of you out there will say don’t hurt the children but this is all out war. The U.S. has already declared war on our children and we should have no qualms about returning the favor.

    All countries should also change their oath of citizenship to include a section just for Americans that incorporates an formal renunciation statement.

    When Americans can no longer apply to live in New Zealand, Austrailia, Canada, England, Holland etc. then you will see the you know what hit the fan. These restrictions would hit American residents hard and you will see them take up the cause with zeal. It will be then that the ears of Congressmen and Senators will burn.

  32. @John

    Automatic information exchange already exists between Canada and the US but Canada sends information to the US on persons with US addresses not US Person Canadian domestic taxpayers. There has been discussion from the Canadian side that Canadian institutions would be exempted from FATCA on the basis of this existing exchange of information arrangement akin to the five EU countries. (One issue is CRA sends info to the IRS on dividends, interest, and trust distributions but not sale of property/securities). Now I have no idea whether these commentators in Canada are completely talking through there hat or not but there have definitely been intergovernmental discussions between the US and Canada going back to at least the fall. I actually though at one point there would be a joint statement released.

  33. info from McCarthy Tetrault

    At the same time as the release of the proposed regulations, Treasury and the governments of five European countries (France, Germany, Italy, Spain and the United Kingdom) released a Joint Statement indicating that the United States and each of their governments had agreed to explore a common approach to FATCA implementation through domestic reporting and reciprocal automatic exchange, based on existing bilateral tax treaties.

    It is understood that an acceptable approach, if one can be determined, would serve as a template for arrangements with other countries. Such an approach would address concerns raised in the consultation process that requirements imposed on financial institutions to report account holder information to the IRS would contravene applicable privacy laws.

    Canada was not a party to the Joint Statement, but it is understood that there are ongoing discussions between Canada and the United States relating to the application of FATCA, having regard to:

    1. the relatively large number of U.S. individuals who reside in Canada;

    2. the fact that Canada is not a low-tax jurisdiction; and

    3. the fact that the Canada Revenue Agency (CRA) already automatically exchanges information with the IRS with respect to certain payments made to persons with U.S. addresses.

    Publicly available documents indicate that the CRA automatically exchanges details of payments made to U.S. addresses and reported on Canadian NR4 forms such as dividends, interest and trust distributions. However, as U.S. taxpayer ID numbers are not collected in Canada, the information provided is not associated with U.S. taxpayer ID numbers that would facilitate matching. It is also understood that there is no exchange of information relating to proceeds from the sale or other disposition of property. In addition, payments to entities in third countries that may be owned by U.S. persons are not reported.

  34. I got this form reply twice from the “contact the White House” page to submit comments:
    January 11, 2012

    “Dear Friend:

    Thank you for taking the time to share your views. I appreciate hearing from you and value your input.

    My Administration is working to address the serious challenges our Nation faces. I am committed to taking immediate steps that generate job creation and economic recovery, and I am determined to make investments that lay a new foundation for real and lasting progress.

    As I move forward on key initiatives, I am making my Administration the most open and transparent in history. Part of delivering on that promise is hearing from people like you. I take seriously your opinions and respect your point of view. Please know that your concerns will be on my mind in the days ahead.

    Thank you, again, for writing. I encourage you to explore http://www.WhiteHouse.gov, which is regularly updated and more interactive than ever before.
    Barack Obama
    Visit WhiteHouse.gov”


    “The White House, Washington
    October 21, 2011
    Dear Friend:
    Thank you for writing. President Obama has heard from many Americans about the tax cut agreement reached at the end of 2010, and we want to make sure you are aware of some relevant information about this important issue.

    President Obama is committed to doing what is right for the American people, for jobs, and for economic growth. Because of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, working families will be able to keep their tax cuts, those looking for work will be able to keep their unemployment insurance, and job creation will be spurred by payroll tax cuts and investment incentives. Independent economic experts have concluded that, taken together, this package of tax cuts should significantly accelerate the pace of our Nation’s economic recovery.

    This bill was a compromise, and like all compromises, there were some provisions in the bill that President Obama did not agree with, particularly the temporary extension of tax breaks to the wealthiest two percent of Americans and a more generous treatment of the estate tax than is warranted. But President Obama was not willing to allow taxes to go up for middle-class families or to cut vital support for people who are looking for work in these tough times.

    Here are some more resources on the middle class tax cuts and unemployment insurance agreement that you may find helpful:

    White House White Board: Tax Cuts, Unemployment Insurance, and Jobs:

    Framework Agreement on Middle Class Tax Cuts and Unemployment Insurance:

    Watch the President Sign the Tax Cut & Unemployment Insurance Compromise: “Some Good News for the American People this Holiday Season”:

    Watch the President’s Weekly Address: Tax Cuts Kicking In:

    Thank you, again, for writing. President Obama is grateful to hear from thousands of Americans each day, and we appreciate your taking the time to contact the White House.

    The White House”

    Needless to say, these form replies have absolutely nothing whatever to do with the issues I raised regarding the reporting and penalty burdens imposed on US citizen/’persons’ ‘abroad’. Not even a mention of taxation, or anything remotely related. I was sending these sometimes 2x per day, for more than a month – figured it might be like the lottery. Got this twice, and the one other form reply, other than that, nothing.

    So much for: “President Obama is committed to creating the most open and accessible administration in American history.”

  35. @calgary411, (and by proxy, Professor Williams);
    thank you for sharing the letter to President Obama, and your other attempts to contact and lobby people. Was it on a blog post here at IBS that you didn’t get any responses re the plight of our children? If so, I think it might be because we don’t quite know what to do – in the short term, as well as the longer term, other than making sure they are, or become duals and then as possible, to renounce or relinquish.

  36. @mauryw,
    read your excellent letter re: “I’ve attached a copy of my second letter to Obama if you are interested. I suspect that among other things my letters were too long for anyone to take the time in Wash to read. Professor Williams — Obama letter Nov 2011”. I agree about the plight of the children.

  37. @John “here in the UK it’s against the law to discriminate banking services by “place of birth” this is where I think it’s going to become problematic. Also foriegn born US citizens get off the hook because the banks have no effective means to tell one type of US citizen from another.” Probably true in the assertion of discrimination, but the US law does not recognise local law as an excuse for not complying. In fact it specifically states that this is not allowable.
    Also, the obvious intent of the inter-governmental agreements is to circumvent such issues by relaxing the requirements for withholding and account termination in the participating countries and making ‘FATCA’ regulatory in these countries. This will allow the detection and reporting to go ahead without impediment, as is the US goverment’s wish.
    The data is what they want. The inter-governmental agreements on data exchange are the ultimate aim of all of this.

  38. @30 year IRS vet

    I just re-read your post of APRIL 22, 2012 AT 7:12 PM

    I had skimmed it quickly earlier today, between chores, and wanted to come back to it tonight and mull it over.

    I think I like the strategy of going for a “no-brainer” issue that anyone could see without triggering immediate opposition. It is like chipping away at the foundation without trying to remove the “corner stone” in one go.

    I think you may be right, that if we can win on one subset issue, we may open the door for a whole new set of common sense rules and exceptions for expatriates abroad, EVEN IF we cannot change the law on citizenship based taxation. Let ACA fight that battle, (with our support, of course) but in parallel, lets work on something we can bit off and chew separately. It doesn’t mean we stop advocating for the end of citizenship taxation. We just go after one of the legs of the stool. Let’s face it, we are NOT going to repeal FATCA. As Victoria said, we probably need to focus on “Mitigation for Minnows.”

    That is essentially what Corporations do with their lobbying. They never try to kill the whole bill, they just try and get their exception or special provision. Of course, we don’t have the money, or the horse power to do this in the back halls or Congress or in the watering holes of DC, so would have to be won on the merits in the open arena or public debate and media spotlight. That is a tough go, but you never know unless you try, I guess.

    Thanks for offering some good ideas to mull over, and your kind offer of advice assistance. Some of us should get together and talk with our voices on a phone to come up with a strategy to build on a little momentum we currently have, instead of just working with our fingers on this blog.

    Anyway, just thinking aloud. Thanks again.

  39. Chester12….

    Re your question:

    By the way, does anyone know of any follow up to M. Wente’s ‘crosshairs column?

    I personally have not seen or heard anything. I have emailed her multiple times, and there is no response.

  40. @p33t – you’re right the intergovernmental gets around the privacy issue, but over here governments have to treat citizens equally and that includes the government – discrimination is another issue all together.

    if you “rat” on one citizen by “place of birth” but allow another citizen in similar circumstances to “get away with it,” that could be grounds to demand a checking system that is foolproof and demands all citizens be vetted in the same way.

    Of course it would be politically difficult to implement such as system when the Britiish go hoopy over Brussels telling them what type of crisps they should eat.

    I’m not a lawyer but I feel that there could be mileage there to be gained. For example a number of years ago, a man brought the government to court over different ages to collect your pension between men and women to an EU court and forced the UK to equalise the ages – it can happen over here.

    The UK may play lapdog to the US, but an EU court might think differently. I think the real danger for the US is even a British court may take the side of its citizens (which would in turn apply to EU citizens) and tell the US sorry resident citizen’s data is not available to the US.

    I think an EU government who practices resident based taxation will have a tough time justifying in court why they turned over a resident EU citizens tax data to the US when they have no US financial connections.

    I believe Americans with American only passports will end up being stuck with the IRS, dual citizens a matter where they make their residency. The US will be forced to accept “resident based” taxation in terms of data. Of course the US can continue wasting its time hassling US ex-pats and receive minimal tax revenue in return instead of coming to grips with their financial problems with vote killing tax raises and budget cuts.

    We’ll see how this plays out but anything said here in this blog or by the IRS will not be the last word. Final regulations for this intergovernment bullsh*t won’t be out for sometime.

    Failing all that I’ll be interested in 30 year vet’s response to the extent of IRS’s collection powers overseas if he chooses to answer it.

    The IRS can hop up and down and threat you with death, but if they have no means to collect and only can hassle you at US airports (or bring you to a US court) all this is a bloody waste of time instread of going after homelanders.

  41. John, when I fill out my self-assessment, my accountant considers me UK tax resident but non-UK tax-domicled. So in spite of my permanent residency plus dual nationality, I believe my dominant citzizenship would still be US in spite of having lived in UK for over 20 years…I have even voiced my concerns with HMRC but they say they can’t protect me from the IRS due to clauses in the tax treaty that allow for double taxation for US persons.

    I think it’s more a case of how aggressively the IRS will be willing to pursue taxes and fines owed across borders. I would assume that wealthy expats with substantial assets still held within the US would be more easy to target and levy than someone with virtually all their assets offshore, though they might choose to make random examples of minnow expats as a deterent.

  42. @monalisa1776 – just out of interest when you originally came to the UK, I have always registered as an Irish citizen and never disclosed my US nationality.

    I pay only UK tax and considered a UK resident. If it’s worth it for you to be considered a non-dom maybe that’s changes your position somewhat with regards to the IRS.

    The tax treaty may give the IRS certain rights, but it doesn’t give the HMRC the right to treat like EU citizens differently because of “place of birth” or let a foreign-born US citizen off the hook because there’s no foolproof method to identify them. For exmaple my kids are duals but the HMRC, the banks, or other FFIs have no way to identify them if they choose not to disclose the fact that they’re US citizens. Also they haven’t renewed their US passport in years, and enter the US on their UK passports because it seems the US systems can’t effectively deal with foreign-born US citizens on their system. Perhaps in future Homeland Security may be able to tie up bio-metric data and start hassling duals at the airport but that day hasn’t arrived yet.

    I’m just dead against citizenship-based taxation and take the view once I leave the US, it’s none of the IRS’s business what I do. Financially I disconnected from the US years ago.

  43. @monalisa1776 – also I forgot to mention, if for example Boris Johnson, Zoe Wanamaker, Ruby Wax, and other famous dual US nationals haven’t renounced and the HMRC turns a blind eye to (especially Boris Johnson) and doesn’t assist the IRS why should I? What’s fair for one should be fair for all when it come to a foreign tax authority (the IRS).

  44. The US Embassy in Stockholm responded relatively well to someone in the Swedish community who wrote the Ambassador about FATCA. This response is below. There are no answers or actions, but at least there is a tacit acknowledgement that there are concerns:
    “The Ambassador has asked me to look into recent changes in U.S. tax laws that will affect United States citizens living overseas. We understand how this law may affect U.S. citizens such as yourself living abroad.

    Our Embassy has not been given any information on the consequences of this new legislation. U.S. Embassies around the world in general do not get involved in taxation issues. The Embassy in London does have an IRS representative that can answer questions, and you may wish to contact that office.

    We encourage you to let your elected representatives in the Congress know how this change in law may affect you and other Americans living overseas. Sometimes it can be difficult to follow these issues from far away, but that does not mean that your point of view is not important.”


    Martin B. Tatuch
    U.S. Embassy — Stockholm
    Considering this, it would be positive if we could see President Obama at least consider the needs of overseas U.S. citizens. Writing him as suggested by Steve and Just Me will may be small steps, but as Steve suggests and as Petros has achieved in the radio broadcast, awareness is key. It is a prerequisite for action.

    The Obama robo response letter does not even mention overseas U.S. citizens, which is very disheartening for those US non-resident citizens who supported and voted for him. This combined with his lack of delivery on promises made to overseas Americans before the 2008 election is encouraging them to look at other candidates who at least recognize that there is a community of non-resident Americans out there. They are looking at candidates who address territorial taxation in some way.

    The simplest taxation issue to address appears to be “mitigation for minnows” related to OVDI. As someone else suggested, it is also good to mention the connection to ACA’s campaign for residence based taxation as they likely have the resources and connections to achieve action in this area and support for their stated goals can help them to achieve them.

  45. Years ago when I opened my various accounts it never occured to me not declare my US citizenship because hadn’t been aware of all the potential hazards at the time. I don’t agree with the citizenship-based taxation laws but feel obliged to obey them nonetheless. I blame myself for not having received the correct financial and tax planning years ago. As I had to use a specialized accounting firm to do all I could to clean up the huge mess, I will also have to use them to do my self-assessment for 2011-12 because I will also suffer UK double taxation on my US-based mutual funds which I sold in January and remitted the cash to the UK.

    Turns out that HMRC treats these as pooled offshore investment funds whose capital gains will be taxed as ordinary income at my highest rate of income tax…..these ‘income gains’ are thus not covered by any capital gains allowance in the UK, so I’m being screwed here as well as the US…I’m not a happy bunny.

    But, again, I blame myself for having been a DIY investor instead of using a financial planner from the start…in fact, I regret that I even invested in the first place! In hindsight, would have probably been better off (and certainly less stressed) just sticking to straightfoward savings bonds. Oh well, just want to get all this sorted and behind me.

    At the end of it all will have wound up having to pay about $25,000 in double taxation to both countries due to incabilities between the tax systems plus about $18,000 in accounting fees!!

  46. It’s frustrating to hear about all this double taxation, but at least you’ll only have one tax master to serve going forward because in theory UK tax credits and foreign exclusion should wipe out liability to the US. For Social Security remember if you fall out with the IRS in future, I believe the max they can withhold is 15% under current law if they deem you “owe” them taxes – something you may want to check into.

    As for me everything gets moved over in small chunks (under $10,000 per transfer) over time. I avoid the US bank reporting – that’s all I want to achieve. I’m happy to pay the HMRC tax on piddly interest – there’s no capital gains involved.

    The only real business between me and the IRS in future will be the small Social Security I’ll collect. What I’ll probably do is keep a US bank account, give the IRS a US address and just withdraw it out of the ATM over in the UK – it’ll be pub money. That’s unless of course they start a withholding tax on ATM transactions which I would put pass the idiots in Congress.

    I’ve got plenty of time to think about eveything – but we’ll have to see what happens with FATCA and citizenship issues in future.

    But going back to basics – if you’re a British citizen and have “disconnected” from the US financially, why shouldn’t you be treated the same as every other resident British Citizen with regards to the HMRC reporting to the IRS? If we can legally get the HMRC to report data on a resident-based taxation model, at least the IRS doesn’t get its hands on the data.

    The HMRC doesn’t give a toss about the IRS as long as they get paid what is owed them.

  47. @John, you’re correct that some of the double taxation will be cancelled out by foreign tax credits so it’s not quite as bad as I’ve made it sound. As I only work part-time, if my gross income (including the capital gains for the sold US mutual funds) comes to under around $45,000, I will hopefully not even owe any capital gains taxes to the IRS because I’d still be within their 15% band and thus owe no US taxation on any longterm gains.

    However, would still owe HMRC income gains taxes at 20% but these will hopefully produce foreign tax credits to offset future US income taxes.

    They’re using form 1116 rather than relying on 2555.

    I should hopefully get tax refunds both later this year and next year which could go towards my estimates for 2013. I hope that this will be the last year I even owe any US taxes because I have switched out of mutual funds and put my assets into a local building society savings/checking account and a FATCA US compliant brokerage account over here.

    Once I get through my statutes of limitations, I will probably be able to use a less expensive accountant or hopefully barter down to a lower cost with the same firm because I like her, plus could have more complications in future if my much older spouse predeceases me or needs longterm care.

    Though I don’t like FBAR and 8938, I am prepared to fully disclose everything and have become a meticulous record keeper. At least I have greatly simplified my situation by consolidating. But I will have to continue budgeting for at least a thousand pounds per year towards accounting costs and probably a few hundred dollars per annum in double taxation, especially as the personal exemtion/standard deduction for a US person filing as married filing separately is less generous than the UK’s personal allowance.

  48. @monalisa1776 – I’m going to eventually trade some US stocks but I’m going to open an account in the UK under my wife’s name (she’s UK only) and screw all this IRS paperwork. I’ll do all the trades online and the IRS does not know the wiser. There’s no benefit using a FATCA fund in the UK, because you’re going to have to top up the difference for the HMRC anyways. You save the extra paperwork and still get the UK capital gains tax free allowance via your spouse. I’m not getting into the game where the US wants to split between short term and long term rates and doesn’t give you a tax free allowance. It’s much simplier to trade through my wife, if I make less than £10,600 gain I pay zero anything over it’s between 18-28% depending on your income – nice and simple. I’d rather pay the HMRC a bit extra and deny the IRS anything and avoid all their intrusive forms.

    What galls me more than anything is filling in paperwork to prove you owe nothing or a few bucks. I’m probably going to become a non-filer again as my US links are sparse these days.

    Living abroad over 20 years has made me realise the US is not the only game in town and I don’t like its treatment of ex-pats. I’m sorry my family doesn’t go back that far in the US being generation 1 on one side and generation 2 on the other.

    My ancestors didn’t come to the US for their descendents to be treated like lepers if they wanted to leave the US for your original homeland. Yes I sound American but the “old” countries were alive and well on both sides of the family when I was growing up.

    The US has to grow up and start accepting the people traffic goes in both directions these days. Acceptance is what will help the US maintain it’s world position not by acting like some pimp trying to squeeze a possible buck out of his working girls.

    The US would get better more dedicated people back in return from living abroad rather than making ex-pats resentful about the US and bad mouthing the country because a few millionaires decided they had enough of the US tax system.

    US millionaires will always avoid paying their share whoever runs Congress – and they will go to any tength to cut down their US tax bill it’s all been and it’ll always be. Making middle class ex-pats suffer for the actions of a few won’t work either – it’s up the the homelanders.

  49. @Calgary 411, I’ve also been in email contact with Maury, actually since last fall after I read his first letter to the POTUS in the paper. He’s one of the people I spoke of knowing on Brock that I mentioned in my story. He passed on the term: FBAR: F*cked By American Revenooers to me, lol! Did you send him a link to this subject post with your recent communication?

  50. @John, I’ve considered moving my assets into my husband’s name (UK-only) but would still face annual limits due to US gift taxes to non-resident-alien spouses. I also have to hedge my risks by keeping assets in my name because he is 15 years older and has already suffered a stroke. He was pensioned off on medical grounds from his local government job at merely 50.

    Obviously, if he were to experience a debilitating stroke and need to go into a nursing home, all his savings and assets would be frozen and used to finance his longterm care on all amounts above around 23,000 pounds and on partial amounts above 12,000 quid.

    So it’s all been agreed that in our particular situation it’s safer to keep our assets split equally in separate names.

    As for my US compliant account here, it’s actually mostly in an ISA so would only be taxed on US capital gains. As I understand it, dividends are taxed by HMRC at 10% when you’re a lower rate tax payer but taxed by IRS at 15% from 2013 so will probably have to pay the difference to the IRS.

  51. @bubblebustin,

    Yes, I did send Professor Williams a link to this thread. His experience, his advocacy, his passion against the injustice, including what is expected of our “Accidental American” children who have no connection at all to the US would be an asset to the conversation here.

    I am glad there is some, but disappointed there is not enough, action from our governments to carry on conversation with us (with notable exceptions). Today I go to place my vote for the leader of the Canadian province I live in. Is it unreasonable to expect accountability? All the politicking and promises to represent their constituents, then many issues they campaign on are placed on a back burner.

    President Obama or those who profess to speak for him at The White House pay the expats no heed. How can we not be disappointed, sceptical, outraged? We must not let it ride.

  52. @Steve Mopsick,

    Thanks also for recent additions regarding FATCA, 8938, etc.on your blog — http://mopsicktaxlaw.blogspot.ca/.

    Also, How To Report Foreign Real Estate Held In A So-Called Foreign “Trust”. How many people outside the US will this affect and give important information?

  53. I just want to throw in my two cents’ worth that, as always, Steven Mospick’s suggestions above are eminently sensible and arguably are the only way of getting any kind of constructive attention from Washington on the issues mentioned. His excellent advice about how to write letters to politicians applies in any country to any issue, and is something I need to print out and keep remembering, as I tend to go on at greater length than is tactically or strategically sensible in some of my letters.

    Personally I am skeptical you’ll ever get any constructive attention from the Obama administration or the current US Congress (and BTW for the very brief portion of my adult life that I actually was a US citizen living in the US, I was a Democrat and never a Republican). However I’d be delighted to be proved wrong. I’m just not holding my breath.

    My personal hope and focus is that we keep pressure on our own politicians and governments in Canada to protect all Canadian citizens frpm outrageous and unjustifiable extraterritorial money-grabs by foreign governments no matter who they are. As someone who isn’t a US citizen and is a Canadian, I think that’s a better use of my own time and energy. But I agree, those who are US citizens, and wish to remain so, need to be strategic about how to fight the mess their bone-headed, pathetic excuse for a government has created. Steven’s approach makes sense to me, and I can’t think of a better one.

  54. @All I’ve copied this paragraph here as it seems to be the most popular thread. Because of the structure of this website, threads disappear and great info. can be lost.

    From SJM April 23 1;20 AM IRS OVDI thread

    The whole issue of the IRS chasing after Canadians through treaties and foreign litigation is a red herring which is not going to happen. The IRS has enough trouble going after all the low hanging fruit it has in front of its nose inside the United States to even think of expending valuable resources on dubious, expensive, divisive and unseemly extra-territorial collection of routine penalties or tax outside the borders of the fifty States,

    I think this should be engraved at the top. It is the clearest piece of wisdom in a long time. Most of us minnows and even small fish have nothing to fear. If we have few or no ties to the US we don’t need to do a thing.

    Steven Mopsick makes common sense. I would add other ex-pats and accidental Americans to the canadians in this scenario.

  55. @Chester, I suspect Steven Mopsick is correct. I would imagine that as long as someone is filing honest returns that they’re unlikely to be harassed by the IRS. I have been biting my nails for thirteen months but my accountant has pointed out quite sensibly that as my past mistakes were unintentional and that I went to them first and corrected things and paid what I owed, that that will probably be the end of the matter.

    The IRS already made some minor readjustments which were paid for so that will probably be the most I will hear concerning the amended returns…all my assets are now over in the UK and will be honestly reported on FBAR and 8938 so there shouldn’t be any further issues with them.

    It will just be a case of having to pay out for an accountant and a small amount of double taxation on dividends and future capital gains. To my mind, there shouldn’t be any need to renounce over it. Might have been different if I were a multi-millionaire with huge assets still stateside.

    I do understand though why people abroad resent this citizenship-based taxation, especially for accidental Americans who’ve never set foot in America but who might have had an American parent, for instance. Also immigrant minnows who didn’t understand about FBAR who would by lower lying fruit than expats like myself with no assets in America any longer that the IRS could easily levy.

    I would imagine the IRS’s priorities will still be resident US persons hiding money offshore followed by immigrants, then very wealthy expats. After all, if they’re going to do an extensive audit overseas, they’re going to want to get as much money for their effort so it would be more efficient for them to pursue whales.

    It’s just such as shame though that so many benign players unwittingly entered into the OVDP/OVDI programmes and thus created so many complications and extra professional costs.

  56. @Schubert, All,


    Personally I am skeptical you’ll ever get any constructive attention from the Obama administration or the current US Congress (and BTW for the very brief portion of my adult life that I actually was a US citizen living in the US, I was a Democrat and never a Republican). However I’d be delighted to be proved wrong. I’m just not holding my breath.

    It should be brought to the light of day through media attention that this is yet another example of US expats being ignored / lack of representation.

    Why again are we supposed to be jumping through these asinine hoops for little or no gain to the US coffers?

    Steven Mopsick’s recommendation for further correspondence to Obama / White House, follow-up if no good response again and again and then reporting on on evasive non-response from Obama / The White House is strategy for Isaac Brock.

    … But I agree, those who are US citizens, and wish to remain so, need to be strategic about how to fight the mess their bone-headed, pathetic excuse for a government has created. Steven’s approach makes sense to me, and I can’t think of a better one.

  57. That letter from the White House is a bullshit response that does not address the issues. “Obama” does not address the subject matter (life-destroying FBAR fines). Some idiot staffer wrote this letter. This Obama response violates the 1st amendment (right to petition the authorities to redress greivances). Did Obama sign this personally or was it a pure form-letter? What a disgrace. I demand Obama’s resignation.

  58. This person should let go of his/her own attorney and then opt out of OVDI on his/her own. It may be frustrating and a longer process, but with this fact pattern it sounds like the best thing to do financially.

  59. I came to the conclusion: nobody knows how to handle FBARS, I hate to think this but it looks to me like a trap. You see, Americans Abroad have a Earned Income Exclusion and Tax Credits. So, they have nothing to hide, If they don´t declare some earnings is more for fear of the paper work than anything else. But the IRS started the FBARs issue in total silence, Let me repeat TOTAL SILENCE. And then when we started finding out about it we already were “criminal”s and had to pay enormous penalties. This is where they thought the money was.and perhaps is. And the penalties for amendments in the returns are higher than for other Americans. I can just imagine – without becoming paranoid – smart MBAs in the Treasury Department creating this trap to collect money of inocent and honest people.The TAS knows this. This in my evaluation is very unfair if not a criminal..

  60. When the government comes up with rules that make everyone a criminal, it is the government that is the real criminal.

  61. @omg,I love this quote attributed to Thomas Jefferson. It’s always worth repeating: “When governments fear the people, there is liberty. When the people fear the government, there is tyranny.”

  62. None of their hair brained ideas are going to generate enough revenues to keep the government afloat. Sooner or later the US government will have to fall to it’s knees and switch to a territorial tax system which is the only hope they have of attracting companies back to the US.

  63. bubblebustin So I am not paranoid. It is hard to believe that the US government would do this to trap its citizens and take money from them. They must be desperate. Incredible.

  64. Petros, or whoever can do site maintenance –
    You could move my FBAR post above to another thread – it’s too long perhaps for this one. It just seemed connected in my mind, because of the discussion of penalties collected in lieu of the zero tax owed. If this information about the flaws of FBARs is on the IRS site (not the Taxpayer Advocate’s), dated December 2011, have they have come to some (albeit small) realization of the FBAR problems? On the other hand, no further announcements or adjustments have been made to make the FBAR reporting any easier. The February 2012 GAO report “Reporting Foreign Accounts to IRS
    Extent of Duplication Not Currently Known, but Requirements Can Be Clarified”
    GAO-12-403, Feb 28, 2012 http://www.gao.gov/products/GAO-12-403
    amply demonstrates their awareness of the now even more difficult FATCA/FBAR reporting confusion, duplication and layered penalty structures – and its being implemented in spite of their knowledge that filers will now have even more of a challenge to comply accurately. The GAO report was prepared at the direction of Congress. So, perhaps it is willful penalty revenue collecting, or part of what they deem ‘acceptable collateral damage’ – with gravy.

    In any case, they are not doing anything to assist filers with the pitfalls, or to remove the obstacles to compliance. Basically, the onus is all shifted to the individual to make workable the impossible.

  65. An update from our petitioner’s attempt to get Obama to respond to an Expat Minnow’s plight….

    Following the suggestions here, this petitioner decided to write back to Obama, but finally has given up trying communicate with the White House. The latest robo response got a letter on Obama’s Human Rights policy.

    Here is the text…

    Dear XXXX:

    Thank you for sharing your thoughts with me. Many Americans have written to me about human rights around the world, and I appreciate your perspective.

    The United States was founded on the principles of freedom and equality, and our history is marked with triumphs and struggles in fulfilling these timeless ideals. Our task is not finished, and protecting these core values is a shared obligation and a priority for my Administration. No nation should be silent in the fight against human rights violations. When innocents in places like Sudan, Syria, and the Democratic Republic of Congo are raped, murdered, or tortured, it is a stain on our collective conscience. I am committed to reinvigorating America’s leadership on a range of international human rights issues.

    As the struggle for human rights continues around the world, we have witnessed an extraordinary change in the Middle East and North Africa.Country by country, people have risen up across this region to demand their human rights; too often, these calls for change have been answered by violence. The United States opposes the use of violence and repression against these men and women. Rather, we support a set of universal rights, including free speech, the freedom of peaceful assembly, freedom of religion, equality for men and women under the rule of law, and the right of people to choose their own leaders. We also support political and economic reform in the Middle East and North Africa that can meet the legitimate aspirations of ordinary people throughout the region. While change may not come easily, America will stand squarely on the side of those who are reaching for their rights, knowing their success will bring about a world that is more peaceful, more stable, and more just.

    As you may know, the United States has joined the United Nations Human Rights Council and is working to make this body as effective as possible. My Administration will also advocate for human rights in other international settings. In our relations with other countries, the issue of human rights will continue to be raised as clearly, persistently, and effectively as possible. Among other things, we will continue to promote accountability for mass atrocities; respect for the rights of minorities and women; freedom of association, speech, and religion; and freedom for people to live as they choose and love whom they chose.

    Our commitment to human rights is an essential element of American foreign policy and serves our national security. Through it, we will help to shut down torture chambers, replace tyranny with good governance, and enlist free nations in the common cause of liberty. To learn more about my Administration’s human rights agenda, please visit http://www.HumanRights.gov or http://www.WhiteHouse.gov/CPo..

    Thank you again, for writing.


    Barack Obama

  66. I hate what America’s doing and I hate still being tied but am bound by a sense of patriotic duty…I was admittedly brainwashed into the religion of the USA. 😛 Ties, ties, ties…we’re a naval family so cannot bear to dishonour my relatives and be deemed a traitor…I will grudgingly but dutifully ‘pay my fair share’ while secretly holding England closest to my heart.

  67. @Mona

    If you really have a sense of “Patriotic Duty” you should be open to renouncing. Patriotism is NOT loyalty to what has become a:

    – “Gangster Government” (as per the title of a book about the Obama Administration – you will find it on Amazon);

    – a government that believes that it is NOT bound by the constitution, the world of Obama “due process does NOT require judicial process”

    – a Government that had the temerity to lecture the supreme court that they should not overturn Obamacare because it was passed by a “democratically elected legislature” (the purpose of the court is to overturn the government when it exceeds the limits of its authority)

    I assure you that your “naval family” was fighting to preserve the antithesis of what the U.S. government has become!

    I am not saying you should renounce. I am saying that what you are describing as “patriotic duty” is NOT patriotism.

    Was it B. Franklin who said something to the effect that:

    Whereever freedom is, that is my country.


  68. @Renounce, thank you for your kind words. I am suffering many conflicting emotions and torn loyalties, as I’m sure you can imagine…and I apologize for often venting my frustrations on here but it’s very theraputic for me. I hate confrontations which is exactly what a renunciation would force upon me…I will see how I’m feeling when the dust has settled but, unlike the others, feel that to do so shortly after a messy disclosure could risk making me a target.

  69. @monalisa1776- the phrase “partiotic duty” is in the end being used for emotional blackmail, just as is the phrase, “if you love me you will sleep with me”. Don’t buy into it! Both phrases are the last resort of an abusive personality type.
    They are the phrases that are used when the other side runs out of rational arguments. The truth of the matter is that the U.S. doesn’t LOVE YOU! They could care less about YOU but they want you to believe that you are the one who is not seeing things straight.
    Your family and history has nothing to do with YOUR choice. The past is the past. Just as you can no more live off of patriotism than you can live off of love.
    In the end it all comes down to how the other partner is treating you. If he/she is beating you up everyday than that is NOT love.

  70. @Renounce. These are wise words and really how many here look at anything called “patriotism” (or blind patriotism). Thank you for the way you put these concepts into easy-to-understand words.

    @mona. If you eventually come to the decision of renunciation, (I think) you will IN NO WAY be dishonouring your relatives. Those that would call you a traitor are the real traitors to the original ideals of the USA.

  71. @recalcitrant,

    Exactly — the analogy of the abuse that some put up with in a dysfunctional relationship or marriage (and pass along to their children, the next generation, as OK) equates, in my mind at least, with the abuse in the “marriage” we have with the US. We are making societal gains that such abuse is NOT acceptable in a relationship and we at Isaac Brock are making US abuse “not acceptable” for US persons abroad.

  72. David S. from Denver, Colorado initiated a White House Petition asking President Obama to “Create a Do Not Kill List” in response to the NDAA and the recent revelation that Obama officially signs off on assassinations, particularly of American citizens. With 30,000 drones (some will be armed) set to take to the skies of the USA soon this petition actually seems quite valid. It already has about 4,000 signatures of the 20,000 needed by the end of June. I don’t think these White House Petitions get any serious attention from Obama in his bubble but I’m just pointing this out to illustrate what has become of the “land of the free”.

  73. @Em…

    The problem with the continuing expansion of Executive branch power, is that one administration builds on the other. Bush/Cheney really pushed the envelope, (to the praise of all NeoCons and Conservatives) and of course the progressives complained, and rightfully so. But then with Obama, ‘their guy’ gets in and continues to expand the power, and they go silent (with some notable exceptions, Glenn Greenwald being one).

    Now if a Republican gets back in, this will only get worse if you are to believe Romney’s belligerent stance on foreign policy issues and continued growth of our military power. Unfortunately, no one in our two party system gives up Executive power willingly, they just build on each others actions. They are afraid to reverse anything out of fear of being called weak on national defense. Obama is a case in point, in spite of his very aggressive actions related to Righteous Drone Strikes he is still criticized as weak on national defense by the Right even when he is out Bushing Bush! As soon as Romney becomes President, and expands on Obama, the Right will go silent again. We have one War Party in America, and it is called DemRep.


    You might want to target this twitter account… @AAforObama

  74. @ Just Me
    I completely agree with your assessment. Furthermore I see the dem/rep divide as a concoction to make Americans think there is a substantive difference between the parties. There isn’t. Democracy which incorrectly is identified with voting is a mere illusion, especially when it comes to a presidential election. This will seem like heresy but I’ve actually thought it would be better for the people of any country (USA included) to have a benevolent dictator (i.e. someone honestly dedicated to improving the lot of his/her people) — if it was possible to find such a person. I think it was Mark Twain who said the best leader would be the one who wants the job the least. The money and time wasted on elections of puppet leaders (those strings are pulled by the global corporate elite) could be much better spent. Just my opinion as I view things from a short distance away but across an increasingly high barrier.

  75. Em,

    I see another Canadian and noted liberal is calling on Obama to end the kill list… I bet the Conservatives are supporting O on this all the way…

  76. I am for Obama. Will like to see him re -elected. I wish for him to get the votes of Americans Abroad. I hope that soon he will address the issues that are making our lives so miserable. We have to find a way to let him know!

  77. Well, I personally liked him too, but his policies related to U.S. Expats is abominable, and he shows no signs of changing.

    I would suggestion you go onto this site, and tell other Americans Abroad who are voting against their self interest what your concerns are with his misguided and disastrous policies. Maybe you can persuade him to change course..


  78. I have written the White House, Democrats Abroad, and will do this now. I am also talking with Rep. Van Hollen and Sen. Cardin from Maryland. I like Obama to win with our votes. But he must address our issues.

  79. Pingback: President Obama opens dialogue with U.S. citizens abroad – Seize the day! Hope you wont’ get fooled again! – UPDATED | The Isaac Brock Society

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