Monday, September 26

Globe and Mail: "IRS bearing down on Americans in Canada"

Many Americans both Conservative and Liberal are upset with how their Government is functioning at the moment. I know I am not happy with the idiocy that is going on and the lies being put forward that somehow, we would be able to continue spending the outrageous amounts of money that the Government is currently spending, IF ONLY rich Americans paid a little more. Even Americans living overseas cannot escape the long arm of the US Government, which has decided to extend the arm of the Internal Revenue Service, the dreaded IRS, into the pockets of Americans overseas, even those who have no link to the country other than to have been born in the US or born by US parents. Apparently, there are lots of them. From this story, there are about a million living in Canada alone:
One person who’s off the hook is my brother. He was 11 when we moved to Canada. At 17, he got a draft notice. So he renounced his citizenship (after a long lecture from a consular official). I suppose I could renounce, too – but they won’t let you do that until you’ve filed your back tax returns. As many as a million U.S.-born residents of Canada are caught in this Kafkaesque nightmare. Finance Minister Jim Flaherty has written an indignant letter to leading U.S. newspapers. All of us are getting wildly conflicting professional advice. At first, Brian and his wife, who are by no means wealthy, decided to come clean. But when they were told they’d be on the hook for $250,000, they changed their minds. - Globe and Mail
I lived in Finland for three years while doing my MBA. Two of those years I filed a tax return. The third year I didn't because I didn't meet the minimum reporting threshold. It turns out that it was good that I did because a short while later I moved back to the US and applied for a GreenCard for my soon to be Finnish wife. One of the requirements was providing copies of my previous three years Income Tax Returns, or an explanation of why I didn't file.

This experience did result in not pursuing US Citizenship for my wife. We did have plans at the time to eventually move back to Finland, and we knew that it would be better tax-wise if she did not obtain US tax liability.

It is odd however, to see the amount of effort that the IRS is extending to track down money overseas the US thinks it can extort from Citizens, however unfair, while at the same time they do little to nothing to hunt down illegal aliens living within the US who are working without the legal authorization to do so, are conspiring with their employers to not pay/evade taxes (in some cases also committing identity theft) and are simply getting a free pass. 
  • It is not fair. 
  • It is discrimination. 
  •  It cannot last. 
 Unfortunately, I think it is going to get a lot more painful before it gets better. This is an illustration of a pile of $100 bills totaling $15 Trillion. That is $2,500 per person on earth. That is a hell of a bill to pay off and it is still growing. And this is why the US Government is trying to fleece Americans living abroad, they are simply running out of places to rind more revenue.

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