Shadow Raider brought this to our attention in a comment he made on the Ways and Means Committee Highlighting International Apsects of Tax Reform thread today.
Shadow Raider writes:
“The tax reform working groups of the Ways and Means Committee are discussing tax reform at full speed now, with hearings almost every day (nothing on international aspects yet, other than a hearing about trade with India). The committee announced that it is accepting formal comments from the public until April 15, and that those comments will be included in the final report by the Joint Committee on Taxation on May 6. The committee is even posting the comments on its website as they are sent (the only comment sent to the international group so far is about corporations). If many of us send comments about citizenship-based taxation, FATCA, FBAR etc., the subject should catch their attention.
Instructions:
Any person(s) and/or organization(s) wishing to submit comments can email tax.reform@mail.house.gov.
In the subject line of the email, please indicate “Comments: (name of) Tax Reform Working Group” (in our case, International Tax Reform Working Group).
Attach your submission as a Word document.
In addition to the Word document attachment, please include in the body of the email a contact name, physical address, phone number and email address.“
Thanks to Mark Twain for pointing out this should be prominently featured as a new thread of its own.
@pacifica777
What is your feeling on non-USC’s contributing? Do you think they would accept?
@NobleDreamer ‘Don’t ask, don’t tell’ , but please contribute
@pacifica @nobledreamer
Well, I think that non-USCs’ opionions should be heard. After all, the FATBARDT mess takes money out of their local economies by attempting unconstitutionally to force USPs to pay extra tax to the United States of Arrogance as well as excessive fines if they don’t waive their rights to privacy.
There should also be a way that we could put US officials and legislators in the same mobility bind that we are in. In some countries it may be possible to charge them with crimes and have an arrest warrant issued. After all, they are potentially comitting what would amount to acts of war against every country on Earth.
If we can get all human beings informed, we could hope to raise enough outrage that the US won’t dare continue.
@ Noble Dreamer,
I really don’t know anything about if they accept input from non-USCs. I put the thread up at Mark Twain’s suggestion. Mark and Shadow Raider, whose comment sparked Mark’s suggestion for a thread, and some other Brockers, too, would know more about that than I do.
@Jefferson D. Tomas
if breach of trust is considered a crime, than any action taken to induce or bribe an individual to commit a crime is also a criminal offence. The IRS whistle blower program is an attempt to bribe/induce people to breach the trust of the clients of a financial institution. Any and all personnel associated with this activity should be charged, might be difficult in the case of a congress critter, but anyone working with, IRS, Treasury, and Justice should be arrested.
@pacifica777, Thank you for putting my post in a new thread.
The instructions in the Ways and Means website asks for an address, but they don’t say anything about citizenship. I see that the committee has already posted the comments sent by some Americans abroad (I suppose some of you).
Margo Lindener”s submission is very good. She’s a Canadian born, dual CND-USA, living in Canada, considering renunciation.
@em Hey, that’s me! I didn’t know it would be posted somewhere. Where did you find it?
I intend to be a non-citizen as of next Monday. The Halifax consulate appears so far to be wonderful. I will submit. a report once it is all completed.
@ CanuckDoc
Here’s the link. The submissions are all downloadable pdf files. Thank you for doing that submission. It tells the tale for so many. Halifax is a good place to go from what I’ve read from other Brockers. Looking forward to your report and best wishes! 🙂
http://waysandmeans.house.gov/taxreform/workinggroups.htm
@Canuckdoc, I just read your submission. Really really fine work. I’m going to work on one as well. I will also put up a link on the Flophouse and see if some of my readers want to do the same. One impediment here is that an awful lot of people still don’t want to use their names or call attention to themselves.
I’ve written to the founders of two large expat newsletters asking for their help getting other U.S. citizen expats to write in for this to share their stories of how citizenship-based taxation, FATCA, and the form nation are harming them and to encourage a switch to a fair, residency-based taxation system like the rest of the world uses. We’ll see what comes of it. Hopefully a few more letters will come in from it.
Also, I’m talking with an immediate family member (homelander) who works for a well known U.S. Fortune 50 company that is having enormous issues and difficulty doing business abroad and sending its employees abroad to expand markets because of this citizenship-based taxation and the incredibly convoluted system that they are faced with. They’ve recently pulled back and canceled sending many employees abroad this year and I believe it’s due to the negative effects FATCA. This company literally has a team of people employed just trying to deal with these issues. We’ve learned from Roger Conklin how harmful this is to U.S. companies domestically that aren’t able to promote their products in export markets and it’s true. It’s very real. I hope to encourage this company to submit an statement about how they, as a domestic company, are being harmed by all this as well.
Submissions now showing up from Pinto, Engen, Lindener.
Hoping to see the SWAT effort, especially those that remain Citizens, but there doesn’t seem to be a blcok against non Citizens.
Where is ACA, American Women’s Clubs? AARO? Dems Abroad? Republicans Abroad?
Here is the forum, and there are 3 submissions.
Here is my comment (I am Lindener) I probably should have put more into formatting it, but I was tired and in a hurry to get to bed.
I am writing with comments regarding tax reform, particularly as it relates to American citizens residing overseas. The system is very flawed and in serious need of reform. Although I can understand the rationale for attempts to prevent American citizens, particularly those resident in the US, from avoiding tax responsibilities, the systems in place are horrendously complex and unworkable for the average American living outside of the US.
I am a Canadian born, dual US/Canadian citizen I live in Canada, where all my bank accounts are held, and any relevant information is reported to the Canadian tax authorities where I pay tax. Attempting to arrange my affairs to comply with the tax regime of a foreign country as if I lived there is crazy. Consider the following few examples:
1) As a Canadian I am encouraged to save with some tax favoured accounts, as I’m sure there are probably some similar things in the US (ie for my childrens education, etc) However, those accounts are not tax favoured in the US. They are “foreign trusts” which are not only taxed, but require extra complex paperwork.
2) As a Canadian, sale of my principle residence is not taxed. But the IRS system wants to tax the capital gains on the sale of my principal residence in Canada, paid for with Canadian earned money, which is further artificially inflated by currency fluctuations.
3) I am required to report the the IRS not only all of my bank accounts, but any of those of my Canadian husband on which I have signing authority, (so as to facilitate probate in the event of his death) and the non-profit organization for which I volunteered to be treasurer.
4) Canadian mutual funds are Foreign Passive Investments and require really onerous reporting. Although I’m sure the rules were passed to prevent Americans living in the US from investing offshore, it seems unjustifiable to expect those rules to apply to people who want to invest in the country in which they live.
5) I have seen on several occasions that investments which I have wanted to make in Canadian companies have in the prospectus that their stocks or investment vehicles are “not available to US persons”. It is galling to be told that I can not invest in things my neighbours are able to profit from because my mother was US citizen.
It is very difficult to complete the required forms, most of which are never seen by “ordinary US resident citizen” The language is unintelligible, to ordinary human beings without law or accounting degrees. It costs $1000 or more to get a “simple” US tax return done by a preparer here. And the end result for most of us is no tax owing. It is just a huge waste of time for the citizen and it must require some IRS time to process all those returns with no benefit to anyone.
I am not evading taxes. I have lived and worked in Canada since 1977 and am fully compliant with my local tax authorities. I have no particular desire to disassociate myself with the US, where I lived as a child and where some of my family still lives, but I feel I have no choice but to renounce my US citizenship as soon a I can.
The most obvious solution is to stop taxing American citizens who are long term residents of other countries and compliant with the tax regimes in the place they live. If this is not possible, the regime needs to be simplified
Tax forms should not need to be filed if the earned income is less than the foreign income exclusion and the unearned income is less than the standard deductions
FBAR should not have to be filed by people living abroad whose accounts are in the country they live in
Capital gains should be calculated in local currency in which they are transacted
The instructions need to be written in intelligible English.
There should be a presumption that foreign retirement savings plans are tax deferred.
There should be allowance for any tax favoured vehicle in the country of residence being treated similarly by the IRS
Self employed people living overseas should not be forced to pay Social Security tax for which they will never get any benefit.
I could go on. I hope you will consider fixing this. It won’t help me, but it may benefit my Canadian born dual national children.
Excellent comment, CanuckDoc, and congratulations on your renunciation. I’m no longer a US citizen either, having received my CLN documenting relinquishment in 1979, but for the sake of other people I hope comments like yours will help US lawmakers see the injustice of their extra-territorial tax policies. Cheers!
Excellent work and thank you, @Canuck Doc, for being so brave as to make the submission showing the impact on an ordinary individual and Canadian family, and @Engen, amply illustrating the insane and punitive form and penalty compliance burden, and @Pinto – all those solid footnotes and references!
H.D. Pinto should get a Doctorate in Tax Reform Engineering for his Ways and Means submission. It is brilliantly organized and extensively footnoted.
@CanuckDoc
Nice work. Just wanted to point out, however, that this is not correct: Self employed people living overseas should not be forced to pay Social Security tax for which they will never get any benefit.
It is correct that self-employed people are forced to pay into S.S., however, they are indeed entitled to benefits as residents/citizens of many countries who have S.S. agreements with the USA. Perhaps you meant to refer to Medicare? Self-employed expats are forced to pay into that as well, and will never get any benefit from it outside the USA.
Formatting correction of above comment:
@CanuckDoc
Nice work. Just wanted to point out, however, that this is not correct: “Self employed people living overseas should not be forced to pay Social Security tax for which they will never get any benefit.”
It is correct that self-employed people are forced to pay into S.S., however, they are indeed entitled to benefits as residents/citizens of many countries who have S.S. agreements with the USA. Perhaps you meant to refer to Medicare? Self-employed expats are forced to pay into that as well, and will never get any benefit from it outside the USA.
I realized after i said it that it is not technically correct. However, I have been told that Social security benefits are decreased if you are receiving benefits from an equivalent program in another country, so it’s not a good use of ones (possibly limited) income, to put it into US social security. if you are living somewhere else and expect to continue to do so. And there are ways of getting exemptions from having to pay if you are covered under another countries program, but the process is complex and might be easy for an accountant or lawyer, but it is difficult to figure out how to do it for the ordinary person. For a person who is “self employed” but barely getting by, (you are supposed to file if you earn more than $400 a year if you are self employed) it is a nightmare. Not me, and I can’t say any more, except that I have good reason to know all this.
@CanuckDoc
Yes, it is a nightmare (for the self-employed). Especially since you have to make estimated payments 4 times a year. That means, for example, having to maintain a US checking account with a US address. Having to wire funds in a local currency to that US bank (fees, currency fluctuations). Having to send checks from your home country to the USA and make sure they arrive. (Several of mine got lost over the years. Had to put a stop on them and reissue and/or pay with a credit card instead to meet the deadline, which incurs another large fee, approx. 2%). I also tried to set up the automatic electronic payments the IRS likes to tout, but that doesn’t work for expats, since the tax address (non-US address) must be identical with the bank address from which the funds are taken (US address). If I had had the option of opting out of S.S. I certainly would have. Now I have effectively opted out by renouncing.
Before I became self-employed, however, I worked as an employee here in Germany and paid into the German system. I was then automatically exempt from U.S. S.S. and didn’t have to do anything in particular to become exempt. Perhaps it’s different for people in other countries, depending on their agreements with the USA.
@notamused
I am self employed in Canada, but was able to opt out because the very first accountant I talked to when all this “stuff” started happening gave me a document that affirms, with the appropriate documentation, that I am covered by the Canadian equivalent. I just file it, changing the date, every year with my tax form and so far nobody has complained. If I had not been given it, I would never even have known of its existence. And the accountant I subsequently saw didn’t even mention it. Apparently there is a similar set up for the UK, and probably other countries as well. But it is not easy to come by the paperwork..
Yes, I’ve heard of that, but self-employed people here are not (generally) required to pay into the German system, so I couldn’t claim that I was covered by the German equivalent. Since the USA requires self-employed persons to pay into one system or the other, I had to pay into US S.S.
there are a couple more submissions up on the site. ACA has weighed in. Anyone with Connections to Demos abroad should do some prodding to get something out of them which might be more meaningful than their Little fun-along they did last May 15. Anyone with Connections to Repubs abroad can ask them to turn their alarm Clocks on—maybe they will Wake up. Anyone who has Connections to the American Womens Club?
And 2 paragraphs from any individual is helpful to show interest.