FBAR delinquency and VDP
#16
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I am sympathetic with your plight so please do not take my comments the wrong way.
There is a saying that ignorance of the law is no defence and it seems to me that the IRS is using this principle to punish you. In one of your other posts you seem to suggest that until quite recently you didn't know you were American. If that is correct my argument would be that until that date you could have had no way of knowing you needed to comply with US tax law so therefore you should have "reasonable cause" up until that point. After that date I guess the counter argument could be you should have taken steps to find out what the responsibility of being a US citizen entailed. How your counter that I'm not sure.
There is a saying that ignorance of the law is no defence and it seems to me that the IRS is using this principle to punish you. In one of your other posts you seem to suggest that until quite recently you didn't know you were American. If that is correct my argument would be that until that date you could have had no way of knowing you needed to comply with US tax law so therefore you should have "reasonable cause" up until that point. After that date I guess the counter argument could be you should have taken steps to find out what the responsibility of being a US citizen entailed. How your counter that I'm not sure.
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.
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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.
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.
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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
http://federaltaxcrimes.blogspot.com/search/label/FBARs
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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
http://federaltaxcrimes.blogspot.com/search/label/FBARs
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Sounds extremely ignorant, but for whatever reason, I did not presume I was a UK citizen.
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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.
Sounds extremely ignorant, but for whatever reason, I did not presume I was a UK citizen.
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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.
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You miss the point...it was the bit in bold to make it clear ![Embarrassment](https://britishexpats.com/forum/images/smilies/redface.gif)
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.
![Embarrassment](https://britishexpats.com/forum/images/smilies/redface.gif)
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.
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.
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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.
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.
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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.
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.
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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.
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I knew there was a fine for the airlines, but did not know that there was a fine for the individual too??!!! ![EEK!](https://britishexpats.com/forum/images/smilies/eek.gif)
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.
![EEK!](https://britishexpats.com/forum/images/smilies/eek.gif)
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.
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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
http://www.flottco.com/docs/Shulman%...04-10-2009.pdf
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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.
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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! ![Smile](https://britishexpats.com/forum/images/smilies/smile.gif)
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
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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
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).
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