# Late FBARs for U.S. residents



## greggy

Hi everybody,

Thank you for all the great info on this forum. I'm a U.S resident with French citizenship, and have been a resident since 2008. I did not know about FBARs until now (thanks FATCA!)and would like to *file late for the past 6 years*.

On the IRS website, I have found two ways to do that, but it confuses me because one has a penalty and the other doesn't:

- *Streamlined Filing Compliance Procedures:* "For eligible U.S. taxpayers residing in the United States, the only penalty will be a miscellaneous offshore penalty equal to five percent of the foreign financial assets that gave rise to the tax compliance issue."

- *Delinquent FBAR Submission: * "The IRS will not impose a penalty for the failure to file the delinquent FBARs if income from the foreign financial accounts reported on the delinquent FBARs is properly reported and taxes are paid on your U.S. tax return, and you have not previously been contacted regarding an income tax examination or a request for delinquent returns for the years for which the delinquent FBARs are submitted."

What is meant by "and taxes are paid on your U.S tax return"? Is it taxes on foreign bank accounts that need to be payed when filing late?

Does anybody know what to use for somebody like me that only has savings in France? I obviously don't want to give away 5% of my savings but I want to do the right thing.

Thanks in advance!

Here is where the quotes are from: irs.gov>Businesses>Small-Businesses-&-Self-Employed>Report-of-Foreign-Bank-and-Financial-Accounts-FBAR


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## BBCWatcher

OK, let's suppose you have a bank account in France with a balance of US$25,000 (in euro, of course). Every year let's suppose you receive 1% interest on that bank account, or US$250. Let's further suppose -- and I have no idea, this is just an example -- that you pay a 10% French income tax rate on that interest income, or US$25. So you keep US$225 every year.

Now, let's look at what happens in two situations:

A. Every year in the United States you reported that US$250 in foreign interest income on your U.S. tax return. You took the U.S. Foreign Tax Credit (US$25) since you paid some French income tax on that interest. However, your U.S. tax rate on such income was actually 20%, so you owed another US$25 to the U.S. government, and you paid that.

B. You failed to report your foreign interest income on your U.S. income tax return.

What the IRS is referring to is path A, that you reported your interest, dividends, capital gains -- all the income from your foreign accounts -- on your U.S. tax return and paid U.S. income tax owed (if any) on that income, less Foreign Tax Credits. If you took path B then you're both financial account reporting delinquent and tax delinquent, at least assuming the failure to report your income from your foreign accounts would have changed the amount of tax you owed to the U.S. (That could happen even if the French income tax rate is equal or higher if that unreported income would have made you ineligible or less eligible for U.S. tax breaks, for example.)

Anyway, if you took path A, congratulations! If you took path B then the worst case under the domestic Streamlined Program is a 5% penalty. However, first recalculate your taxes. If the failure to report that income did not harm the IRS, then you will probably do much better than the worst case. Path B is where you'll probably want to consult with a tax professional at least a bit to decide how to correct the situation amicably.

To boil it down: did you make one mistake or two?  To the IRS (and the U.S. Treasury) there's a difference. One mistake looks like you just missed a bit of paperwork but without malicious intent -- you didn't evade taxes. Two mistakes looks like you hid the money in order to evade taxes -- intentionally or not. That's a big difference in the IRS's eyes, understandably, so that's what they mean. But if your failure to report the accounts did not materially change your tax position in the U.S., then you probably (my guess) are going to end up somewhere much less than the 5% penalty, probably more like 0%. (In some cases you could imagine that you'd be entitled to a tax refund from the U.S. because you could have claimed a higher Foreign Tax Credit due to high French taxes. In such cases you're really going to be just fine, I think.)


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## StewartPatton

The difference between the two programs you mention is whether you have reported income on your foreign accounts or not. If you have, then you can just file the past FBARs and the IRS will waive the penalties. If you haven't, the only way to get explicit penalty protection is to use the streamlined orogram and pay the 5% penalty.


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## Bevdeforges

It pretty much boils down to just how much you have stashed in those savings accounts in France. If you're talking the normal sorts of savings accounts (including your full allotment of tax-free livrets), just file the back FBARs and be done with it. There is a reasonable chance that the amount of interest you've been paid in that time won't affect your taxes due, anyhow. (Also, that the IRS doesn't have the time or the resources to pursue you over a couple hundred dollars worth of undeclared income like that.)
Cheers,
Bev


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## greggy

That makes already a lot more sense, thank you all for your replies!
I definitely am in the B case and I have more questions: 

1) Most of my French accounts are "tax-free" (PEL, Livret A and LDD), which are apparently exempt from FATCA reporting. Should I have been reporting the interests from those accounts on my US tax returns?

2) My parents have been putting money regularly on those savings accounts for me. How does this work in terms of taxes? In the last 6 years this has probably added up to 20 000 euros...

Thanks in advance for your help!


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## Bevdeforges

Technically, yes, you are supposed to report all bank interest from foreign (as well as domestic) accounts - including the "tax-free" accounts. And yes, technically, the banks in France are not required to report interest paid to you under the tax-free accounts (Livret A and LDD - and I think the PEL's are included, but I'm not sure of that), nor are they required to report the accounts themselves under the bilateral agreements.

At today's rather feeble rates of interest, even $20,000 is only a couple hundred $ in interest income at best. Personally, I'd just start reporting the account going forward - but you have to do what helps you sleep at night.
Cheers,
Bev


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## StewartPatton

You really need to speak with a tax professional about your specific situation. You got some info and opinions from this thread, but there is just no substitute for actual specific tailored advice. Many tax pros will have an initial consultation at no charge.


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## greggy

Thank you! Yes, I'll find a professional asap, all this info definitely helped me understand the extent of what needs to be done.


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## BBCWatcher

greggy said:


> 1) Most of my French accounts are "tax-free" (PEL, Livret A and LDD), which are apparently exempt from FATCA reporting.


I think this point has been clarified already, but just in case.... These accounts are not exempt from FATCA/FBAR reporting because of anything the French government might or might not say, or because of some data sharing agreement between governments that you are not a party to. You simply read the FATCA and FBAR rules, and you report accounts that they each require be reported. By the way, I don't think you're a FATCA person since you probably don't meet the filing threshold for IRS Form 8938.

This is why it drives me almost _crazy_ when people even bring up intergovernmental agreements (IGAs) for data sharing. Those agreements have zero bearing on *your personal* legal obligations. Ignore them, please. People are getting confused, and they shouldn't be getting confused.


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## Bevdeforges

BBCWatcher said:


> This is why it drives me almost _crazy_ when people even bring up intergovernmental agreements (IGAs) for data sharing. Those agreements have zero bearing on *your personal* legal obligations. Ignore them, please. People are getting confused, and they shouldn't be getting confused.


The IGAs have zero bearing on the rules related to individuals, true. However, they do give you an idea of the information to which the IRS has ready access when it comes to cross checking and/or auditing individual tax returns. As such, it may give you an idea of what sorts of items the IRS is most concerned about.
Cheers,
Bev


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## Nononymous

BBCWatcher said:


> This is why it drives me almost _crazy_ when people even bring up intergovernmental agreements (IGAs) for data sharing. Those agreements have zero bearing on *your personal* legal obligations. Ignore them, please. People are getting confused, and they shouldn't be getting confused.


They do have bearing on what will and will not be reported about you, which helps you to assess the risk if, say, you are a US citizen living outside the US who has chosen to remain non-compliant because you think US tax policy is bollocks.


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## maz57

The terms of the IGAs are very useful for those considering "selective compliance". For example, most people would not bother to inform the IRS if they sold a car for $200 more than they paid for it. The reporting is more trouble than it's worth and the IRS has no way of knowing about such transactions anyway. By agreeing to exempt some types of accounts from FATCA reporting the IRS has indicated they are just not interested.

So why bother to report them? The mere fact they exist can trigger a ridiculous form nightmare even though the amount of money involved is minimal. Better to just "overlook" them if they will never be reported under FATCA. Does it really make sense to have to hire a tax professional to do a "by the book" reporting of some small account that will make no difference in the amount owing on your tax return anyway?


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## maz57

You beat me again Nononymous!


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## ForeignBody

Nononymous said:


> They do have bearing on what will and will not be reported about you, which helps you to assess the risk if, say, you are a US citizen living outside the US who has chosen to remain non-compliant because you think US tax policy is bollocks.


No they don't. They give the minimum requirements for reporting. There are reports that some Financial Institutions will report more than required because it is easier for them to manage, rather than using the cut off amounts in the IGAs.


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## StewartPatton

ForeignBody said:


> No they don't. They give the minimum requirements for reporting. There are reports that some Financial Institutions will report more than required because it is easier for them to manage, rather than using the cut off amounts in the IGAs.


Yep. People sometimes use the IGA exceptions and the minimum account value thresholds like they are personal "get out of FATCA free" cards, but it doesn't work that way at all. They are both just ways a bank can reduce its reporting workload if it so chooses. 

The really funny part is that many non-compliant Americans can achieve a compliant status without paying any US tax, but they stubbornly cling to their non-compliant status (and some even wear it as a badge of courage, even announcing their intention to lie to maintain that status). That's no way to be, IMHO.


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## Nononymous

StewartPatton said:


> The really funny part is that many non-compliant Americans can achieve a compliant status without paying any US tax, but they stubbornly cling to their non-compliant status (and some even wear it as a badge of courage, even announcing their intention to lie to maintain that status). That's no way to be, IMHO.


I don't find it that odd, really. For the most part such folks are Canadians who also happen to be American due to some childhood accident. Apparently the discovery of US tax filing obligations (and the cost/hassle of renunciation) has rubbed many of them the wrong way. I can't imagine why they'd be upset, or defiantly refuse to cooperate - how strange. If you think I'm cranky, read some of the commentary on the Isaac Brock Society site.

But to the other point, indeed, this is correct, the IGA lays out minimum reporting requirements, which financial institutions may choose to exceed, out of zeal, caution or convenience. This may be the issue I'm having with the investment broker, who wanted citizenship data despite my holding nothing but RRSPs. (That issue has gone quiet for now, which could mean many things.)


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## maz57

StewartPatton said:


> Yep. People sometimes use the IGA exceptions and the minimum account value thresholds like they are personal "get out of FATCA free" cards, but it doesn't work that way at all. They are both just ways a bank can reduce its reporting workload if it so chooses.
> 
> The really funny part is that many non-compliant Americans can achieve a compliant status without paying any US tax, but they stubbornly cling to their non-compliant status (and some even wear it as a badge of courage, even announcing their intention to lie to maintain that status). That's no way to be, IMHO.


In view of the fact financial institutions are being forced to do this reporting at their own expense with a gun to their heads, I imagine they will take advantage of any opportunity to reduce their workload. In the case of account minimums it may well be less work to forget about the minimums and report ALL accounts. In the case of accounts that don't have to be reported at all it will be less work to not report them. We are all speculating; the actual reporting doesn't start until next year.

Re your second point: We know most will not actually owe tax; it's the time and expense of the reporting that people are objecting to. For those who have lived their entire lives with zero US connection having to deal with the US government at all is the issue. Unless a person's financial affairs are bog simple the reporting can get into unbelievable complexity (foreign trust and PFIC, for example). Complexity = expense. In Canada, those who are lucky enough to sell their personal residence and realize a nice gain will suffer a big US hit if that gain exceeds the 250k exemption. Such a gain will not be reported by FATCA. Why then, would one tell the IRS about it?

You make it sound so easy but the reality is this; true compliance may well destroy the retirement planning of permanent expats. Most are not willing to allow that to happen. They will choose non-compliance or selective compliance and work on their own plan to fly under the radar or exit the US system forever.

Personally, I wouldn't spend 5 cents to become US compliant nor would I pay any money to the IRS.


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## Bevdeforges

To be completely honest about it, I doubt anyone anywhere in the world can be assured of being 100% "compliant" in US tax matters. There are numerous interpretations of some of the finer points of tax law (and regulations) - and it comes down to what each individual believes they can live with (or, if you prefer, "get away with"). This is also how most tax professionals operate. My former accountancy firm employer called it "taking an aggressive tax stance" but it boiled down to what they thought the client could get away with.

I agree with maz57 that I won't pay to file my taxes, and when the time comes that I wind up paying US tax again (i.e. when I start drawing on my IRA funds), I will make very sure that I have the proper withholding so that I don't have to pay a "fee" to have them accept payment by credit card. But each of us has our own threshold - we just need to understand what our options are (and the level of risk we run with each selected option).
Cheers,
Bev


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## Nononymous

maz57 said:


> Personally, I wouldn't spend 5 cents to become US compliant nor would I pay any money to the IRS.


I suspect that many people feel this way. 

I'll get back on the soapbox one last time. The greater point I'm trying to make is really specific to Canadians living in Canada who for one reason or another are also US citizens, though it probably applies to others. 

The point is this: many people in this situation are refusing to comply, or figuring out very "selective" ways to comply (filing simple, incomplete returns to make it go away); even more remain unaware that there is anything to comply with, though I expect that number is decreasing. 

So don't panic, don't be bullied into spending money on compliance, take your time and assess the risks. Staying off the radar is an option. Until such time as the Canadian government changes the rules, there is zero risk to income earned in Canada, or assets held in Canada.

As to whether one should lie about citizenship to avoid FATCA reporting and preserve non-compliant status, that's a personal decision. (I can't boast about it because I haven't yet done it.) For me, it comes down to a pragmatic assessment of risk, rather than a moral question. If it got me off the hook, I wouldn't lose a second's sleep.


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## StewartPatton

You people can all do whatever you want to--you don't need nor want my approval, and your personal decisions don't bother me one bit. I just find many of these conversations strange. If you want to achieve a rational status vis-a-vis U.S. tax, there's an easy way to do that. Instead of doing that, you would rather shout at the wind to stop all that damn blowing. It's just weird to me is all.

Also, as BBCWatcher is fond of pointing out, you guys like to look only at one side of the equation (the burdens of U.S. citizenship) with absolutely no regard, and even denial of, the other side (the benefits). 

But, like I said, whatever. You guys keep crowing about your violation of laws you choose to remain subject to, and I'll keep helping people who have a more rational outlook on life.


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## Nononymous

Fair enough. Most of the (i.e. my) ranting makes sense only in the Canadian context. I imagine it will become a larger issue here over the next few years due to the sheer numbers involved. I think there's a great deal to be done educating some of those people so that they don't panic and needlessly make their lives more difficult. Non-compliance is a pretty rational response, in my view, particularly as the costs of compliance (or exit) are not always cheap or easy, however that's defined. There are certainly benefits to having US citizenship, but If you don't ever intend to live in US, the negatives probably outweigh the positives.


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## maz57

StewartPatton said:


> You people can all do whatever you want to--you don't need nor want my approval, and your personal decisions don't bother me one bit. I just find many of these conversations strange. If you want to achieve a rational status vis-a-vis U.S. tax, there's an easy way to do that. Instead of doing that, you would rather shout at the wind to stop all that damn blowing. It's just weird to me is all.
> 
> Also, as BBCWatcher is fond of pointing out, you guys like to look only at one side of the equation (the burdens of U.S. citizenship) with absolutely no regard, and even denial of, the other side (the benefits).
> 
> But, like I said, whatever. You guys keep crowing about your violation of laws you choose to remain subject to, and I'll keep helping people who have a more rational outlook on life.


I, personally, haven't violated any laws, although I'll admit to an occasional stretching, i.e. "aggressive" stance. That's to the best of my knowledge, but we all know how complicated US tax law is. My rational response was to get rid of that US citizenship ASAP (i.e. choose not to remain subject to) after I achieved minimal compliance. There was no benefit to me besides the right of return (for a short visit) which can be accomplished with any decent passport. I don't need to preserve the right to go home; I am home.

By the way, doesn't it also seem weird that the approximately 7 million expats are supposed to file every year even though they can receive no benefit because they are non-resident except for tax purposes while at the same time 57% of homelanders (say 100 million people) don't pay anything, qualify for all the benefits they want, plus they get to STAY? But that's the system Congress created and it's about as irrational as you can get. Every other country in the world figured this out a long time ago; the US is stuck on stupid.


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## BBCWatcher

maz57 said:


> By the way, doesn't it also seem weird that the approximately 7 million expats are supposed to file every year even though they can receive no benefit because they are non-resident except for tax purposes while at the same time 57% of homelanders (say 100 million people) don't pay anything, qualify for all the benefits they want, plus they get to STAY?


That would be "weird" if your characterization of the facts were reasonable. It's not. So let's look at the facts.

First, you're attempting to compare the percentage of U.S. persons living overseas obligated to file U.S. tax returns (penalty or not) with the percentage of U.S. residents who owe federal income tax. This comparison makes no sense -- it's truly apples to turtles. Here are what would be valid incidence comparisons between U.S. persons living overseas and U.S. residents:

1. Percentage of each cohort obligated to file;
2. Percentage of each cohort that face non-zero penalties for non-filing;
3. Percentage of each cohort that owe U.S. federal income tax.

I have not seen data for the first comparison, but with high confidence the percentage of U.S. persons living overseas obligated to file income tax returns is at least no higher than the percentage of U.S. residents. For #2, the percentage of U.S. persons living overseas that would face some penalty for failure to file a U.S. income tax return is, according to the best available estimate, 6%. (Including me, as it happens.) Among U.S. residents the same percentage is over 50%.

For comparison #3, the percentage of U.S. persons living overseas that owe U.S. federal income tax is again 6%, including me. If there are 7 million U.S. persons living overseas then I'm one among the 420,000, a small and fairly exclusive club. The percentage of U.S. residents that owe U.S. federal income tax is approximately 53%. (These figures are apples to apples, on a per tax year basis.)

No matter how you slice it, the U.S. tax code is extremely generous to U.S. persons living overseas in comparison to U.S. residents. You may not think it is generous _enough_, but it is extremely generous, factually.

By the way, the approximately 47% of U.S. residents that do not owe U.S. federal income tax pay lots of taxes, including federal taxes. That includes payroll taxes and federal excise taxes. Income tax is by no means the only form of taxation, even federal taxation. It is highly misleading to even suggest that it is. (Which is why people who pay relatively large absolute income tax bills try to be misleading, of course, because it serves their self interest.)

It is factually incorrect to say that U.S. persons living overseas receive "no benefit," as the U.S. Supreme Court ruled about 100 years ago before global jet travel and telecommunications. We can quibble about _how much_ benefit, but "no benefit" is just not correct. Personal situations vary, but as a few examples U.S. persons residing overseas often qualify for refundable tax credits; they carry U.S. passports and receive U.S. consular protections; they enjoy privileged access to the world's best and lowest cost financial markets; they (typically) can receive free or heavily subsidized medical care in the U.S. starting at age 65; they will be taken care of by U.S. Medicaid in the U.S. if disabled and destitute (e.g. full time nursing home care); they can receive U.S. disability benefits (at least if destitute and in the U.S.); they enjoy unfettered and unlimited access to the world's #1 economy for any lawful purpose at any time; and they enjoy privileged civil rights and other legal rights under U.S. law (which is substantially extraterritorial in its impact).

Beyond all that, on what planet should a tax system ever be fee-for-service transactional? That if I pay $6 in taxes I must get $6 in benefits? _No_ country's overall taxation system is like that (with the possible, debatable exception of Somalia), nor should it be in any fair, just, civilized society. Some people (like me) won life's lottery, and some didn't/don't. We can again quibble about how much the lucky should be compelled to help the unlucky in society, but zero is unquestionably, morally the wrong answer. It isn't even the right answer on an individual lifecycle basis. Babies don't change their own diapers, and government has a patently obvious role in protecting orphans and abused or neglected children, as examples. The whole premise behind that idea is devoid of merit.

Finally, for people who don't like that whole package -- rights, privileges, and obligations -- there's an exit option.


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## Bevdeforges

All statistics aside, the "benefits" vs. "penalties" aspect of US citizenship for those living abroad is an intensely personal situation and not one that can be evaluated by disinterested (or even interested) third parties.

For every benefit cited, I can point out a situation where it is either irrelevant or detrimental to one or more citizens living overseas. It's up to each and every individual to decide for themselves whether their particular circumstances warrant scrupulously maintaining their citizenship or dumping it, or some sort of middle path (i.e. selective compliance).

It's also the case that circumstances vary by your country of residence. Those in Canada appear to be under more intense pressure regarding the new FATCA rules than, say, here in France. Those in Germany and Switzerland (and, by some reports, Austria, too) have reported difficulty opening or maintaining bank and/or investment accounts. What works for someone resident in Thailand or Japan may be completely inappropriate for someone in Europe or Canada. And on top of everything else, you have to take into account the "reach" of the IRS to pursue specific types of errors or non-compliance situations outside the US.
Cheers,
Bev


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## StewartPatton

Bevdeforges said:


> All statistics aside, the "benefits" vs. "penalties" aspect of US citizenship for those living abroad is an intensely personal situation and not one that can be evaluated by disinterested (or even interested) third parties.
> 
> For every benefit cited, I can point out a situation where it is either irrelevant or detrimental to one or more citizens living overseas. It's up to each and every individual to decide for themselves whether their particular circumstances warrant scrupulously maintaining their citizenship or dumping it, or some sort of middle path (i.e. selective compliance).


Sure, I won't disagree with that. The people disagreeing with this point are the ones steadfastly claiming that there is NO benefit to U.S. citizenship.



> It's also the case that circumstances vary by your country of residence. Those in Canada appear to be under more intense pressure regarding the new FATCA rules than, say, here in France.


The key to this sentence is "appear to be." FATCA doesn't actually affect U.S. citizens in Canada any worse than anywhere else, they just seem to be the ones crowing about it the loudest. 

Really, the worst-off U.S. citizens abroad are those in countries where it is illegal to have a second citizenship (certain Middle Eastern countries)--FATCA essentially outs them and could result in them losing their principal non-U.S. citizenship (there was a good article on this by a Ms. Jeker I believe).


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## Bevdeforges

StewartPatton said:


> Sure, I won't disagree with that. The people disagreeing with this point are the ones steadfastly claiming that there is NO benefit to U.S. citizenship.


Point being that, for some folks, there may not be any benefit to US citizenship. It depends on the "facts and circumstances of the particular case." (One of those favorite IRS phrases.)
Cheers,
Bev


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## StewartPatton

Bevdeforges said:


> Point being that, for some folks, there may not be any benefit to US citizenship. It depends on the "facts and circumstances of the particular case." (One of those favorite IRS phrases.)
> Cheers,
> Bev


Ah, you mean "net benefit," gotcha.


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## maz57

BBCWatcher said:


> It is factually incorrect to say that U.S. persons living overseas receive "no benefit," as the U.S. Supreme Court ruled about 100 years ago before global jet travel and telecommunications. We can quibble about _how much_ benefit, but "no benefit" is just not correct. Personal situations vary, but as a few examples U.S. persons residing overseas often qualify for refundable tax credits; they carry U.S. passports and receive U.S. consular protections; they enjoy privileged access to the world's best and lowest cost financial markets; they (typically) can receive free or heavily subsidized medical care in the U.S. starting at age 65; they will be taken care of by U.S. Medicaid in the U.S. if disabled and destitute (e.g. full time nursing home care); they can receive U.S. disability benefits (at least if destitute and in the U.S.); they enjoy unfettered and unlimited access to the world's #1 economy for any lawful purpose at any time; and they enjoy privileged civil rights and other legal rights under U.S. law (which is substantially extraterritorial in its impact)


I believe you refer to Cook vs. Tait ("that government by it's very nature benefits the citizen and his property wherever found"). That was 100 years ago; the Court might very well reach a different conclusion if the issue were revisited presently. There are many things which used to be perfectly legal which later were determined to be totally wrong. (Slavery and the right of women to vote for a couple of random examples.)

1. Refundable tax credits: I'm not expecting nor am I asking the US for money. Irrelevant.

2. US passport: I already have a fine Canadian passport, arguably one of the best in the world. Don't want/need a US passport. Irrelevant.

3. Access to US markets: If I want to buy the stock of a US company I can easily do so with the click of a mouse. Don't need to be a US citizen to do that. (But I'd rather invest in the Canadian economy anyway.) Irrelevant.

4. Medicare: must live in the US to be eligible. Already have fine Canadian health care coverage (plus disability, etc., if I need it which I don't). The US system is actually a mess. Don't need it, don't want it, and don't qualify for it because I don't live there. Irrelevant.

5. Access to the worlds #1 economy: See 3 above. 

6. Privileged civil and other rights under US law: I enjoy the same (possibly better) rights under Canadian law, which, except for FATCA, are what apply in Canada, not US law. You are right about the extraterritoriality part though I wish you were wrong. But still irrelevant. 

To sum it up; "No benefit" is factually correct; for me there is/was no benefit to US citizenship and I didn't want to pay for something that was not only useless but had turned into a liability. I have taken the necessary steps to terminate that citizenship to make sure I don't.

You are arguing the US (and it's soul mate Eritrea) have got it right with their CBT and every other country in the world with RBT has got it wrong. Sorry, I just don't buy it.


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## Nononymous

StewartPatton said:


> The key to this sentence is "appear to be." FATCA doesn't actually affect U.S. citizens in Canada any worse than anywhere else, they just seem to be the ones crowing about it the loudest.


There are good reasons for this. Proximity, numbers involved, and for many people, the nasty discovery that they are being asked to establish an ongoing bureaucratic relationship with a foreign government that is otherwise completely irrelevant to their lives, due to either accident of birth or heritage (or in some cases the retroactive reinstatement of citizenship after naturalization decades in the past). 

If one could exit the US quickly and cheaply I would complain less about CBT - $100 to renounce, swear an oath that you wouldn't have owed any taxes, basta, you're done. But when it's a potentially five-figure investment for those who need to travel to consulates and can't or won't do their own tax paperwork, then I have no problem with "**** you" being the basic response. In fact I encourage it.


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## StewartPatton

Yeah, tell all that to the IRS computer when it spits out an automatic letter and wants to play 20 questions. It will be so impressed with your principled stance and photoshopping abilities.

Meanwhile, my clients are safe from all that hassle.


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## Nononymous

Should a letter from the IRS ever find its way to this (Canadian) address, I would not deign to answer it.


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## maz57

If I ever get one (not likely) I'll just forward it to my MP and tell him to fix it. He and his cronies are the ones who created the problem by signing that IGA.


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## StewartPatton

Nononymous said:


> Should a letter from the IRS ever find its way to this (Canadian) address, I would not deign to answer it.


The ol' ostrich approach. Good luck with that.


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## Nononymous

No US income. No US assets. Neither need nor desire to travel south. Not a problem. Of course one day the government could sell us duals down the river (again) but for now, they won't facilitate collection of anything.

It could all look very different in a year or two. Not holding my breath, but the Republicans did say something about FATCA before winning the mid-terms, and of course there's the constitutional challenge against the IGA going forward here in Canada. Staying off the radar could get easier, or it could get harder. But right now, I don't see a lot of compelling arguments for making one's identity known to the US government.


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## StewartPatton

You sure spend a lot of time on this board trying to convinve yourself everything will be OK. Maybe one day you will succeed.


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## Nononymous

It's a strange hobby, I agree, and something I should probably spend less time doing. Believe it or not, my motives are largely to reassure other duals in Canada that they don't need to run off to an accountant the moment they discover this problem - much like the Isaac Brock folks are doing. If you're off the radar, stay off and see how things develop. Right now the US can't touch you.


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## StewartPatton

Nononymous said:


> It's a strange hobby, I agree, and something I should probably spend less time doing. Believe it or not, my motives are largely to reassure other duals in Canada that they don't need to run off to an accountant the moment they discover this problem - much like the Isaac Brock folks are doing. If you're off the radar, stay off and see how things develop. Right now the US can't touch you.


. . . is an example of factually inaccurate fantasy.


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## Nononymous

Well, I'm rather going on what our previous Finance Minister said on this subject. If you're a Canadian citizen resident in Canada with only Canadian assets and income... the US can't touch a dime. FBAR fines are not covered by the tax treaty; CRA will not assist the IRS in the collection of taxes owed (caveat - provided the debt was incurred when the subject was already a Canadian citizen). So, currently, where's the risk?

Now having a whole lot of proceedings against you in another country is, I grant you, not an ideal place to be, particularly when you factor in that whole plane-makes-an-emergency-landing-in-the-US nightmare scenario. So it's obviously much better to stay unknown. With credit unions and RRSPs exempt from FATCA reporting, that should be relatively straightforward for most duals.

This could all change for the better, or for the worse, it's not for me to predict. What I take comfort in is the scale of the problem in this country; potentially up to a million people are not going to be very happy when they start learning what their banks have planned for them.


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## Bevdeforges

OK, this is getting really tedious. I'm going to close out this thread since the original query has been answered - repeatedly.

To sum up, you take your stance - anything from full, literal compliance with every rule you can find, to out and out ignoring of the rules - and you takes your chances, based on your specific circumstances and your ability to tolerate risk. Somewhere in there lies the option of renouncing, which has its costs, both monetarily and otherwise.
:amen:
Cheers,
Bev


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