Will the Fun Ever End? Possible New US Person Reporting Requirement

Some mornings I read some delightful missive in my inbox, and then I put down my coffee, walk over to the nearest wall, and knock my head against it.  Made for a very satisfying thunk back in Versailles where the walls were 1929 solid.  Not nearly as effective in my modern Osaka apartment since the room dividers are covered in cheesy thick white wallpaper which cushions the blow.

But I make do.

So what had me banging my head against a wall this morning?  A possible new US Person reporting requirement.

According to Allison Christians, a McGill University tax law professor and all around Fine Person (she loans me books and buys me coffee) based in Montreal, Canada, reports that the US Bureau of Economic Analysis  has decided to make its bureaucratic life easier, and by extension other people's lives much harder.

Their form (and isn't there always a damn dead tree form?) Benchmark Survey of U.S. Direct Investment Abroad, the BE-10a-d, was used by the BEA to gather information about US investments outside the Land of the Free.  It was voluntary;  now it's required.  The due date for new filers of this form is June 30, 2015 - the very same day millions of US Persons around the world must have completed their Fincen 114 reporting (aka FBARs).

Christians says that the now mandatory BE-10 filing concerns "any US Person that directly or indirectly held 10% or more of the voting securities ("US Reporter") of any non-U.S. business enterprise (a “Foreign Affiliate”). There are no de minimis exceptions: no matter how small your nonUS corporation might be (or have been-you must file for the year even if the corporation ceases to exist), you must report or face the penalty."

The penalty for non-filing is "$2,500 to $25,000 for nonfiling, plus $10,000, or a year in jail, or both, if the nonfiling was wilful."

That's the bare bones info.  I imagine that most of you have just one burning question and that is:  Does this filing requirement apply to US Person me, my investments, and my small non-US family business or consulting company?   Once my head stopped spinning from all that wall banging, I watched this BEA video and, for the life of me, I couldn't figure it out. Christians herself is looking into it, and if it isn't obvious to a professor of tax law, then no wonder little ol' me is confused.




Just out of curiosity, were any of you Costco (or local equivalent) shoppers out there aware of this?   Did anyone send you a note, give you a heads-up, cc you on the memo?    Or are you reading it here for the first time?

Because, setting aside for the moment the question Is this reporting necessary? (for some reason that escapes us peons) this highlights once again that there is a serious communication gap here between the homeland and Americans abroad.  Did the people at BEA think for two seconds that there might be 8 million US citizens and Green Card holders abroad (not to mentions those living in the US) potentially affected by this requirement?  And if those 8 million+ people were taken into consideration, might that not change how the requirement was designed, implemented and communicated to the population concerned?

It's not just the BEA but the entire US government that needs to get a grip on globalization and the fact that it has a Domestic Abroad, a population that does not live in the US and may never ever live there.  Yes, taking them into account makes things messy and harder to implement but if laws, policies and regulations are applied to these people regardless of where they live, and they run the risk of draconian fines or jail time for failure to comply, then, at minimum, government has an obligation to clarify and inform.

And don't give me that "ignorance of the law is no excuse" crapola.  According to one source, US Federal law has over 23,000 pages in 50 volumes.    The US tax code alone is over 7,500 pages written in the weirdest, obscurest language comprehensible only to a small, select group of scribes (some of whom charge 500 Euros an hour for the "translation").   With numbers like that ignorance isn't a choice, it's a chronic condition.

What to do?  Instead of roiling in fear and frustration one option is for us to start banging on their walls instead.  BEA has a contact email: be10/11@bea.gov and a phone number (202) 606-5566.  Ask for clarification and be sure to get them to put it in writing that you do or do not have to file this pesky form.  Let them know that you are not the only US Person abroad asking these questions and suggest that they provide additional information on their website pertinent to US Persons who do not live in the US. And then send everything to your US Congresspersons so that they are in the loop as well.

Maybe it will work and maybe it won't.  It's worth a try, if for no other reason than the possibility that sending those emails might just assuage some frustration and save a wall or two.

Update:  Professor Christian has updated her post and says that, as far as she can tell from the instructions, non-resident US citizens are not required to submit this form.  Between you and me, I would still ask them directly and extract an answer in writing.  Cover your ass?  Absolutely.