Strength in Numbers

Many Hands Make Light Work
Old English Proverb

United we stand, divided we fall
Aesop

There is always strength in numbers.  The more individuals or organisations that you can rally to your cause, the better
Mark Shields

All for One and One for All!
Motto from the Three Musketeeers, by Alexandre Dumas

I not only use all the brains I have, but all I can borrow
Woodrow Wilson

Alone we can do so little; together we can do so much
Helen Keller

With an estimated 200,000 persons of American origin living within Australia, one would think that the awareness would be greater of the significant threats imposed on them through the US Government’s harmful and unjust practices of extraterritorial taxation.   I’ve been baffled at how few actually understand the breadth of compliance expectations, costs and potential risks such reporting compliance penalties and double taxation but I also recognise that following years of minimal enforcement or education, many would have been able to stay blissfully ignorant of expectations imposed by a far far away country.

However, all this is changing now that the USG, with Australia’s full cooperation, has begun to enforce their extraterritorial Citizenship Based Taxation regime, aided and abetted by FATCA.  Stakeholders are starting to wake up to the material threats they face and are motivated to seek change.  This led to the recent formation of Let’s Fix the Tax Treaty! as an Australian focused advocacy group seeking to press the Australian Government for amendments to the Australia/US Tax Treaty and the FATCA IGA to eliminate discrimination against a subclass of Australian citizens that is also disadvantageous to all Australians

As a new, word-of-mouth grassroots initiative, it is pleasing to see that membership in our Facebook group has already reached over 125 members.  Nevertheless, current membership is a very small fraction of the impacted community and clearly our cause will be better served by greater membership representation.

Why does membership numbers matter?  Firstly, if we are seen to represent a large stakeholder group having aligned goals, we’ll have much greater creditability and a better opportunity to influence Australian policy and opinion makers.   Secondly, our advocacy group strategy (currently under development –look for blog posts on this soon) will flow onto specific activities that will require volunteer efforts to execute.  To successfully bring about change, we will all need to get involved.  Recently, a call went out for volunteers to serve on a Steering Committee (which remains open, hint, hint!) and there will be further calls for volunteer support as standing committees are formed to support targeted activities.   Thirdly, the more broad and diverse the skills and mindsets we can draw upon, the more successful our efforts are likely to be.

Who are the Stakeholders we need to attract?  Stakeholders consist of:

  • Australian residents of American origin, many of which are dual citizens;
  • Australian spouses of American citizens;
  • Australian citizens living in America who are now subject to US tax laws including potentially material (penalty) taxes on Superannuation and passive investments they established before moving to the US
  • Indirectly, all Australians who have to pay for FATCA systems, suffer money being unfairly diverted from their domestic economy into a foreign economy and tolerate a loss of Australian sovereignty as Australia domestic policies are undermined by a foreign power.

 

So if we accept that larger membership is desirable, what can we do about it?

  1. Spread the word to your network and ask them to do the same. Most of us know many impacted people so this is a great place to start.  To make this easier, I’ve previously posted a “model email” (look for it in the comments) that you are welcome to modify and personalise as your own.
  2. Let appropriate organisations know about our group. I’ll cross-post this in the a couple of relevant Facebook Groups I am a member of (Yanks Down Under and North American Expats in Adelaide and South Australia) please do this with other appropriate groups and please tell us about them in the comments.
  3. Media helps immensely. After the recent SMH article featuring our very own leader Karen Alpert, we saw a sharp uptick in FB membership requests and visits to our blog site.  We’ll be formally working the media angle further as the Steering Committee and group strategy gets rolled out but perhaps some of you already have connections or ideas here?  Please tell us about it in the comments.
  4. Finally, we are happy to take other ideas in the comments.

I think we should be targeting to grow this group to the 2,000 to 5,000 persons size, which seems to me both a reasonable and achievable target.  Of course, we recognise that numbers for numbers sake is not what we are here for and we will soon table an advocacy strategy and corresponding activity plan for your input and feedback.  Then it will be time to get involved!  Look for my next post soon on the benefits of having a well thought-out advocacy strategy.

18 thoughts on “Strength in Numbers”

  1. I am a dual US/Australian citizen, resident of Australia of 20+ years and with an Australian citizen spouse. I understand that the number of members is essential for any advocacy cause but I don’t participate in social media. I fear taking a public position because retaliation/targeting by the US Government can be expected. I will, however, continue to visit this website regularly as well as Isaac Brock Society and ADCT and when the ‘call to arms’ for financial support comes, I will happily post cash contributions – a donation mechanism that worked brilliantly with ADCT!.

    1. Let me echo Carl here and thank you for your comment, Anne. I understand the desire to stay anonymous. I didn’t “come out” until I had decided to resolve the issue personally by renouncing. As Carl said, those who have attempted to become IRS compliant have done nothing wrong – and US citizens have a right to free speech – so speaking out should not lead to retaliation by the US government or IRS. Besides, most expats owe so little to the IRS that they are not an “attractive” audit target.

  2. Thanks for your comment, Anne. I completely understand how you may have fears over taking a “public stand”. In fact, my wife has the same fears over my involvement. Although I remain a US citizen, I made the decision to get publicly involved to bring about positive change as I have the strong view (and I stress this) that **I am doing nothing wrong!** I am living a normal lawful life and doing the best i can to deal with complex and confusing laws imposed upon me from a country that I left 26 years ago. One would hope that exercising my (constitutionally protected) democratic rights will not result in retaliation or targeting by the USG. We forget sometimes in all the stress, that we are the victims, not the wrong doers!

    Importantly, this group is not about going to battle with the USG to change their CBT policies – as necessary as this is, we will leave that to other groups and forums. We are focusing on exercising our democratic rights within Australia and our activities will be Australian focused. As Australian citizens and residents, we are looking for our home country to provide basic protections to mitigate the worst of the impacts of citizenship based taxation that currently discriminates against me due to my country of origin and does not allow me to enjoy the same treatment as my fellow Australian citizens.

    Why can’t I invest in Australian passive investment funds (unit trusts and similar) like anyone else? Why have some companies refused to sell me legitimate financial products that are available to my fellow Aussies just because it is too hard to do business with me because of a country I left 26 years ago? Why can’t I have a SMSF? Why is my Superannuation double taxed? Why do I loose my redundancy tax concessions to a foreign government? We must press the Australian Government to renegotiate the underlying tax treaty and FATCA IGA agreements to provide basic protections to their constituency.

    At this early stage, we will soon need volunteer workers more than donations. I’ll speak with Karen to brainstorm ways that you and others can help out yet still preserve your anonymity. The only way things are going to change for the better is if we all work collectively to bring about this change.

    1. @cwgstreet An answer to your questions is tax treaty malpractice. In my opinion, The Australian Government believed they were putting in place an “all good” agreement that met its purpose of “preventing double taxation. However, while the treaty mitigates double taxation, the treaty has numerous and significant “gaps” guaranteeing double taxation for Australian residents. The process appears to have lacked proper due diligence on the part of the Australian Government. Perhaps there was too much trusting of the text provided by The US Treasury.

      I am interested in more detail here: “some companies refused to sell me legitimate financial products.”

      1. Thanks JC; to answer your question re “some companies refused to sell me legitimate financial products”, I have two recent personal examples that I am happy to share plus name & shame the companies involved.

        First, I left my employer of 20 years at the start of 2016 and had to rollover a Defined Benefit Super fund into a retail Super account. As I looked around, the ING Living Super account was one possibility that fit my needs. However, the PDS (https://www.ingdirect.com.au/pdf/ING_DIRECT_Living_Super_PDS.pdf) clearly says: “The invitation in this PDS to become an ING DIRECT Living Super member is only available to persons receiving this PDS in Australia. ING DIRECT Living Super is open to Australian residents (that are not U.S. Persons)”

        The Product Guide (https://www.ingdirect.com.au/pdf/ING_DIRECT_Living_Super_Product_Guide.pdf) goes on to say “U.S. Persons: We will not accept your application if you have a U.S. residential, postal or scal address, phone number, ***citizenship*** (emphasis mine), Green Card or any U.S. related proxy (U.S. details). Additionally, if at any time you have any U.S. details we may write to you and give you 30 days to nominate an alternative fund to which to transfer the balance of your Living Super account. If you do not respond to our request we may transfer your bene t to an ERF and close your account.”. As a dual citizen who still retains US citizenship, it is pretty clear to me that they would not accept my business.

        Secondly, I recently contacted Citi Bank over possibly opening a term deposit as they had good rates on offer. They had a salesperson contact me who wanted to offer me an investment bundle that included a managed fund and an even higher rate term deposit (let’s not go into the potential PFIC issues here). However, when he heard my accent, he asked if I was American and then said he could not offer the product to me. When I said I was also an Australian citizen and that I reside in Australia, he told me that did not matter, he could not offer me the investment products because of my country of origin – clear case of discrimination to me.

        1. Super is not reportable under the FATCA IGA. Term deposits: I heard these can be a mess for 8938 if is applicable (each one a different 8938). It might be handy to find out the reason why an Australian citizen US person may be excluded from such financial products. So then the case may be advanced against the reason rather then just the symptom of the reason used . Why not write a letter to senior management asking for the “reason” and hinting the denial smacks of discrimination and that you are offended.

          1. Yes, given Super is not reportable, I wondered why ING decided not to offer it to “US Persons” when they do allow US Oersons to use their other products like online banking. Go figure. I will note that we have online banking accounts with ING that predates FATCA and they were one of the companies that specifically questioned us later if we were US Persons.

            Honestly, I wasn’t that interested in these products once I got the stiff arm; it was the principle of being discriminated against that gets me. At present, Rather than following up, I am putting my time into this group to get an advocacy strategy up and running.

  3. Hi Karen.

    Everyone should get right on board with this and I commend you for the great work you’re doing.
    The key is to get the word out – spread the news of this page to as many people as possible.
    I and my partner run a facebook page for ‘Americans in Canberra’ and we have just shared your page in the hope that more people from our neck of the woods join the cause.
    Good luck!

    https://www.facebook.com/americansincanberra/

    1. I appreciate that you reposted this in “Americans in Canberra’ FB page – exactly the kind of groups that we are trying to get the word out to. Thanks!!

  4. Just found this blog and will follow with interest. You can add me to the list of affected people living in Australia. I’m a dual citizen. My mother was american but I’ve lived here all my life. I got a big shock a couple years ago when I learned for the first time about CBT, FATCA, FBARs etc. I find it ironic that I’m not allowed to vote in the U.S. but can be punitively fined if I forget to hand over my private Australian bank account information to the U.S. So much for no taxation without representation.

  5. Thanks Karen, Just wondering if you or Carl might be able to direct me to a reliable data source regarding the number of U.S. citizens in Australia. I see this article estimates 200,000. I’m thinking of writing a couple letters to federal members but just wanted to be absolutely certain with regard to some of the data that I might mention in the process. I trust your figures but I want to be able to verify them to others. Cheers

    1. Sam – sorry for the delay in answering. The best source I can find lists 185,000 US citizens in Australia, but does not include naturalized US citizens (for example Australians who worked in the US, became US citizens, then returned to Australia). The source is a spreadsheet shared here on Facebook.

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