Welcome to the United States: You now must pay your taxes to the USA

Snowbirds may become an extinct species, at least within the borders of the United States.  Few outsiders know this but Canadians live in igloos year round.  Snowbirds are Canadians who seek warmer climate, especially during their retirement years.  They have been a significant boon to the real estate markets in Southern states, especially Florida, but one should not forget places like my Dad’s trailer park in San Benito where numerous Winter Texans can play year-round golf and outdoor tennis. Mostly, they spend their enormous retirement wealth that it took many years working in Canada to earn.  Expect the snowbirds to start flying further south, to places like Cayman Islands, Mexico, or Costa Rica, anywhere outside the reach of the IRS taxman.

It is no exaggeration to say that United States border guards now have had tax enforcement added to their list of duties.  A few months back at the Expat Forum, Omater wrote a little anectdote (now apparently censored), still unverified:

I just got back from my local CGA who is doing our business tax return. He bought a house in the US at about the same time I did. I told him about my trip next week and he advised that I take copies of my last 6 tax returns, which I had already decided to do.

He said that last October a good friend of his who is a dual citizen as well as a CPA and CGA was headed to the US to visit family. They scanned his passport and told him that he could not board his plane for failure to file tax returns. The thing about this guy is that he had always filed his returns in a timely manner, every year since he had landed in Canada. He had to get his office staff to find 6 years of tax returns and fax them to wherever he was at the airport. By the time that happened he had missed his plane.

This is the only verifiable account I have heard of somebody being refused entrance to a plane headed for the states.

Numerous commenters considered the above story to be an urban myth.  But Omater now offers a couple more stories of Canadians–not US citizens–who are planning to sell their US condos as a result of the recent crackdown and the hassles that they are receiving from border guards (emphasis mine):

The stories I am hearing first hand are not about United States Citizens, but about Canadians. I had taken a water aerobic class and was sitting in the hot tub afterwords when one woman talking to another woman got louder and louder about being stopped at the border on the way to Palm Springs and were told that they had to file a US tax return. She was very angry and said they would give the place away before they filed a tax return to the IRS when it was none of their business, taxes or no taxes.

A few weeks ago I took my dog to the vet and she asked where in the south I was from. She then told me she had done her residency in Memphis, my home town. I asked her if she had used a green card and she said no and, “Thank God”.  She started telling me about her uncle who had a place in Arizona where he and his wife spent 6 months per year, mostly because of his allergies. This year they were headed down and were stopped at the border and told that they had been flagged as being required to file a tax return on their worldly income. When her uncle told them they never spend more than the 6 month allotted time, they were told that they could visit 6 months but would have to file a tax return based on a formula that would basically only allow them a few months per year otherwise. I once read that it worked out to around 120 days. (I am sure you know what I am talking about here.) However, the formula that these people were told about only allowed them a few months per year over a three-year period. Everybody is pretty livid that they will be required to pay tax and to expect no benefit in return.  I asked the vet how the IRS knew about her uncle and she didn’t know.

People are talking about selling as soon as the economy allows them to. We just bought a place last April, before I heard of FATCA and FBAR and thankfully we bought cheap. I hate it but we will have to sell. We had hoped to have 6 months a year in our little villa for retirement. I am not sure what we will do now, but it will not be in the states. I can tell you, we spent a lot of money down there. It will be a loss to a depressed little community whose people are always grateful for our business.

I talked to several Real Estate brokers and agents there and I wonder why they are not flying off the handle about this! If they think things are bad now, just wait until the last Canadian leaves Florida, California and Arizona!

Thanks for all you do!

The words, “they had been flagged” provides further proof that this is a systematic usage of border guards to enforce taxes.  I would like to track down when the border guards started doing the IRS’ dirty work.  Which POTUS approved this crack down?  Was it Obama, Bush, or did it start earlier than these two?


105 thoughts on “Welcome to the United States: You now must pay your taxes to the USA

  1. Hold on. Did I understand this article correctly? You’re saying that if a Canadian (or any other nationality presumably) purchases US real estate and/or stays there under the six months residency requirement that they become “US persons”, subject to worldwide taxation, FBARs for Canadian bank accounts and FATCA?

    I would find it reasonable to have to pay property taxes on the real estate purchased. Nothing else, period. Nonsense like this has overtime convinced me that if I get get some sort of summer home it won’t be outside of the EU! I hope that all of the Canadians affected are able to sell swiftly and move onto friendlier locales.

  2. I would just caution that second hand anecdotal stories as compelling as they may seem, do not a case make. I think you know that, and so I am just repeating for those that might need that reminder.

    It is the same with the Opt Out experiences we hear about. The results seem positive, but then they are still anecdotal, (there is no data base you can search or any IRS reporting requirements of results) and as such, you always have to be careful about the conclusions you draw based upon the stories we hear.

    It would be good, if one could ever find a real immigration officer or two who would be willing to be interviewed without attribution about what types of screens they are looking at, and if there is any systemic requirement from higher ups to inquire about tax filing status of Expats. Is that information even available to them to see online at those monitors they peer into?

    This would take some hard journalist investigative work to uncover evidence that one could substantiate. Does anyone know of any who might want to undertake that mission?

  3. @ Just Me: There is caution about anecdotal evidence, to be sure. But I’d caution likewise that, while reserving judgment, we should not simply dismiss the above stories. They are plausible in the current environment of fear and intimidation. Several people I know, including Calgary, have been intimidated into getting a US passport. Two legal writers have suggested that the only reason that the US is doing this is to trap more people into the tax net. There seems to be a belief in DC that enlarging the tax net will result in greater revenue, instead of looking at the unintended consequences of their actions: (1) Renunciations; (2) anti-Americanism on the part of former citizens; (3) Canadians selling their condos at a loss to avoid the IRS tax net; (4) investors selling their assets rather than allowing their investment accounts to become subject to FATCA.

    Stories like these, when framed against the background of our times, are plausible, and eventually will become part of the history of our times. Only the person lacking curiosity can deny it.

  4. @Petros…

    I understand those points. Plausible, yes, but gosh I would like to see or read some first hand reports and have some hard evidence to take to the bank, as that would be something we could really use. Where is that journalist that wants a challenge… 🙂

  5. @Petros, This morning’s Miami Herald includes a story about the Canadian media Mogul Conrad Black having been released from a US prison after serving 3 years for defraduing investors. He is back home in Toronto now, but the real question is after having “lived” in the US while in prison, is he now subject to US income tax on the income he earned back in Canada and elsewhere during this time of involuntary residence in the US, and forever or now that he is back home?

  6. @Don: “…stays there under the six months residency requirement that they become “US persons”…”.

    Depending on how long under the six months, sadly, yes. The “substantial presence test” sums up time spent over three years, with older years counting less than recent ones:


    So… spend 123 days in the US in each of three years, and on the third you’re a “US person” (123 + 123/3 + 123/6 > 183). That’s even though you’ve never spent more than a couple of days more than four months in the US in any one single year.

  7. @Petros The laws for being considered US tax resident on each year are clear and transparent for anyone who wants to read Pub 519. Actually, Canada and most European countries have similar laws considering a person a tax resident if the spend a certain amount of time or meet other “tax domicile” criteria:) So not a big deal. In this case I think the laws are “relatively” fair!!

  8. @ Roger Well, I am among those who believe that Black was wrongfully imprisoned, and as Canadian, I’d wish the narrrative in the press here would change to one of the overreach of the United States. Why is Jon Corzine still a free man. Which one of the banksters went to jail. The justice system in the United States goes after people like Black in order to justify their pay cheques but they seldom go after the real criminals. Fact is that your main criminals are in office defrauding the people of their Social Security, spending it in the biggest Ponzi scheme on planet earth. But no, they put Conrad Black in jail to show to public that they are going after corruption in Wall Street. Give me a break.

    This was a case of Patrick Fitzgerald
    , who also went after Scooter Libby. Black was a exonerated for most of the charges, and only two of the original 13 crimes Fitzgerald accused him stuck to him. But a successful prosecutor only has to get one or two charges to stick: the defendant must win against every single charge or go to prison. I am sure that the IRS believes that he should pay his taxes in the US, and even before his prison sentence, had given a bill for millions saying he was resident in the US. This becomes a pain in the rearend for Revenue Canada, to whom he likely paid taxes as a bonafide resident of Canada at the time.

    Black renounced his Canadian citizenship a few years ago in a pissing match with Jean Chretien. Now, having faced the US justice system, he has no more stomach for these kinds of games and he hopes to regain his citizenship in Canada. When I learned that immigration Canada had granted a one-year visa to Black, I nearly cried tears of joy for him and his Canadian wife.

  9. @ Alex The US has a residency that basically makes it wise not to spend more than 180 days in one year or more than 120 days in three consequetive years. This leads to a problem. If the person spends 150 days in the United States for three consecutive years and 215 days per year in Canada, then the person is considered bonafide resident by both countries. This leads to a tax absurdity and frankly, is not fair at all but favors the United States. It is also likely a violation of the Tax treaty.

  10. @alex – what you forget is in Europe you can work in another EU country and elect to be a tax resident of another for quite a period of time. The tax authorities show some flexibility in this respect. For example, you could work in Belgium for a year or two and pay your taxes to the UK. But of course you would have to claim unemployment benefit from the UK not Belgium in that event.

    The EU states better defined rules between them than the US or Canada. At the end of the day, the US wants it all its way and always be the minimum taxation rate for “US persons.” This is the concept that pisses most people off. They won’t let go. Trapping people in taxation rarely works as a good long-term strategy.

  11. So, is there some big plan by the US gov’t that I’m not seeing? They’re forcing US citizens that don’t live in the country to renounce. They’re forcing people who spend their vacation money there to go elsewhere. They’re forcing non-US people who invest in property in the US to sell and leave. They’re forcing people to give up any investments in the US. Are they battening down the hatches in preparation for something? I just don’t get it!

  12. @outragedcanadian, when the blind lead the blind they both fall in the ditch. That exactly describes what is currently happening in the US today. The “plan” is to ignore the likely consequences of legislation before it is introduced and enacted. “Don’t confuse me with facts, my mind is already made up” is the prevalent attitude both on Capitol Hill, on both sides of the aisle, and the White House today.

    It reminds me very much of the ad campaign on US TV today urging people to acquire flood insurance. One very stupid guy is shown standing knee deep in water and being asked “What is your plan?” His reply: I don’t have a plan.” That describes those writing and enacting our tax legislation since 1962 when the Tax Act of that year was, at the request of the Administration, enacted and signed into law by president Kennedy subjecting US citizens resident abroad to US taxation on their world wide income. The camel’s nose was under the tent and since then the tent has been torn into shreds.

  13. http://www.accountingtoday.com/ato_issues/26_5/tax-amnesty-IRS-state-federal-FBAR-62474-1.html?pg=1

    Here’s an article from Accounting Today, about ‘voluntary disclosures’ – but it is skewed towards those INSIDE the US – even in the discussion about federal taxes (vs. the state tax portion of the article). Those quoted keep saying that offering any ‘amnesties’ at all, – particularly at the federal level – is a bad idea. Still no awareness of the impact or even existence of those duals, or living outside the US permanently, or those who are ‘snowbirds’ and others who are not US citizen residents. @StevenMopsick – this is indicative of the lack of any context and understanding of the situation we face as ‘internationals’ – it illustrates the level of professional ignorance inside the US as to how this is playing out.


    “It’s always better for a taxpayer to come forward voluntarily when they are in violation of a tax rule or regulation. In addition to the greater flexibility the Internal Revenue Service gives to examiners when dealing with voluntary disclosures, the IRS and the states have had a number of formal programs encouraging taxpayers to come forward in exchange for greatly reduced penalties, and a reduction in the amount of interest owed.”

    “While the programs do produce immediate revenue, some oppose the idea of amnesty because it seems to reward bad behavior. “It’s better to have people in the system than out,” said Saul Brenner, tax partner at Berdon LLP. “But there are people doing their civic duty, paying taxes all these years, and now you’re giving a pardon to those who failed to do this – so what’s the point of being compliant? It’s rewarding bad behavior, which is one reason why a general amnesty hasn’t occurred at the federal level.”

    “States like amnesty programs for the simple reason that it brings in money and helps them with the cash crunch du jour,” said Robert Kerr, senior director of government relations at the National Association of Enrolled Agents. “But from the tax administrative standpoint, amnesty is a bad idea because it undermines a belief in the justness of the system. It’s even worse when there are recurring amnesties. It works better when they say, ‘This is the only one, and we’re not kidding. We’re not doing another one for X years.””

  14. @petros I wasn’t aware of that nuance between US and canada.Seems like a bilateral tax treat issue Canada and USA . But , in any case, the US side is at least clear with respect to number of days so Caveat Emptor:)

    @john so the UE system is same as system within different states in USA. But if live outside of EU and spend time in EU, then each EU country has specific criteria about treating you as tax domiciled there and those criteria are very similar to USA criteria.

  15. @outragedcanadian

    Remember that the USA is still the most attractive place in the world for importing capital. If the USA opens the immigration doors , even a little, there are an inexhaustible number of WEALTHY Asians and South Americans, for example, who would just love to come here and become residents and pay their taxes to USA.

    That advantage puts the USA in a different league than other countries.

  16. @ alex I am afraid you are mistaken. The United States is far from a class on its own. Financial advisers around the world are warning their clients to stay away from the United States. Soon the US dollar will be worth less than toilet paper, which has intrinsic value, unused as per indicated, and used as composte. I agree caveat emptor. That means keeping your money out of the United States. That was the mistake that Conrad Black made. The other mistake is that he thought he could clear his name in a fair and just court system–he learned the hard way that it is neither fair nor just. That is the unintended message of the Conrad Black case. You can do something that is perfectly legal here in Canada, and then go to jail for it in the United States. Best to keep your investment capital out of the United States. As an investor, I actively short the United States dollar. I expect a huge drop in value due to inflation.

  17. @alex – you’re buying into the “myth” about so many rich people wanting to move to the US. There are ALREADY investor programs, which have been around for many years. There’s no blocking wealthy people from moving to the US. There are no flood gates. There is even a program where if you buy an expensive house, you can get a green card.

    A recommended viewing is this — http://www.youtube.com/watch?v=w2XYsgUosEI

    Sorry about the quality. The guy was shaking when he was recording this. It’s funny nonetheless.

    Actually, I saw some reports last week that said that there really ARE more illegals leaving the US than going in. Who ever thought that would happen!!

  18. @geez
    hi. Do you have any concrete information about that program existing for foreign investors to purchase real estate? as far as i know it is a bill which was proposed in congress but never passed!!! I am told that it is not easy at all for wealthy foreigners to get green cards unless they actually move here and are willing to invest in a new business and employ at least 10 people. It is called EB-5 visa. That is the only program!!! if you have other information please let me know.

    The illegals leaving are the ones at the low end of the economic scale so doesn’t really say anything about wealthy people wanting to get green cards. I believe wealthy Russians, Chinese and Brazilians, among others, would immediately enter the real estate market if it led to green card. that is what the realtors are saying:)

  19. @Petros
    I am not sure about the future of the USD but from what i see the US stock and bond markets are the investment vehicle of choice now that Europe has gotten hit so hard.
    The PIGS countries have gotten mauled in last 12 months.US has its problems but markets seem to feel it is still safe haven compared to europe.
    I wish I had crystal ball for the future:)

    maybe physical gold?? or asia??
    i wish i knew:)

  20. There are many Brazilians who are coming as tourists to purchase vacation condos and homes in Miami, but not with resident visas.

    I am aware of one Brazilian businessman I met a few years ago from Sao Paulo who bought an auto dealership just a couple of miles away. I do not know the details of how much money he broght with him, but his entire family moved here. He still had investments in a manufacturing company in Brazil He told me he knew nothing about automobiles, but that he was learning fast..

    He subsequently sold the dealership and I have no idea what happened to him or where he is today. If he were to come today and still had properties and investments back in Brazil his income there woulld of course be subject to US tax and very likely he could have a problem, with FATCA, or maintaing bank and other financial accounts in Brazil. Brazilian banks do not appear to be ready to embrace FATCA because there are several requirements it places upon them which would require them to violate Brazilian law and even Brazil’s constitution. More information will likely come out during the IRS hearing on FATCA on May 15 in Washington.

  21. @alex
    The U.S. is certainly not the only country attracting the wealthy from Asia and other countries. Come to Vancouver for a visit – the streets, the schools, the neighborhoods are filled with wealthy people from Korea, Hong Kong, mainland China etc. I have been told it is quite similar in Toronto. I recently stood on a busy street corner in Vancouver’s Westend with my sister, who was visiting from Washington, DC. She pointed out to me that we were the only two people speaking English.

  22. @Alex : investing in currencies and sovereign debt is bad everywhere. Read Zerohedge: there is no good place to put your money: only bad and worse. As a result of my inflationary view, I think the Canadian resource sector is better than most bad places, particular in down swings like at present. The Chinese think the same. That’s why they use their US dollars to buy Canadian oil & gas companies, like Daylight Energy which Sinopec recent purchased at the double the market price. But even what makes sense according to macro-trends does not always do well in the short term because there is massive deleveraging going on in many different markets. In Toronto we have a Chinatown (at Spadina), and new Chinatown North, Markham, which is more recent Chinese money. So yes, we are getting massive influx of Chinese money–they don’t like the high taxes of Canada, but they do like our resources, our wide open spaces and the freedom of Canadian culture.

  23. @justme I understand completely where you are coming from, but the “second hand anecdotal stories” you mentioned were actually stories told to me first hand by the people I mentioned in the stories. I have heard second hand stories too, but unless I can talk to the people involved I don’t write about them. Like you, I feel I must be able to back up what I repeat in order to stay credible because frankly, most people find the truth hard to believe.

    A client (Canadian) was in town last week from Toronto and we took him to dinner. This man is an executive in a very large global company. In talking about a few of his American counterparts I brought up the tax issues. He asked why it had not been reported on CBC, etc and I told him it actually had some play there in the past as well as having been reported in major newspapers. He found it hard to believe and asked me to send him links. His reaction was the same that I get from many Americans and Canadians alike: disbelief!

  24. @alex – you’re right– that’s 1 way for someone to get a green card. There is another program for buying houses (because there’s a glut) and investing in a type of investment fund, if I remember correctly. The latter, I’ve read, if ripe with fraud. Yeah, fraud even in the “high and mighty – do not wrong – USA”.

    Here’s the link about buying real estate = get visa. This is all OVER the mainstream media or was, since it’s from last year:

    Having a company and creating jobs is nothing new. It’s actually like that for many countries, I know for a fact in Brazil and Portugual do this. What I can’t say is how easy or difficult it is to set up a company and hire employees….

  25. @geez
    The link you sent me refers to the Schumer-Lee proposal. But I believe that bill was NEVER passed. So EB-5 is only quick way for wealthy foreigners. anyone know otherwise?

  26. @ Petros
    I agree with your opinion of Conrad Black. He did not get justice in the American court system. He was to all intents and purposes a politically expedient prisoner. They wanted desperately to put someone in jail but not a high profile American bankster. It was all a diversion to make it look like they were doing something. I hope his Canadian citizenship will eventually be restored but I just want it to be AFTER my husband gets his Canadian citizenship papers because his application went in before Mr. Black’s did … no queue jumping, that’s all we ask.

  27. ^^ Alex, that looks like just a proposal for now about the buy 500k in real estate = get a visa.

    I know half a dozen lower-middle class (no education) Brazilians who are now US Citizens in the US. When I see them again, I’ll ask the how they did it. Because from what I know, if you are on an expired visa in the US, you can’t become a citizen.

    But if they were able to acquire US Citizenship, I don’t think it’s very difficult to acquire.

  28. @Petros
    Well. Zero hedge is another guru:) among the others.
    I understand Chinese are big investors in Australia also and UK. They want a safe haven – english speaking and perceived legal system which works.
    Wealthy russians and Brazilians want the same

  29. Guys who earned their riches in China by underhanded means prefer U.S. investment visas. Canada is not a safe haven for Chinese criminals, as the Lai Changxing and Zeng Hanlin cases illustrated. They don’t care how much they lose in tax as long as they can launder some of their ill-gotten gains and avoid getting extradited back to China to face the music.

    In contrast, guys who earned cleaned money through legitimate enterprises they built up with genuine business skill increasingly prefer Canada, Australia, or New Zealand. Or they stay home entirely. I just noticed someone’s name in the Federal Register who I’m pretty sure is a famous entrepreneur from Taiwan who now lives in Beijing. (I’m pretty sure it’s him and not just some random guy with the same name, because someone matching his wife’s name is listed in the same quarter). I’m debating whether or not to do a post on this because as far as I know it’s never been mentioned publicly and it might just bolster the claims of ignoramuses like Al Lewis that all expats are fatcat tax evaders. (Though looking at this guy’s situation, I don’t think he would have saved much tax).

  30. @geez
    US citizenship is EXTREMELY DIFFICULT to acquire. if it were easy there would be an interminable line of the economically middle and lower classes stretching from los angeles to peking, from miami to buenos aires, from texas to southern mexico, and from new york to moscow and new delhi. zillions wanting to come here. don not underestimate that.
    there are hundreds of millions in the world who dream of living in USA:)
    only way to acquire is marriage to us citizen .


  31. You must be a lawful permanent resident (green card holder) of the US for 5 years in order to apply for US citrizenship. For foreign spouses the green card residency requirement is 3 years. There are excptions for members of the US armed forces which allow this process to be shortened. Here’s the website:
    Lawful permanent residents are encouraged to become US citizens.

  32. @ Roger Conklin
    I was a Resident Alien (that was the term used then, not the now more euphemistic sounding Lawful Permanent Resident) for 12 years and they certainly never encouraged me to become a US citizen. It would not have done any good anyway because I would never give up my Canadian citizenship and had no interest in becoming a Dual Citizen. The green card for me was merely a permission granted card making it possible for me to live with my new American husband in the USA for what turned out to be 12 years.

  33. @Em, the “encouragement” to which I was referring is the words printed in the link. They go into some detail in listing the advantages of becoming a US citizen. Many, like you, come here on a temporary basis expecting to return to your homeland.

    Most of our political leaders here in the US make the mistake of believeing that persons who come to the US do so for the purpose of becoming US ctizens, but that when Americans go abroad they never do so for the purpose of becoming a foreign citizen, unless it is to evade US income taxes.

  34. @outragedcanadian, and of course to that great tax haven of Sweden. In 2006, according to the Treasury Department statistics for that year, there were 1,399 IRS Forms 2555 claiming the Foreign Earned Income Exclusion submitted by US persons with addresses in Sweden. And Sweden is, as I undertand it, the only country where social security payments can be claimed for US foreign tax credit purposes because, in that country, they in fact are not separate payments but all lumped with and included in a single tax on income. So that is a REAL tax haven. If social security is a separate tax you cannot claim it for foreign tax credit purposes on your US tax return. So you end up paying double social security tax if you are US citizen self employed abroad. And that can kill your ability to compete with everybody else in that country.

  35. @ Roger Conklin
    I was just going by our USCIS interview to get my green card issued. The whole emphasis was on our “sincerity” about being married. There was no mention of how much they wanted me to become a US citizen as soon as possible. Truthfully my husband faced the same type of questioning at Canada Immigration when he applied for his Permanent Resident card here. I still remember the questions about whether my husband had ever worked in Canada while still under the temporary visa restriction. My husband had not worked but the officer said something to the effect that they could have had him followed. However at the end, he did get a welcome to Canada from the man.

  36. @Em, the marrige of foreign nationals to US citizens used to be a growth industry here in the US, so that the foreign person would qualify for a green card. Then the instant it was received they filed for divorce and the US citizen was available for marriage to another foreigncitize willing to pay thousands of dollars for this “Service.” So a fewn years back Congress made this illegal and subject to severe fines.

    I worked with a Brazilian-Venezuelan dual national in the US who had come to the US to go to the University and eventually become a naturalized US citizen with 3 citizenships. He fell in love and married an Italian girl and helped her apply for a Green Card. They seemed very happy together. But the day she received it she walked out on him. To say he was broken hearted is inadequate to describe what he went through.

    He eventually went back to Brazil, married a lovely Brazilian girl and they now have a family. He is sales manager for the Brazilian subsidiary of a US company.

  37. @ Roger Conklin
    I understand why they questioned us so much about our marriage. I was just pointing out that there was no encouragement for me to become a US citizen. Maybe they didn’t like the looks of us and were hoping we’d go to Canada eventually (no medicare drain on the US in the future). We didn’t disappoint them in the end.

  38. @Em, yes, the first hurdile is the green card. One hurdle at a time.

    It is onlly after you have passed all the litmus tests and have it in hand that, when you go in and look at the how to apply for citizeshp page that you find the propaganda on what a great thing it would be to become a US citizen.

  39. Alex – with all due respect, you are really sold on the USA being the safest haven and rich people around the world. Lemme give you an example:

    Paulo Maluff – Brazilian politican. Loved by the people, but has very sticky fingers and a very creative mind for stealing money from public coffers. He sent money through a correpondent bank in New York to banks in the CHANNEL ISLANDS. As a result, the US indicted him and he got put on Interpol. He eventually worked the case out. I don’t know how much he had to pay off the US.

    Notice – he used banks in the ** Channel Islands **, most likely a dollar account. Next time, I’ll bet he uses Euros or Sterling. The point is that there are many countries that have up-to-date banking systems and offer multi-currency accounts, The US isn’t the only stable place on the planet.

    And if you are a criminal, why would you want a legal system that actually works? There have also been a few Brazilan execs. that have also been indicted by the US for insider trading because their companies trade on US Exchanges. For most corrupt people, I bet the US is the LAST place they want to actually go.

    For an honest Joe Schmoe with hardly any money or future, I bet the US is at the top of his list, with the UK second.

  40. @Geeez,, Paulo Maluff – wasn’t he the governor of the State of Sao Paulo, when I lived in Brazil 40 some years ago?

  41. @badger…

    Don’t know whether to thank you or curse you! LOL That Accounting today story got my blood boiling, as you can imagine.. 🙂 It did wake me up this morning more than the coffee!

    I had to fire off this. Just can’t help myself… 🙂
    My dear Mr. Russell…

    First of all, the programs that the IRS has been operating in the past 3 years are hardly an amnesty. Even Shulman has said they are not. Not sure why we continue with this myth. Requiring people to go through a 2+ year inefficient process, to pay up to 27.5% of total offshore assets as an “in lieu of penalty” can hardly be called an amnesty!

    Add onto that all the cost associated with hiring professional practitioners to help you collect your 8 years of data and amend returns, is not an insignificant cost in and of itself. Then, with foreign tax credits, you may not have any significant tax liability at all!!

    This cost was also heaped on thousands of benign non willful compliance failures by Minnows yet you all blindly believe IRS claims of willful tax cheating Whales coming clean. Some egregious Whales did get relief, but you all have no idea of how many were Minnows because you NEVER ask. You just accept IRS assertions.

    Also, there is very little data to support the contention that this new compliance will bring in a regular stream of new revenue. The IRS trumpets $4.4 billion collected, but ever idiot knows that this might just be “one off penalty revenue” and not reoccurring tax revenue. Not one journalists asks a question or tries to understand what is a happening and now much real new revenue this “non amnesty” compliance program is producing.

    You are told that 33,000 have come forward, without any historical information or basis to determine if that is a statistically significant number.

    I would think that readers of Accounting Today, would understand that one number does not a story make. You need a lot of other numbers for reference and context, and the IRS provides none, and no one asks!

    Can you imagine a Conference call with a CEO being able to get away with such nonsense?

    What is the compliance rates for FBAR offshore account reporting before and after these programs? Did we go from 3% to 5% ? Interesting to know, but again, NO ONE asks!!

    I don’t get it. How come when it comes to IRS pronouncements that journalist and professional practitioners are sooo passive?

    Now, if you want to know what a REAL amnesty program is, look at what Canada does…

    Google this…Voluntary Disclosures Program for the Canada Revenue Agency

    I quote:

    “The Voluntary Disclosures Program (VDP) allows taxpayers to come forward and correct inaccurate or incomplete information or to disclose information they have not reported during previous dealings with the CRA. Taxpayers may avoid being penalized or prosecuted, if they make a valid disclosure.”

    So, if you want to talk Amnesty lets start there with a REAL Amnesty and not confuse that with what the IRS is doing now. It is having lots of unintended negative consequences and may actually be lowering future tax collection as many Americans Abroad are now walking out the door and renouncing their Citizenship rather than subject themselves to this stupid “non amnesty” jihad.

  42. alex – “only way to acquire is marriage to us citizen .” – not true and you said it yourself. You can set up a company and employ people. Or you can invest in the pools, which is what 80% (reported) people do.

    I’m not arguing that people don’t want to go to the US. I believe they do.. still.. even with the idiotic laws. What I don’t agree with is that it is impossible to to get US citizenship because I know too many people who have gotten it. I have to go out now, but I’ll look for more eligibility requirements when I get back. I wish they would let me sell mine!

  43. Roger, yep, that’s him. Very interesting story. With the World Cup construction projects and the “way” things are here, I wouldn’t doubt it if a lot of high-level people get indicted by the US 🙂

  44. @geez
    i am just stating the facts- not necessarily being sold. I was not referring to criminals. think this way. There are few wealthy americans who want to move and keep their assets in china, russia, or india , or brazil while gthefre are maybe many millions of the latter (rich and poor) who want to do it in usa. even getting a usa tourist visa is a big challenge for young foreigners.

    re; citizenship. yep. but what is a “pool”. i didnt understand that one? many foreigners get citizenship but they are a drop in the bucket compared to the ones who want it and cannot even get a tourist visa to usa. i have employed hundreds of young college grads in south america and in india and russia and I know they ALL without exception would give up everything if they could come and stay in usa:) even i was amazed when i saw it.
    but seeing is believing

  45. @omater

    Thanks for your additional information on sources. Really appreciate it… As for the ‘disbelief!’ It is a common response I get too…

  46. alex – I mentioned the Channel Islands because there are MANY places someone can park money in a “safe place” like Switzerland. (Personally, I think that the US is attacking Switzerland because it is one of the safest and they are competition to the US). Most countries nowadays have deposit insurance.

    Pools – search on “pools of capital” in this link:
    ^^ I have seen uncountable links to this same information so it’s common knowledge.

    You said it was impossible to get US Citizenship. I found a link for you. Here is how to get Citizenship starting with a student visa and then working your way up:
    I know of a few European nationals in the US now who are on work visas or green cards. Whether they apply for citizenship, I don’t know. I certainly told a few of them of the drawbacks. If they heed my warnings, I don’t know…

    It’s also very commonly known that there are some very rich Brazilians that virtually “commute” between the US and Brazil, like Silvio Santos. I don’t know if Silvio is a US Citizen, but I doubt that he is. Moreover, with a typical tourist visa, a foreigner can live in the US for quite a while. Reference: the B vias. http://en.wikipedia.org/wiki/B_visa . In other words, for someone to have a house in the US and spend several months out of the year, citizenship is not required, whether they want it or not.

  47. Alex, reference pools of capital:

    Citizenship impossible?: The pathway from student visa to citizenship:
    I know of a handful of people that actually did this. I know others that went to the US on the H1B visas. Whether they decided/have decided to be US Lepers, I don’t know.

    Even if someone needs to do business in the USA, have a house in the US, and spend 6 months out of the year in the US, the only thing that’s necessary is the B visa.

  48. ok, I logged out and logged back in:

    Alex – pools of capital – http://blog.do-business-in-china.com/2011/06/10/visas-lure-foreigners-seeking-u-s-residency-real-estate/

    how to go from student visa to citizenship:
    I know a few people who did this. Others I know were hired on H1B visas. I told them all the downsides of being a US citzenship should they ever leave. Who knows if they’ll listen to me.

    Someone doesn’t need US Citzenship or even Permanent residency in the US to have a house there and live there for several months out of the year. A “B Visa” is sufficient:

    The REAL people who want to immigrate to the US come from unfortunate countries. Check out these stats from the Visa lottery:

    “Taking into account dependents, there are more than 10 million participants in the 2008 Diversity Visa Lottery. Most of the applications were from Africa and Asia: 41 percent of the total came from Africa, 38 percent from Asia, 19 percent coming from Europe, and two percent from South America, Central America, and the Caribbean. The largest number of applicants came from Bangladesh (more than 1.7 million applicants) followed by Nigeria (684,735) and Ukraine (619,584).”

    Yeah, a whopping 2% (two percent) from South America and 41% from Africa. Who wants to move to the US? Probably lots of Eritreans! 🙂

  49. @geeez, There are lots of foreign citizens with green cards who have lived in the US for many years but have never become US citizens and they never will. The only real advantage is that as a citizen you can vote. But there is one disadvantage if you are not a citizen. If you are conviced of a felony then you can be deported to back from where you come from, after you complete your sentrence.

    There is no forgiveness for that. When that law was enacted a significant number of foreign citizens – long term resididents were deported, evn though they had long since completed their sentences, learned their lessons and become upstanding residentents in their community. This is one law that was made retroactive so no matter how long ago you had been in trouble and how exemplary your life had been since, you were on the list to be rounded up and deported. It happened to a good friend of mine, a Haitian. As a teenager he was arrested for a drug offence and went to prison. Thirfty years later after his US born children were adults, he was stopped for a routine traffic stop, his name was on the deportation list. He was deported. His wife joined him in Haiti and they now operate a business there. But he can never enter the US again. Had he become a US citizen he would still be here.

  50. I would like to know why my comments are not showing up here? When I posted it, it didn’t show here. Then when I tried to post the same comment again, it said “Duplicate: You’ve already said that.”

    I’m just trying to post some stats showing Alex that people from South America don’t really care about US Citizenship….

    The statistics I wanted to provide the link for (wikipedia Visa Lottery), show that the majority of people who want to get a permanent visa to the US are Africans. Next Asians. Only 2% of the Visa Lottery applications came from South America.

    Even my own Brazilian wife remembers a time when Brazilians really wanted to work in the US and they were able to make a lot of money. Things are different now.

  51. @geeze..

    That has happened to Moby too. There is some spam filtering on Word Press, and for some reason some comments drop into it. That means one of the Administrates, Petros is one, has to look for it, and pull it out and post it. Hopefully he will see this, and bring it back into the open. It is a glitch, so to speak.

  52. @geeze,
    Do you remember the TV series in Brazil titled America? Stories abrout Brazilians who had immigrated illegallhy to the US? is it still being broadcast? I believe it was on Rede Globo.:

    Here are some thoughts on why there are so manhy Canadians with dual citizenship entering the US:
    It just occurred to me why there are so many Canadians which the US regards as US citizens that are entering the US with Canadian passports which indicae they were born in the US:

    That is because Canada is a visa-waiver country, so Canadians, with a valid Canadian passport, can enter the US any time they please.

    But if you are a dual US citizen from Mexico, Brazil or from any other country which is not a Visa Waver country, you must have a visa issued by a US consulate stamped in your foreign passport in order to enter the US.

    And if you go to a US consulate abroad and your foreign passport indicates you were born in the US, the consulate will refuse to issue a US visa and stamp it in your passport. Why? Because you are a US citizen. So the only way you can travel and enter the US is with a US passport. So instead of a visa in your foreign passport you will be issued a US passport upon presentation of a valid US birth certificate. Absolutelly no US consular official will stamp a US entry visa in the foreign passport of a person who also holds US citizenship.

    Canada I believe is the only visa waver country in the Western Hemisphere. Argentina was for a while, but no longer is.

  53. @geeez, @Just Me,

    I un-spammed geeez’s comments — so they now appear in the commentary to this thread.

    You’re right, Just Me. Someone has to physically go in each time online and look at all the spam that has accumulated, then take appropriate steps to un-spam.

    Apologies, geeez. I think I also freed Moby from spam earlier today or yesterday.

  54. Roger. Yes, indeed. I know of a case where a Brazilian girl married an American guy. I met both of them personally in Rio Janeiro about 4-5 years ago before they got married.

    They both live in the US now. The Brazilian wife went to the university and now has an excellent job. I’m very proud of her.

    The best thing she can do is become a US citizen to avoid the potential complication that you mentioned, especially if she starts having children.

    When I say that I don’t want US Citizenship, it’s due to the headaches we get by living overseas. Journalists say that “we are selling out our country” or “we don’t want to pay our taxes”. This is complete rubbish. But just because I don’t want US Citizenship doesn’t mean that I wouldn’t recommend it for other people.

  55. Thanks Calgary.

    Roger – “America” was a novela (soap opera) that aired shortly before I arrived here. Yep, I understand the situation you are talking about, but that’s why there is a very strong chance I’ll have a CLN in hand when I ask for a tourist visa. All I’m waiting for is to know my citizenship documents are being processed in Brasilia before I go renounce because I don’t want to be stateless for too long.

    And no, the stateless thing doesn’t scare me one bit because a stateless person can still travel on documents issued where they are a resident. Being stateless won’t affect my life 1 drop where I live because I do everything as a Brazilian and not an American. My US passport is getting moldy because I never use it.

    But the documents for Stateless people cost A LOT more and are only good for a round trip, there and back. It seems like a waste of money to travel as a stateless person. This is the only reason I haven’t renounced yet.

  56. The spam filter sometimes takes out good messages. It is important to us. Because it makes it possible to eliminate messages from people we don’t know. Spam is designed to look like regular comments, and Akismet takes out all of the spam messages of known spammers, but only occasionally good ones too. So we have people who regularly check the spam for the good messages, and we pay attention when we receive e-mails that good messages are being filtered out.

  57. @Roger:

    There is no forgiveness for that. When that law was enacted a significant number of foreign citizens – long term resididents were deported, evn though they had long since completed their sentences, learned their lessons and become upstanding residentents in their community.

    There does exist one obscure exception: Vietnamese who arrived before 1995. Hanoi is not obligated to accept them for deportation; effectively they’re stateless (Here’s the text of the relevant treaty). This is a big issue in the Bay Area now because a guy who couldn’t be deported in 2006 is now back in police custody for a quintuple-murder.

  58. @geeez:

    For most corrupt people, I bet the US is the LAST place they want to actually go.

    If you’re a corrupt person from a democratic country like Brazil, maybe. If you’re a corrupt person from a dictatorship like Iran or China, it’s easy to stick around in the US by selling them some sob story about how you’re being persecuted for your political views in an “Axis of Evil” country. When of course you’re really being “persecuted” for stealing hundreds of millions of dollars from widows and orphans. ICE are very famous for their extremely lax investigations the source of the funds used to apply for EB-5 visas. And “treaty investor” (E-2) visas don’t even require you to make a token attempt at proving lawful source of funds. The U.S. does not really give a damn about its obligations under the UN Convention Against Corruption. Like the State Department claims:

    In U.S. practice, treaty provisions may be self-executing or non-self-executing. A self-executing provision is one which requires no implementing legislation to take effect as U.S. law; a non-self-executing provision is one which requires implementing legislation to be enforced as domestic law. Excepting Articles 44 (Extradition) and 46 (Mutual Legal Assistance), the obligatory provisions of the Convention would require legislation but, with the reservations taken, the existing body of federal and state law and regulations is adequate to satisfy the Convention’s requirements for legislation, and thus further legislation to implement the Convention was not required, and the Convention is consistent with existing U.S. law

    Also, the naturalization rate in the U.S. has been falling for many years. Divergent Trends in Citizenship Rates Among Immigrants in Canada and the United States:

    In 1970/1971, about two-thirds of foreign-born residents in both Canada and the United States became citizens of their new country. Thirty-five years later, in 2006, the percentage had risen to 79% in Canada, and fallen to 46% in the United States. Some of the decline in the U.S. rate is due to a rising share of unauthorized immigrants, who are not eligible for citizenship. However, even after accounting for this fact, there was still a divergence in the citizenship rates between the two countries, particularly between 1970 and the mid-1990s.

    U.S. citizenship is simply no longer as attractive as Homelanders think it is. Here’s a Chinese article from last month about the reasons behind this phenomenon. Google Translate does an okay job on it, surprisingly.

  59. @Just Me, re earlier comments about the Accounting Today story – sorry about boiling your blood! Thanks though for making that reply. I was just flabbergasted by the quotes from so-called ‘professionals’. Plus, they were not interested in whether those abroad perceived that the system would treat them justly and fairly (and thus comply). Also, about VD programs providing ‘flexibility’ – for who? Did they mean the ‘flexibility’ to fine people into dust – based on the incomprehensible and growing list of forms and requirements – in the absolute absence of any actual tax owing that they could penalize?

    And,re; ““But from the tax administrative standpoint, amnesty is a bad idea because it undermines a belief in the justness of the system”

    Okay, lets take a poll: does anyone reading here feel that they believe that the current system is just? When all the evidence we have so far is that ‘justice’ is not even part of the design – not even part of the IRS and US intent – just raising revenues however they can. Otherwise, why would it be so problematic to answer the Freedom of Information request by the ACA and others?

    By-the-by, what is the progress on that? Bet they release some sketchy useless answer way after the election?

  60. @Eric…
    thanks for the Chinese article. I have a good friend who just split her family in two citizenship wise with her getting a US citizenship, and her husband refusing to do the same. They are both living with their US children in Beiing. I tried my hardest to make her reconsider what she was doing. Last I talked with her, she was in SFO sitting outside the Chinese Consulate waiting to get her visitor visa to get back to China. She just made her life so very complicated, but I could not convince her otherwise. Will see her this summer, and see what she is thinking now.

  61. @Badger…

    It was good to start the morning fired up and ready to go. I am surprised how quickly I can pound responses out these days, so it didn’t take long. When I started months ago it was more of a chore. I am sure few if any read them, but it makes me feel better.

  62. @Eric, There is anothere exception besides Viet Nam: Cuba. Cuba will not allow Cubans to enter Cuba if deported from the US. Since this is the case, Cubans resident in the US are allowed to stay because Cuba refuses to take them back.

  63. @geeez, get your Brazilian citzenship before you renounce. Having to travel with a Salvoconduto for persons with no citizenship is, so I am told, a real pain. I knew a Russian born in Shangahi when I lived in Brazil who had one before he got Brazilian citizenship. His parents had fled the Soviet Union for China as refugees so they had no citizenship when they all fled to Brazil as Mao was moving to take over Shanghai.

  64. Eric – nice article – translation was not perfect, but I got it. I think seeing an article written by someone from a different culture and in a totally different language, emphasises the “serious” of this US decline

    The part I liked best was “Once upon a time, naturalising in the US would allow someone to travel anywhere in the world…..”

    Nowadays, any European passport allows someone to travel almost anywhere. Even a Brazilian passport allows someone to travel to Europe visa free.

    The world has changed, but the US doesn’t want to accept it. Even more mind-boggling is how the politicians in DC can’t see this.

  65. Roger, yeah, statelessness is a serious issue, and I think countries that allow children to be born stateless should be sanctioned and punished until they change their laws. In many countries in Europe, if the parents are stateless, then the children acquire the natonality of the country. This is the only exception to the jus sangis citizenship that I have found in Europe.

    For me, statelessness makes no difference (slapping my hands Brazilian style). I have Brazilian dependents so deportation is only a risk if I were a major Colombian Drug Dealer or I ticked off the wrong politicians, but I am/will do neither. But if I WERE stateless, I would have to go to the US Consulate TWICE, and pay to travel there, and pay for the travel card. It’s not worth it for me yet. Plus, neither my wife, nor my son have passports. We’re not in a hurry because he’s too young to travel.

    As far as becoming a citizen of the US, if you ask thousands of the average Brazilians on the street, “Would you like to get a green card to the US?” – After thinking about it for a long time, I bet only one or two would accept it. Why?

    Because someone can make money here. AND they have more holidays, they don’t have to learn another language, and they can can stay close to their friends and family. Setting up a life in a different country is VERY HARD and requires a lot of hard work. I think the average Brazilian can see that.

    One time I was in a corner bar and in came a Brazilian that naturalised in the US. I talked to him for a while. When he left, a guy that owns a computer store said “I say it all the time, if someone wants to work 2-3 jobs, they will make money here too. You don’t need to go to the US for that.” This is an average small business owner saying this. I’m sure many other Brazilians would agree with him.

  66. Yes billions of people love to go and live in the USA. If the USA opens doors, India alone can contribute a billion immigrants. Out of 1,150 million, under 100 million (about 7 to 8 percent) make enough to file taxes.

    But let me tell you another side of the story: I went to a department that processes applications for Indian citizenship. During past few years there is huge spike in applications for Indian citizenship from US citizens. Many of them are well known names and extremely wealthy. In 70s and 80s it was a passion for rich people in India to go to the USA for delivery, to get US citizenship to their children by birth. All most all of them now want to get rid of their citizenship (most people legally, while others illegally by loosing US passports and fabricating Indian birth certificate).

    I am sure, there are 10s of thousands of rich people like that. Let me explain one interesting thing. To apply for Indian citizenship, one must live in India for 12 months continuously without any foreign travel. If one goes 1 day to Singapore or Dubai, he must wait for 12 months to apply. It is the hardest requirement for the rich business people. A bill is passed by MPs in lower house and being discussed in higher house, which is introduced by ruling party and supported by main opposition party. Very few bills can have that kind of unanimous support.

    Of course, 80% of the people make less than US$10,000 a year and I am sure never have savings over US$10000 in any bank. They loose nothing by becoming US citizens and gain everything (especially considering generous Obamacare and social welfare).

    The citizenship officer asked me, why so many people want full Indian citizenship, since most of them have OCI – A kind of dual-citizenship? I told him about unbelievable form requirements and life altering penalties for innocent mistakes, even when there is no tax liability. He said, it is unbelievable. He would not have believed me, if he hadn’t seen how disparate many rich and powerful people are to get Indian citizenship. Since they are rich, they send their executive assistants along with recommendations from power political buddies. I am poor, so I went myself.

  67. In the previous email, I forgot to mention that the bill was to water down the 12 month continuous stay requirement.

  68. @Indian_Expat
    That is an interesting story. It has been one I wondered about since 2009. I thought of all those Indians in America who have contributed so much, and now getting caught in the jihad would start walking down jetways going back home. What you are indicating to me, is many are getting citizenship back in India to assure they have an escape route if this nonsense keeps up. Humm… Another story no journalist will ferret out and write about..

  69. @Just Me: They must relinquish US citizenship, once their Indian citizenship is approved. India doesn’t allow full dual-citizenship. The OCI is limited citizenship for life, like US green card. They can’t vote or contest for political posts. I didn’t know about FBAR until I wanted to start a company to bid for contracts from defense-department. I must be a citizen to bid for defense projects.

    I was middle class person and stood in queues at American consulate many times, but I always wanted to return to India and I returned to India as I planed. But unfortunately, Indian government started offering dual-citizenship and in a weak movement I decided to apply for US citizenship. Still I can’t believe, it would become a nightmare. I don’t owe any taxes, because my income is very low and for many years below threshold for filing US taxes. But I have many accounts and joint accounts with my aging parents. The balance in the accounts is over US$100K and unfortunately, the money is transferred between the accounts. My parents reported income and paid taxes in India.

    Many people disparate (as I did) to get into the USA don’t know how complex it would be, if they return to their homeland. No one would believe me about complex tax code and forms and penalties, if they return to their homeland.

  70. Pingback: Trolls or Clowns Below Our Border? | outragedcanadian.ca

  71. @Administrators… I included a link to this article on my blog and now it shows up in comments. Is this what I’m NOT supposed to do? I see it shows as a pinkback. If I’m not supposed to do this, let me know, and I’ll remove it….

  72. Hi, outraged. Hope you’re doing well these days. Guess Petros is the only one to be able to answer you questions about pingbacks.

    However, I am glad that people can easily get to your site from here and to this site from there when they are reading. So, I’m glad your pingback is there.

    My vote on your post on your site is that there is a group of clowns down there driving willy nilly in their minicars, smashing into each other, each intent on grabbing their own treasure as I don’t think they are capable of scheming plots that are, at any rate, well thought out and not going to hurt the US economically in the long run.

  73. @Calgary, thanks for that. If Petros deems this incorrect, I’ll remove it. I’m doing well, took a break from obsessing about this for awhile, but now I’m back at it again – that old pendulum swing, you know? I’ve read that it’s human nature to look for plots or ‘conspiracy theories’. Guess it proves I’m human. Albeit a Canadian one. 🙂

  74. @outraged The pingback is not a problem. It was nice to see your references back to Isaac Brock. Thank you. We ask that if you wish to post that particular blog post at Isaac Brock that you actually copy the entire post into a post here at Isaac Brock. What we ask that you not do is reblog the post, because it give us absolutely no editorial access to it, except to erase it. You may, however, reblog your post back to your own blog site, if you wish. Thus, the authorized action is called “cross-posting” with the full post accessible to the editors here at Isaac Brock. “Reblogging” to Isaac Brock is the bad thing.

  75. @Petros, thanks. I hadn’t intended to post it here, just on my own. I actually removed the embedded link and then just put it under the links section, so hopefully any reblogging is stopped. Is it within good taste to keep a section that I’ve quoted as an excerpt? Obviously, I’m still learning the ins and outs and dos and don’ts of blogging.

  76. @outragedcanadian,
    re: “it’s human nature to look for plots or ‘conspiracy theories’”
    I’m finding that there is often good reason to at least be wary – for example;
    “FBI: We need wiretap-ready Web sites – now”
    by Declan McCullagh May 4, 2012 9:24 AM PDT

    “CNET learns the FBI is quietly pushing its plan to force surveillance backdoors on social networks, VoIP, and Web e-mail providers, and that the bureau is asking Internet companies not to oppose a law making those backdoors mandatory.”


  77. An article that links DATCA and FATCA, and also calls the harm to US ”persons” outside the US a ‘human rights’ issue.

    “……. the Foreign Account Tax Compliance Act. It puts a huge paperwork, cost, and legal liability burden on foreign financial institutions and U.S. banks that also operate abroad. It is having the predictable consequence of making it very difficult, if not impossible, for Americans living abroad to have a local bank account (which, in many places, is almost a necessity).

    There is more than $10 trillion in foreign-portfolio (stocks and bonds) investment in the U.S. This is not counting direct investment by foreign corporations and others. Much of this $10 trillion-plus is managed by foreign financial institutions. Now many of them are saying they are going to leave the U.S. market because of these regulations, which means the potential loss of several million U.S. jobs.

    As Mr. Keating has said, “These costly information reporting regimes are not used by the banks themselves; instead, these are required for the sole benefit of the IRS. In some cases, it is difficult to understand how the IRS will even use these new reporting rules.”

    The real scandal is that the Treasury/IRS never did a real cost-benefit analysis before finalizing these rules. The reason they didn’t is obvious. Neither rule could have been justified on economic or human rights grounds — it is all about power for a few in Washington and their foreign bureaucrat cronies.

    The failure to do what any responsible person would do — by looking at the real and potential resulting harm — constitutes willful negligence. If Geithner or IRS Commissioner Douglas H. Shulman were in the private sector, they clearly could be indicted and probably convicted because of both the monetary damage and risk to individual lives these rules promulgated by them are causing and will cause”……………………..

  78. Interesting, that several articles have said that tax amnesties don’t work, but here is a large US city offering the very same:
    “Marty Germ, finance director, notes that back taxes and interest must be paid in full prior to June 30 to avoid penalties. Germ adds that residents can contact the city if they are uncertain whether they missed a tax bill or overlooked a taxable source of income when filing.

    According to Germ, individuals are “often misinformed about taxes.” Germ reveals that some older residents believe they do not have to pay income taxes after a certain age. Other community members fail to report rental income, gambling winnings or monies earned while self-employed.”

    Funny that inside the US, they can understand that “individuals are “often misinformed about taxes.””, but outside – far far away from the ‘center of the universe’, we’re supposed to have an encyclopedic knowledge of the federal regulations – and any changes enacted on the fruits of our local non-US labour – no matter how technical – and retroactive.

  79. Outraged wrote:

    @Petros, thanks. I hadn’t intended to post it here, just on my own. I actually removed the embedded link and then just put it under the links section, so hopefully any reblogging is stopped. Is it within good taste to keep a section that I’ve quoted as an excerpt? Obviously, I’m still learning the ins and outs and dos and don’ts of blogging.

    You may quote as little or as much as Isaac Brock Society as you like. We will not sue you and in addition, it adds to our prestige whenever anyone cites our articles. Therefore, you should put the link to Isaac Brock back into your post. That has nothing to do with “reblogging”. The link is good because the more sites that link to Isaac Brock the better. That is why in the past I have encouraged people to put links in their comments on other blogs or in newspaper articles. Links back to Isaac Brock increase our traffic and our pagerank.

    Note on fair usage: We want to keep our citations of newspaper articles down to fair usage when we do not have permission to copy the article to our blog. Many newspaper outlets are very sensitive to their copyright, and they will indeed go after successful blogs that have cited their articles. This is especially true of the Associated Press which has a notorious reputation for wanting to sue blogs even for quoting small excerpts of their articles.

  80. @Badger, well in a strange way it’s comforting to know that I’m not alone in suspecting malovence behind all this. Sometimes I get so upset at all this big brother crap (thanks for the link, BTW), I have to go away for a while and calm down. I truly fear what life we might be living in 20 years time. Heck… less than that…

  81. @ outraged rather than fear the future, it is better to hedge the future by owning some spam, a few stores of other staples and some physical gold and silver. Perhaps a generator, if you are afraid the power grid will go down.

  82. @Petros, we think alike. Have already bought the generator… besides isn’t the world going to end on December 21st, anyway according to the Mayan calendar? What am I doing worrying about all this crap, I should be out living it up, spending my money and giving the US the metaphorical finger!

  83. @Petros…

    In this thread people have placed some very good links to other articles or news stories that are of interest. Some I had already discovered previously, and some were new to me.

    Scattered all through out the Comments on Isaac Brock are many many more. I am always looking for them, as like you discovered the Al Lewis link from a comment on another thread, they can become a good source material for another post or tweet.

    On the right hand column, I see there is a heading called External Articles that hasn’t been updated for some time. You couldn’t possibly list that many there anyway, or it would run on forever down the column.

    I have been mulling over how better to keep current and good article links in one place, as a resource for all of us who just can’t remember where we saw that, and who would best administer it.

    Now, I have to think that many of us keep our own favorites somewhere, (our browsers probably) but having something more universal that you could go to see the new ones have been dropped into comments on threads that you may not have read due to time constraints, would be helpful, I would think.

    Any interest from any Administrators in doing this?

    Or, alternately should I just create a blog post called News Links, and have nothing else but ones I have found either here, or from other sources. I would think it might be helpful for those not slaves to searching the internet to have a central repository.

    I haven’t taken it on, as it does require a certain about of dedication. I don’t want to take it on, and then let it falter after it becomes too much work.

    An example of news links on a specific subject on steroids is Antiwar.com. I am not that ambitious, but putting up one thread that then was featured on the right hand column that contains nothing good stories from around the internet related to FATCA, FBAR, OVDI, Citizenship taxation, might be something I or someone else would be willing to do.

    It would be best as a collaborative effort. I would want to keep it simple. Create the linked headlines in the body of the Post, and then just use Replies as just a way to submit new candidates for “The List”. After submission and inclusion, the reply would be trashed to keep the Post clean of clutter.

    Think it over. Shoot it down if you wish. Just something I have been mulling over… Any other or better suggestions?

    Another model is what Jack does….without the commentary as I don’t think I could be that dedicated!


    @all… thanks for the links here, as they have been rich twitter material for me.

  84. Articles or news stories of interest. That is what USxCanada InfoShop has tried to do. So far the traffic over there has not rewarded the effort. Maintenance is a breeze compared to the data definition and initial set-up.

    Criteria may be too selective for your taste, but less is more for people who do not want to be overwhelmed with minutiae and repetition. (Crap from Al Whoever does not make the grade.)

    Brock is a great forum, but its information architecture stinks. And always will, because that is not what WordPress is set up to do, though it can be kludged into a decent reading list, providing that function is made primary.

    I think we have a major problem with Dark Web that will never go away – search engines that mask and/or downgrade the info that people should be finding. Good to hear in recent postings that at least a few Brockers found their way here through broad-spectrum search.

  85. @Just Me, @Petros, @usxcanada:

    usxcanada has a wonderful resource for relevant news articles, US Citizens in Canada Info Shop: http://usxcanada.wordpress.com/. Is this something we could put a link to on the Isaac Brock main page under “Our Resources”? So as not to re-invent the wheel?

    Or, as you suggest, we could put a NEWS LINKS sticky on the main page, having a link to the usxcanada site as the main resource under there — because it is done so well, with a summary of what each new article contains. (This would be like the Relinquishments and Renunciations database and Consulate Visit Report Directory stickies at the top of the main page). In addition to the usxcanada link (with permission), we could include additional ones identified in the comments of Isaac Brock site.

  86. calgary411 – Thanks for the encouragement. Brock is free to link at willl, and to reuse any material with credit to source. The door is always open to considering the addition of citations that may have been overlooked. InfoShop offers a contact form that can be used to make suggestions.

  87. @usxcanada

    Thanks for the come back.

    I was unaware what you were doing there, and so appreciate the link and the info. I knew some good ideas would float up, if I mentioned the subject. Also, in doing some research on for another comment, I was reminded that ACA is also keeping a good resource list since November. If they keep it up, that is another link to consider…


  88. @Indian_Expat

    I don’t know if you are interested, but I found this CPA service that was catering to Indian immigrants and talking about Opting Out of the OVDI. I read it through, and thought it was way too limited and hyperbolic in the penalty threats. Decided to try posting something there to see if they would accept it. I took them a few days, but I see it is still there, and I directed people back here for information….


  89. There is a link to USX under external resources. If someone wants to maintain the external articles part of the website, I’d be happy to hand that over to someone.

  90. @Just Me: I left the USA in mid 1990s and never even visited the USA for nearly a decade. A quick analysis of my income and tax returns I filed in India resulted in no tax due (I left with large 1116 foreign tax credit that I can use in future as well, even after calculating US-taxes on tax-free gains of my retirement plans in India).

    My understanding by reading many posts in this forum is that, I must file past 6 years before relinquishing my US citizenship (to avoid future criminal activity of not filing forms such as FBAR or not mastering IRS tax code and commit an accidental mistake). I can’t trust CPA’s, since most CPA’s don’t even know about FBAR before 2008. Did I misunderstand the suggestions, since you are taking about OVDI. I didn’t know that I must file taxes in the USA, even if I don’t owe any taxes. I am trying to rectify this mistake and become compliant, with least pain.

  91. @Just me: Do I need to enter OVDI, if I am living in India for more than a decade and not filed taxes in the USA (but owe no taxes to IRS due to foreign tax credits)? I am concerned, if I have to enter OVDI.

    I am not planning to use 2555 to exclude my salary, so can I claim tax credit for my child born in the USA and under 17 years to reduce my tax liability?

  92. @Indian_Expat…

    There is no quick and easy answer to that, as it is in the “it all depends” category. That would include a detailed examination of your facts, current circumstances, past income filing and FBAR reporting status and future plans as to your citizenship and residency. So, while I can’t really give you a comprehensive answer other than to say, I probably would not really consider it unless you are planning to live back in the States, and have been involved in egregious criminal tax evasion.

    To help you determine if you should or not, will take a lot of drudgery in terms of self education, and if you are up to that, you might explore more. You could have a read here,


    That might help with some self identification, as to your Whale to Minnow status, which would bring you closer to a conclusion of whether or not that decision is right for you. If you are truly a Minnow, and still want a generalized answer that you should not consider as legal advice, I would generally say No to the OVDI. There are now other and better strategies for dealing with compliance failures, but again I stress caution in giving any weight to what I am saying, as I really do not know your facts, and I am not an attorney.

    That is the best I can do for you. I don’t know if that is any help or not.

  93. @justme, When I returned to the US from Brazil 35 years ago I had a good supply of unused foreign tax credits as well, which I “used up” quite quickly over the next 3 years because back in the US my job involved extensive foreign travel. These tax credits offset my US tax on my earnings while present at a foreign destination. I kept close track of my days working outside of the US in case of an audit, but never had one.

    Had I stayed in Brazil they would have been used up very quickly because of the massive tax increase on overseas Americans in the Tax Reform Act of 1976 which pushed my combined US + Brazilian tax up to 81% more than any other non-American in Brazil with my same earnings and family dependent status.

  94. @Roger…
    That is interesting about the Foreign Tax Credits (FTC). I have a nice build up of them too, but assume with my income situation (in semi retirement) will mean I will never get to use them. Maybe they can be tallied next to my tombstone epitaph.

    “He was FBAR Compliant FTC $XXXXXX”

  95. @JustMe, I was really fortunate when I returned to the US to land in a position where I was doing a lot of foreign travel and thus able to use up these foreign tax credits.
    I also left behind our personal residence home in Brazil where, with the exchange controls that existed at that time, I could not take the funds out of Brazil when I sold it. But since my business travels including going to Brazil I was able to purchase airline tickets in Brazil, in Braziian currency, for my travels to Latin America, Europe, Asia, etc, as long as the travel on the ticket started and ended in Brazil.

    If not used,each flight coupon was stamped “refundable only in Brazilian currency,” but I was able to plan my trips so that the tickets included some 20 individual flight coupons, all with open reservations, and then make reservatiohs and use them as I actually traveled. The Brazil portions were on PanAm but the other portions were on whichever carriers served the countries I visited. Changing carriers was usually possible by having the carrier whose name was on the ticket endorse it to the other. And then I vouchered them as I used them. Over the course of several years I got my money out of Brazil this way. I used them all. Tickets then were valid for one year.

    The coupons were not used in he order issued, but that did not matter. and each segment had a stated dollar value. That probably wouldn’t work today with today’s aif travel pricing policies, elecronic ticketing, etc., but it did back in the 1970s. Back then there was generally a single fare for travel between cities for all carriers, not the multiple fares we have today.

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