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!
@Just Me, You can keep your hopes up. The reporters who wrote that article on The Hill probably contacted both chairmen of the international tax reform working group, Devin Nunes and Earl Blumenauer, and I suspect that the Republican aide who responded is the same Devin Nunes’s assistant whom I met last year. Yes, he defends citizenship-based taxation, but he is the only aide that I met who does. His opinion is not representative of what Congress thinks about the subject, so I think we can safely ignore his comments. All other aides that I met were supportive or at least open to changing the tax system to one based on residence.
Speaking of congressional aides, most of them are young, as you noticed (20-40 years old), highly educated, motivated and friendly. Also, most of them have traveled abroad, and they live in or around DC, which has a substantial international presence. Perhaps because of these characteristics, they are open-minded about the rest of the world and are interested in new ideas. A 150-year old policy that restricts international mobility is not something that they support. I think citizenship-based taxation is not going to survive much longer.
Also, Earl Blumenauer responded himself to the article on The Hill, and his response seems positive. I think I finally found the point that makes Congress care about the subject: the competitiveness of Americans for jobs abroad. When Bill Alexander proposed expanding the FEIE to all kinds of foreign income in 1992, he titled his bill “Overseas American Economic Competition Enhancement Act”. When Jim DeMint and Gregory Meeks proposed making the FEIE unlimited in 2007, they titled their bill “Working American Competitiveness Act”. Earlier this year, Dave Camp wrote that tax reform is needed to make US workers more competitive internationally. Now Earl Blumenauer mentioned something similar. The Senate Finance Committee scheduled a meeting on “international competitiveness” for next month, and I don’t think they are just talking about corporations. So congressmen don’t care much about logic, simplicity or fairness in the tax code, banking problems, exports or additional tax revenue, but they don’t want Americans to be undesired for jobs outside of the US simply due to their citizenship. In the past, this problem could be mostly solved with the FEIE, but today, with FATCA and the enforcement of FBAR penalties, even excluding all foreign income wouldn’t be enough. For Americans and foreigners to be considered equally for jobs abroad, Americans abroad can’t have tax or financial reporting requirements to the US either.
The Joint Committee on Taxation should say something about the subject in its report on May 6, and the Senate Finance Committee should also say something after its meeting on May 23. I think we’re in for a pleasant surprise.
@shadowraider
US competitiveness is something everyone can get behind.
“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.
Roger Conklin did an excellent job covering the subject in his submission.
Could competitiveness be the thin edge of the wedge we need to can pry this thing open?
@Shadow Raider…
Thanks for you comments and your insights, having walked those hallowed halls and met those young aides!
“Competitiveness” is definitely the wedge and the relationship to job creation. It has been Roger’s constant theme, and it may finally resonant. Fairness, certainly won’t, as that is in the eyes of the beholder.
Regarding the JCT, I was not kind to them in my submission, especially as related to their 2009 Press Release on FATCA
@Em,
re; ..”I love how AICPA addresses the problem with penalties but I wonder if they have ever addressed the trouble with the tax code being too bloated and too complex for mere mortals to do their own taxes without the aid of CPAs”…
The AICPA site is pretty useful, and though some of it is locked – only accessible to members, there is also open and public information, some of which is advocacy letters – and one of the themes is the need to simplify the tax system ex. http://www.aicpa.org/interestareas/tax/resources/individual/advocacy/pages/aicpa%20aba%20tei%20urge%20more%20tax%20simplification%20provisions%20for%202004.aspx
I do agree though that there is opportunity for a conflict of interest.
There was a mention in the AICPA document about the complexity and thus penalty costs (and by extension, professional fees) incurred by mere laypersons due to accidental errors, though the connection to fees isn’t explicitly made;
…”The existing civil penalties are numerous and complex, which results in innocent parties being subject to them for the slightest misunderstanding of reporting requirements and tax law. In addition to
the taxpayers being affected by these penalties, a burden is placed on
the IRS to implement and monitor them. This burden causes increased errors in assessment and the devotion of significant time by IRS personnel to deal with taxpayers requesting abatement.
In many instances, the numerous civil penalties are too complex for IRS personnel to understand and administer. Numerous reports from
U.S. Treasury Inspector General for Tax Administration (TIGTA) and other interested parties have highlighted the errors by IRS personnel that adversely affect taxpayers.
Taxpayers are placed in a situation where requesting reasonable cause relief can be an exhaustive task without consulting a tax professional.”….
And, they do note that in the context of IRS penalty regimes – in some cases individuals have chosen to pay whatever the IRS proposed – because contesting it is too expensive and complex.
@Shadow Raider, I enjoy and appreciate your optimism! 🙂
@ badger — Thanks for the additional info re: AICPA.
THis appears to be a milestone in a major effort. One that has great potential.
I think that the quote was deliberately placed into the article to inflame the readers.
@just me
““Competitiveness” is definitely the wedge and the relationship to job creation. It has been Roger’s constant theme, and it may finally resonant. Fairness, certainly won’t, as that is in the eyes of the beholder.”
It is only a recognition of the ‘unfairness’ in the law’s treatment of Americans abroad that will lead to change when US companies operating offshore are forced to hire foreign nationals instead of Americans. Whether it would apply to other USP’s abroad would have to be seen.
It concerns me that Congress may instead take some half measure, like allowing US persons to live abroad on a ‘tax holiday’ to work with only US companies and on a temporary basis, rather than end citizenship based taxation altogether. Brockers, would such a plan be feasible?
This would also work to discourage Americans from working for ‘the competition'(foreign companies) Remember: “don’t mix with the natives”,
oh God, bubblebustin, given what we experience, any stupid idea is possible out of Congress.
Ways and Means must have really been “slammed” in the last few days. They haven’t posted anything since April 10th. I’m still waiting to read Just Me’s 11 pages. I hope a big percentage of the submissions in the final batch are international. The last time I checked they were at 40% I think.
@bubblebustin, re ..”It concerns me that Congress may instead take some half measure, like allowing US persons to live abroad on a ‘tax holiday’ to work with only US companies and on a temporary basis, rather than end citizenship based taxation altogether”..
I wouldn’t be surprised. I think it unlikely that they will want to forego whatever else that they can tap us for – common ‘taxable events’ like the sale of our permanent residence, our estates, etc.
They have no interest in those already abroad – born or living permanently outside the US really. Because any reference to individuals only comes up in the context of US corporate assets being held ‘offshore’, it seems that their focus is through the lens of how it might benefit US corporations, induce them to repatriate their assets, and perhaps make it cheaper to hire US personnel to work abroad. I know a US resident citizen who refused to go ‘abroad’ partly out of xenophobia (one spouse), partly because of the costs involved (the employee). Perhaps those concerns might persuade them to make some bandaid changes, but that will not solve our overall problems. The only other argument I can think of that might broaden their approach is that for longer postings, the whole family will be going. To get one employee to work on longer assignments and projects that could take a few years, it is necessary to make it attractive to move the entire family. And there is no effective inducement if the US tax system ends up punishing the entire family abroad tax-wise.
@Em, yep, I sent mine on the 11th. It would probably have been good if I had written more, but I was afraid that some genius might attempt to use what I wrote against me, and thus I limited it to address issues.
@Em….
Yes, indeed they have not updated since the 10th. A director of ACA whose submission has not been posted called also, to confirm that it will be. Again, they are slammed, and have just not got the list undated, but plan too. I think we may have to give them a day or two…
CF&P to Congress: Tax Reform Must Include FATCA Repeal
http://freedomandprosperity.org/2013/press-releases/cfp-to-congress-tax-reform-must-include-fatca-repeal/
And then ole Doggett from Texas can not wait for a comprehensive tax reform, so he is submitting his own bills…
Congressman Introduces Bill to Stop Corporate Tax Haven Abuse
http://www.accountingtoday.com/news/Congressman-Introduces-Bill-Stop-Corporate-Tax-Haven-Abuse-66364-1.html
These guys (even of the same party as Camps) can’t help but just muddy the waters and get a few other bills in the works, rather than just work on ONE comprehensive approach.
Guess I will have to go see what beauty he has in this one, like Carl Levins, doubling down on FATCA issues in his CUT Loopholes Act,
Maybe someone else has time…
I just heard this story as working around the house….
There is a story of Compliance, which similar to FBAR compliance, but is a State Use Tax…
Low compliance, but guess who is? Yup the lawyers and CPAs, and the state isn’t really enforcing now, BUT…
Have a listen to the parallels. Homelanders will understand this story which than can be extrapolated in many ways, including the complexity, to Expats filling out all their forms…
Most People Are Supposed To Pay This Tax. Almost Nobody Actually Pays It.
There are some postings marked April 15, very few are International, of which 5 were from individuals and 3 or 4 were from organizations. Mine’s still not there and it’s been almost 2 weeks since I sent it in…
@ bubblebustin
You’re right, they are starting to get them posted now. I’ve collected about a dozen international submissions so far for April 15th but still don’t see Just Me’s. I suspect they are simply enjoying reading his before they put it up.
@bubblebustin
I would call them! 2 weeks seems like a long time. Maybe they would suggest you send it again, if they lost it.
@just me
I sent it again last week. I’ll call them tomorrow, thanks.
@Bubblebustin…
When I get time, we ought to upload some of the submissions here, especially good ones anyone finds that we might want to highlight, and then put up a post just on those submission.. I might put mine up, and Rogers. No time right now, but if I get all my chores done, I will work on it.
If you see any others that are good, point the way please… \
@ bubblebustin and Just Me
At least you know you helped to slam them but they really need to get busy and finish posting the submissions — ALL of them. Actually I think the numbers and quality of the overseas submissions are very good. There were a couple of doctors in the last bunch and the Schneider (a tax lawyer) ones are particularly well done (actually published by the Virginia Law Review). I just hope Nunes and Blumenauer really listen and something gets done. US citizenship-based taxation is intolerable.
@Em I was just writing a post here about the Schneider submission. Eric brought the same paper to our attention last December:
http://isaacbrocksociety.ca/?s=bernard+schneider
@ bubblebustin
You have a great memory. I see I even made a comment there and yet I totally didn’t make the connection. I’m beginning to feel like the Strawman before his arrival at OZ. 🙂
@Em
Don’t feel so bad, I don’t even remember reading it, but apparently I did as I commented on it too. I’m way too ADD now, it seems. I guess we need to read it again 😉
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