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Professor Allison Christian focuses her studies at McGill University on national and international taxation.
In this video she discusses how the injustice caused by FATCA has caused her to change her mind not only on the FATCA itself but on the whole policy of citizenship based taxation.
“No solution goes far enough except the repeal of citizenship taxation.”
If one good thing can come out of the horrible policies such as FATCA being passed is that it is waking people up to the desperate and tyrannical nature of the US government.
Another example of such overreach is the bill being discussed now in Congress that would give the IRS the power to revoke the passport of anyone who owes (or is accused of owing) $50,000 or more in taxes. It is set to pass in the next couple weeks, if so, the law will go into force January 1st, 2016.
Thanks for posting this Scott. She’s a smart girl but she did leave out some critical info. In the interview, the HIRE act and “pay fors” were mentioned but they really didn’t tie in the relevance. Every US bill has to have a provision as to how it is payed for. The HIRE act was payed for by imposing a 45% “exit tax” on the assets of people, above a certain threshold, who wanted to renounce their US citizenship. i.e. another lock on the door.
Imagine this, you and your wife are throwing a party, shortly after arriving, guests want to leave. Do you a) try to figure out why they want to leave and correct the problem or b) nail all the windows and doors shut so that they can’t get out? It is pretty obvious which choice the US has made.
Now, FATCA isn’t the entire problem. It is just how folks are going to get caught. You see, the problem is “disclosure penalties” that have been on the books for a very long time. Imagine this, a young girl from Niagara Falls, New York falls in love with a boy from Niagara Falls, Ontario only a Rainbow Bridge away. They marry and raise a family in St. Catherine’s. Then, one day, a letter comes in the mail from the IRS telling them that they owe a million dollars, not in taxes, but in disclosure penalties. It has gotten so bad that the head of Revenue Canada sent an open letter to the United States that basically said, “Our people live under one of the most heavily regulated financial systems on the planet. BACK OFF of our people!”
There are many in CR that have been flying under the radar for a long time. FATCA is how they are going to get caught! And it isn’t going to be pretty. The US has had access to the National Registry in CR and now, with FATCA, they not only have access to the officers, but also the directors and beneficial owners.
You may want to check out this example that I put together as an illustration.
http://www.galtsgulch-cr.com/?page_id=24
Thanks again for posting this as a lot folks are going to have heart attacks when they get the letter in the mail.
[quote=”BillNew”]
There are many in CR that have been flying under the radar for a long time. FATCA is how they are going to get caught! And it isn’t going to be pretty. The US has had access to the National Registry in CR and now, with FATCA, they not only have access to the officers, but also the directors and beneficial owners.You may want to check out this example that I put together as an illustration.
http://www.galtsgulch-cr.com/?page_id=24
Thanks again for posting this as a lot folks are going to have heart attacks when they get the letter in the mail.
[/quote]
And thank YOU ‘BillNew’ for showing that bloody brilliant illustration which is FANTASTIC!
[b]Would you please allow me to publish that illustration here on WeLoveCostaRica.com?[/b]
If you’re OK with that, just send me a short ‘author’s biography’ that I can put at the end of your article to give you credit where much credit is due.
Scott
You are free to republish as you see fit.
No credit is needed … and the example may not be entirely accurate as the obligation to file the 8938 may have just began in the mid-2000s … but the gist remains the same.
Folks just need to get prepared.
I mentioned Don Nelson at taxmeless elsewhere on this site. He has been an invaluable resource to me on international taxation issues. He is someone that can advise you as a tax attorney and as an international tax accountant. He doesn’t work for free but I don’t think that any of us try to. BTW, we live a country apart and I don’t get kickbacks, incentives or otherwise for recommending him. I tell people about him because he has been a great help to me and most folks don’t understand the total ramifications of all of their actions when acquiring assets abroad.
Being an officer of the court, Don can’t advise you to do anything that isn’t specifically legal, however, there is a conventional wisdom that folks that aren’t compliant should simply try to slide sideways into the system i.e. start filing the proper forms as if your obligation just began. Unfortunately, it may be too late for that.
Take care.
On behalf of our VIP Members, I would like to thank you very much BillNew
I have republished your article at:
[url=https://www.welovecostarica.com/members/IRS-Reporting-Obligations-For-US-Citizens-When-Buying-Real-Estate-in-Costa-Rica-Dont-make-this-million-dollar-mistake.cfm]IRS Reporting Obligations For U.S. Citizens When Buying Real Estate in Costa Rica. Don’t make this million dollar mistake![/url]
Scott
I have owned a home in Costa Rica for about 10 years…I purchased the home for $35K…and spend a couple months Dec and Jan each year…I live in Alaska…I have never kept more than a couple thousand in the bank…and have reported having a “foreign bank account”…
1.) Does the reporting of a home and corporation start at a home priced at $200K…..Am I ok for owning a home much less than that?
2.) I have reported having a bank account every year…but have never deposited more than a couple thousand.
I am preparing to go back in a couple weeks…Where do I stand?
1. Just a reminder that [url=https://www.welovecostarica.com/members/5589.cfm]Bill’s article here[/url] is specifically referring to people who have bought Costa Rica real estate in the name of a Costa Rica Corporation
2. Finding a good tax advisor is tough enough as it is but in this case you need a good tax advisor who must also understand how your domestic tax affairs can be planned as efficiently as possible while owning international real estate in your name or in the name of a Costa Rican corporation.
3. Although recommends Don Nelson at [url=http://taxmeless.com/]TaxMeLess.com[/url], I do not know him personally so I would encourage you to visit his website, do your own due diligence and speak with him before you decide to hire him.
4. Lastly, this is NOT something to be left until mañana or “I’ll beer round to it one day soon!” It is always better if you voluntarily start getting your affairs in order rather than the IRS coming after you ….
Good luck!
Scott
And now, they are going to hold your passport hostage.
http://tax-news.com/news/Americans_Abroad_Advised_To_Ensure_US_Tax_Compliance____69765.html
tonto,
The $200K was a reporting threshold for Form 8938 for a specific set of circumstances … a couple filing “married filing jointly” and residents of the US.
These thresholds change depending on your filing status and place of residency.
I do not consider myself competent to advise on these matters. You may want to check out the “Instructions for Form 8938.”
If there is a foreign corporation involved, and you own 10% or more, your reporting requirement may start at $0. You may want to check out the “Instructions for Form 5471.”
Also, if you transferred money to the foreign corporation so that it could purchase the house, that’s where the Form 926 comes in.
And all these forms change depending on whether you formed an SA or SRL.
And again, I’m NOT a qualified individual when it comes to advising on legal or tax matters.
Good luck.
The text of the bill relating to passports
[quote]SEC. 32101. REVOCATION OR DENIAL OF PASSPORT IN CASE OF CERTAIN UNPAID TAXES.
(a) In General.—Subchapter D of chapter 75 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:“SEC. 7345. REVOCATION OR DENIAL OF PASSPORT IN CASE OF CERTAIN TAX DELINQUENCIES.
“(a) In General.—If the Secretary receives certification by the Commissioner of Internal Revenue that any individual has a seriously delinquent tax debt in an amount in excess of $50,000, the Secretary shall transmit such certification to the Secretary of State for action with respect to denial, revocation, or limitation of a passport pursuant to section 52102(d) of the Transportation Funding Act of 2015.“(b) Seriously Delinquent Tax Debt.—For purposes of this section, the term ‘seriously delinquent tax debt’ means an outstanding debt under this title for which a notice of lien has been filed in public records pursuant to section 6323 or a notice of levy has been filed pursuant to section 6331, except that such term does not include—
“(1) a debt that is being paid in a timely manner pursuant to an agreement under section 6159 or 7122, and
“(2) a debt with respect to which collection is suspended because a collection due process hearing under section 6330, or relief under subsection (b), (c), or (f) of section 6015, is requested or pending.
“(c) Adjustment For Inflation.—In the case of a calendar year beginning after 2016, the dollar amount in subsection (a) shall be increased by an amount equal to—
“(1) such dollar amount, multiplied by
“(2) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting ‘calendar year 2015’ for ‘calendar year 1992’ in subparagraph (B) thereof.
If any amount as adjusted under the preceding sentence is not a multiple of $1,000, such amount shall be rounded to the next highest multiple of $1,000.”.
(b) Clerical Amendment.—The table of sections for subchapter D of chapter 75 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:“Sec. 7345. Revocation or denial of passport in case of certain tax delinquencies.”.
(c) Authority For Information Sharing.—(1) IN GENERAL.—Subsection (l) of section 6103 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(23) DISCLOSURE OF RETURN INFORMATION TO DEPARTMENT OF STATE FOR PURPOSES OF PASSPORT REVOCATION UNDER SECTION 7345.—
“(A) IN GENERAL.—The Secretary shall, upon receiving a certification described in section 7345, disclose to the Secretary of State return information with respect to a taxpayer who has a seriously delinquent tax debt described in such section. Such return information shall be limited to—
“(i) the taxpayer identity information with respect to such taxpayer, and
“(ii) the amount of such seriously delinquent tax debt.
“(B) RESTRICTION ON DISCLOSURE.—Return information disclosed under subparagraph (A) may be used by officers and employees of the Department of State for the purposes of, and to the extent necessary in, carrying out the requirements of section 52102(d) of the Transportation Funding Act of 2015”..”.
(2) CONFORMING AMENDMENT.—Paragraph (4) of section 6103(p) of such Code is amended by striking “or (22)” each place it appears in subparagraph (F)(ii) and in the matter preceding subparagraph (A) and inserting “(22), or (23)”.
(d) Authority To Deny Or Revoke Passport.—
(1) DENIAL.—
(A) IN GENERAL.—Except as provided under subparagraph (B), upon receiving a certification described in section 7345 of the Internal Revenue Code of 1986 from the Secretary of the Treasury, the Secretary of State shall not issue a passport to any individual who has a seriously delinquent tax debt described in such section.
(B) EMERGENCY AND HUMANITARIAN SITUATIONS.—Notwithstanding subparagraph (A), the Secretary of State may issue a passport, in emergency circumstances or for humanitarian reasons, to an individual described in such subparagraph.
(2) REVOCATION.—
(A) IN GENERAL.—The Secretary of State may revoke a passport previously issued to any individual described in paragraph (1)(A).
(B) LIMITATION FOR RETURN TO UNITED STATES.—If the Secretary of State decides to revoke a passport under subparagraph (A), the Secretary of State, before revocation, may—
(i) limit a previously issued passport only for return travel to the United States; or
(ii) issue a limited passport that only permits return travel to the United States.
(3) HOLD HARMLESS.—The Secretary of the Treasury and the Secretary of State shall not be liable to an individual for any action with respect to a certification by the Commissioner of Internal Revenue under section 7345 of the Internal Revenue Code of 1986.
(e) Revocation Or Denial Of Passport In Case Of Individual Without Social Security Account Number.—
(1) DENIAL.—
(A) IN GENERAL.—Except as provided under subparagraph (B), upon receiving an application for a passport from an individual that either—
(i) does not include the social security account number issued to that individual, or
(ii) includes an incorrect or invalid social security number willfully, intentionally, negligently, or recklessly provided by such individual,
the Secretary of State is authorized to deny such application and is authorized to not issue a passport to the individual.
(B) EMERGENCY AND HUMANITARIAN SITUATIONS.—Notwithstanding subparagraph (A), the Secretary of State may issue a passport, in emergency circumstances or for humanitarian reasons, to an individual described in subparagraph (A).
(2) REVOCATION.—
(A) IN GENERAL.—The Secretary of State may revoke a passport previously issued to any individual described in paragraph (1)(A).
(B) LIMITATION FOR RETURN TO UNITED STATES.—If the Secretary of State decides to revoke a passport under subparagraph (A), the Secretary of State, before revocation, may—
(i) limit a previously issued passport only for return travel to the United States; or
(ii) issue a limited passport that only permits return travel to the United States.
(f) Effective Date.—The provisions of, and amendments made by, this section shall take effect on January 1, 2016. [/quote]
It has passed the House and is expected to pass the Senate without ammendment before recess.
The POTUS is expected to sign withot objection.Funny…. our politicians in the US have allowed millions to enter and remain in the US illegally all while violating dozens of laws currently on the books…. and now they want to keep US citizens from leaving!
Pretty soon having a passport and playing by the rules will be more of a burden then it’s worth.
Folks flowing across the US border without the need for one has been the norm for a while.
4000 Cubans in CR looking to simply walk into the US without the need for a passport.
Syrians looking to migrate without rules.
Seems the politicians in the US want to lock the doors on a house on fire refusing to let those inside get out!
Getting more and more like the Matrix every day!
[quote=”Imxploring”]…. and now they want to keep US citizens from leaving!
Pretty soon having a passport and playing by the rules will be more of a burden then it’s worth.
[/quote]
True … but even with the oppressive fees that they have levied in order to renounce your US citizenship … you still won’t live long enough to get an appointment to do so …
It’s too late for us … we can only worry about the children …
Properly structured … death can be the opportunity of a lifetime …
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