UPDATE: JUNE 14, 2015
from JakDak:
The Senate Finance Committee chairman, Senator Orrin Hatch (R-UT), has established working groups to study different aspects of the tax system. These working groups are scheduled to report back to the committee by June 26.
Tax Policy Update
June 09, 2015[Interesting: NUMBER OF THE WEEK: 61. The number of countries that have signed on to implement the OECD’s multilateral agreement for the automatic exchange of tax information, in conjunction with the ongoing Base Erosion and Profit Shifting (BEPS) project. Although the U.S. has committed to implement the standard, it has not yet signed onto the formal agreement (the “multilateral competent authority agreement”), which lays out in detail what information will be exchanged, the timing and method of exchange, and how signatories will work together to ensure compliance. Signatories to the agreement will begin exchanging information as early as 2017. Additionally, the OECD released on June 8 its “Country-by-Country Reporting Implementation Package” developed under the BEPS Action Plan. Under the plan, which the Treasury Department has said it will implement for the 2016 fiscal year, multinational companies are required to aggregate and report information annually regarding where they do business, the global allocation of income, and amount of taxes paid, along with other information that will allow taxing authorities to more closely examine multinationals’ tax practices. The release of the package coincides with the 2015 OECD International Tax Conference in Washington, D.C., this week where OECD representatives are expected to review and discuss key initiatives under BEPS.]
SPOILER ALERT: Comprehensive Tax Reform Unlikely in 2015. In an interview last week, Senate Majority Leader Mitch McConnell (R-KY) outlined a busy legislative agenda between June and August recess: passing a highway bill, cybersecurity legislation, No Child Left Behind, and the Toxic Substances Control Act. Tax reform, however, is conspicuously missing from the list. “We’re certainly not going to be able to be doing big, comprehensive tax reform with this president,” McConnell said. Tax reform optimists have been eyeing the highway reauthorization bill as a potential vehicle to move a limited set of tax reform measures, but according to McConnell, the bill might instead be better suited to pick up a different legislative passenger—the reauthorization of the Export-Import Bank. McConnell believes the highway bill would provide the best opportunity to reauthorize the bank, which is set to expire June 30.
The inability of the Senate Finance Committee Tax Reform Working Groups to meet their original May 31 deadline to report recommendations to Chairman Orrin Hatch (R-UT) and ranking member Ron Wyden (D-OR) only adds to the general pessimism. The international tax working group may offer the only glimmer of hope, with reports that it has made the most progress in hammering out detailed recommendations. The working groups are now aiming to deliver their reports before Congress departs for the July 4th recess.
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UPDATE: MAY 25, 2015
Em’s comment to JakDak:
I’m not sure of the where for the SFC recommendations but the when has been delayed:
http://thehill.com/policy/finance/242916-senate-tax-reform-groups-get-more-time
The Senate Finance Committee’s leaders are giving tax reform working groups some more time to formulate their recommendations.
Finance Chairman Orrin Hatch (R-Utah) and the panel’s top Democrat, Sen. Ron Wyden (Ore.), had hoped for recommendations by the end of May.
But in a statement Thursday, the two senators said that the working groups made it clear that they needed extra time to do the job right. The panel will set a new deadline after lawmakers return from next week’s recess.
“It is our hope these bipartisan working groups will use this extended time to finalize their recommendations for tax reform and produce in-depth analyses of options and potential legislative solutions,” Wyden and Hatch said in a statement.
etc.
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Shadow Raider says
April 29, 2015 at 6:39 pm
The Senate Finance Committee just released the comments sent by the public on tax reform. As expected, there are lots of comments about CBT and FATCA.
http://www.finance.senate.gov/newsroom/chairman/release/?id=3b14e94b-69f9-41e2-9fd3-7d191971b7ee
Hatch, Wyden Release Public Input on Bipartisan Tax Reform
Over 1,400 Submissions Made to Working Groups
WASHINGTON – Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Ore.) today released over 1,400 submissions from stakeholders on how to best to overhaul the nation’s broken tax code. In March, the Committee sought input from the public in an effort to provide additional data and information to the Committee’s bipartisan tax working groups, which are currently analyzing existing tax law and examining policy trade-offs and available reform options within each group’s designated area.
“We thank the stakeholders and public who provided us with this valuable data and input,” Hatch and Wyden said. “These submissions have equipped us with the ability to better evaluate how reforming the tax code will affect both American families and business of all kinds. As our bipartisan groups work towards producing substantive recommendations on how to reform the tax code, they will now be able to consider these valuable ideas.”
All comments received by the Committee that met submission requirements were made public.
Submissions can be found below. Total submissions to each bipartisan tax working groups are as follows:
Individual Income Tax – 448
Business Income Tax – 332
Savings & Investment -128
International Tax – 347
Community Development & Infrastructure – 207
Each of the five bipartisan working groups is currently working to produce findings on current tax policy and legislative recommendations within its area, with the goal of having recommendations from each of the five working groups completed by the end of May.
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Thanks, Shadow Raider, for alerting all here. There will be many Brockers reading, starting with the submissions (not all by individuals) to International Tax.
@JC, regarding the Investment Funds Institute of Canada, they supported the FATCA IGA for their own reasons, so I think they are unlikely to help us. We are challenging the lawfulness and constitutionality of the IGA. They supported it as making FATCA less costly to implement, and more workable for themselves.
See:
https://openparliament.ca/committees/finance/41-2/34/ralf-hensel-1/only/
“..IFIC’s interest is in Bill C-31’s implementing legislation for the intergovernmental agreement between Canada and the United States concerning FATCA. Recognizing that non-compliance with FATCA is not a realistic option, we have advocated for requirements that impose the least possible burden and cost on mutual fund investors specifically and on the industry generally.
As you are aware, the U.S. imposes income tax based on U.S. citizenship regardless of jurisdiction of residence. As such, FATCA applies to U.S. citizens resident in Canada. We support the federal government’s work and negotiations with the U.S. that have led to completion of the IGA on this initiative.
We believe the IGA is essential. It minimizes impact by reducing the number of Canadian investors who will be impacted by FATCA, the number of accounts that will be reported to the Internal Revenue Service, and the amount of administration and re-documentation that will be required.
The IGA will also significantly reduce the costs to implement FATCA, costs that are ultimately borne by investors. In fact, without the IGA, Canadian investors may have their access to U.S. financial assets, held either directly or through mutual funds, significantly curtailed or have the rates of return on such assets significantly reduced…..”
@JakDac and Embee,
Am stretched because of sudden new work and family issues. Don’t want to volunteer for something, get in over my head and then have to bow out. Apologize for having proposed the idea of analyzing the submissions and not be able to help with it. Just threw it out there because I realized that it was unlikely that our opponents are unlikely to be motivated to read through each one individually – and even I was having trouble after a certain point. Initially I was interested to see that overall, there are submissions coming from different parts of the world and so started thinking about other categorie – along the lines of the work an analysis by Prof. Amanda Klekowski von Koppenfels http://www.kent.ac.uk/brussels/news/?view=1973 http://isaacbrocksociety.ca/2015/02/11/amanda-klekowski-von-koppenfels-ph-d-releases-results-of-her-university-of-kent-study-survey/comment-page-1/ .
Sentence in post above should have read; “…I realized that our opponents are unlikely to be motivated to read through each one individually …”
@ badger
I don’t see why it would need to be done instantly … just something to keep in mind for the next occasion when it would be nice to have something on the shelf to bring down and hand over to educate someone. BTW, did you see Dr. Christine Harlen’s International submission? She draws on Dr. KvK’s research and will be presenting a paper at Michigan U. in October. Although she doesn’t come all out for RBT (wonder why?), she has many interesting points about the difficulties Americans overseas face.
@George & Polly,
I believe the 2 passport system is the best possible “workaround”. I don’t know any other way to say this: abolishing the FATCA is going to be extremely difficult. Any time I’ve heard of someone mentioning that, they say that they are condoning money laundering and tax evasasion.
Add to that, resident Americans have been thoroughly “educated” to think overseas Americans are all rich living in paradise. Whereas, if politicians can say overseas Americans are exempt from certain obligations because they have given up MOST OF their rights, then resident Americans can be sure that we are not “freeloading” or getting a free lunch (Who cares if they are rights that we aren’t allowed to exercise in the first place.)
HOW CAN THE TWO PASSPORT SYSTEM BE INCORPORATED WITH THE FATCA:
Imagine if we have the black passport. The banks are given rules (A) If blue passport, must send banking info to the IRS (B) If they have black passport, then treat as national of resident country.
I believe it’s just easier to go with the current. This way FATCA can stay and they can still chase after resident Americans stuffing money in foreign accounts, but we could get some relief for the first time. Imagine if everyone put their weight behind an idea like this. No more losing sleep at night. No more stress. No more need to renounce, especially if you live in a country that doesn’t require it to get citizenship.
Geeez. Ain’t gonna happen.. Don’t waste your energy.
Duke, which is going to be more difficult?:
Getting a bad law thrown out; a bad law that they’ve somehow all convinced themselves that saves them “billions” of dollars a year? — or working with the existing framework? I would think the latter.
But if the suggestion actually goes somewhere, and politicians shoot it down, then it’s really just a case that they despise the idea of Americans living in other countries.
Does anyone know if this 2 types of passport ideas has ever been proposed by the ACA or one of the like?
@Embee, re doing a spreadsheet to analyze the submissions, there may be more time to spare over the summer. I will keep it in mind. Probably could do a limited chunk then along with others.
@ badger
In the meantime I’ve checked out all of the submissions in the Individual Tax Working Group and the International Tax Working Group categories. My numbers come out like this (plus or minus a couple for error):
Individual category (total of 448 submissions)
215 submissions are from those concerned with taxation of Americans overseas
International category (total of 347 submissions)
257 submissions are from those concerned with taxation of Americans overseas BUT 187 of those are duplicated in the Individual category which makes
70 unduplicated submissions
CONCLUSION
285 (215 + 70) people were concerned enough about the taxation of Americans overseas to send in submissions (in either one or both categories). I think that’s a pretty significant number.
TOTAL SUBMISSIONS = 448 + 347 = 795
“Concerned” SUBMISSIONS = 215 + 257 = 472
Percentage of “Concerned” SUBMISSIONS = 472 / 795 = 59%
I read all of the submissions by the 285 concerned people but I didn’t do any analysis of them and of course they are all a blur in my head now. However I did keep a record so I could count them up.
@EmBee
Excellent work
Awesome work, EmBee! So over half of the combined individual and international submissions are concerned with expat issues. If that doesn’t get their attention, nothing will.
@EmBee
I would have loved to have put in a submission but I am not US tax compliant – I cannot afford to be compliant. So I could not use my real name – I was afraid that the IRS would be after me. There would have been many “US persons” like me.
@ EllenDownunder
It’s only a rough guess but I would say 95% plus of those who made submissions were US tax compliant or trying to be. We absolutely appreciate that there are many who must remain under the radar for obvious reasons. I didn’t submit anything either because I am Canadian and I thought no US Senator would give one hoot about anything I might say. (I do feel free to pester Canadian MPs though.) I’m very pleased that those who could, did send a submission. The submissions were all top quality, even the very brief ones.
@Patricia Moon Any guesstimate as to the number of individuals submitting to Senate Fiance through the Stephen Kish 7 part series?
I guessed a number of 1,000.
@EmBee, Great job! So 48% of individual and 74% of international are related to Americans abroad. That’s much higher than my estimate using keywords, and of course disproportionally high. I’ll inform this to senator Rob Portman’s assistant.
@Shadow Raider. I did not look at the individual. 48% indeed a high number.
If we say for International those individual international submissions (not related to corporate tax), it must be something like 90% plus pro RBT/ anti CBT. I saw 2 individual for the flat tax, and some for the reform of the whole system, yet not necessarily related to RBT.
@Shadow Raider, it is important to get some number for submissions through Stephen Kish, so as not to diminish those submissions, as myself and others have done so far by not considering the Stephen Kish submissions. While in reality those through Stephen Kish must vastly out number all other direct ones to the Senate Finance Committee.
Wonder if she is sympathetic ?
The New York Times | BREAKING NEWS ALERT
BREAKING NEWS Monday, May 4, 2015 7:51 AM EDT
Carly Fiorina, Republican, Announces 2016 Presidential Campaign
Re: Carly Fiorina. From the New York Times article today about her stands on various issues:
“In her 2010 Senate race, she called for eliminating the estate tax and capital gains taxes for investments in small businesses, and lowering marginal tax rates.”
(yawn…)
Then there’s Ben Carson, another Republican without a chance, from yesterday’s New York Times:
“Mr. Carson has expressed support for a flat tax on all Americans, not to exceed 15 percent, using the supply-side argument that lower tax rates would help the economy and ultimately generate higher tax revenues. He says a flat tax would eliminate loopholes and cheating, and he has called for eliminating the Internal Revenue Service.”
It’s probably worth shooting some e-mails to these candidates, on the off chance that CBT might make it into the conversation.
915 L Street, Suite C-378
Sacramento, CA 95814
(877) 664-6676
contact@carlyforca.com
https://www.bencarson.com/contact/
And Facebook and Twitter
A flat tax rate alone doesn’t help us unless it’s only on income earned in the US. Rand Paul proposes such a plan.
probably would be more interesting to the candidate to invite them first to meet a group of expats, and then to work in the issues in the packet you give them before they arrive.
Here is something the committee should have been made aware of since those abroad face more significant jeopardy to their personal and financial data because of FBAR and FATCA:
“.Here’s the Nightmare Once “Your” Tax Return is Filed by an Identity Thief
If a refund has improperly been issued by the IRS to the identity thief, nightmarish problems begin for the victimized taxpayer. When the IRS realizes that the refund issued was not proper, the taxpayer is usually presented with an IRS audit notice. Of course, the innocent taxpayer will try to defend himself and in the ordinary course, will request the IRS provide the return that was filed claiming the erroneously issued refund. When the taxpayer explains that he was the victim of identity theft and did not file the tax return, the IRS will refuse to provide the taxpayer with a copy of the return. In doing so, the IRS takes the position that the disclosure laws contained in Internal Revenue Code Section 6103 prohibit the release of the information to the taxpayer since the taxpayer, himself, did not file the return. Sadly, this is exactly what happened in a recent case decided February 19 2015. The court in the case of Kathleen Stegman ruled that the IRS could keep from the taxpayer the return filed by someone who had misappropriated and used her identifying information.
Fortunately, National Advocate, Nina E. Olson, of the Taxpayer Advocate Service, has made it a priority to address this issue. The Taxpayer Advocate Service is currently assessing how much information it believes the IRS can provide and may make a recommendation later this year. Surely, victims of tax-related identity theft need to learn what information has been stolen in order to safeguard against the future misuse of their personal data. Ms. Olson has been advocating for better and more efficient IRS handling of identity theft tax fraud cases for some time. In 2013, she submitted detailed testimony to the Committee on Oversight and Government Reform Subcommittee on Government Operations U.S. House of Representatives. .”
http://blogs.angloinfo.com/us-tax/2015/05/04/part-ii-identity-theft-fatca-security-risks-tax-zombies-phishing-and-other-scams-be-careful-out-there/
Interesting on Republicans Overseas
Republicans Overseas
May 1 at 1:14am ·
Patricia Moon, Treasurer of Alliance for the Defence of Canadian Sovereignty (ADCS) posted her comment on the DA SFC submissions:
Tricia Moon says
@USCitizenAbroad & Stephen Kish
I read through all 4 DA [SFC] submissions slowly and carefully.
1)There is not a single instance of mentioning CBT.
2)There is not a single instance of mentioning RBT.
3) DA does not support a repeal of FATCA; requests it be applied to Homelanders and non-compliant Americans abroad.
4) DA suggests only those who file 8938 with tax return be accepted into Safe Harbour (program)
5) DA mentions collaboration with AARO, FAWCO and ACA; a united front?
As a former American abroad, I find it both puzzling as well as cause for concern that a prominent expat organization would consider that changes to FATCA are the only recommendations for large-scale tax reform. With all the financial inequities that plague expats, to request only that FATCA be altered is truly bewildering. (As if FATCA is the only way to sift out the real tax evaders). FATCA is about a lot more than tax evasion. The privacy concerns, the effects on the economies of nations other than the U.S; negative effects on the U.S.’s economy etc. Do people really NOT question the action/economic sanction inflicted by the US government against every other nation on earth? Really? I wonder how many people will fail to investigate for themselves, thinking that DA surely will have the best “reading” of the situation.
To not even mention CBT/RBT is mind-boggling. It is not FATCA that is the real the anti-saving feature faced by expats. Yes, if you cannot have a bank account, you cannot save. That is the symptom of a greater problem, not the cause. I presume most nations have somewhat similar incentives for tax-deferred savings and so on. If the US is taking away those advantages because of CBT, how is Safe Harbour going to be of any help? How will Safe Harbour help young adults set up their financial plans for their future? Is it ok for the US to tax our capital gains on the sale of our primary residences (no foreign tax credit there) when we have not received the same deduction for mortgages/interest that Homelanders receive? “Foreign” mutual funds? “Foreign” pensions? I noticed that the survey indicated that 57% of the respondents were over 55 years of age. And that 50% of the respondents had savings/investments of less than $50,000. Given many countries expats live in have a much higher rate of tax/standard of living, I do not understand. How they will afford to retire?
Now I feel like you USCA. What am I missing here?
AARO
https://www.aaro.org/fatca/516-comments-to-senate-finance-committee