United States Run Amok (again)

[bankside]

So it seems Americans, no matter which country they live in, roads they drive on, hospitals they visit, education system they rely on, are obliged to pay taxes to the US government.

Fair enough. Apparently most countries will let people go away and as long as they are living and paying taxes somewhere else, then that's the end of that. But not so for an American. You're free to leave the country, as long as you keep paying your US taxes. And I have no particular problem with that: it's their system, their citizens, their laws.

A tax crackdown by the United States has sent more than one million Americans and green-card holders living in Canada scrambling to figure out how to comply.

The move is part of a push by the U.S. Internal Revenue Service (IRS) to make sure U.S. taxpayers are paying what they owe on foreign accounts. Unlike most countries, the U.S. requires its citizens to file annual tax returns based on their worldwide income, regardless of where they live.

http://www.theglobeandmail.com/glob...kdown-hits-canadian-residents/article2067393/

However, then their tax people have the presumptuousness to do this:

Starting in 2013, the IRS will require financial institutions outside the United States to disclose all accounts held by current and former U.S. citizens and green-card holders. They will likely have to file years of U.S. tax returns and detailed annual account disclosure.

Nonsense! The US simply has no sovereignty outside its borders. And it is the height of hypocrisy to preach deregulation at home whilst claiming the right to regulate abroad. It's really not our problem how individual Americans do or do not pay their taxes. By way of treaty, there might be some scope for cooperation and quid pro quo. But by no means can a foreign government simply legislate how Canadian banks will report on Canadian bank accounts.

BTW, I have to comment on the amateur reporting there... Canada has no such thing as a "green card." I assume they mean Permanent Residents or Work-Permit holders or something.

Sadly, the US tried to do something like this before, with the Helms-Burton Act. Fortunately, we thus have a precedent and a response to this kind of nonsense in our law: the Foreign Extraterritorial Measures Act, which makes it clear that it is illegal to go along with the dictates of a foreign government, imposing million dollar fines for compliance: http://laws.justice.gc.ca/PDF/F-29.pdf

The real question is, will Harper's government have the integrity to adapt the act to this situation? Or are our objections just hot air from our Finance Minister.

What's your country doing about this? Aus? UK? NZ? France? Mex?

 

[RobinGoodfellow]

Well, duh. There are still American citizens. This isn't about the sovereignty of the US on foreign soil, but that the person still claims to be part of the US. Of course, the good news is that there is a $91,500 exclusion available, as well as meals and lodging. Based on $500/mo room, that's an additional $6000 you can claim (or $97,500). Better yet, if your employer is picking up the tab for meals and lodging, you can claim all of that as well. And it doesn't include amounts for pensions, etc. This actually sounds nice.

Okay, I'm sorry: Besides having to possible pay taxes in two countries, how this a problem? The person is claiming to be a US citizen; why should he be able to not pay taxes, just because he's not actually in the US?

RG

 

[JB3]

So it seems Americans, no matter which country they live in, roads they drive on, hospitals they visit, education system they rely on, are obliged to pay taxes to the US government.

Fair enough. Apparently most countries will let people go away and as long as they are living and paying taxes somewhere else, then that's the end of that. But not so for an American. You're free to leave the country, as long as you keep paying your US taxes. And I have no particular problem with that: it's their system, their citizens, their laws.



http://www.theglobeandmail.com/glob...kdown-hits-canadian-residents/article2067393/

However, then their tax people have the presumptuousness to do this:


Nonsense! The US simply has no sovereignty outside its borders. And it is the height of hypocrisy to preach deregulation at home whilst claiming the right to regulate abroad. It's really not our problem how individual Americans do or do not pay their taxes. By way of treaty, there might be some scope for cooperation and quid pro quo. But by no means can a foreign government simply legislate how Canadian banks will report on Canadian bank accounts.

BTW, I have to comment on the amateur reporting there... Canada has no such thing as a "green card." I assume they mean Permanent Residents or Work-Permit holders or something.

Sadly, the US tried to do something like this before, with the Helms-Burton Act. Fortunately, we thus have a precedent and a response to this kind of nonsense in our law: the Foreign Extraterritorial Measures Act, which makes it clear that it is illegal to go along with the dictates of a foreign government, imposing million dollar fines for compliance: http://laws.justice.gc.ca/PDF/F-29.pdf

The real question is, will Harper's government have the integrity to adapt the act to this situation? Or are our objections just hot air from our Finance Minister.

What's your country doing about this? Aus? UK? NZ? France? Mex?

Sorry, your argument doesn't hold water. They're still US citizens, and they still owe taxes. There is nothing resembling encroachment on sovereignty, so that line of reasoning is as impotent as your prime minister.

Look, the US has a sordid history of individuals using accounts and income earned in foreign lands and held in foreign banks as a way to dodge their tax responsibilities. This is the result of their actions.

Frankly, tough noogies. It doesn't affect you, and there's nothing your or any other government can do to stop it.

 

[Tengilethos]

Sorry, your argument doesn't hold water. They're still US citizens, and they still owe taxes. There is nothing resembling encroachment on sovereignty, so that line of reasoning is as impotent as your prime minister.

Look, the US has a sordid history of individuals using accounts and income earned in foreign lands and held in foreign banks as a way to dodge their tax responsibilities. This is the result of their actions.

Frankly, tough noogies. It doesn't affect you, and there's nothing your or any other government can do to stop it.

They can just refuse to comply to stop it? The real problem is not that some people are avoiding taxes in the US, it is what these measures reveal about the people and corporations outside the United States that do business with your citizens.

 

[JayHawk]

If they refuse to comply as banking institutions they will be penalties that I am sure could include exclusion from working with the financial capital of the world.

Not a lot makes bankers squirm more than taking away their profits.

Finally are you afflicted with some sort of ignorant bliss where you believe ONLY U.S. citizens evade taxes?

 

[hotatlboi]

Sorry, your argument doesn't hold water. They're still US citizens, and they still owe taxes. There is nothing resembling encroachment on sovereignty, so that line of reasoning is as impotent as your prime minister.

Your third sentence seems to follow from the second (which I bolded).

While it is true that a legal requirement for US citizens to pay taxes regardless of where they live is perfectly legitimate, bankside's point on sovereignty was specifically on the question of whether the US can compel foreign financial institutions to disclose records about these people. I'm forced to agree that that is an area where the US simply has no jurisdiction.

 

[TriBi]

This:

Apparently most countries will let people go away and as long as they are living and paying taxes somewhere else, then that's the end of that.

If I leave a country, travel to and work somewhere else, am paid by an employer in that second country, am using the infrastructure and services of the country to which I have moved - then I should be paying taxes in that second country - but most definitely NOT the country I have left. I am not utilising their resources - so why should I have to pay the country I have left behind? That is just a ridiculous money grab which goes against all principles of decency, logic and common sense.

I was unaware of this - if true, I think it is ridiculous.

 

[JayHawk]

Ah... jurisdiction no? Means to compel? Absolutely.

The difference being what?

We get what we desire as a nation... citizens who desire the benefits of US citizenship but do not desire to pay their fair share for that honor.

We avoid and amazing sloth of legal barriers from other nations where they would simply fight for the privacy of their American citizen who is living in their country contributing to their economy.

I wonder how this will affect the Swiss. They are notorious for hiding criminal monies and valuables.

The true bottom line is if you do not want to pay your dues then get out of the club. And to add to that if your business wants to facilitate that dishonesty then you are just as accountable.

It appears to be the fairest thing ever to exist. The countries that fight tooth and nail over providing the information obviously have something they don't want shared. Good intelligence point to focus our asset on tracking money trails.

SO seriously what is not to like?

 

[JayHawk]

This:
If I leave a country, travel to and work somewhere else, am paid by an employer in that second country, am using the infrastructure and services of the country to which I have moved - then I should be paying taxes in that second country - but most definitely NOT the country I have left. I am not utilising their resources - so why should I have to pay the country I have left behind? That is just a ridiculous money grab which goes against all principles of decency, logic and common sense.

I was unaware of this - if true, I think it is ridiculous.

Bullshit. They keep their US Citizenship for a reason and it isn't smiles. You are not legally allowed to hold both US citizenship and any other countries citizenship. SO you are right they should pay that other country AND be a citizen..... of that other country

Gee I wonder why they would keep it??? Perhaps taxes are so low and then if you can cheat your way out of most of the taxes then you pay no one anything.... hmmmmmmmmm

 

[bankside]

This:
If I leave a country, travel to and work somewhere else, am paid by an employer in that second country, am using the infrastructure and services of the country to which I have moved - then I should be paying taxes in that second country - but most definitely NOT the country I have left. I am not utilising their resources - so why should I have to pay the country I have left behind? That is just a ridiculous money grab which goes against all principles of decency, logic and common sense.

I was unaware of this - if true, I think it is ridiculous.

I agree that it is ridiculous, but if it bothers any Americans living in Canada then they should go debate it with their fellow Americans and get the tax laws changed. That's not my fight. My issue is only with the idea that the US thinks they can regulate Canadian banks or Australian banks. Of course they can't; Americans who live here legally and open bank accounts legally are doing business under Canadian law, and nothing else.

Our government is making noise about it, though I don't know if I have any confidence that they'll follow through. What about in .au? Anything from the banks or government on this issue?

BTW Canada doesn't object to multiple citizenship. Most of my in-laws, and even my mom (though not me) can claim citizenship in other countries. It's actually the rule these days rather than the exception. Modern open countries have families with roots in many places, and ties in many places. Most Canadians agree that this openness is a good thing.

 

[bankside]

Thank you for spelling "amok" correctly.

Yeah. I'm one of those.

Awww! And a cute one at that. Your welcome.








(see what I did there?)

 

[JB3]

Your third sentence seems to follow from the second (which I bolded).

While it is true that a legal requirement for US citizens to pay taxes regardless of where they live is perfectly legitimate, bankside's point on sovereignty was specifically on the question of whether the US can compel foreign financial institutions to disclose records about these people. I'm forced to agree that that is an area where the US simply has no jurisdiction.

You'd actually be quite wrong. IF those people are citizens and are required to pay taxes (which you agree that they are), then the US has every right and expectation to demand banking records concerning those citizen's accounts. Sovereignty has absolutely nothing to do with it. (and I think you could make a case that the sovereignty of the US would be violated should foreign governments attempt to interfere in the US' ability to levy rightful taxes on its citizens)

 

[hotatlboi]

The countries that fight tooth and nail over providing the information obviously have something they don't want shared.

Hogwash.

What they don't want is the precedent set that their financial data is completely open and available to anyone that demands it.

This general argument of "if you don't totally give up all privacy you have something to hide" comes up a lot and it really is the most absurd line ever.

 

[hotatlboi]

You'd actually be quite wrong. IF those people are citizens and are required to pay taxes (which you agree that they are), then the US has every right and expectation to demand banking records concerning those citizen's accounts. Sovereignty has absolutely nothing to do with it. (and I think you could make a case that the sovereignty of the US would be violated should foreign governments attempt to interfere in the US' ability to levy rightful taxes on its citizens)

It actually does matter quite a bit. The US simply has no legal right to compel foreign banks to release those records. It can certainly request them, but if the local privacy laws protect the account holders then that is the first duty of the banks.

 

[MoltenRock III]

The USA is unique / ridiculous in it's demand of expats who don't even live in the country any longer must still file and pay taxes. No other country in Europe, Asia, or the Americas does so. The only way out is to renounce your citizenship which more and more are doing.

http://economix.blogs.nytimes.com/2011/06/16/more-americans-are-renouncing-citizenship/

Filing multiple countries tax forms is a pain in the ass!

 

[JB3]

It actually does matter quite a bit. The US simply has no legal right to compel foreign banks to release those records. It can certainly request them, but if the local privacy laws protect the account holders then that is the first duty of the banks.

The legal right to compel exists in their right to tax their citizens. We're not talking about some company attempting to get information about people, we're talking about a government seeking information that it has a legal right to have access to. No bank would have any legal basis whatsoever to deny that access.

 

[Tengilethos]

Ah... jurisdiction no? Means to compel? Absolutely.

The difference being what?

We get what we desire as a nation... citizens who desire the benefits of US citizenship but do not desire to pay their fair share for that honor.

We avoid and amazing sloth of legal barriers from other nations where they would simply fight for the privacy of their American citizen who is living in their country contributing to their economy.

I wonder how this will affect the Swiss. They are notorious for hiding criminal monies and valuables.

The true bottom line is if you do not want to pay your dues then get out of the club. And to add to that if your business wants to facilitate that dishonesty then you are just as accountable.

It appears to be the fairest thing ever to exist. The countries that fight tooth and nail over providing the information obviously have something they don't want shared. Good intelligence point to focus our asset on tracking money trails.

SO seriously what is not to like?

I have no problem if US citizens have to pay taxes while living abroad. As someone has said, if they don't like it they can just become citizens of Canada for example. Americans are of course not the only ones who try to avoid taxes to their government. But you are collecting data not only about your citizens, but indirectly about Canadian citizens as well, which you have no authority to do. And your data protection policies just don't seem well developed. Especially jarring is the fact that the Internal Revenue Service just decides to require the disclosure of these informations, as if it had any legal authority to for example compel a local Canadian bank which has no business outside of Canada.

It would be better if you strike an agreement with other countries so that their equivalents to your IRS looks through the accounts of the US citizens to find out how much taxes they owe you and you can then collect these taxes.

Oh and to banksides first post, I assume these green-card holders in your report meant holders of US green-cards, not the Canadian equivalent.

 

[BostonPirate]

This:
If I leave a country, travel to and work somewhere else, am paid by an employer in that second country, am using the infrastructure and services of the country to which I have moved - then I should be paying taxes in that second country - but most definitely NOT the country I have left. I am not utilising their resources - so why should I have to pay the country I have left behind? That is just a ridiculous money grab which goes against all principles of decency, logic and common sense.

I was unaware of this - if true, I think it is ridiculous.

Because they have the protection of the US Gov't abroad, and access to consular facilities.

You would be right if the people in consideration were changing citizenship status as they moved from nation to nation.

That isn't happening.

They work abroad because its profitable and some just hold accounts internationally to avoid taxes, and don't work there at all.

If its so profitable to work abroad they need to pay taxes to both, or pick one or the other to be a citizen of.

 

[hotatlboi]

<snip>as if it had any legal authority to for example compel a local Canadian bank which has no business outside of Canada.

This is the problem I have with this action. The US seems to be acting like it has a right to order foreign banks to turn over data, when it really doesn't.

Basically if this was pursued in the manner of a diplomatic request, I wouldn't have an issue with it. But demanding or ordering foreign banks to comply is really an arrogant action which is not warranted by the authority the US has in Canada.

 

[Kulindahr]

Okay, I'm sorry: Besides having to possible pay taxes in two countries, how this a problem? The person is claiming to be a US citizen; why should he be able to not pay taxes, just because he's not actually in the US?

Because he's not using the highways, etc. etc. etc.

Besides which, it's incredibly immoral to tax a person twice for the same thing.

SO seriously what is not to like?

What's not to like is that this is essentially an incentive for people to leave the U.S. and renounce their citizenship, just as corporate tax policies are an incentive to leave America and do business elsewhere. Seriously, why should a business such as Exxon remain in a country where it pays more in taxes than it earns in that country?

The legal right to compel exists in their right to tax their citizens. We're not talking about some company attempting to get information about people, we're talking about a government seeking information that it has a legal right to have access to. No bank would have any legal basis whatsoever to deny that access.

That information is the joint property of the citizen and the institution. There is no legal right to it unless both consent.