Yes, I know this is a duplicate call of a previous posting on IBS by Shadow Raider. But thought I would update and draw attention to this from the ACA website:
Submitting Comments on Tax Reform
Please support ACA’s residence-based taxation (RBT) proposal by submitting comments to the Ways and Means Committee.
The Ways and Means Committee, is actively developing a comprehensive tax reform proposal. Chairman Camp and Ranking Member Levin have created 11 bi-partisan tax reform working groups. They have called on stakeholders and professionals to submit tax reform proposals and suggestions – before April 15, 2013.
You can make your voice heard by writing to the Ways & Means Committees and sending submissions to: tax.reform@mail.house.gov (see submission details from Ways & Means below)
ACA has submitted its comments in support of its proposal Residency-based taxation (RBT) . The ACA proposal would eliminate the serious difficulties that Americans overseas face due to the toxic combination of citizenship-based taxation, FBAR filing requirements and FATCA legislation. Americans abroad would be taxed by the US the same way they tax non-resident aliens – essentially through withholding taxes on US source income revenue such as dividends, rents, royalties, etc. Americans abroad would once again have access to foreign financial institutions and would not be subject to filing the 1040 and FBAR or FATCA reporting.
You may send your own suggestions and thoughts for tax reform or you may use a pre-formatted letter that supports the ACA position on taxation (see attached) and also allows you to include personal comments or insert a testimonial (see our letter here).
Details for the Submission of Written Comments to the Tax Reform Working Groups
1. Any person(s) and/or organization(s) wishing to submit comments can emailtax.reform@mail.house.gov.
2. In the subject line of the email, please indicate “Comments: (name of) Tax Reform Working Group” (note: be sure to specify the name of the working group in the subject line – e.g., Energy Tax Reform Working Group).
3. Attach your submission as a Word document.
4. 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.
5. For questions, or if you encounter technical problems, please call (202) 225-3625 or (202) 225-1721
On behalf of all Americans abroad, thank you for your support for RBT. This is a once in a lifetime opportunity to have your say in D.C.
(March 2013)
Additional Note from Just Me:
I strongly urge all of us who have been so active in our vocal and blogging opposition to FATCA to use this opportunity to also write to this commission to call for the Repeal of FATCA as part of any reform effort.
This may be in the category of stating the obvious, but while we have to make our point strongly, it needs to be in such a way so it does not insult those reading it or they will reject it.
I hate to admit it, but you have to remember your audience when talking to these Congressional House Representatives. You have to come across as a credible and thoughtful concerned citizen, or ex-citizen as the case may be. It is better not to be too hyperbolic, which means, I will not call it the FATCA FATWA, Offshore Jihad, WOOTE (War On Offshore Tax Evasion) or refer to it as ‘Carpet Bombing the Globe’ in my submission! LOL Even I will be a little more restrained and PC, as they say.
I understand that this is NOT something that all who read and comment here will care to do. I get that. But for those of us who can, and or so inclined, we should accept this open invitation for comments.
In the opinion of many who have been lobbying Congress for many years, this submission is a once in a lifetime opportunity. My understanding of the efforts on the Hill in the February Over Seas Week, the group of sister organizations, ACA, AARO and FAWCO, did get strong indications that many in Congress are anxious and receptive to real tax reform, and not just some more exemptions or loopholes on the margins.
Everything I read, tells me that Chairman of House Ways and Means, Representative David Camp is serious in wanting to get a real reform effort out this year. H.R.1 designation is being saved for this effort. We hope that he has some bi-partisan partners in the Senate. They already have their own draft and are just waiting for Camp to come forth first, as required in the law.
Bottomline, partisan politics aside, they all know that the tax code is a total mess, and frankly a creation of their own making. It has been said, and more cynically true than we may want to admit, the tax code exists as a funding mechanism for politicians’ reelection. It will be very hard for them to vote against special interest lobbying and the restructuring of special provisions which has helped fund their campaigns for years.
However, the stars may be aligning just right, and there is a possibility for big changes, even a historic one. Dropping FATCA would NOT even be that big of a change in the context of revisions being envisioned. Pulling the plug on this not fully functioning fiasco shouldn’t be all that hard to do. So far it has only generated costs and created chaos for Americans and financial institutions overseas. It is draining Treasury and IRS resources that in this time of sequester. Time and energy could be better spent shoring up defenses against homeland tax evasion and identity theft. That would have a higher ROI than this massive ideological mission for a global GATCA which has very little revenue return for the effort while threatening great harm to the world’s economy.
Give it a shot!
Mona Lisa, I can understand the connection that you have with your family. But let me relate to you my wife’s situation.
My mother-in-law was the only family that my wife had from the time that she was 6 to the age of 24. They went through hell as a single parent with a child. My wife’s father skipped out on the family when my wife was 6, and they made the choice to move from North Carolina to Louisiana. That depleted the family savings as their car broke down two times on the road to Louisiana. They lived a spartan lifestyle as my wife’s mother worked as a LPN until a botched carpal tunnel surgery even took that away from them. My wife had to leave high-school in order to work at whatever jobs that she could take to support herself and her mother and the drop in income meant that they were in poverty for most of the time that she was with her mother. The essence of this story is to tell you exactly how close of a relationship my wife has with her mother. And my wife is still willing to sacrifice being able to visit her mother because she does not want to test the magnanimity of the US government, as paranoid as it is behaving at the moment. She does not want to leave her children without a mother (if she potentially was imprisoned due to non-payment of potential FBAR fines)
The reason: Her (OUR) children mean more to her than life itself. As hard of a decision as it is, she could not leave her children in a situation where they would be without a mother. So it is with a heavy heart and deep anger that my wife refuses to cross the border, even to visit her mother, even though her mother is not in the best of health. She will not even cross the border to take care of the funeral arrangements if her mother passes away. That is what the United States government has done to her. Now do you understand the sacrifices that she has made in coming up to Canada? My wife has essentially removed herself from her only family that she had known for 24 years so that she could be with her “nuclear family” – her husband and her four children and she is not willing to sacrifice her nuclear family for her only family that she has known for most of her childhood.
And therein is the reason that I feel deep hatred towards the United States Government.
@The Animal, I think you’re both worrying needlessly as far as travelling to the U.S. is concerned; I made my disclosure in mid 2011 and have been back to visit the States twice since then with ABSOLUTELY no problems at all. I will actually be much more nervous the first time I enter on a British passport as a former U.S. citizen. I don’t think from what you’ve told me of your situation that she actually has anything to worry about. She’s definitely a minnow. I seem to think the amount of her unreported assets was under $30,000.
I really think she should still feel free to visit her mother in Louisana! As much as I’ve worried, I am not frightened to cross the border.
Considerably under $30,000, Unfortunately though we can’t tell what the US is going to do in the future, with the budgetary cliff yawning open and their economy poised to take a screaming dive off it. The overwhelming desire to punish expatriates may present future filers of their outstanding FBARs with the menacing spectre of financially crippling fines. The views of the homelanders may end up pushing the decision of Congress to legalize financially punishing fines. My wife is planning to file quietly, but then she is running the gauntlet of the IRS and the ever-present spectre of FBAR fines for late-filing.
She is trying to help me with my business by supplying me the equipment lens that I need to pursue my professional wildlife photography career; essentially just gifting me the $10,000 that I need for my 600mm f/4 lens in amounts of $3900 every four months. And she says she’ll be damned if the IRS gets between me and my business. She’s perfectly willing to give them the finger. She knows that we need a second income coming in, but she also realizes that if I go out and work at an employer’s place, there would be expenses coming from child-care. Wildlife photography means that I can go out with my kids and still shoot while still making sure that they are taken care of.
I want to take care of the US filing situation that she is in, but I also need her to apply for her Canadian citizenship (finances are tight and it seems as though there are too many balls in the air). We need the photography business to start making money but in order to do that, we need the professional lens to enable me to make the shots that are saleable. And we also need to get the 1040s filed, but having to do it ourselves because we don’t have the money to do it through a tax preparer/financial advisor and leaving us open to potential screwups and criminal proceedings if the 1040 is done incorrectly is pretty much leaving us frozen. So something has to give at this point.
It doesn’t help that I’ve had learning difficulties in the past…and difficult situations like this are like negotiating a maze blindfolded. I need to have a step-by-step procedure laid out for me for overcoming this FBAR/1040 mess. Y’know… a) do this…b) then do this c) then do this… then d) voila you’re done, wait for CLN. 😛
… and someone needs to write a book on the “human” side of this, the collateral damage, especially for families like yours, Animal. And yours, monalisa.
If only others really, really understood, we could (or I could) leave the anger behind and live my remaining years without the nagging worry in the back of my mind that my son’s situation (and me as the trustee of his finances) will be “caught” / that I am / we are criminals.
I don’t have the worry of having to visit aging, ailing parents across the line. Mine are both gone — and in many ways (as awful as that sounds), I am glad for that fact. I hate the burden on my one sister who understands all this by my unrelenting discussion to her of me, her Canadian sister, and family’s US citizenship-based taxation issues. It is a maze and we are blindfolded and we don’t have a step-by-step best procedure that will work.
PS — I am one who would be most hesitant to again cross the US border with my Canadian passport and CLN, especially if my son were travelling with me. That he would be safer to cross the US border with his Canadian passport that shows his Canadian birthplace with someone else rather than with his mother who has a Canadian passport with a US birthplace makes me sick to my stomach. But that’s my perception — I would not feel safe in doing that with him and some nice border guard asking if I was his mother, then putting two and two together.
I’m so glad both of you — and I wish so many others — were tuned in to Isaac Brock. And, I’m so glad it’s here for me and my unresolvable anger.
Pingback: The Isaac Brock Society
We also need to stay tuned to what the Senate Finance Committee is up to with their tax proposals…
SIMPLIFYING THE TAX SYSTEM FOR FAMILIES AND BUSINESSES
This is the hodge podge list from the Senate Finance Committee web site.
There is a lot comments I could make on many of these items. What is missing, is any consideration of Residency Based Tax proposal, or ending Citizenship taxation.
The marginally good...
1. Update the taxpayers’ bill of rights
a. Codify and update taxpayer bill of rights that would explicitly detail the rights and responsibilities of taxpayers, such as the right to confidentiality and the obligation to pay taxes on time (National Taxpayer Advocate, 2011 Annual Report to Congress)
e. Strengthen taxpayer privacy rights, particularly regarding digital information
(GAO-13-350)
The Ugly…
d. Ensure that the IRS has authority to oversee paid preparers by providing clear statutory authority for the IRS to regulate tax return preparers if the IRS loses its appeal in the Loving case
c. Limit the ability of seriously delinquent taxpayers to avoid paying taxes through, for example, the following reforms: i. Revoke or deny passports of seriously delinquent taxpayers (Moving Ahead for Progress in the 21st Century Act, 2012; score: $743 million; provision was marked up and approved by the Finance Committee on
February 7, 2012)
If you go through them, you can really expand on the ugly list, but I am out of time this morning. 🙂
Other news references are here
http://www.reuters.com/article/2013/03/22/us-usa-taxes-financepanel-idUSBRE92K10220130322
http://www.accountingtoday.com/news/Senateors-Tax-Reform-Tax-Preparer-Regulation-66136-1.html?pg=1
Where are the people of the Americans Women’s Clubs?
Where are the people of the AARO?
Where are the Dems Abroad?
Where are the Repubs Abroad?
@DemsAbroad @AFWCO and @AARO support it.
@Republicansabroad. Silence
https://twitter.com/FATCA_Fallout/status/315878954647031810
No Republican legislators have signed on as co-sponsers, and the count of Dems who have is 11
Prognosis
0% chance of getting past committee.
0% chance of being enacted.
11 cosponsors (11D) (show)
Honda, Michael “Mike” [D-CA17]
Napolitano, Grace [D-CA32]
(joined Feb 14, 2013)
Capuano, Michael [D-MA7]
(joined Feb 26, 2013)
Davis, Susan [D-CA53]
(joined Feb 26, 2013)
Moran, James “Jim” [D-VA8]
(joined Feb 28, 2013)
Carson, André [D-IN7]
(joined Mar 14, 2013)
Christensen, Donna [D-VI0]
(joined Mar 14, 2013)
McGovern, James “Jim” [D-MA2]
(joined Mar 14, 2013)
Schakowsky, Janice “Jan” [D-IL9]
(joined Mar 14, 2013)
Cohen, Steve [D-TN9]
(joined Mar 21, 2013)
McCarthy, Carolyn [D-NY4]
(joined Mar 21, 2013)
my question is regarding Ways and Means submissions. Silence from all so far
It doesn’t look very promising:
http://www.nytimes.com/2013/03/27/business/global/experts-foresee-no-tax-overhaul-in-united-states.html?_r=0
@swisspinoy, at least there is someone in the NY times saying:
………”It would be difficult for American companies abroad” if the [FEIE] exclusion ended, Mr. Entin said. “They would have to pay expatriates more, so they might send someone from Canada to the Paris office instead of someone from New York. Then the revenue disappears. It’s never going to be what they think it is by closing that so-called loophole.” “…….
Some more submissions yesterday. Lots of form letters supporting ACA, which is good. The one from James Albright is most serious, saying that the ACA proposal doesn’t go far enough—that ACA wants to tax like Non resident aliens (as I guess ACA is scared to ask for full Residence based taxation).
Also, the bottom-most submission for April 1 is unique, and had some personal Points.
All submissions are needed. 7 million US persons and 20-some letters is quite low.
Well, Anne did it again, another great and informative interview on Radio Frontier today talking about RBT. Below is the link to the website podcast. The media player at the bottom of the opening Text..
http://www.radiofrontier.ch/change-could-be-coming-to-us-tax-payers-abroad/
@ Just Me
That’s a dynamite interview with Anne Hornung-Soukup — very encouraging! I hope everyone takes the time to listen in. It’s a perfect antidote to all the offshore tax evasion booga-booga propaganda poison flooding the MSM at the moment.
I’m starting to read Roger Conklin’s submission posted today, it’s long but it’s a page turner!
Thank you Roger.
http://waysandmeans.house.gov/uploadedfiles/conklin_wg_comments.pdf
Looks like this won’t be the only effort to solicit ideas for tax reform from the public…
Congress to Solicit Tax Reform Ideas via Social Media
Here is the link that I left out…
http://www.accountingtoday.com/news/Congress-Solicit-Tax-Reform-Ideas-Social-Media-66294-1.html
For what it is worth, I just emailed my 2 cent contribution:
Sorry that I couldn’t suggest more, but I’ve ranked the issue as being hopeless.
Great story about ACA in “The Hill” which is widely read in DC…
US expatriates plead for relief from IRS
Lawmakers in Congress who are eyeing a rewrite of the tax code are getting an earful from Americans abroad who want relief from double taxation and time-consuming paperwork.
Letters are pouring in to the House Ways and Means Committee from as far away as Australia, Germany and Bahrain from citizens who say the IRS inflicts a particularly cruel form of punishment on them for living abroad.
“For the simple tax situation of one wage and some interest income, my 2012 U.S. tax return, with supporting documentation, is 28 pages!” an American living in Australia wrote to the House committee. “I muddle through as best I can, spending dozens of hours each year on it.”
The group American Citizens Abroad, which is headquartered in Geneva, Switzerland, is organizing the letter-writing campaign in a bid to change how U.S. expatriates are taxed.
Marylouise Serrato, the group’s executive director, said citizens living abroad want to be heard as lawmakers on Capitol Hill debate closing loopholes and deductions to lower tax rates.
“Our experience has showed that our members get behind our causes. They want to make their Congressman listen. They want to write to Washington,” Serrato said.
The effort shows that tax reformers will face lobbying pressure not only from K Street and giant multinational corporations but also from groups around the world that are affected by the American tax system.
The chairman of the tax-writing Ways and Means Committee, Rep. Dave Camp (R-Mich.), is welcoming any and all comments on comprehensive tax reform. Major corporations and trade groups such as 3M Co. and the U.S. Chamber of Commerce have duly obliged.
But few groups are making as much noise as American Citizens Abroad. Nearly 80 of the comment-writers to Camp’s committee cite the group’s talking points, according to The Hill’s review of the roughly 200 groups and individuals who filed letters.
On its website, the group offers form letters and precise instructions on how to email Ways and Means.
“They want everyone’s opinion — even yours! Your comments are having an effect,” the website says, noting the number of comments that have come from the group’s supporters. “Representatives in Washington and the media have taken note of this.”
The group also had its members lobbying lawmakers and aides in person in February.
The expatriates group is pushing hard to change how the U.S. government taxes U.S. citizens living abroad — from a “citizenship-based” model, which can lead to double taxation, to a “residence-based” one.
“We want to empower Americans who are going overseas who create economic opportunities. We are just not doing that with citizenship-based taxation,” said Serrato, who is helping run the organization out of her Maryland home after moving back from Switzerland last year. “You pay taxes in the jurisdiction where you have earned the income. … You shouldn’t be taxed twice on the same income.”
The United States and the tiny African country of Eritrea are the only nations that tax their citizens’ worldwide incomes. The U.S. system received increased attention last year after Eduardo Saverin, a Facebook co-founder living in Singapore, renounced his citizenship.
U.S. citizens can apply for exclusions on some foreign earnings, as well as credits for some taxes paid abroad, but still generally have to file a U.S. tax return every year.
“I don’t really mind paying my US taxes, which are minimal or zero after deducting and crediting my residency-based Swiss taxes. I do really mind the enormous hassle and final uncertainty of computing them,” one U.S. citizen abroad wrote to Ways and Means.
American Citizens Abroad is also pushing hard against the Foreign Account Tax Compliance Act (FATCA), which requires foreign banks to report U.S.-citizen-held accounts to the U.S. government. The law was created to crack down on offshore tax evasion, but expatriates have complained of foreign banks denying them service due to FATCA’s strict rules.
Serrato said Americans residing in foreign countries should not be subject to the law.
“An American living in France having a French bank account is not an overseas account,” Serrato said. “Let’s exclude those in-home accounts.”
The bulk of the ACA-inspired letters to U.S. lawmakers have gone to one of 11 working groups set up by Camp to discuss tax reform. Reps. Devin Nunes (R-Calif.) and Earl Blumenauer (D-Ore.) are leading the group on international tax reform.
A House Republican aide said that business issues were the main focus of the international tax reform working group. Lawmakers knew about the issues facing citizens abroad before the letters came in, the aide said.
“We were definitely aware,” the aide said. “This isn’t anything new.”
But the aide added: “Unless we drag in the individual side [of the tax code], it’s kind of irrelevant.”
Blumenauer said the “point of departure” for his working group was corporate tax issues, not the individual code, but said he hopes tax reform “goes beyond that” to “our role in a global economy, how we raise revenues.”
“We don’t want to be in a situation where we’re forcing companies to hire foreign nationals because it’s not cost-effective for Americans to take those jobs,” Blumenauer said.
Serrato said business groups are also concerned about how individuals are taxed. She pointed to a U.S. Chamber of Commerce letter to Ways and Means that said, “no other country taxes its citizens working abroad … any transition to a territorial tax system should take this into consideration and end this damaging practice.”
When it comes to international taxes, the Chamber has pushed for a territorial system, which would shield U.S. corporate overseas profits from U.S. taxes. Camp’s first draft framework on tax reform, released in October 2011, proposed shifting America to such a system.
Lobbying will only pick up as Camp and Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, try to cobble together a comprehensive tax reform bill this year. The House Ways and Means Committee’s deadline for comment letters on tax reform is next week, on April 15. Expect to hear more from American Citizens Abroad.
“There is tax reform on the table. It doesn’t come around every day. … It’s an once in a lifetime opportunity,” Serrato said. “We are telling our membership that Ways and Means has given you a platform. Take it and use it.”
I think this quote says it all:
“A House Republican aide said that business issues were the main focus of the international tax reform working group. Lawmakers knew about the issues facing citizens abroad before the letters came in, the aide said.
“We were definitely aware,” the aide said. “This isn’t anything new.”
But the aide added: “Unless we drag in the individual side [of the tax code], it’s kind of irrelevant.”
So the fact that the USG persecutes “US persons” is not new, it’s simply irrelevant. Draw your own conclusions as to whether anything will get better for USPs as a result of any “tax reform”.
@notamused, small business America says to tax the hell out of ’em expats, and thus so shall it be:
http://asbcouncil.org/sites/default/files/library/docs/msa_asbc_poll_reporttaxesapril2013.pdf
@SwissPinoy
I wonder how those taking the survey would have responded if it had pertained to individuals and not corporations.
I also wonder. But I’ve concluded that they just think we’re a bunch of whiners.
re-posted from http://www.expatexchange.com/expat/index.cfm?frmid=267&tpcid=3371790
Norway Forum – Expat Exchange
danmor
4/14/2013 19:17
“Dear fellow US citizens,
Please distribute this message widely!
Please send an URGENT message today to your newsletter and on your website, urging your members to personally send letters to Congress by the Monday, April 15th deadline (tomorrow!), pleading Congress to repeal FATCA and change the tax system from citizenship-based taxation to residency-based taxation just like it is in the rest of the world.
As you very well know, these issues have caused immense financial hardship to all of us (US citizens living abroad).
We don’t get any benefits from the US but we have to file US tax returns??!! The US is the only country in the world that harms its citizens residing abroad in this way!
It’s time to tell Congress and the IRS: Enough is enough! No taxation without representation!
More information on the call for action can be found on the website of the American Citizens Abroad association:
http://americansabroad.org/issues/taxation/have-your-say-tax-reform/
Our voice is starting to have a positive impact:
http://thehill.com/business-a-lobbying/293187-americans-living-abroad-plead-for-relief-from-irs
But we need to keep on with the pressue, and we need your support as well!!
It is EXTREMELY important that we ALL support this effort and make our voice heard on the Capitol in order to put an end to our unnecessary suffering once and for all!
Please explain that even if one misses the deadline by a few days, it is still crucial and worthwhile to send the letters to Congress, as they will most probably take them into account as well.
Finally, you can add that to those US citizens abroad who are reluctant to send such emails since they don’t want their names to end up on some list that somehow finds its way to an unfriendly eye in the IRS, there is a very simple solution: create a new email account using gmail, yahoo, or hotmail, under a made-up name, and send the emails from that account.
Thank you very much for your immediate help and support on this crucial issue that is affecting you, me, and all of us!
Sincerely yours,
A fellow US citizen “
AICPA makespoints about civil tax reform – including the issue of appropriate and proportionate penalties:
http://www.tax-news.com/news/AICPA_Submits_US_Civil_Tax_Penalty_Reform_Proposals_____60446.html
…….”The specific issues addressed by the AICPA include the trend away from voluntary compliance as the primary purpose of civil tax penalties; the lack of clear standards in some penalties; the fact that some penalties are disproportionate both in amount and severity; the fact that some penalties are overbroad, deter remedial and other good conduct, and punish innocent conduct; and the trend toward strict liability.”…….
http://www.accountingtoday.com/news/AICPA-Tells-Congress-Lighten-Civil-Tax-Penalties-66347-1.html
………………………..
“The AICPA asked Congress to address the following issues:
• The trend away from voluntary compliance as the primary purpose of civil tax penalties;
• The lack of clear standards in some penalties;
• The fact that some penalties are disproportionate both in amount and severity;
• The fact that some penalties are overly broad, deter remedial and other good conduct, and punish innocent conduct;
• The trend toward strict liability;
• An erosion of basic procedural due process;
• Inconsistencies between penalty standards and the role of tax professionals;
• The increase in automated assessment of penalties that can lead to unwarranted assessments;
• The need for better coordination and oversight of penalty administration;
• The bias in favor of asserting penalties;
• The need to improve IRS guidance and training; and
• The need for the IRS to increase its efforts to educate taxpayers and tax professionals.”
Read the whole document, which also specifically flags form 3520 re our favourite “foreign trusts”
http://www.aicpa.org/Advocacy/Tax/TaxLegislationPolicy/DownloadableDocuments/AICPA-legislative-proposals-penalties-2013.pdf
and also read this;
http://www.aicpa.org/Advocacy/Tax/TaxLegislationPolicy/DownloadableDocuments/AICPA-report-civil-tax-penalty-reform-2013.pdf