This new thread is laser-focused on the IRS's OVDI program (Offshore Voluntary Disclosure Initiative for Offshore Accounts). There is a great deal of uncertainty about how this program is being administered, especially now that the September 9th, 2011 deadline has long-since passed and we are waiting for what new policy initiatives might be coming next from the IRS.

I hope that this thread can become a one-stop shop for anyone wanting to know more about this specific program: its history (including its 2009 predecessor), the status of current cases in the process, IRS policies now that the deadline has expired, anecdotal stories from OVDI participants etc.

What motivated me to start this thread were two very long and detailed critical assessments of both the 2009 and 2011 OVDI programs that I came across today. They were both co-written by Scott D. Michel and Mark E. Matthews, who have both had extensive involvement with the IRS, both from the inside, as staff, and outside, as professional tax advisors.

These two articles provide a rare and stunning insider's look at how the IRS has implemented these programs and how even the most loyal apologists for the department have become dismayed at the clumsy, heavy-handed tactics the IRS has deployed through these initiatives.

I have one family member who has just received her first notification from the IRS after her accountant convinced her to enter this program in August 2011. If there is a God, may he have mercy on her soul. You too may feel the same way after reading these articles:

OVDI #1 (2009):
http://www.morganlewis.com/pubs/TaxR...s_21sept10.pdf

OVDI #2 (2011) and beyond:
http://www.morganlewis.com/pubs/TaxN...er_18oct11.pdf

The absolutely most chilling and infuriating sentence in the second report is the following (about halfway through the report, if you can stand to read that far into it):

"We acknowledge that the entire offshore account
issue may eventually disappear if FATCA in its
current form remains the law of the land (or, more
accurately, the law of the world)."

There you have it, folks. The US Congress is in their eyes and the eyes of their consultants who wrote this report, the Master of the Universe. A law passed in Washington (FATCA) will be the "law of the world."

So much for democracy. So much for national sovereignty for anyone other than the US. So much for "no taxation without representation."

We have met the Enemy, and he is THEM.

I have no trouble comprehending the motives of those who want to renounce US citizenship. I have significant trouble understanding how any intelligent, logical person can read something like this, reflect for 30 seconds on what they learned in US history in US high school (at least back in the 50s and early 60s), and still want to remain a US citizen. Or ever vote a single one of these arrogant monsters back in office. Any of them, Republican or Democrat.

Do not let ANY Canadian government grovel before them or cowardly submit to this. Watch carefully what our politicians do, and remember it for the next election (that is, if the US allows anyone outside their borders to have a free election again).

GOD am I glad I'm no longer an American citizen and haven't been one for the past 36 years. You can't blame these wingnuts on me, fellow humans of the rest of the world! I didn't vote for these lunatics!

Maybe I will get a Canadian Passport without the place of birth showing. I'm seriously doubting that I want ever to cross the US border again, even though I actually can with my Certificate. I'm ashamed for anyone to know that I was born and grew up there. I'd feel like a leper if someone saw that annotation on my passport, below my photograph.

Yeah, that one kind of stood out for me as well. Nut, meet nutshell.

Another one is this:

Iron Fist and Velvet Glove Strategy Works

The lesson is obvious: If the IRS wants people to come forward voluntarily, it needs to couple its VDP with well-publicized tax enforcement. A VDP without the enforcement component will prompt only the sorts of anecdotal disclosures we all saw before 2008. With the iron fist hammering away, however, thousands of people will come forward.

Now I might be missing something here, but how likely are most sane people to voluntarily come forward directly into the path of an iron fist hammering away ? And exactly which aspect of the OVDI program could be characterized as a Velvet Glove?

If this were a concentration camp, it would be like offering a prisoner the choice between cutting off his own testicles or gouging out his own eyeballs.

1984 has fully, finally arrived.

You know, we haven't talked about this yet, but I also wonder if there might be any possible recourse with the U.N., if only for the symbolism and embarrassment?

The Universal Declaration of Human Rights

BTW, it was much quicker for me to determine which articles don't apply to these actions of the U.S. (including OVDI, FBAR, FATCA as well as expatriation and cross-border penalties and restrictions).

I have nightly dreams now of a shiny, golden Certificate of Loss of Nationality - my very own winning Wonka ticket. I shall not rest until I am holding it in my hands, gazing at it in wonder, giddy with happiness and relief...

The only people I've talked to who are keeping U.S. citizenship are in a financial position to do so and travel there frequently. For most of us it makes zero sense in any way to keep it. Part of my reason for renouncing is this reaching across the borders and imposing U.S. laws on others. You're already a lesser citizen by "virtue" of the fact you left the U.S. at all in many people's eyes, as this is what the government there encourages them to think. So what's the value in hanging on to this so called citizenship. They've treated ex pats like crap for years and years, now they've demonized us and attempted to fine our families and control the laws of the countries we live in.

Contacting the U.N. or any other action that can be taken which will draw negative attention to this issue and embarrass the U.S. is worth it whether or not it makes an impact on "their" laws.

Thanks for posting these. I have read both in their entirety and there isn't one thing in them that convinces me I have anything to gain by not renouncing. If anything, promises of 40% penalties etc ad nauseum, simply terrify me more.
It sounds as if there is no hope of convincing them that one had never heard of FBARS (in addition to being unaware of the requirement to file tax returns). And to be expected to accept ANY penalty, as if it were some sort of gift, just fuels me more. I want out, nothing to do with them and as others have said, this is simply not the America I grew up with.

Nobel I've been thinking about that too, what if it IS the American we grew up with and we just didn't realize it as much as we do now due to the way we were taught to see things there. After ALL have we not *America* been going all over the world imposing our will for decades and decades now against poor people in other countries? This is hard to face and to say but, I'm starting to think THIS IS what it's been about for millions of others. We were just not told the truth about it. Not that the U.S. has only done bad but, it certainly has whenever they needed to and always, excused these actions. Covered over with a lot of flag waving. There are a lot of good people there, they just don't see this or a lot of other things because of the way everything is spun. LOOK at the trouble we are having explaining this to citizens who never have lived outside the country? The only thing making this hard for them to comprehend is the lies they've been told about ex pats...how many other issues are like this. I think we all knew it deep down and just wanted to believe something else.

I'm seeing a lot of things differently now and I was starting to before this even happened. Shubert is right about many things he alludes to here. It's got me thinking for various reasons. As long as I can see my father and family I am caring less and less about the "cost" of renouncing. It's sad to say but, all this has done is wake up a lot of people as to what the U.S. government is capable of against innocent citizens AND foreign persons too.

The Universal Declaration of Human Rights is one of many UN documents the US has steadfastly refused to sign over the years. Just so you know...
Cheers,
Bev

Figures.

Something else caught my eye and mind in reading those two reports.

In one of them, I forget which, the authors mention approvingly cases of which they are aware in which the IRS, through its 25%-of-the-penalty-reward whistle-blower program, got at least one bank teller and at least one computer operator or programmer in a foreign financial institution to divulge client information to the IRS, leading to penalties and the 25% reward.

I am reasonably certain that in all countries, certainly those with reasonably advanced legal systems, bank tellers and computer operators have to sign confidentiality and non-disclosure agreements as part of their employment contract. Employment contracts are legally binding documents. Moreover, in most jurisdictions, there is a concept of “duty of care” and another concept of “breach of trust,” which apply to everyone regardless of employment contracts and non-disclosure agreements.

There is also a legal concept of “suborning,” that is, bribing someone to commit a crime.

In the above-mentioned cases, it seems to me there is a solid case for charging the IRS with suborning tellers and computer operators in those countries to commit a breach of trust against account holders and probably also a breach of contract with their employers. Not sure how you’d enforce the charges against IRS, though, since the US refuses to sign the international court agreements that might hold their own soldiers responsible for crimes against humanity, or just plain murder, in other countries. US “exceptionalism” means “we can do whatever we want, wherever we want, however we want, and have to answer to no one but ourselves.”

I’m not really surprised, though. Nor would anyone else who has ever looked at the long, horrible track record the US has regarding its treaties with every First Nation it ever encountered on this continent.

There are legal processes for trying to get information. They involve things like search warrants, which require an application to a judge or a court, showing probably cause. That isn’t what has been going on in these cases.

The IRS, which claims to be going after “tax cheats” and “tax criminals,” is itself engaging in illegal behaviour and criminality in other countries. The evidence is right there in those two reports.

The cognitive dissonance here does not surprise me. There was recently an article about how hard this administration has been on "whistle blowers" after saying they would support them more. In fact even harder on them than the previous administration. So, we have them not supporting any sort of whistle blowing in the U.S. while encouraging it in other countries. Also, they have been trying to get around and make laws which do not require search warrants. They can already delve into your online activities, your email etc. if they want to without any warrant. The so called "Patriot Act" as well as the dubiously named "Homeland Security" caused a lot of this. What they once again ignore are the laws of other countries. Harper has recently been leaning towards passing similar legislation that would allow searches without a warrant. This has to be stopped.

The U.S. is going to use every trick in the book, count on it. That's why I have little faith in any safety with a major bank.

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Dear U.S. government, 1984 was NOT an instruction manual.