Bink

You are correct in that I did not realise that I was a US citizen until last year. At that point in time, as I was making preparations to move to the US for work, I found out that I was already considered a US citizen and also was made aware of the requirements for filing taxes as a US citizen. I was advised to approach the IRS at that time, and so I did.

This has all been explained to the IRS but they have failed to take it into consideration.

Their perspective, is that I have been a US citizen since birth (whether I knew it or not), and I should have known that, and as a US citizen I should know that I need to file taxes and FBARs.

The most frustrating part for me is that I owe them no taxes (they have audited my accounts back to 2003 and I have filed tax returns back to 2003). I have not gained anything by not filing FBARs, I have not hidden any taxable income. I have purely failed to file a piece of paper each year. If I had of known to file, I would have paid them nothing.

I would be a bit more sympathetic to getting fined if I owed them money, but I do not. I am being penalised solely for not informing them that I owned 'foreign' bank accounts.

celticgrid

First let me say I am entirely sympathetic. My wife (the USC) was unaware of the bank account reporting requirements whilst we were living in the UK, and we filed 5 years of retrospective paperwork as part of the process of moving here a couple of years ago. Luckily (?!) our reportable balances weren't massive - most of the stuff being in my name and not hers! They accepted that filing without a murmur.

Having been sympathetic, here's the other view.

You were born in the US. You have a US birth certificate. Neither of these were recent news. Why would it come as a surprise that you are American? I don't think, from their viewpoint, that that view is unreasonable.

However, levying a fine seems unreasonable to me so I still think you should spend a bit on legal advice and possibly fight this.

meauxna

I read a couple of entries in depth and skimmed some more; this person might be a good contact for a consultation.

http://federaltaxcrimes.blogspot.com/search/label/FBARs

Bink

Thanks Meauxna!

AlienUk

I'll tell you why. In the UK, unless certain conditions are met, the child is not automatically a UK citizen. At 19, having lived in Jamaica since the age of seven but born in the UK, I actually phoned the UK embassy to see whether I needed a visa to go to the UK.
Sounds extremely ignorant, but for whatever reason, I did not presume I was a UK citizen.

celticgrid

You miss the point...it was the bit in bold to make it clear

From the perspective of the IRS official, who probably knows nothing about the situation in the UK, Jamaica, Outer Mongolia or anywhere else, and certainly cares about those situations even less. I was not talking about the OP's viewpoint, but the viewpoint of the IRS official, as that is going to be a salient viewpoint to overcome in any challenge to the decision.

Bink

You've hit the nail on the head. That's my issue. My viewpoint is the same as AlienUK's, that being born there didn't automatically make me a citizen as it was never my parents intention to stay there and I have lived my entire life in the UK.
In hindsight, this may have been naive, but hey...

The IRS doesn't give a monkey's backside about this, to them I AM a US citizen, and I should have filed.

The problem with the VDP is that it doesn't account for those that were unaware, and were not trying to avoid tax. They get treated the same as someone who knowingly put funds offshore, solely for the purpose of hiding it from the IRS.

Bink

I'll also add that, I've travelled countless times to the US on a British passport, unaware I should have had a US passport and travelled on that. I have the VWP stamps in my passport to prove it.

Never, not even once, did anyone stop me and say I should be travelling on a US passport and my UK passport does state my place of birth.

meauxna

Better keep that on the downlow.. there's a fine for that too! (no, seriously)

Bink

I knew there was a fine for the airlines, but did not know that there was a fine for the individual too??!!!

I can tell you that there was disbelief from the US embassy in London when I applied for a PP for the first time, that I'd never been denied entry into the US...

The officials at the embassy told me about the airline fine, but not about the personal implications.

meauxna

Look in the wiki here for the pros/cons article about dual citizenship. and/or, google up Rich Wales' Dual Citizen FAQ.. lots of tidbits you'll want to know!

Bink

I came across the following letter to the IRS which sums up some of the issues with the VDP programme so thought I'd post it as auseful reference for anyone else:

http://www.flottco.com/docs/Shulman%...04-10-2009.pdf

ian-mstm

The 14th Amendment to the US Constitution made you a USC at birth whether your parents intended it or not, wanted it or not, or cared either way!

I now it's no comfort to you but there are, literally, thousands of people who would kill to have a claim to US citizenship.

Ian

Bink

When I first got my US PP, I'd have understood. Now, my opinion is vastly different. I can understand people wanting to be able to move to America, and being an American citizen who lives in the US is one thing, but to be subjected to US taxes and beaurocracy worldwide, isn't so fun. Of course, my opinion is heavily biased by the fact I'm quite bitter about a $10k fine, despite owing no taxes.

I actually have a friend who also was born in the US and moved to the UK at a very young age who is now scared to travel to the US, due to tax reporting and FBAR violations. He had previously owned a US PP and SSN so is probably on the system somewhere (whether they'd spot him is a different matter).

lansbury

$650 a pop. So how many times was it and we'll get the bill calculated