The deadline has now passed to submit comments to the Ways and Means Committee on Tax Reform. Comments are posted here. There were (and hopefully continue to be) a large number of letters from U.S. citizens abroad. Who knows what will happen? I am hopeful that Shadow Raider’s optimism will “carry the day”. For those who missed his comment:
Shadow Raider says
@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: thecompetitiveness 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 EconomicCompetition 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 competitiveinternationally. 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.
Here are some comments that really captured the life of “U.S. citizenship abroad”.
Somebody trying to live an “every day life” in Canada
I suspect that #americansabroad in Canada can relate to this waysandmeans.house.gov/uploadedfiles/… – Accurate portrayal of the burdens of US citizenship
— U.S. Citizen Abroad (@USCitizenAbroad) April 17, 2013
This is an excellent submission from a U.S. citizen in Canada who is nowhere near retirement and is faced with the prospect of trying to live and build a life. What is particularly interesting in this one is that she suggests that many U.S. citizens abroad are afraid to write because they are not compliant.
And from a person at a similar stage of life in Switzerland
Excellent description of how “US citizenship abroad” is a punishment and why #americansabroad must renounce waysandmeans.house.gov/uploadedfiles/…
— U.S. Citizen Abroad (@USCitizenAbroad) April 17, 2013
The complete community of U.S. citizens abroad owes a great debt to those who are writing to the Ways and Means Committee.
Not all letters have been posted! (at least yet)
For those who have not been following this discussion, comments on this blog reveal that at least three people have written letters that have not been posted. Hopefully they will show up. But I am beginning to wonder (some were clearly written before some that have been posted). Perhaps those who wrote and find that your letters were NOT posted should post them here.
In any case, many helpful letters have been posted.
@Bubblebustin
I URGE you to send your Ways and Means submission to the Dept. of Finance ASAP. There is no reason to think that submissions and even if they are closed, the truth is they are always still open.
bubblebustin,
The Department of Finance are still accepting submissions. From April 18, 2013:
http://isaacbrocksociety.ca/2013/04/17/excellent-submission-to-the-ways-and-means-committee/comment-page-3/#comment-287413
… and now I am going to try to find your submission to the Ways and Means Committee. Thank you for doing that!
@USCitizenAbroad
May I suggest you send that message out as a new thread for others who may be new here and may not have heard about the Dept of Finance’s surreptitious bulletin? This sh*t is only beginning to hit the fan, really.
@Calgary411
Thank you.
bubblebustin,
Yes, of course as I knew it would be, a powerful submission to the Ways and Means Committee. After all of your hard work, I hope it finds its way to as many places as possible, including the Canadian Department of Finance.
Thank you!!
@Calgary411
Following yours and USCitizenAbroad’s advice, I’ve done just that, thank you.
Churchill once said; “Never give in–never, never, never, never, in nothing great or small, large or petty, never give in except to convictions of honour and good sense. Never yield to force; never yield to the APPARENTLY OVERWHELMING MIGHT OF THE ENEMY.”
Right on, Churchill!
I wonder what Churchill would have done if the IRS came after him. Born to a US-citizen mother in Britain, he was a dual British/US citizen. Under todays US tax laws he would be liable for subbfmitting US tax returns, FBAR and FATCA reports and paying US taxes on his salary as Prime Minister of Great Britain as well as being subject to British taxation.
Excellent submission @bubblebustin. It is so very comprehensive and so clearly describes the negative effects on Canada and all Canadians, as well as those of us with the unjust US citizenship-based extraterritorial tax burden.
Thanks, Badger, but do you really think they’ll care?
First Carl Levin, now Max Baucus announced that he will not seek re-election next year.
@Roger
You got me curious…
From what I understand, Churchill was given honorary US citizenship in 1963, and was of the belief that it would have to have been his father to have been the US citizen in order to receive US citizenship through descent:
“Winston Churchill was half American by birth – a fact of which he was deeply proud. In his first address to a joint session of the United States Congress, on 26 December 1941, he teased the assembled Senators and Representatives with the mischievous suggestion, “If my father had been American and my mother British, instead of the other way ’round, I might have got here on my own!””
http://www.winstonchurchill.org/learn/biography/genealogy/churchills-american-heritage
I believe he was correct:
The Revised Statutes of 1874 (coincidently, Churchill was born in 1874) denied United States citizenship to foreign-born children of United States citizen mothers. “All children heretofore born or hereafter born out of the limits and jurisdiction of the United States whose fathers were or may be at the time of their birth citizens thereof, are declared to be citizens of the United States; but the rights of citizenship shall not descend to children whose fathers never resided in the United States.
Although Congress amended the statute in 1934 to include children of citizen mothers, the amendment was not retroactive.”
It appears that anyone born to abroad to an American mother before 1934 is safe. I don’t know about prior to 1874. I’m only assuming that prior to 1874, children of either mother of father had no US status.
https://litigation-essentials.lexisnexis.com/webcd/app?action=DocumentDisplay&crawlid=1&doctype=cite&docid=34+U.+of+Louisville+J.+of+Fam.+L.+250&srctype=smi&srcid=3B15&key=46f4c9b34f78b6aae405abb6c00011a7
Re> pessimism on the hill. With the right letter Campaign to your reps and with ACA and others, this could be turned around into a benefit> forget revamping the entire tax code, just fix what was obviously pointed out as being completely and totally sinister.
All they need to do is to follow the Pinto submission, nearly to the letter. Pinto’s was less complicated than ACA and he had worked it down to be simpler and I Think he cut out most of the exit tax in his later versions. Clean, easy, simple. They could indeed do a financial analysis upon it and show that it is beneficial.
If they get rid of the baggage of revamping all 40 bajillion Words of the code, and just focus on the most glaring problem (citizenship-US-person-based taxation) they can succeed. Write your letters accordingly.
@bubblebustin, I believe you are right. Under today’s citizenship and US worldwide citizenship based taxation he would, if he was alive today, be subject to US income tax. But these laws were not retroactive.
But there is a similar case today. Egyptian President Morsi’ son and daughter were born in the US while he was living here first earning a graduate degree and then on the faculty of the university himself. Clearly they are US citizens by birth. They left the US and moved to Egypt as small children.
I have always wondered if they are filing US tax returns and paying US taxes on that income. The IRS does not reveal that information so we are left to wonder if All American citizens are really equal or if some are more equal than others.
I recall reading that the son was under considerable pressure for patriotic reasons by others in Egypt to renounce his US citizenship, and that it was actually taken to an Egyptian court to force him to do so, but that court ruled that it had no authority to order him to renounce his US citizenship,
Shadow Raider, I owe you an apology. When you wrote in a comment that were rewriting the Internal Revenue Code last July, I was convinced that you were wasting your time. Now it seems almost cosmic. Thank you Shadow Raider.
@bubblebustin, You’re welcome.
@bubblebustin;
re’ your and others’ submissions making a difference. We’ll never know what is behind the curtain, so can only do our best – which you and others did so well. Judging from the tone and content of the submissions, the high level of unrest and opposition is amply evident. They may not act to lift the unjust burden they have imposed, but they cannot say they weren’t made aware. They were already acting ‘willfully’, but now even more so.
The third wealthiest non-profit foundation in the world is the Wellcome Trust, based in the UK and founded by an American pharmacist, Henry Wellcome, in the 1930s. It has a net worth of $22.1 billion according to Wiki:
https://en.wikipedia.org/wiki/List_of_wealthiest_charitable_foundations
I was thinking that since there is no statute of limitations for tax fraud, the IRS should investigate whether Henry Wellcome, as an American citizen, committed tax fraud personally, e.g., by not filing a US income tax return 80 years ago, or when setting up the trust, and then claim the trust’s assets in settlement. In addition to the trust’s financial assets, the US government would become the owner of much of the real estate in the South Kensington/ Knightsbridge area of London, currently owned by the trust.
@USCitizenAbroad
Thank you for urging me to make another submission to the Dept of Finance! I sent the same thing I sent the Ways and Means working group to Kevin Shoom and he got back to me. I had forgotten that I’d sent him the link to my pre-budget submission. He said: “Thank you for your additional comments. The cover letter which is included helps to give a clearer picture of the concerns in your pre-budget submission to the House of Commons Finance Committee which you brought to my attention last November, as the cover letter was not posted on the Parliamentary website.”
He appears to be paying attention 🙂
I have been told that the US Treasury Department is providing technical assistance and analysis to Ways and Means of the comment letters sent.
This doesn’t surprise me. Maybe mine took 2 1/2 weeks to post because I said I was in OVDI.
@Bubblebustin
Yours is up(I happen to know your real name). According to Just Me who called the Ways and Means office last week they were totally swamped by the submissions. There are only 10 people who work directly in the Ways and Means office in DC so they got very behind. (The reason Treasury is providing technical assistance and analysis is because Ways and Means only has ten employees.)
Thanks for more insight on the Ways and Means people being really, really swamped.
And to double the good, bubblebustin has also sent her powerful US submission to the Canadian Department of Finance and received a reply back from Kevin Shoom. http://isaacbrocksociety.ca/2013/04/17/excellent-submission-to-the-ways-and-means-committee/comment-page-5/#comment-296984
I do believe just about all submissions have been published at this point.
Another 15 international submissions to Ways & Means today. Here are some excerpts.
From a 73 year old widow in Belgium, a sad situation …
“Here’s my story (unfortunately not untypical): As a permanent resident of Belgium since 1985,and an American and Belgian citizen, widow of a Belgian, in order to become US tax compliant since my husband’s death in 2008, I have paid AROUND $32,130 to Belgian tax specialists, lawyers and my ING Belgian bank for assistance. For this four year period through 2011, I owed the U.S. government approximately $2,000 IN TOTAL. Unreal!
Now, the ING bank which my husband’s family business (and he and I) have used for generations, disallows me any further investment possibilities through them. (I’m advised to find a private investment firm to help me, if I can find one, and at significant expense.) The bank evidently doesn’t to contend with the myriad of complicated reporting requirements demanded by the IRS and U.S. Treasury for their American clients. So, my “foreign” bank literally down the street from my home used for modest financial administration over many years is divesting itself of me. This move seriously jeopardizes my ability to support myself adequately. At 73, alone and partly immobilized, my possibilities are dim under the current American Citizen-based taxation system.”
From a woman in Europe, something unique …
“Laughed at by my colleagues. That is not an exaggeration. My colleagues cannot believe and do not understand how the US have such a strange policy. When I first arrived I was asked by a vice president of human resources if this were really true. He truly didn’t believe his American colleagues and wanted to use my freshness to expose what he was sure was a lie. The subject is continuously brought up whenever possible by foreigners and cited as yet another example of how the US bullies not only other and their businesses, but their own citizens. They look at me with a combination of pity and disbelief. It doesn’t make me feel very proud and I can’t find a good argument to stand up for my countries policy… frankly I have to
agree with them even if I don’t say so.”
From a doctoral student in Sweden, complexity strikes again …
“Complicating matters in my situation is the farm that my parents own in the USA that was
inherited from my great grandmother. My share of this farm’s income is about $1000 per year which I gladly pay taxes on. But this tiny income combined with my overseas status makes my tax reporting requirements an unfathomable mess. So much of a mess that my sister and her husband who are both CPA’s specialized in income taxes refuse to even talk to me about taxes for fear of losing their licenses!”