Liberty and justice for all United States persons abroad

The Isaac Brock Society

Posted on by Posted in Issues regarding US persons abroad 19 Comments

Shadow Raider has brought this to our attention and asked that it be posted:

 

The Ways and Means and Senate Finance Committees have just launched the website TaxReform.gov and are asking for the general public to submit comments on tax reform again. This time,  they even said they want “horror stories”, and many Americans abroad and immigrants have such stories to tell.

The form on the website asks for a US address, but, as Shadow Raider points out, “I suppose you could use your voting address (or perhaps try to input a foreign address using one of the obsolete postal abbreviations at the end of the list)”.

19 thoughts on “Again, Comments on Tax Reform are requested. Ways and Means and Senate Finance Committees lauch TaxReform.gov.”

  2. You’re welcome. I am one who will hesitate to take advantage of commenting — many of us have fears of doing so in our real names. It’s encouraging they are asking for more input. Thank you for highlighting this important opportunity, Shadow Raider!

  3. @calgary411, You’re welcome too. I totally understand that you and others don’t want to use your real names.

    By the way, I’d like to explain the meaning of my internet name. “Shadow Raiders” is an animated series that I enjoyed watching when I was growing up, about inhabitants of several planets in a solar system who have to reconcile their differences to unite and fight a common enemy. Due to the theme of the story and the fact that the series was produced in Canada, the name Shadow Raider seemed appropriate for me to use here.

  4. This is another very good opportunity. What I know realize is that when the other submissions were going in, nobody organized the thoughts of TaxPayer Advocate about the plight of U.S. citizens abroad. This opportunity provides a good way to get this in and more. Including:

    1. Tax Payer Advocate Report

    2. Democrats Abroad task force – expattaxstory.us

    3. Organize the highlights of the submissions to the Ways and Means (which has already been done on the Ways and Means thread)

    4. Perhaps one or more of our participants who have experienced OVDI Horror

    Let’s get all of this stuff in.

  5. @Shadow Raider

    When it comes to fighting the evil of citizenship-based taxation, what unites us is far greater than what divides us. I think you should be made an honorary Canadian citizen (don’t worry no citizenship-based taxation included).

    Thanks for all your great work!

  6. Thanks for telling us of your “Shadow Raider” Canadian connection. I agree with USCitizenAbroad, you should be an honorary Canadian. You’ve certainly helped a lot of us with all your hard work there in the US.

    The many aspects of subjects to report on at TaxReform.gov is a good start, UCA.

  7. @Calgary411
    I’d be happy to submit your horror story on your behalf, with the explanation that you fear reprisals in doing so yourself. No one would make up a story like yours. Just post it here if you would like me to. I promise no matter how much they water board me, I won’t give you up. I’m flame resistant at this point :-/

    Thank you Shadow Raider for bringing to our attention.

  8. YES! YES! IT WORKED!!! The Senate Finance Committee had its meeting on international competitiveness today (instead of May 23 as scheduled), and it included notes about individuals! It’s considering the proposal in Bernard Schneider’s paper!

    Excerpts from the meeting notes (my comments in bold):

    “The United States income tax rules applying to cross-border income are based on two core concepts: the residence of the taxpayer and the source of the taxpayer’s income.” (Are they abandoning the concept of citizenship now?)

    “Nonresident citizens: U.S. citizens living abroad are generally taxable as residents of the foreign country where they live. They are also required to file U.S. federal income tax returns annually and pay tax to the U.S. on their worldwide income, subject to the foreign tax credit and an exclusion for a limited amount of foreign-earned income. Other countries generally tax their nonresident citizens only on income their citizens earn in their country of citizenship. Some believe certain employers overseas are reluctant to hire U.S. citizens because of the associated tax burden and compliance costs.”

    “NON-RESIDENT U.S. CITIZENS

    1. Provide an election to citizens who are long-term nonresident citizens to be taxed as nonresident aliens if they meet certain conditions (Schneider, “The End of Taxation Without End: A New Tax Regime for U.S. Expatriates,” 2013; similar to the law in Canada) (You read it right, they mentioned Canada!)

    a. Require a minimum period of residence abroad

    b. Impose an exit tax on electing taxpayers where deemed to sell all assets at the time of election

    2. Repeal the foreign-earned income exclusion (H.R.2 (108th Congress), Jobs and Growth Tax Relief and Reconciliation Act of 2003, sponsored by Rep. Thomas)”

    I can’t believe it! feel like jumping around right now!

  10. bubblebustin,

    If you want to stick out your neck to do that on behalf of me and my son and all others like him, I will be most grateful — and so will others who have no idea or have no voice. You’re a true Isaac Brock friend. I hope the submission, without my or my son’s name, will be an example that others have not given, as well as an example of why people are afraid to come forward. Hopefully, the following will work as my submission, via you (dear friend).

    ENTRAPMENT AS AN “ACCIDENTAL AMERICAN” US CITIZEN WITHOUT THE RIGHT TO RENOUNCE THAT CITIZENSHIP

    Adult children who have developmental disability born in foreign countries to US parent(s) or anyone with mental incapacity and who does not understand the concept of citizenship or consequence or benefit of such cannot renounce US citizenship. US Department of State advises that a Parent, Guardian or Trustee of such an individual DOES NOT HAVE THE RIGHT to renounce US citizenship on behalf of their family member, even with a court order, although they make other, some life and death decisions, for them every day. I am presenting an example of a person who has lived in Canada since 1969, became a Canadian citizen in 1975 and has an adult son who was born in Canada, raised in Canada, never registered with the US, never had any benefit from the US, has and will never live in the US but has US citizenship as he was born to a US parent in Canada.

    The Registered Disability Savings Plan that the Parent / Trustee holds for him to save for his future when she is gone is considered a “foreign trust” by the US, taxable by the US, and with huge compliance costs for the son, herself or the executor of her estate after she is gone to file tax returns and Foreign Bank Account Reports each year, negating benefit of this Canadian registered disability account for him compared to ANY OTHER developmentally delayed Canadian by virtue of his US status and US citizenship-based taxation law. It would be very unlikely that this person or any other like him would owe any taxes to the US, so a exercise in futility and great compliance costs. This person’s son is imprisoned by the US though he will never live there. He will not be the only one affected by this. Canadian families who have members with a “mental incapacity” (including things like dementia, brain injury from an accident, etc.) have more important things to worry about each day, more important places for money intended for their family members well-being – other than the US IRS.

    This was submitted in March of 2012 to the IRS Taxpayer Advocate Service — on behalf of all in this situation: Comments to IRS Taxpayer Advocate Service, March 2012

    Note that the mother feels this should also be human rights issue and has been reported to the various government representatives and to the Canadian Civil Liberties Association on behalf of those so affected:

    This is from the ‘Americans with Disability Act’ which doesn’t address a lot of the discrimination for RDSPs, etc. for Canadians with developmental disabilities (and the like).

    The mother of this developmentally delayed “US Citizen” did glean the following portion, which talks about discrimination ‘economically’. Her comments are in CAP’s.

    The Congress finds that

    (1) physical or mental disabilities in no way diminish a person’s right to fully participate in all aspects of society, yet many people with physical or mental disabilities have been precluded from doing so because of discrimination; others who have a record of a disability or are regarded as having a disability also have been subjected to discrimination;

    (2) historically, society has tended to isolate and segregate individuals with disabilities, and, despite some improvements, such forms of discrimination against individuals with disabilities continue to be a serious and pervasive social problem;

    (3) discrimination against individuals with disabilities persists in such critical areas as employment, housing, public accommodations, education, transportation, communication, recreation, institutionalization, health services, voting, and access to public services;
    THESE INDIVIDUALS HAVE EMPLOYMENT, HOUSING, PUBLIC ACCOMMODATION, EDUCATION, TRANSPORTATION, COMMUNICATION, RECREATION, HEALTH SERVICES!!!!!, VOTING, ACCESS TO PUBLIC SERVICES IN CANADA — THAT IT WOULD BE DIFFICULT TO PROVIDE FOR THEM IN THE US (WITHOUT THEIR FAMILIES WHO ARE ALSO LIVING IN CANADA).

    (4) unlike individuals who have experienced discrimination on the basis of race, color, sex, national origin, religion, or age, individuals who have experienced discrimination on the basis of disability have often had no legal recourse to redress such discrimination;

    (5) individuals with disabilities continually encounter various forms of discrimination, including outright intentional exclusion, the discriminatory effects of architectural, transportation, and communication barriers, overprotective rules and policies, failure to make modifications to existing facilities and practices, exclusionary qualification standards and criteria, segregation, and relegation to lesser services, programs, activities, benefits, jobs, or other opportunities;

    (6) census data, national polls, and other studies have documented that people with disabilities, as a group, occupy an inferior status in our society, and are severely disadvantaged socially, vocationally, economically, and educationally;
    THESE INDIVIDUALS ARE DISCRIMINATED AGAINST ECONOMICALLY; I.E. THEIR CANADIAN BENEFITS ARE DIMINISHED IF THEIR PARENTS / GUARDIANS / TRUSTEES ARE NOT ALLOWED TO MAKE A DECISION FOR THEIR BEST INTERESTS TO RENOUNCE THEIR US CITIZENSHIP, WHICH THEN BECOMES A SEVERE ECONOMIC HARDSHIP FOR THEM LIVING IN CANADA OR ANOTHER COUNTRY. IF THEY HAVE IN THEIR NAME A CANADIAN REGISTERED DISABILITY SAVINGS ACCOUNT OR A TAX-FREE SAVINGS ACCOUNT, IT DOES NOT GIVE THEM THE SAME VALUE FOR THOSE LEGAL TAX-SAVINGS PLANS AS A CANADIAN WITH A DEVELOPMENTAL OR OTHER DISABILITY COMPARED TO THE SAME CANADIAN WITHOUT AN ADDITIONAL US CITIZENSHIP AND ITS RESPONSIBILITIES.

    (7) the Nation’s proper goals regarding individuals with disabilities are to assure equality of opportunity, full participation, independent living, and economic self-sufficiency for such individuals; and
    THESE INDIVIDUALS CANNOT HAVE ECONOMIC SELF-SUFFICIENCY — IT IS INCOMPATIBLE WITH AN EXTRANEOUS (TO THEIR CANADIAN OR OTHER COUNTRY CITIZENSHIP) US CITIZENSHIP.

    (8) the continuing existence of unfair and unnecessary discrimination and prejudice denies people with disabilities the opportunity to compete on an equal basis and to pursue those opportunities for which our free society is justifiably famous, and costs the United States billions of dollars in unnecessary expenses resulting from dependency and nonproductivity.
    THIS IS, FURTHER, UNFAIR AND UNNECESSARY DISCRIMINATION BY NOT LETTING THE PARENTS / GUARDIANS / TRUSTEES OF DEVELOPMENTALLY OR OTHERWISE DISABLED CANADIANS RENOUNCE US CITIZENSHIP ON THEIR BEHALF, WHICH DENIES THESE INDIVIDUALS THE OPPORTUNITY TO COMPETE ON AN EQUAL BASIS (IN THE COUNTRY WHERE THEY RESIDE AND HOLD CITIZENSHIP), THEREBY CREATING MORE DEPENDENCY AND MORE RESULTING EXPENSES. THE COST OF ADMINISTRATION OF THEIR EXTRANEOUS US CITIZENSHIP IN CANADA (OR ANY OTHER COUNTRY) CREATES LITTLE, OR IN MOST CASES $0.00, FOR THE US. IT DOES GIVE MONEY TO CROSS-BORDER ACCOUNTANTS AND US TAX LAWYERS IN CANADA (OR ANY OTHER COUNTRY) — NOTHING FOR ANY SERVICES IN THE US.

    WHAT ARE THE OPPORTUNITIES FOR THESE INDIVIDUALS FOR WHICH THE US IS JUSTIFIABLY FAMOUS THAT IS BETTER THAN WHAT CANADA, IN THIS CASE, PROVIDES?

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  14. Thanks very much, bubblebustin, for the submittal you made on my behalf — as well as that of my son’s, Animal’s son, Cecilia’s daughter, Recalcitrant’s son and so many others’!! — condensed to meet the 4,000 word limit. I’m thankful that you’ve done that as it is an aspect of US unjust US law that needs to come to Congress’ attention. All we want here is a little common sense.

    ENTRAPMENT AS US CITIZEN WITHOUT THE RIGHT TO RENOUNCE THAT CITIZENSHIP

    Adult children born in foreign countries to US parent(s) who have developmental disability or mental incapacity and do not understand the concept of citizenship or consequence or benefit of such cannot renounce US citizenship. US Department of State advises that a Parent, Guardian or Trustee of such an individual DOES NOT HAVE THE RIGHT to renounce US citizenship on behalf of their family member, even with a court order. Example is a US Person who became a Canadian citizen in 1975 and has an adult son who was born in Canada, raised in Canada, never registered with the US, never had any benefit from the US, has not and will never live in the US.

    A Registered Disability Savings Plan the Parent / Trustee holds for him to save for his future is considered a “foreign trust,” taxable by the US, with huge compliance costs for the son, herself or the executor of her estate after she is gone for filing yearly US tax returns and FBARs, negating benefit of a Canadian registered disability account for the son compared to ANY OTHER developmentally delayed Canadian. It would be very unlikely that this person or any other like him would owe US taxes so exercise in futility with great compliance costs. Such a person is entrapped by the US though he does not live there. Canadian families who have members with a “mental incapacity” (like dementia, brain injury from an accident, etc.) have more important things to worry about each day. Money intended for their family members well-being should be just that.

    The mother feels this should be human rights issue and has reported this to the various government representatives and the Canadian Civil Liberties Association on behalf of those so affected.
    The ‘Americans with Disability Act’ doesn’t address discrimination for things like RDSPs, for Canadians with developmental disabilities.

    The mother of this developmentally delayed “US Citizen” notes the following, over and above Congress’ findings:
    • These individuals have employment, housing, public accommodation, education, transportation, communication, recreation, health services!, voting, access to public services in Canada — that it would be difficult to provide for them in the US (without their families who live in Canada).
    • These individuals are discriminated against economically; i.e. their Canadian benefits are diminished if their Parents / Guardians / Trustees are not allowed to make a decision for their best interests to renounce their US citizenship. It becomes a severe economic hardship for them living in Canada or another country. If they have in their name a Canadian Registered Disability Savings Account or a Tax-Free Savings Account, it does not give them the same value for those legal tax-savings accounts as a Canadian with a developmental or other disability compared to the same Canadian without US citizenship and its costly responsibilities.
    • These individuals cannot have economic self-sufficiency — it is incompatible with an extraneous (to their Canadian or other country citizenship) US citizenship.
    • This is, further, unfair and unnecessary discrimination by not letting Parents / Guardians / Trustees of developmentally or otherwise disabled Canadians renounce US citizenship on their behalf, denying these individuals the opportunity to compete on an equal basis (in the country where they reside and hold citizenship). That creates more dependency and resulting expenses. Cost of administration of their extraneous US citizenship in Canada (or any other country) creates little, or $0.00, for the US. It does give fees to cross-border accountants and US tax lawyers in Canada (or any other country) — nothing for services in the US.
    What are the opportunities for these individuals that is better than what Canada, in this case, provides?
    US Department of State has “sympathy” for such cases. The developmentally disabled person will have to have FULL UNDERSTANDING; if any question of lack of comprehension and grasping meaning and importance of ramifications, they could not approve such a case. From DOS point of view, US citizenship is precious and they have therefore established fundamental requirements for “compelling reason.” Even though there is risk that a person’s financial resources could run out before his/her life is over, they will NEVER approve a renunciation for economic reasons. DOS has never had such a renunciation case approved due to “compelling circumstances.”

    This was submitted in March of 2012 to the IRS Taxpayer Advocate Service — on behalf of all in this situation: Comments to TAS.

  15. @Calgary411
    No problem. It was a pleasure working with you on this project, although I found myself also typing with one (middle) finger 😉

  19. 18 days left to provide tax reform ideas to Senate.

    Easy ways to make a difference are to
    —resend last years submissions
    —refer to the ACA proposal
    http://www.americansabroad.org/files/7913/7467/5734/July_2013_ACA_submission_to_taxreform_website_-_July_2013_copy.pdf

    —refer to the Pinto proposal at the Ways and Means site
    http://waysandmeans.house.gov/uploadedfiles/pinto_wg_submission.pdf

    http://www.americansabroad.org/issues/taxation/your-suggestions-tax-reform/
    ACT NOW: Senate Finance wants to hear your suggestions for tax reform.

    The Senate Finance Committee has issued its proposal for International Business Tax Reform: http://www.finance.senate.gov

    The Senate Finance proposal does not address international tax reform for individuals, however Senate Finance is considering options for individual reform, “The Chairman’s staff is considering reforms to simplify the rules in this area (international tax for individuals) while appropriately taxing such individuals.”

    The Senate Finance Committee requests that comments and suggestions regarding the scope and mechanics for individual tax reform be submitted by January 17, 2014. Submissions should be made to: Tax_Reform@Finance.Senate.gov

    ACA supports a move towards Residency-based Taxation

    ACA encourages members and supporters to submit their comments. Let your voice be heard!

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