US Consulates and US Embassy in Canada cease to offer US Social Security Assistance

I received the following email today from the U.S. State Department: notifications@state.gov. It is clear that the U.S. will no longer be offering “Social Security Services” from the U.S. Consulates or Embassy in Canada. I presume this also means that the Social Security numbers cannot be obtained from U.S. Consulates in Canada. Assuming this to be true, this is one more big headache for Americans in Canada who are attempting to become U.S. tax compliant.

What follows it the bulletin from the State Department:

_________________________________________________________________________________________

United States Embassy Ottawa, Canada

Notice Regarding Social Security Services

September 29, 2017

The Social Security Administration (SSA) has consolidated its overseas operations and will no longer be offering social security assistance through the United States Embassy or Consulates in Canada. Effective October 1, 2017, individuals residing in Canada who require social security services or have questions about SSA benefits must contact their nearest SSA field office in the United States.

Please be advised that as of October 1, the United States Embassy and Consulates across Canada can no longer accept telephone calls, emails, or walk-in consultations regarding Social Security issues.

For questions regarding your application or your benefits, residents in Canada can find their designated field office on the SSA website: https://www.ssa.gov/foreign/canada.htm. SSA may require you to appear in person to submit your SSA application.

For general information on SSA services for people living outside the United States, please visit https://www.ssa.gov/foreign/.

If you are already receiving SSA benefits payments, there will be no change in the method of distribution of those payments.

For further information for American citizens in Canada:

• See the Department of State travel website for the Worldwide Caution, Travel Warnings, Travel Alerts, and Canada Country Specific Information.

• Enroll in the Smart Traveler Enrollment Program (STEP) to receive security messages and make it easier to locate you in an emergency.

• The U.S. Embassy in Ottawa is located at 490 Sussex Drive, Ottawa, Ontario, K1N 1G8, and is open from 8:00 a.m. to 12:00 p.m. Eastern Time on Monday, Tuesday, Thursday and Friday. You can reach us at 1-613-688-5335 during business hours. If you are a U.S. citizen in need of urgent assistance outside of business hours, the emergency after-hours number for the U.S. Embassy is 1-613-238-5335.

• Call 1-888-407-4747 toll-free in the United States and Canada or 1-202-501-4444 from other countries from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays).

What’s a #GreenCard anyway? It’s NOT what you don’t know. It’s what you know that isn’t true!

Introduction – It’s about the right to live permanently in the United States

There are tens of thousands of people who have “Green Cards” who live outside the United States. Some of them want to maintain their Green Cards which they understand to mean maintaining their right to live permanently in the United States. Otherwise do NOT want to maintain their Green Cards meaning they do NOT want to maintain their right to live permanently in the United States.

The “Green Card” itself, is different from the “right to live permanently in the United States”.

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Travel Documents: Canadian citizens need either a U.S. or Canadian passport to enter Canada by air (or by land)

This post is a reminder for Canadian citizens traveling outside of Canada who wish to return to Canada by air! YOU NEED THE RIGHT KIND OF “TRAVEL DOCUMENT” TO RETURN TO CANADA!

Section 6 of Canada’ Charter of Rights and Freedoms guarantees the right of Canadian citizens to enter Canada.

6. (1) Every citizen of Canada has the right to enter, remain in and leave Canada.

Yet, certain travel documents are required as proof of identity and citizenship.

There is a distinction between a “travel document” and one’s “citizenship or immigration status”. The “travel document” is generally considered to be “proof” of the “citizenship status”. A Canadian “permanent resident” card, which is valid for at most five years, is proof of having the status of “permanent resident” of Canada. A U.S. Green Card, which is subject to renewal, is a document that is proof of having the status of being a lawful permanent resident of the United States. All travel documents are valid for finite periods of time and must be renewed.

The expiration of the “travel document” does not affect the “citizenship” or “immigration” status. For example, the failure to renew the U.S. Green Card does NOT mean that you lose the right to live permanently in the United States. (You will be required to file U.S. taxes until your status as a lawful permanent resident has been terminated. The recent cases of Mr. Topsnik, discussed here and here, confirm that Green Card holders are subject to U.S. taxation until their status as permanent residents has been terminated.)

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Part 2: The problem is NOT “worldwide taxation”. The problem is imposing “worldwide taxation” on people who don’t live in the South Africa or the USA and are “tax residents’ of other countries.

As goes taxation, so goes civilization.

This is Part 2 of my post discussing the South Africa tax situation. Part 1 is here.

This is a follow up to my post exploring whether South Africa is moving to a tax system that is based on “citizenship-based taxation” or (in the case of the United States of America) “taxation-based citizenship”. That post was the result of a “special request”. The response from that first post included:

I now understand the difference between the SA system and the US. I believe that the similarity that caused the consternation when this first came up was the issue of “tax residency”. CBT mandates that those declared US citizens by the US are simultaneously declared US tax residents. In a similar fashion SA has a concept of tax residency that *does* include some people who do not physically reside in SA but NOT just because they’re citizens. I get it. Thanks again for clarifying this!

That being said, I think the term “tax residency” is crazy. I wish that someone with the power to influence terminology in the general usage of language could come up with something that accurately describes the basis on which a person can be taxed by a country in which that person does not live. Taxes don’t reside; people do, and they can only live one place at a time. Any ideas? 🙂

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Part 1: South Africa is NOT attempting to compete with USA by challenging the US monopoly on citizenship-based taxation

As goes taxation, so goes civilizations

This is Part 1 of my posts discussing the South Africa situation. Part 2 is here.

There have been a number of suggestions in various blogs that South Africa is somehow taxing on the basis of citizenship. American citizens (whether by accident or design) are most sensitive to any discussion of “citizenship-based taxation”. After all, U.S. tax policies combined with FATCA (which is part of the Internal Revenue Code) are destroying the lives of those who have entered the U.S. tax system.

I recently received an email that asked:

They’re talking about SA expats, people who no longer live in SA, being taxed by SA. Like us, these people are residents and earners in countries other than their country of origin (and, I would assume, citizenship). http://www.internationalinvestment.net/regions/south-african-expats-hit-tax-exemption-removal-plans/ If this is not CBT, on what basis are they being taxed? If SA is just wanting to expand its definition of tax residency on what basis do they feel they can apply this to someone who no longer lives in their country?

The short answer …

South Africa imposes “worldwide taxation” on those who are “tax residents” of South Africa. The rules for an individual to qualify as a “tax resident” of South Africa are here. South African “tax residency” is irrelevant to citizenship.

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The Green Card and the “Oh My God” Moment: You know you want to leave the USA? Not so fast!

Well he won the lottery. Specifically he won the “Green Card” lottery. He and his wife came all the way from an Asian country to “Live The Dream” – specifically the dream of living in the United States of America.

He spoke English. His wife did not speak English. He believed in strict compliance in the law. His wife relied on him to ensure her compliance with the law.

As a Green Card holder he was vaguely aware that he could be deported if he were convicted of certain kinds of offenses. But, mainly he believed in compliance with the law for its own sake.

As a Green Card holder and as a U.S. resident he was subject to laws that were never explained to him. He didn’t realize that he was taxable on his WORLD income (including a small pension that he received from his country of citizenship).

In 2009 the “Offshore Jihad” began. He didn’t think of himself as having “offshore accounts”. After all, he was a just citizen of another country. Surely it could NOT be criminal to have a bank account in his country of origin. Did he have to report his small foreign pension to the IRS? That pension was in no way related to the United States of America? And then he learned about the alphabet soup of “reporting requirements” – Mr. FBAR, Uncle FATCA, etc. He began to learn what the “reporting requirements” were. But, the penalties (as least described) were certain. He could not believe the extent of the penalties.

It was at this moment that his “Oh My God” moment began. He was confused and mentally disorganized. At that moment, all of his life assumptions were reversed.

Assumption 1: He had always believed that he was a good, moral “law abiding” person. How could it be that he was NOT in compliance with the law. He had no reason to believe that the reporting requirements would even exist.

Welcome to the United States of America where any involvement with anything “foreign” makes you a presumptive criminal.

Assumption 2: He had always believed that the United States was a “just nation”. How could the United States threaten to impose such penalties on a person in his situation?

Welcome to the United States of America where justice is NOT the norm.

What’s a poor “Green Card” holder to do?

He was ill prepared to deal with the situation in which he found himself.

He strived to learn what he could. The IRS would not answer his questions – suggesting that he go to a “tax professional”

The “tax professionals” gave him different, conflicting and contradictory answers.

His greatest frustration was that he could NOT completely understand what was expected of him – although he did understand the threat of penalties, penalties and more penalties.

He eventually decided that he had to move back to his home country. He did this NOT to escape U.S. taxation, but because:

  1. He could not completely understand what was required of him to be U.S. tax complaint; and
  2. He was worried that he would die and leave his wife in a situation where she would not know how to be U.S. tax compliant.

In order to prepare for leaving he:

  • entered the streamlined program (domestic  version) and “back filed” for 3 years
  • stayed in America for two more years so that he could certify the “five years of tax compliance” when he handed in the I-407
  • even filed the “Sailing Permit” (The 1040C) that is required of ALL aliens (resident or nonresident) when they leave the United States

He in now trying to file his final return and 8854. Fortunately he will not be subject to the S. 877A Exit Tax. He is currently focusing on staying alive long enough to complete his U.S. tax filings. He feels that it is important that he NOT die and leave the U.S. tax compliance problem to his wife.

His emotional state:

Like many he is living in a state of fear. I pointed out to him that he was a small insignificant person and that nobody in the U.S. Government cared about him. He thanked me for telling him that “nobody in the U.S. Government cared about him”. He said that it was the first time in his life that he felt good that nobody cared about him.

Epilogue:

One more day. One more life ruined. One more person chased out of America because of the Internal Revenue Code.

His greatest wish is that he lives long enough to file Form 8854 to log him and his wife out of America.

Nobody, but nobody should move to America without reading the fine print!

#YouCantMakeThisUp!

John Richardson

 

 

 

 

 

#Taxreform17 means that the USA should stop imposing U.S. taxation on the residents of other countries! @SpeakerRyan @RepKevinBrady @SenateJamLdr @OrrinHatch @Stevenmnuchin1

Some of you may be interested in the “short letter” that I sent by regular mail to the “powers to be” in Washington who are working on “Tax Reform”.

A “Town Hall” interview with Speaker Ryan suggests that Tax Reform is going to happen.

The interview confirms that there is pressure to move U.S. corporations to “territorial taxation”. See also the following tweet from the House Ways And Means Committee.

The question is whether individuals will also be considered. In January of 2017 Republicans Overseas proposed “territorial taxation” for individuals. This week the Republican National Committee adopted a resolution from Republicans Overseas urging that “territorial taxation” for individuals be adopted.

Both U.S. corporations and U.S. citizens are “U.S. persons”. If the United States moves to “territorial taxation” for corporations then “territorial taxation” for individuals should follow.

The United States would be will advised to stop imposing U.S. taxation on the tax paying residents of other countries.

What follows is my “short letter”. A PDF copy of the letter is here:

taxreform

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Dewees 3: Lessons about the “Oh My God Moment” and dealing with the problems of U.S. citizenship

As I write this post, my mind goes back to one of my very first posts about U.S. compliance issues. This post was called “What you should consider before contacting a lawyer“. Since that time I have written hundreds of post describing the problems faced by Americans abroad.

More recently …

In Dewees 1, I explained the importance of the Canada U.S. tax treaty and how it provides “some protection” to Canadian citizens from U.S. tax debts.

In Dewees 2, I explained some of the characteristics of the OVDP program and how Mr. Dewees got caught in it.

In Dewees 3 (this post), I am suggesting some possible lessons that can be learned from the story of Donald Dewees.

Ten thoughts on U.S. taxation, non-compliance, Americans Abroad and the U.S. taxation of Americans abroad

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