Note the following comment from Steven Mopsick:
The law which requires U.S. Persons to submit worldwide income to US taxation must be changed. It is unfair, it makes no sense, and it has a chilling effect on commerce, jobs creation, and free trade. Perhaps more importantly, our world image has suffered enough over the last few decades. People over the world who have been on the fence about whether America has lost its mind can only be convinced with this new compliance initiative which removes all doubt.
Thought I would thank him in a more public way as follows:
#Americansabroad thank @mospicktaxlaw for stand on citizenship-based tax #FBAR #FATCA #OVDI – Thanks for listening! rendezvous.blogs.nytimes.com/2012/04/16/ame…
— U.S. Citizen Abroad (@USCitizenAbroad) April 18, 2012
Congratulations also to the Isaac Brock Society for the role it may have played in generating this comment!
It is an excellent comment. I must admit that Mr. Mopsick is the be given credit for his willingness to become a part of this blog. He is also to be acknowledged for being willing and able to see the validity of our position.
Bravo, Mr. Mopsick! With your wise and sympathetic remarks combined with Nina Olson’s common sense fairness regarding our plight, what a dynamic duo the two of you are! Many, many thanks……Will
@ Mr Mopsick – if you are out there. Thank you for listening. Please continue to ‘send the message’.
Thank you @Steven Mopsick. I know that your comment, with it’s unequivocal wording – comes from someone with years of experience, a respect and some warmth for some of your former colleagues in the IRS – and so are doubly uplifting to those of us who are struggling for recognition of this burden.
Thank you Steven Mopsick. I wish Congress would listen to your words and change the law. If they did, they would find it easier to get other countries to cooperate catching the real tax evaders who are rich Americans resident in the US who hide their assets in foreign accounts.
Expats are just ordinary folks living their lives not doing anyone any harm. Most of us pay much higher taxes in our countries of residence than US residents do. I wish sanity would find it’s way into Congress.
Thank you Steven! Where are you? We miss you. You didn’t let us chase you away, did you?
@all: You are very welcome!. The more I see of the injustice of citizen-based taxation, the more I realize this law cannot be allowed to stand!!
@30 Year IRS Vet,
Thank you so much for your comments on the news article and here. I will not be the only one to say we are glad to see your statement on the injustice of citizenship-based taxation!!
@30 year IRS Vet,and ALL, I vote for Steven Mopsick for the next IRS Commissioner!!
Yes! We have missed you Steven!!
I would also cast my vote for Steven, but I don’t want to jeopardize my 1972 ‘relinquishment’ of citizenship. However, I might work ‘behind the scenes’ to help with his nomination. Thanks again Steven and please do stay involved in IBS.
@tiger, @saddened123- I too would vote for Steven but not as Commissioner. Remember all of the tax law power rests with Congress, the IRS Commissioner is their agent and as such must do their bidding, he cannot change tax law.
It wouldn’t be a bad thing though to give Steven Tim Geithner’s since I believe that the IRS is under the Treasury department.
Remember, I cast Steven as Douglas Shulman in War of 2012: The Movie.
Now, he can do it–or another role–for real. Maybe Steven can be Mitt Romney’s Vice-President running mate.
Thank you indeed Steven! As they say, “You have come a long way Baby!” We have learned from you, and hopefully, in spite some of our hyperbole, you have learned from us. You have been a welcome voice of reasoned debate and sobering analysis.
Yes indeed to your final sentence! http://nyti.ms/HYFo16
“People over the world who have been on the fence about whether America has lost its mind can only be convinced with this new compliance initiative which removes all doubt.”
BTW, you are absolutely right when you say, Expats were not the Target of FATCA and minnows were not the target of the OVDP either, but as you now see, they are definitely the unintended consequence of this madness unleashed by Carl Levin and Shulman. However, as time moves on, the mission has morphed and they have become the Target if we are to believe the words of Geithner in his testimony.
“We are working very closely to try to meet the Congressional intent in making it harder for American Citizens overseas to avoid US taxes without putting undo burden on their ability to have a bank account for example…”
How do you know expats and minnows were not part of the original target list?
Well, it maybe now, but it certainly, in my opinion, it was not the target when it started in 2009.
I am relying on some well regarded speculation by many well regarded practitioners like Mopsick, Townsend, Hodgen and others and based upon how the program was rolled out right after the UBS prosecutions. The FAQs at the time were only one penalty, 20%. The new lower penalty provisions and “opt outs” were only added after they began to net tons of minnow expats and immigrants. The IRS seemed surprised and tried to adapt to what they were seeing versus what they had planned for.
From a practical matter, if you were really targeting expats and immigrants, you would have come up with an entire new structure. You have to remember, they were flush with the victory of all those UBS client names, and so were thinking about forcing their hands and getting them to Voluntarily Disclose, because they certainly did not have the resources to prosecute 5,000 of them.
Also, Jeffory Neiman, who was one of the chief prosecutors of UBS said this in response to one of my questions to him…
“These were IRS programs that piggybacked upon the publicity we had generated with the criminal investigation.
I think we have seen the IRS try to give the non willful taxpayer some relief by issuing the opt out guidance and by lowering the penalty for non-US residents without US sourced income who are tax compliant in their home country. We are stuck with the programs as they were announced. Opting out may be the only way the non willful taxpayer will be treated fairly.”
Perhaps you’re right, but Geithner’s words, “Congressional intent” sound premeditated to me.
Moreover, it’s no secret that Grassley and Levin have been gunning for expats for a long time.
A good source of information on any law, especially tax law, is to read the committee reports from the House, Senate or the Joint Committee on Taxation when it relates to a tax statute. The latter is considered by tax people to be the “bible” for an explanation of the purpose behind tax legislation. If you go to my blog under Resources and then look under the FATCA heading, on the second link down, I have published the Joint Committee Report on FATCA.
There you will see fairly straightforward language which explains why Congress thought there was a need for a legislative change, what the change is, and how it works. If you peruse that you will see that the target of the withholding rules under FATCA and IRC section 6038D, the statute which authorizes form 8938 (this discussion starts on page 37 of report) is all about US residents who are trying to get away with something. I could find not a single reference in that or the legislative history for the Bank Secrecy Act which implies in any way, that Congress was thinking about American expats when FATCA was conceived. I just don’t believe anyone in Washington was thinking at all about ex pats when this law was enacted in 2010. I don’t think the words, “expatriots” or “ex pats,” or “Americans living abroad” appears anywhere in the legislative history.
If anyone would care to do a word search on this we would all like to know. I don’t you will find it.
@ Steven Thanks for these comments. They are very helpful. I would add that FBAR explicitly gives the Treasurer the ability to exclude certain people from the filing requirements. He could have said (and indeed can still say) that bonafide residents of foreign countries don’t need to file FBARs at all, as a excluded class of people.
@Petros: Agree. Geitner could also say to Flaherty and others that FATCA does not apply to bona fide residents who have earned, saved and invested in the countries where they live. One simple common sense statement to the media and to financial institutions confirming Congress intent as outlined by Steven would alleviate stress and anxiety for both individuals and financial institutions. The fact that Geitner is not doing that is worrisome.
Thank you for the informative reply.
If that is the case, Congress shouldn’t have such a difficult time embracing the merits of residence-based taxation as laid out by ACA.
In the mean time, renunciations will continue to rise. So hopefully the members of Congress come to their senses soon.
@Blaze,All, Yes I think you are onto something I think Steven would be a good running mate with Romney as our next Vice-President !! Steven what do you think??
@ Blaze Yes, they could now…but now…after FATCA passed in 2010, Geithner is just putting it back on Congress to force them to say, “NO that is not our intent,” IE..Geithner is passing blame. “don’t blame us, Treasury, as we are just following your will.”. And… as you heard (or didn’t hear) in that meeting there was no push back by anyone!
So, I do think VD “intent” has morphed over time.
@Steven. Thanks for the great resource.
Learning a lot from you about bibles I never knew existed. 🙂
I went to your web site.
http://www.mopsicktaxlaw.com/resources.shtml found a link called…
Selected Excerpts from the Joint Committee Technical Explanation
Just checking to be sure I am reading the right bible, chapter and verse. 🙂
Steven has also blogged his comments here…
Welcome back Steve. Your comments on Jolly’s article are spot-on and most appreciated.
Thomas Paine was once a tax collector. So I knew there was hope for you all along.