Reporting on foreign bank accounts
There have been numerous articles on the “reporting requirements” of the FATCA [Foreign Account Tax Compliance Act] in which foreign financial institutions are expected to send information to the IRS identifying any statutory “U.S. person” accounts. The National Government is attempting to reduce the levels of tax avoidance by those who are statutory “U.S. persons”, which include by definition in the Internal Revenue Code [Title 26] those who are statutory “U.S. citizens”.
As you read further, you will see the frequent use of the word ‘statutory’. This is very important because it is our effort to denote that the word(s) expressed after this term mean those words that were created by the Congress and placed in their statutes of the United States Code.
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These ‘statutory’ words have a unique and different definition which many times is at odds with the everyday use of these words by the general public.
Americans must be very careful not to substitute their commonly used words for what the National Government defines them to mean or else Americans will be entrapped. ‘Statutory’ words are very special to the National Government and it will be of great value to you as you will soon find by reading further.
The impression by the press, international bankers, global financial institutions, and of course, the IRS, is that all Americans must file the FATCA and FBAR forms. You will find by continuing to read that there is some vital information that is not being presented to American Nationals [those born in one of the 50 states of the Union] that will surprise you. Impressions are not always correct. If you make the wrong assumption, it will have a strongly negative impact on your true status as an American National [those born in one of the 50 states of the Union — the Constitutional Republic].
What the FATCA Instructions state
Who Must File [see page 1, 3rd column]
“Unless an exception applies, you must file Form 8938 if you are a specified individual that has an interest …”
This opening sentence in the identification section for those the IRS claims must file is the admission that there are exceptions to this IRS form being required to be filed.
The TIP comment on page 2, first column, states:
“Exception if no income tax return required. If you do not have to file an income tax return for the tax year, you do not have to file Form 8938…”
So you are probably asking yourself, “Why doesn’t the IRS state under what conditions the ‘Exception’ applies?”
First and foremost, the IRS is in the business of only addressing those who are Taxpayers and collecting money from them. By the IRS including the ‘Exception’ reference, there must be a “dual group” consisting of those who are: (1) lawful Taxpayers, and (2) lawful Non Taxpayers. At first glance that may appear to be the wrong impression on our part, but soon you will see what the Federal Courts have to say about this “dual group” actually existing.
Before going further, we want to provide two introductory definitions which will help you start your journey. The statutory term ‘Trade or Business’ is greatly misunderstood. The actual definition for ‘Trade or Business’ is found at 26 USC §7701(a)(26) and it means only “the performance of the functions of a public office.” That clearly shows that a statutory ‘Trade or Business’ does not mean what the average American would understand the term to mean, and the IRS will never tell you that is the meaning! Thus, a statutory ‘Trade or Business’ only defines those American Nationals who have chosen to work for the National Government. [check out the definition for yourself here]
The last introductory word is a phrase. In casual conversations with friends, you know what is meant by the phrase “United States”. Most often it is related to the 50 states of the Union — the Constitutional Republic. In Title 26, the Internal Revenue Code, the statutory definition only rarely references the 50 states of the Union and mainly does so in relation to petroleum products. You will find the statutory phrase “United States” defined at 26 USC §7408(d) to mean ONLY the District of Columbia. [check out the definition for yourself here]
Were you aware of the differences in federal definitions of “Trade or Business” and “United States” before you started reading this information? Keep reading, you don’t want to miss any of this information.
Statutory ‘Taxpayers’ have a lawful obligation to file and pay the federal income tax — even if they live internationally — and are required by statutory laws in Title 26 to file the FATCA and FBAR forms. Why?
Because their “tax domicile” is still the District of Columbia. The foundational reason statutory ‘Taxpayers’ are required to pay the tax is found in the Legislative Intent of the 16th Amendment.
As you continue reading, you will learn that American Nationals who do not work for the National Government [meaning they not ‘derive income that is effectively connected’ with the conduct of a statutory ‘Trade or Business’ in the statutory ‘United States’] have no federal income tax liability unless they choose to make a voluntary ‘election’ under 26 USC §6013 (g) or (h) by filing a FORM 1040 U.S. Individual Income Tax Return. FATCA and FBAR apply only to those who make the ‘election’ you will learn about.
Already you should be thinking about being extra careful about the words you commonly use in context to understanding the definitions of terms used by the National Government. Words are the government’s only real tools they work with. Those federal workers know how to create problems for Americans who don’t recognize their skill in creating definitions that can be easily misunderstood.
Time to look over the definition of other terms like “specified individual” used by the IRS in their FATCA and FBAR forms.
FATCA & FBAR definition of terms
Form TDF 90-22.1, the FBAR [Foreign Bank and Financial Accounts Reporting] also addresses the reporting requirements of “specified individuals” which by definition on page 2 of the FATCA “Instructions for Form 8938” include:
- A “U.S. citizen”
- A resident alien of the “United States” for any part ot the tax year
- A nonresident alien “who makes an election” to be treated as a resident alien for purposes of filing a joint income tax return
- A “nonresident alien” who is a bona fide resident of American Samoa or Puerto Rico
Don’t forget that the IRS uses only ‘Statutory Law’ so all their terms are Congressional Statutes. Notable by its absence is any definition listed on these forms, or instructions for completing the forms, for the four terms listed under “specified individuals”. So if you approach these forms by asking the basic questions:
- What is the definition of a statutory “U.S. citizen”?
- What is the definition of the statutory term, “United States”?
- What does it mean when one “makes an election” to be treated as a resident alien?
- What is the definition of the statutory term “nonresident alien”?
We searched Cornell University Legal Website in order to locate the above definitions in the Internal Revenue Code [IRC]. Interesting was the fact that there is no definition of the statutory term “U.S. citizen” in the IRC. Definitions will be emphasized at points but that does not change the definition.
- A statutory “U.S. citizen” is defined at 8 USC §1401 (a) and it means “a person born in the United States, and subject to the jurisdiction thereof”. [check out the definition for yourself here]
- The statutory term “United States” is defined at 26 USC §7408(d), and the expression used was “If any citizen or resident of the United States does not reside in, and does not have his principal place of business in, any United States judicial district, such citizen or resident shall be treated for purposes of this section as residing in the District of Columbia.” Thus, the statutory word “United States” refers only to the District of Columbia. Probably not what you expected! ”. [check out the definition for yourself here]
INFO NOTE: a United States judicial district means ‘the District of Columbia and other U.S. Territorial locations’, such as Puerto Rico, and are the only locations referenced by this term and does not include any reference to the current 50 states of the Union.
- An “election” is statutorily defined at 26 USC §6013 (g) or (h) and it basically means the filing of any variant of the Form 1040 U.S. Individual Income Tax Return. [check out the definition for yourself here]
- The statutory term “nonresident alien” is defined at 26 USC §7701(b)(1)(B) and it is stated as follows: “An individual is a nonresident alien if such individual is neither a citizen of the United States nor a resident of the United States.” [check out the definition for yourself here]
A ‘nonresident alien’ is a strange-sounding term and, due to the unusual nature of such a term, is clearly something not widely known by Americans. 26 USC §7701(b)(1)(B) has a definition, but it is somewhat puzzling in the manner it was stated. Most definitions will tell you what the term “is” rather than what it “is not”. This is not the case in the Congressional description of what a nonresident alien actually “is”. Something is indeed amiss!
When you look at all the possibilities of terms Congress uses in describing what we routinely think of as living beings or people you get a clearer picture. Statutory “U.S. Citizens” are a sub-type of statutory “U.S. Persons”. Remember, these are not the same as those “Citizens of the United States” as stipulated in the Constitution. Then you have the Congressional term “Resident Aliens”. This group consists of those who come from other nations and choose to live and work in the Constitutional Republic. They are taxpayers by their ‘foreign’ status. So where are the “nonresident aliens”?
Try looking for “nonresident aliens” this way.
Group 1: Statutory “U.S. citizens” [a sub-group of “U.S. persons”] are legal fictions created by Congress and they are ‘Taxpayers’. This also includes those who were ‘born of a woman’ in Washingon, D.C., or any U.S. Territory.
Group 2: Resident Aliens [Taxpayers] are all the other people living and working in the Constitutional Republic as they were born in a foreign country to foreign-born parents. This group also contains any American National (Nonresidet Alien Individual) who chose to work for the National Government.
So who else is left? American Nationals! Those are the people born in the Constitutional Republic [the 50 states of the Union]. Very few Americans, as a whole, work for the National Government but if they do they are lawful statutory ‘Taxpayers’ made liable by the Legislative Intent of the 16th Amendment. But what about American Nationals who do not work for the National Government in any capacity? They are the last segment of people in the World not described so far in context to the Constitutional Republic.
Group 3: Any American National (Nonresident Alien Individual) who made a voluntary election to have their income taxed like that of a U.S. Resident Alien.
Group 4: Nonresident Aliens [Non Taxpayers] are those American Nationals who do not work for the National Government in any capacity! Congress cannot tax Americans and they say that in 26 CFR §1.871-1(a).
Still think you are a statutory “U.S. citizen” as expressed by the National Government? Perhaps this will help to clarify so that you can determine if you need to file a FATCA or FBAR form or not due to the ‘exception’.
Did you notice the statutory term “person” and “born” in the definition of a “U.S. citizen” at 8 USC §1401(a)? We need to define this term. See how the government works with the words they use? You cannot assume anything but must check out every term they create or else you will find yourself headed in the wrong direction.
The statutory word “person” is defined at 26 USC §7701 (a)(1) as follows:
“The term ‘person’ shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.” The definition reflects only legal fictions.
Here we go again! The Congress slipped in a new word that is easily overlooked at first glance. Initially puzzled about the new word “individual”, we scanned 26 USC but that term was not defined there. So we searched the entire United States Code to find this statutory word “individual” and located the definition at 5 USC §552a (a)(2). Keep in mind this is also a statutory term!
“The term ‘individual’ means a citizen of the United States or alien lawfully admitted for permanent residence.”
By substitution, the statutory word “person” better be understood as follows:
“The term ‘person’ shall be construed to mean and include an individual [meaning a citizen of the United States], a trust, estate, partnership, association, company or corporation.” The statutory definition of “person” consists of only legal fictions because the Congress is a corporation and can only create and control other legal fictions.
All the definitions you will ever deal with on government forms are statutory in nature and are thus ‘legal terms’ created by those representing the corporate legal fiction — the National Government. That’s right, the government is a corporation and by definition of that term can only create other legal fictions.
This brings us to the statutory term “born”. As a statutory term ‘Born’ can’t possibly mean what we understand as an everyday term such as a child being born of a woman. So the term must reflect some kind of statutory creation via an Act of Congress.
For a statutory “person” to be “born” in the “United States” can only mean that the legal fictions that make up a statutory ‘person’ were created [‘born’] into legal existence by the Congress. Those legal fictions were created in the District of Columbia and are the property of the United States [the National Government]. Semantics can be confusing at times but we must continue to seek not to overlook but to understand the correct definitions being referenced by FATCA and FBAR documents. For the purpose of this discussion, we are not addressing those who were born of a woman in Washington D.C. or in any U.S. Territory. They have no benefit or protections under the Constitution due to the location of their birth and will always be liable for the FIT as they are subject to the jurisdiction of the National Government and thus property of that government arising from the location of their birth.
Before we leave the definitions pertinent to the FATCA and FBAR forms, one must realize that the target audience of both of these documents addresses the reporting requirements of international banks and financial institutions toward those who are statutory “U.S. persons”. So we now add the definition of the statutory term “U.S. person”.
The statutory term “U.S. person” at 26 USC §7701(a)(30) shows that “U.S. person” refers solely to statutory legal fictions in 26 USC as you can now see:
- a citizen or resident of the United States,
- a domestic partnership,
- a domestic corporation,
- any estate (other than a foreign estate, within the meaning of paragraph ), and
- any trust if—
- a court within the United States is able to exercise primary supervision over the administration of the trust, and
- one or more United States persons have the authority to control all substantial decisions of the trust.
We have come full circle. You can now see that the statutory term “U.S. citizen” is a subtype of a statutory “U.S. person”. Again, all the terms used to statutorily define a “U.S. person” are nothing more than legal fictions created or ‘born’ into legal existence by the Congress.
Equally important for an in-depth education of legal definitions is Black’s Law Dictionary. We prefer Black’s 6th Edition because editions after this one we have found many words have been ‘omitted’ from the dictionary so that the average American will not be aware of those terms omitted unless they go back in time to an earlier edition.
Here is what Black’s has to say about the statutory term “citizen” in context to the statutory “United States”:
“Citizens are members of a political community who, in their associated capacity, have submitted themselves to the dominion of a government, are citizens of the United States and of the state wherein they reside”.
There is another new legal term to consider, ‘Dominion’. Black’s Law Dictionary defines the legal term “Dominion” to mean:
“Perfect control in right of ownership. The word implies both title and possession and appears to require a complete retention of control over disposition. Title to an article of property which arises from the power of disposition and the right of claiming it.”
Bare with us, as we found another new legal term. “Disposition” was found in Black’s to mean:
the “Act of disposing; transferring to the care or possession of another. The parting with, the alienation of, or giving up property.”
Can you see what legal damage has occurred when you make an ‘election’ by filing a tax return?
So now you can begin to see that if you have made the ‘election’ by filing a return or mentally considering yourself as a statutory “U.S. citizen” without realizing the definitions prior to the ‘election’ … that is why statutory “U.S. citizens” and “U.S. Persons” MUST file the FATCA and FBAR forms with the IRS when you live internationally.
Resulting from these referenced definitions, the consensus for a statutory ‘U.S. citizen’ appears to be as follows:
A statutory “U.S. citizen” means ‘one who is a member of a political community who has submitted their former status to the dominion or control of the National Government by a voluntary act or election and are considered by the National Government as an article of property owned by that government.’
Those who are “…subject to the exclusive jurisdiction thereof” reflect the same definitional design as found in Black’s Law Dictionary insofar as anything that is subject to the government means that it is under the dominion or control of that government.
This also includes the fact that anything that is subject to the dominion and control of the government must be understood to be the property of that government. Those who make the ‘election’ are in effect volunteering to become one with an inferior status as an indentured servant or property as if they were a slave.
However, the Thirteenth Amendment does outlaw slavery and involuntary servitude but the Amendment was craftily designed so that the government had wiggle room to find a legal path to bypass the restrictions of this Amendment by allowing Americans to “voluntarily” become their tax slaves. If the Thirteenth Amendment had been written to outlaw both voluntary and involuntary indentured servitude none of this would be something that American Nationals would have ever had to deal with.
Putting it all into proper context
Make a presumption that you are a “U.S. citizen” on a government form, and you joined yourself to the statutory world of the National Government. Thus, you are telling the government that you are their property [for that tax year] and are under their dominion or control for that tax year.
This is exactly what happens when Americans [who do not work for the National Government] when they file a federal income tax return. The reason is based on the Legislative Intent of the 16th Amendment which shows that the federal income tax was only levied upon the National Government itself … and only within the exclusive jurisdiction of the statutory United States [the District of Columbia].
The Federal Income Tax is perfectly legal. There are those who protest this fact and lose every time. They simply did not realize that they have the choice to make an ‘election’ or not. Then the IRS continues the search for you every year because they want to impress you with the fact that you need to send in a new ‘election’ for the new tax year to keep the game going. Many corporations are structured to encourage you to continue the ‘election’ under compulsion and if you don’t you could lose your job.
So when one looks at 8 USC §1401(a): “A person born in the United States and subject to the exclusive jurisdiction thereof,” It becomes more readily understandable by substitution of the definitions. A statutory “U.S. citizen” is:
‘A legal fiction [person] created by Congressional Act [born] in the District of Columbia [the United States] and subject to the exclusive jurisdiction of the District of Columbia [thereof] because the legal fiction is the property owned by that government and subject to the control or dominion due to the act of a transfer of title to the government by voluntary election under 26 USC §6013 (g) or (h).’
If you will permit us, a more detailed definition of the statutory term “U.S. citizen” expands our understanding when one combines the above definitions so as to distinguish the everyday use of this term vis-a-vis the statutory legal definition for use in FATCA and FBAR use of this term which is unfortunately not defined by the IRS.
With the amalgam of the above, a statutory “U.S. citizen”, a sub-type of “U.S. person”, becomes one who is:
‘A legal fiction created by an Act of Congress to denote one who is a member of a political community and who in their associated capacity have submitted themselves to the dominion or control of the National Government by transferring the title of ownership and possession of their former status in the Constitutional Republic. The domicile [abode] of a statutory U.S. citizen is none other than the District of Columbia regardless of where they might live outside the District of Columbia.’
Thus, Americans identify their status as an article of property and can transfer ownership of their status to the dominion of the National Government by making a voluntary election [filing a federal income tax return] and are then identified by the National Government and its representative agents as property owned by the National Government and identified as a type of “a statutory U.S. person, a legal fiction created by Congressional Act”.
By that election, they are no longer considered by statutory law as one born of flesh and blood but by Congressional Act volunteering to be classified as property of the United States [the National Government in the District of Columbia], and disposing any claims otherwise by their voluntary election to establish a domicile, residence, or abode in the District of Columbia. Their Tax Home under 26 USC §911(d)(3) is solely the District of Columbia once they have made an election by filing a federal income tax return under 26 USC §6013 (g)(or (h).
The reason this is so important can be found in 26 USC §911 (d)(3) ‘Citizens or residents of the United States living abroad’ addresses the statutory term ‘Individual’ which we both now know to mean one who is a statutory ‘U.S. citizen’.
“The term ‘tax home’ means, with respect to any individual, such individual’s home for purposes of section 162 (a)(2) (relating to traveling expenses while away from home). An individual shall not be treated as having a tax home in a foreign country for any period for which his abode [domicile or residence] is within the [statutory] United States [the District of Columbia].” [Emphasis & clarification added]
As such, by acceptance of that status, they become ‘one who was created in the District of Columbia and are fully subject to the jurisdiction of the District of Columbia for taxation as they are property of that government.’
At this time, we see from our legal research a large chasm between what is statutorily defined and what is commonly used expressions by American Nationals both in the Constitutional Republic as well as Overseas.
Since the foundation of America, following the ‘War for Independence’ with Great Britain, the United States Supreme Court has repeatedly stressed, as in Afroyim v. Rusk, 387 U.S. 253 (1967):
“In the [constitutionally defined states of the Union] United States the people are sovereign, and the government cannot sever its relationship to the people by taking away their citizenship.” [Emphasis & Clarification added]
European monarchies were known as ‘sovereigns’ and they created the laws that the people were duty-bound to adhere to. The people living within a monarchical jurisdiction were ‘subjects to the crown’ or under the control and dominion of that monarchial government. Uniquely distinct, the United States Supreme Court has addressed ‘sovereignty’ in America rather clearly in Yick Wo v. Hopkins, 118 U.S. 356 (1886):
“Sovereignty itself is, of course, not subject to the law for it is the author and source of law.”
Perhaps, at this time, it is best to consider what the Federal Courts have to say on this matter of ‘Exception’. Then you will see this “dual group” actually exists. Currently, the majority of Americans have only considered the existence of lawful Taxpayers.
So if American Nationals are indeed ‘sovereigns’ as expressed by the United States Supreme Court and thus affirming it to be the law of the land then the following federal court decision reflects identically to the statements by the United States Supreme Court as in Economy Plumbing & Heating v. U.S., 470 F2d. (1972):
“Revenue Laws relate to taxpayers [officers, employees, elected officials of the Federal government, U.S. citizens, and resident aliens] and not to non-taxpayers [American Nationals who are not subject to the exclusive jurisdiction of the Federal government].
The latter [Non-Taxpayers – nonresident alien non-statutory U.S. Persons] are without their scope. No procedures are prescribed for non-taxpayers and no attempt is made to annul any of their Rights or Remedies in due course of law.
With them [non-taxpayers] Congress does not assume to deal and they are neither of the subject nor of the object of federal revenue laws.” [Emphasis & Clarification added]
American Nationals [non taxpayers] are looking more like the referenced ‘nonresident aliens’ and they appear to be the ‘exception’ referenced in the FATCA and FBAR documents as they are not statutory ‘U.S. persons’.
Try thinking about the core groups as referenced by the federal court: (1) Taxpayers, and (2) Non taxpayers.
The Taxpayer group consists of those who work for the National Government in a variety of public offices that exist. Also in this group are resident aliens who are guests in the Constitutional Republic, so they are taxed.
Then there is a large sub-group of Taxpayers who are those American Nationals making an ‘election’ every year by self-assessing and voluntarily submitting to the dominion of the National Government, and become federal property, with willful and knowing intent to have their earnings taxed like that of a U.S. Resident Alien. They have the option to not make the ‘election’ but most do not realize that fact and others are too frightened by fear of the National Government to do anything else.
Notice that, according to the Federal Courts, a ‘Non Taxpayer’ is not one who is a ‘tax protestor’. Only non-compliant statutory Taxpayers are those who can wear the IRS label as such.
The federal courts clearly stated the revenue laws in Title 26 do not apply towards those who are in the “Non Taxpayer” group. There is no denying that this ‘Non Taxpayer’ group exists and they are not obligated by federal law to file or pay the federal income tax. That being true, then American Nationals [Nonresident aliens as the government calls us] who do not work for the National Government are beneficiaries of the ‘exception’ to the FATCA and FBAR filing requirements.
Perhaps this is a new concept to you, as it was to us years ago. One can very clearly see that there are indeed two (2) separate and distinct groups in regard to the federal income tax question and the necessity to complete or ignore the FATCA and FBAR documents.
So “Why would this federal court make such a statement in the first place if all American Nationals were liable for the federal income tax?” The explanation was found by searching the federal documents in Washington, D.C.
The Legislative Intent of the 16th Amendment written by POTUS William H. Taft on June 16, 1909 and was promulgated in the Congressional Record of the United States Senate on pages 3344-3345 prove to be the answer.
We found the following statement, presented to you in part, that addressed the ability of the National Government to levy a federal income tax [to which the FATCA and FBAR most definitively apply] was stated by the former POTUS as follows:
“The decision of the Supreme Court in the income-tax case [Pollock v. Farmer’s Loan & Trust Company, 157 U.S. 429, 1895] deprived the National Government of a power which, by reason of previous decisions of the court, it was generally supposed that government had.
“I therefore recommend to the Congress that both Houses, by a two-thirds vote, shall propose an amendment to the Constitution conferring the power to levy an income tax upon the National Government without apportionment among the States in proportion to population.” [Emphasis & Clarification added]
The only geographical area that the National Government can pass an income tax law without regard to apportionment consideration prohibiting such is the singular jurisdiction of the District of Columbia. If the National Government did pass an Implementing Regulation which would disregard or attempt to bypass the apportionment requirement for direct taxation, such an Act would be ruled unconstitutional.
In fact, that was already accomplished by the United States Supreme Court in Pollock v. Farmer’s Loan & Trust Company, 157 U.S. 429, 1895.
Keeping in mind the requirement placed upon the National Government to publish all Implementing Regulations in the Federal Register so as to notify the American public, we came across a federal document signed by a federal attorney which in effect acknowledges the Legislative Intent of the Sixteenth Amendment.
Before any Congressional Act can legally apply toward American Nationals, the National Government is required via the Federal Register Act to be published in the Federal Register if they were directed toward American Nationals. Statutes cannot be published in the Federal Register.
Michael L. White, Federal Attorney has documented that there are no Implementing Regulations published in the Federal Register obligating American Nationals to file a federal income tax return or to pay that tax. That is why the IRS goads American Nationals every new tax year to make the ‘election’. This is yet another clue to the nature of the ‘exception’ that was referenced in the FATCA [Form 8938] has an “Instructions for Form 8938” that increases our awareness of what is going on.
Michael L. White, Federal Attorney, Office of the Federal Register, stated in his legal opinion letter back in 1994 the lack of published implementing regulations requiring American Nationals to file or pay a federal income tax. His legal opinion reflects the distinction of those who are the lawful ‘non taxpayers’ referenced in the above federal court decision. Mr. White, in his capacity as a federal employee deriving his income from a statutory ‘trade or business’ within the District of Columbia, expresses what can be considered as a landmark statement:
“Our records indicate that the Internal Revenue Service has not incorporated by reference in the Federal Register [as is required under the Federal Register Act] a requirement to make an income tax return.”
So you see even clearer why the IRS needs American Nationals to make the ‘election’ for each new tax year. They do this effectively for many reasons including the years of conditioning the American public to accept this tax as one they owe. The repetition of their mantra has become so effective that the eyes of most Americans today gloss over when they read or hear any of what you have just read.
Shockingly to many, even the National Government has openly stipulated in other federal documents the same theme of American Nationals [nonresident aliens] being lawful non-taxpayers as found in the Federal Retirement Thrift Investment Board’s publication “Tax Treatment of Thrift Savings Plan Payments to Nonresident Aliens and Their Beneficiaries” which states that:
“A nonresident alien [read as American National] participant who never worked for the U.S. Government in the United States [the District of Columbia] will not be liable for U.S. income tax.”
Here we are introduced, yet again, to a word most Americans are not familiar with. Our initial thought about the words nonresident alien was, “Could this be a reference to the ‘exception’ that was stated on page 1 of the FATCA [Form 8938] ‘Instructions for Form 8938’?”
The Federal Retirement Thrift Investment Board’s publication “Tax Treatment of Thrift Savings Plan Payments to Nonresident Aliens and Their Beneficiaries” continued with a reverberation of this nonresident alien reference in the statement that:
“A nonresident alien beneficiary of a nonresident alien participant will not be liable for U.S. income tax if the participant never worked for the U.S. Government in the United States.”
A ‘nonresident alien’ is still a strange-sounding term to many and, due to the unusual nature of such a term, we have demonstrated by the somewhat ambiguous Congressional definition that nonresident aliens are in fact American Nationals who do not work for the National Government in any capacity.
Still the term ‘nonresident alien’ will remain something not widely known by Americans.
The lack of a taxable liability of ‘Nonresident Aliens’ and the need for them to make an ‘election’ first [the filing and paying of a federal income tax] is indeed an ‘exception’ — and an unique one.
The sole purpose of the FATCA and FBAR forms being pushed so heavily against Americans, who wish to bank internationally, and are not in any fashion trying to be a tax evader, might be the real clue to resolving this international banking situation and no one has searched deep enough. If Global Bankers are open to hearing and understanding these concepts they can re-establish banking relationships with American Nationals who do not choose to make the ‘election’.
With the world being floated with fiat currency today, bankers are controlling the governments more and more. Our guess is that those bankers are part of the reason this issue of FATCA and FBAR exists today. Just something to consider.
That still leaves many American Nationals who do not want to associate with the National Government via an ‘election’ and they comprise the ‘Non Taxpayer’ group the federal court addressed. These again, are not tax protestors, but a lawful group who wish to use their earnings in a different fashion without taxable obligation by ‘associating’ with the National Government under voluntary indentured servitude.
Nonresident Aliens cannot be people who live in foreign countries. They have a different nationality and citizenship vis-a-vis the National Government. The federal government has no jurisdiction over them to begin with. That would be a rather foolish presumption to presume otherwise, of course, and the federal courts would not waste their time addressing American Nationals who are ‘neither the subject nor the object of the revenue laws’ which lawfully apply but only toward those targeted under federal law and are the real Taxpayers [those subject to and the object of the federal revenue laws].
From all the above, there are simply no enacted federal laws that allow the National Government to compel Americans against their will to associate with that government. As we have discussed, the Thirteenth Amendment outlaws slavery and involuntary servitude in the Constitutional Republic. However, it does not outlaw those who volunteer with willful and knowing intent to transfer their status of a sovereign.
Transferring of one’s status to that of an inferior status and thus becoming property from the granting of dominion and control of that government, at least so far, is still permissible and does not violate the law. It does, however, violate the intent behind the law if done in a sub silentio manner.
This is even more profound by an implementing regulation at 26 CFR 1.871-1(a) which states in part:
“Nonresident alien individuals are taxable only on certain income from sources within the United States and on the income described in section 864(c)(4) from sources without the United States which is effectively connected for the taxable year with the conduct of a trade or business in the United States.
However, nonresident alien individuals may elect, under section 6013 (g) or (h), to be treated as U.S. residents for purposes of determining their income tax liability under Chapters 1, 5, and 24 of the code.”
There can be a number of reasons American Nationals wish to remain in the ‘Non Taxpayer’ group, but the primary ones are referenced as supporting the rationale as to why American Nationals prefer not to make an ‘election’ and thereby remain as an ‘exception’ referenced by FATCA [Form 8938] “Instructions for Form 8938”:
- American Nationals do not wish to associate with the National Government,
- American Nationals know that they cannot be compelled to associate with the National Government and are protected from such coercion by the Thirteenth Amendment and the Foreign Sovereign Immunities Act,
- American Nationals are aware of the Legislative Intent of the 16th Amendment only levies the federal income tax upon the National Government and thereby places no obligation upon them,
- American Nationals are aware that 26 CFR1.871-1(a) shows that if they derive no income that is effectively connected with the conduct of a statutory trade or business in the District of Columbia there is no income tax liability,
- American Nationals have learned that there are no Implementing Regulations published in the Federal Register requiring American Nationals to file or pay a federal income tax as required of the National Government under the Federal Register Act,
- American Nationals are aware of the United States Department of the Treasury statute at 31 USC §321 (d)(1) and (d)(2) which states that federal income taxes are ‘gifts and bequests’ provided to and for the use of the National Government however it chooses to use those gifts and bequests. They know they cannot sue the National Government over a ‘gift or bequest’ granted to the National Government any more than they could sue United Way over a ‘gift or bequest’ after the fact.
From the federal laws and United States Supreme Court decisions discussed above, only if an American National, domestically or overseas, makes a voluntary “election” under 26 USC §6013 (g) or (h) to have his/her income treated like that of a U.S. resident alien could the targeted terms “U.S. person”, “person”, “U.S. citizen” referenced in FATCA and FBAR be applicable.
Otherwise, only federal workers, federal employees, elected federal officials and others who derive their income that is effectively connected with a statutory ‘trade or business’ in the District of Columbia ever be liable for the federal income tax and thus the FATCA and FBAR concerns addressing those statutory “U.S. citizens” who are really legal fictions created by the Congress.
The ‘election’ makes any American National liable for the federal income tax and the necessity to complete the FATCA and FBAR forms. This election may be terminated using our Revocation of Election Affidavit. This document will substantiate with your international banker, that you are the Exception listed in the “Instructions for Form 8938” as not being required to fill out an income tax return. In addition, you are supporting — with the Revocation of Election — that you are NOT a “Specified Individual” as stated in the IRS “Instructions for Form 8938”.
These two affidavits amount to a knockout punch against the IRS and its claims against other Americans. NOTE: These products are separate purchases but offer the supreme protection against IRS intrusions or further claims against your bank account(s).
We have a FATCA Exception Declaration for your use which explains the reason for your personal “exception” (as stated in the IRS “Instructions for Form 8938”) as documenting that you are not a “Specified Individual” upon whom the FATCA is directed toward. This is for application to your Foreign Financial Institution. You may attend one of our upcoming seminars, which will provide for a more personal experience. You may reserve your seat at an upcoming event for €25,00 EUR, but that nonrefundable fee will be credited toward the program fee. The fee for the combination of the FATCA Declaration and the Termination of Election is €135,000 EUR. The FATCA Exception Declaration will be provided to you then, and we will submit the Termination of Election on your behalf. Once becoming a client, we can also provide service on IRS enforcement actions such as Notice of Deficiency, Notice of Federal Tax Lien, or Notice of Intent to Levy at an additional discounted price for past years in question — if such arises.
This information you have just read is very difficult to explain and gain acceptance from International Bankers and Investment firms. Thus, we feel the easiest thing to do is learn the facts based on the truth and present them where need be, but to also have a multi-pronged approach for opening international bank accounts with a second or third passport. This has proven to be successful and far easier to work with such institutions.
article source: grandcaystrategies.com/fatca.html