10 thoughts on “FATCA and The Patriot Act Identify Innocent US Citizen

  1. How many of your U.S. Taxpayers Rights were not abused? You are right to feel humiliated and embittered. I hope that you will come through this soon and without penalty. It is unfortunate part of your assets (your inheritance, part of your plans for a simple retirement) is in the USA. http://isaacbrocksociety.ca/2014/10/11/similar-to-the-u-s-constitutions-bill-of-rights-the-u-s-taxpayer-bill-of-rights-contains-10-provisions/

    In order to hopefully have penalties waived, you should be able to author, with the help of your CPA, your Personal Statement In Support of Reasonable Cause Arguments for FBAR, etc., ending with something like:

    “Given my background it is not reasonable to expect that I should have been aware of these obligations. As soon as I became aware of my U.S. tax obligations, I immediately sought professional tax counsel to become compliant. The foregoing is true and correct to the best of my knowledge.

    Filed under penalties of perjury:
    xxxx ”

    I wish you all the best — from another even more naive than you retiree who has now renounced her US citizenship, which you will have to as well (vs. claiming relinquishment when you became a citizen of another country) as you have been carrying on *some* of US citizenship-based tax obligations.

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  2. If your goal is to get right with the IRS and your only issue is delinquent FBARs and you were genuinely unaware of the filing requirement:
    1) Do NOT consider OVDP/OVDI. This program is for actual tax evaders, which you are not. Again, do NOT consider it, even if a supposed tax professional recommends it.
    2) Consider the Streamlined Program. This is for people like yourself that have inadvertently made filing mistakes/omissions.
    Go to http://www.irs.gov/Individuals/International-Taxpayers/Streamlined-Filing-Compliance-Procedures
    3) Consider just filing 6 years of delinquent FBARs (also required in Streamlined). These are filed online and one of the drop-down reasons for filing late is something like “I didn’t know I was supposed to file”. [as if any normal human being would consider their local accounts to be “foreign”]
    4) Consider just filing FBARs going forward.
    5) Go to the Isaac Brock website to ask more FBAR/tax questions. There’s a ton of sympathetic people there who have been thru their own OMG moment, as well as a ton of collective knowledge.
    Go to http://isaacbrocksociety.ca/expat_tax/
    6) For questions re renunciation, go to http://isaacbrocksociety.ca/renunciation/

    Personally I’d advise doing 3 (or *maybe* 2), but IANAL and IANAA; you have to do your own due diligence (see 5 & 6).

    Also, you are hardly the first person this has happened to, so take a deep breath and try to relax (easier said than done, I know). If your only issue is delinquent FBARs, you should emerge from this unscathed.

    HTH

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  3. There are, quite literally, millions of people who should have filed an FBAR for multiple years and didn’t. I doubt there are many US expats who didn’t meet the $10,000 aggregate filing limit – a completely ludicrous amount that hasn’t been updated for inflation since it was created decades ago.
    Because the US is currently broke, the Treasury Dept. decided to dust off this ridiculous antiquated form and use it as a way to fill up the coffers with fines and penalties. Even Nina Olsen, the IRS Tax Advocate, thinks the entire FATCA/FBAR issue is doing nothing but tormenting honest tax-paying citizens:

    http://www.taxanalysts.com/www/features.nsf/Features/FD2860D17810639485257D6B0052AC9C?OpenDocument

    Anyway – you are far from alone. Do head over to the Isaac Brock Society as the other commentor mentioned. There is simply loads and loads of information and sympathy there. You may also want to look into the ADCS (http://www.adcs-adsc.ca/) who are filing a lawsuit against the Canadian government for signing up to FATCA.

    Like you, I live in an EU member state, and I’m hoping that some group gets their act together and brings some sort of case before the EU Court on Human Rights. FATCA is a complete violation of basic rights targeted at one group of people. It’s discriminatory, intrusive, extraterritorial and just plain stupid. Seriously.

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  4. I agree – take a deep breath and calm down, even though the underlying situation is so absurd and unfair it does literally take your breath away. Multiple tax preparers (in private) are saying that people who just file back FBARs are NOT being pursued by the IRS. They tried to pursue some minnows in the beginning of the FBAR enforcement (after, as you confirm, decades of tax preparers themselves not being aware of this requirement !!!) but some minnows fought back and won cases and the IRS now seems to be concentrating on going after whales. I’m not a tax preparer and not a fiscal expert, just someone active in American Citizens Abroad who hears MANY stories from our members. You should be OK. But what the US is doing to patriotic Americans overseas is scandalous, and extremely detrimental to the United States itself, in terms of discouraging investment from abroad (whoa, the horrible possible penalties !) and pushing Americans to such despair that they renounce and therefore do NOT work in any way on increasing exports from the US (let alone act as informal ambassadors abroad which we’ve all done for so many years). ACA is working on several different aspects of the problem, educating Congress and the Administration and presenting specific proposals, but our top priority is working on Congress to change to a system of Residence Based Taxation which would solve most FBAR/FATCA/FINCEN and other alphabet soup problems. And it’s not as far-fetched as it sounds !!!

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  5. Your life will not be complete until you file an FBAR. FBAR is an important life event for Americans abroad. We are born, we grow up, we file FBARs and we do. Robert Wood can help He understands how important that first FBAR is. Google “Robert Wood Forbes Your First FBAR”

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  6. In the past, the IRS offered expats some amnesty, enabling them to file FBAR’s without penalties as long as they were not previosly requested to do so and stated that they were unaware. If this is still the case today, I don’t know.

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  7. Rita:

    As long as you have filed your returns and own no U.S. tax you have nothing to fear. Look at this post at the Isaac Brock Society. The first part of the post will explain why you want nothing to do with Streamlined anywhere. But if you read to the second part of the post you will see a discussion of:

    How to mange a situation where your only omission is the FBAR. The bottom line is that you just file them with an explanation – “I didn’t know about them”.

    http://isaacbrocksociety.ca/2014/10/12/what-are-the-benefits-of-the-coming-into-u-s-tax-compliance-through-the-streamlined-program/

    You do NOT need to do anything else.

    So, stop your worrying. Be happy. But, you do need to this as a “wake up call”.

    Renounce that U.S. citizenship before it kills you.

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