Persecution by paperwork at hands of IRS bullies

Appeared in the North Shore News – October 21, 2016

What is WRONG with those people?

I was speaking – in very rare CAPITAL LETTERS – of the Americans. But large issues call for large letters.

About the U.S. presidential campaign? Good guess. But not so. Nor about the Iraq or Libyan invasions, or waterboarding – torture, a lingering unpunished crime – or the dangerous economic imbalance between the one per cent (some analyses say one-tenth of one per cent) with grotesquely fabulous wealth and a disenchanted American class who once had good jobs and hope.

After that list, the issue I have in mind may seem a trifle. Not to its victims. It is the relentless pursuit by the U.S. Internal Revenue Service of its own citizens abroad – more particularly, in Canada, including in our own North Shore communities. That’s what makes it a local issue.

The word fascism was fired at “Amerika” by the hippy-dippy real and play-Marxists of the unlamented Sixties. Absurd. But this stuff is near enough to the spirit of fascism and Soviet-style repression for the undersigned.

No barbed-wire camps, no gulag, no street beatings, but the IRS was empowered by a 2014 change in U.S. tax law to force banks everywhere to disclose the account information of American citizens living abroad.

And note well: The Canada Revenue Agency co-operated, giving the IRS the names of 155,000 American citizens holding accounts in this country, as Jeff Lee reported recently in the Vancouver Sun.

The law’s apparent intention was to expose rich, tax-ducking sleaze-bags stashing huge assets abroad. Good. Do it. Well deserved. And doubtless applauded by people at any level who conscientiously declare their income, certainly including the well-off.

No hate-the-rich animus here. Only look at the community benefits bestowed by the wealthy, both individuals and corporations, right down to small local businesses that underwrite kids’ sports and such.

But the IRS net’s mesh is so fine that it catches innocent financial minnows, some not even aware – like those who haven’t lived in the U.S. since infancy – that they were violating an outrageous new tax procedure shared by exactly one other country on earth: Eritrea.

“They’re terrorizing people,” a North Shore resident, living in Canada for decades, bluntly said.

The IRS bullies furthermore are demanding back taxes. Yes, retroactive to the law’s enactment.

There’s more. Given the complexity at best of complying with tax laws – including very much concerning our CRA – the IRS requirements have spawned hugely profitable work, thousands of dollars a year in many cases, for a raft of lawyers and accountants in Canada.

“It’s persecution by paperwork,” said the U.S. citizen quoted above.

It might seem to simple minds that the obvious course is to toss American citizenship. But you don’t wriggle out of Uncle Sam’s clutch that easily.

Reporter Lee quotes the case of Susan Wood, who came to Canada with her parents as a child and never worked or voted in the U.S. She paid Calgary tax lawyer Alex Marino $12,000 to renounce citizenship. (Marino’s firm recently held a free seminar to guide others.)

To be fair, the complexities are unbelievable, a mare’s nest even to experts in U.S. tax law. One victim on the North Shore put through the mill had to sign many dozens of papers: “They were threatening us with practically confiscation.” As for those who share title on American property with others:

More tangles, more billable hours for lawyers, advisers and accountants.

And hear this: Canada’s registered education savings plans and tax-free savings accounts don’t cut it as tax shelters with the IRS. They’re taxable.

We’re not as far from repressive regimes and arbitrary rule as our soft-shoe propaganda would have it.

• • •

The Sewells, a popular family and operators of a marina that has given Horseshoe Bay residents and visitors a stunning experience of Howe Sound for 75 years, won unanimous council approval of a development of 159 condo units in six buildings ranging from three to 11 storeys.

The Sewells deserve it. They’ve earned it. I just wish they – or any other developer – wouldn’t do it.

Stand at Bay and Nelson streets. The buildings will obscure a gorgeous sweep of mountainside scenery.

But how can anyone complain in good conscience? Every one of our West Van homes has diminished precious nature and wildlife space.

© Trevor Lautens, 2016