Free Newsletter Signup:

About our newsletter ...

Already a Subscriber?
To manage your current subscription settings, enter your email address.

Recent Articles

Life Member: The Top
Trial Lawyers in America

Past Articles


You are receiving this e-mail as part of your subscription to David Tanzer’s newsletter about asset protection and offshore living and investing. For optimal viewing please enable images and add our distribution email to your safe senders list.  Please feel free to share this message with your colleagues and friends. Subscribe and Unsubscribe information is listed below, and if you have any questions or comments, please see contact information after the newsletter.


The number of inquiries I receive from honest, law abiding citizens about offshore banking reporting requirements continue to climb. On more than one occasion - men and women alike – some have broken into tears of confusion. Others are paralyzed with fear.

Truth be told, the reporting requirements for offshore assets are not that difficult, or burdensome. Many good accountants handle the reporting with ease, and many clients successfully complete the reporting themselves.

This doesn’t mean that I’m a fan of the reporting requirements, as they irritate the bejeebers out of me. And I’ll stop now before I get started on what I really think about the draconian reporting rules. But rules they are, and reporting there must be ….. but that might change, as we’ll get to in a moment.

In the meantime, does this mean you should stay home and avoid everything foreign or offshore? Hardly, as the heavy-handedness at home is all the more reason to protect your assets offshore.

As our long timer readers know, we have for over three decades assisted clients with asset protection strategies, implementing international trust for investment diversification and protection, estate planning, second citizenship, renouncing citizenship, and much, more. It continues to be a great personal pleasure of mine to work with so many great individuals and organizations located in the U.S. and across the globe.

Now the good news is that there is a fresh, positive tone brewing in Washington, which may, over time, eliminate or reduce offshore reporting burdens.

Today’s newsletter includes an outtake from a trusted source that is getting attention in Washington to lessen the burdens of FATCA and the FBAR on U.S. individuals, both at home and abroad.

Washington is listening to the Madness of Offshore Reporting

Finally, a voice of sensibility is heard in the world of offshore tax madness in the Washington darkness. The voice seeks to lessen the burdens of U.S. reporting requirements, both at home and abroad. And some members of Congress are actually starting to listen to the problems associated with FATCA and the FBAR. That voice is ACA (American Citizens Abroad), with offices in Washington DC, and associate’s offices across the globe. Good on ya ACA!

Even for those not living offshore, ACA’s steps could benefit you too.

ACA’s efforts in Washington are the first of many small steps in Congress and at the IRS to address the offshore reporting complexities.  They are baby steps, but at least steps in the right direction. An ACA recent newsletter published an article from Professor Allison Christians, the H. Howard Stikeman Chair in Tax Law at McGill University in Montreal, that highlights not only about the impact of FATCA and FBAR, but solutions to the problems. It’s the solutions that are getting attention.

What follows below is a brief summary of one of Christians’ articles.  Let’s listen in to what she has to say.

FBAR e-filing Violates Taxpayer Bill of Rights

The Taxpayer Bill of Rights (TBOR) was adopted by the IRS on June 10, 2014, and each and every U.S. taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. Your rights include:

1)      The Right to Be Informed
The Right to Quality Service
The Right to Pay No More than the Correct Amount of Tax
The Right to Challenge the IRS’s Position and Be Heard
The Right to Appeal an IRS Decision in an Independent Forum
The Right to Finality
The Right to Privacy
The Right to Confidentiality
The Right to Retain Representation
The Right to a Fair and Just Tax System

Allison Christians comes to the fore regarding FATCA and FBAR (Report of Foreign Bank and Financial Accounts)  reporting issues.

First, she echoes the claim made by Eric Kroh of Tax Analysts that it is unfair to label U.S. citizens living overseas as criminals by making them register with the Financial Crimes Enforcement Unit (FinCEN) using an FBAR e-filing system that is riddled with frustrating error messages. Worse yet, there are no other ways to comply with the reporting requirements. The same is true for citizens living at home.

Christians reminds us that the FBAR reporting clearly violates the third and the tenth provisions in the recently IRS-adopted Taxpayers Bill of Rights (TBOR), specifically “The Right to Quality Service” and “The Right to a Fair and Just Tax System”. 

Second, the other point she makes is that the e-filing requirement is susceptible to legal challenge under the recent tax court decision of the Massachusetts Appellate Tax Board (MATB) in Haar v Commr.  Here, Christians is questioning the IRS’s legal right to impose hefty fines on someone who has not paid electronically, arguing that FBAR-filers, like regular taxpayers, should have a choice to pay online or by check.  The court finding in the taxpayer’s favor, the MATB ruled that the taxpayer, Mr. Haar, exercised the degree of care that an ordinary person in his position would have exercised when he made his timely payment by check.

This raises the further question as to whether IRS penalties for FBAR non-compliance generally are fair and reasonable, and meted out appropriately.  If, as Professor Christians suggests, the TBOR is being taken seriously and at face-value, it would seem that, despite Congress’ unwillingness to codify the TBOR, we are in for more legal challenges against the IRS to help protect U.S. citizens going offshore while establishing reasonable boundaries for IRS enforcement. 

It’s certainly a great start for U.S. citizens abroad and at home.

Paperwork and Punishment: It’s Time to Fix FBAR

In Christians recently published paper, she points out that the foreign bank account report (FBAR) is part of a regime designed to stop terrorists, money launderers, and tax evaders.  As law-abiding citizens living abroad, most, she argues, are unfairly burdened with expensive and time-consuming reporting responsibilities just to prove that they don’t owe anything to the IRS.

It’s time, says Christians, to put the emphasis back on the criminals and terrorists, and take it off the backs of the rest of the 7 million U.S. citizens living abroad.  Again, the same is true for many more millions of citizens living at home that invest internationally or have a part time home offshore.

The next point Christians makes is that the $10,000 reporting threshold was established in 1970 and, if adjusted for inflation, should be closer to $60,000. The inflation adjusted amount would eliminate reporting requirements for many Americans who don’t owe any taxes anyway. And, that many FBAR violators are simply ignorant of the filing requirements or procedures, but the exorbitant financial penalties treat them like criminals.

What’s more, by housing FBAR on the FinCEN Network, newly aware FBAR filers are greeted as suspected money launderers or terrorists and asked to input extensive personal information, obtain an identification number that is separate and distinct from their taxpayer identification number, and navigate an online-only form that is characterized by known technical issues, including incompatibility with standard computer operating systems and software programs.

Candidly, I personally don’t think that a more inept, over-burdensome, draconian FBAR reporting system could be created if someone was intent to design one. But what do I know?

How to fix the problem? 

In “The Big Picture – 2012: Could a Same-Country Exception Help Focus FATCA and FBAR?”, Christians proposed that there be a same-country exception for bank accounts, where the local bank account an expat is using for day-to-day transactions is treated as just that:  a local bank account, not a foreign one. The same argument is valid for citizens at home demonstrating a reasonable purpose for a local bank or financial account offshore.

Christians argues that by integrating FBAR into the regular 1040 tax filing, the IRS would normalize and decriminalize these reporting requirements. She suggests this as an interim fix while we wait for a more just and permanent solution in the form of residence-based taxation, a move that would greatly simplify matters and save both expats and the IRS time and money currently wasted on FBAR compliance under the current citizen based tax system.

If you are interested in the full length version of Christians’ recent articles, she focuses here specifically on the blatant contradictions between the filing requirements and recently IRS-implemented “Taxpayer’s Bill of Rights”. And here she examines the undue burden of FBAR filing requirements.  Importantly, both interim and long-term solutions are proposed, which are long over-do for attention.

What Does this Mean if You’re Not Currently Living Offshore?

Plenty …. in my humble opinion.

It is apparent from these early steps at least some in Washington are beginning to recognize the burdens imposed with FATCA and the FBAR. Once some of the more blatant problems are addressed for those living offshore, this then opens the door to mitigating similar burdens for those at home conducting legitimate offshore activities, whether investing or living part time.

And one additional measure of good news for American’s moving, living or investing abroad, is that there has been a positive response to ACA’s proposed Residence-Based Taxation (RBT) replacing the current Citizen-Based Taxation (CBT) system. Instead of worldwide taxation based solely upon citizenship contrary to the rest of the world, under RBT, Americans residing overseas could elect to be taxed on the same basis that the U.S. currently taxes non-resident foreign nationals.

For those with more than a passing interest in history, CBT was implemented in 1861 during the American Civil War designed to prevent wealthy individuals from dodging mandatory military obligations.

RBT means U.S. source income could be taxed through withholding taxes determined by U.S. tax law and bilateral tax treaties on all U.S. source unearned income (including dividends, interest, royalties, pensions, passive rents from U.S. properties, etc.). And income earned in the U.S. from offshore, or from U.S. partnerships and self-employment services, could be taxed either by a withholding tax at source or by reporting income on 1040NR. Under RBT, investments in U.S. real estate remain subject to local real estate taxes and to the provisions of Foreign Investment in Real Property Tax Act (FIRPTA) at the time of sale.

RBT includes anti-abuse measures, and it is aimed solely at Americans who are overseas residents. There is no benefit to U.S. residents who fail to report their assets overseas, fail to pay taxes on non-U.S. income, or try to hide their assets overseas.

According to ACA, RBT resolves incompatibilities between CBT and FATCA. And as a win-win solution it creates a positive tax revenue flow for the U.S., creates jobs, enhances U.S. competitiveness and export appeal, streamlines reporting requirements, reduces compliance burdens, and reinforces synergies between citizens abroad and at home.

And most importantly, RBT aligns U.S. tax policy with the rest of the world basing tax responsibility solely upon one’s residency, and not citizenship. (OK, there’s also tiny Eritrea, so no need to email me with the other exception.)

However, it’s not all wine and roses in Washington. The Senate shot down a privacy bill 18 November, proving that many in Washington still continue to be out of touch with Americans and their needs. The USA Freedom Act failed to get the 60 votes needed to prevent a filibuster. This act would have ended the government’s program for storing American phone records for five years as well as allowing public advocates to appear at some hearings of the foreign intelligence court. This court is responsible for the majority of surveillance requests.

Unfortunately, since Edward Snowden spilled the beans in June 2013, there haven’t been any real reforms to protect privacy. It’s dreadful that Congress has failed to respond to protecting your right to privacy, or to rein in NSA.

As the newly elected office bearers take their place, I try to remain optimistic. But we are reminded by Ronald Reagan’s quote that “Politics is the second oldest profession. I have come to realize that it bears a very close resemblance to the first.”

Meanwhile, our office continues to provide ways to protect your assets from frivolous claims, enhance retirement and estate planning, offshore investment diversification, living abroad, second citizenship, and much more. We are here to help protect your privacy, your wealth and your freedom.

What you can do now

There are numerous complimentary past newsletters and articles on our website at, which is a good place to begin learning about asset protection and offshore investing and living. International tips are located here.

To learn more about the legitimate use of international trusts for integrated estate planning and asset protection, start with How to Legally Protect Your Assets, 2nd edition.

And to learn more about the correct ways to go offshore, read Offshore Living & Investing, 2nd edition.

If you wish to start now, and learn how to proceed with a confidential consultation to review your personal situation to accomplish your objectives, then contact me here.

Until next time……




David A Tanzer, Esq.
JD, BSc, Ph.D (Hon)

For more information visit or email to David is the author of “How to Legally Protect Your Assets” and “Offshore Living and Investing.”

David A Tanzer & Assoc., PC.


Vail, CO USA:
Tel. (970) 476-6100
Fax (720) 293-2272

Auckland, New Zealand:
Tel. (64) 9 353-1328
Fax (64) 9 353-1328

Brisbane, Australia:
Tel. (61) 7 3319 6999
Fax (61) 7 3319 6999

(Licensed to Practice Law in U.S. States & Federal Courts; Assoc. Member Auckland, N.Z. District Law Society - Foreign Lawyer; & Assoc. Member Queensland Law Society, AU - Foreign Lawyer)

The comments herein are not intended to constitute a legal or tax opinion regarding any specific legal or tax issue as additional issues may exist; does not reach a conclusion with respect to any specific legal or tax issue addressed herein or any additional issues not included; and cannot be used for the purpose of avoiding legal or tax obligations or penalties with respect to issues in or outside the scope of matters discussed herein.

(c) Copyright by David A. Tanzer & Associates, P.C. All rights reserved. Except as permitted under the United States Copyright Act of 1976, as amended, and pursuant to the laws of all countries, no part hereof may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, electronic or otherwise, without the prior written permission of David A. Tanzer & Associates, P.C. Reprint in whole or part strictly prohibited unless prior written permission is granted. International Copyright protected under the Berne Convention, Universal Copyright Convention  and laws of all other Copyright protected countries, and consistent with the World Trade Organization TRIPS.