42 thoughts on “International Conference on *Taxpayer Rights* – Washington, D.C., November 18 – 19, 2015”

1. “Yes, Petros, she’s trying to make CBT work. It never will.”

   Yes it does. It brings in a boatload of penalties.

   CBT didn’t work for a handful of other countries because all it did was encourage renunciations. CBT doesn’t work for the US’s sole remaining friend, Eritrea, because the US and other countries sponsored a resolution against the practice. But it works for the US because it brings record amounts of penalties and renunciations.

2. FYI, Comments from Nina Olsen on FATCA

   http://federaltaxcrimes.blogspot.com/2015/10/national-taxpayer-advocate-nina-olsen.html

3. @GopalAllu, “I started a small startup company and I can’t run the startup without bank accounts. Any suggestions?”

   It is IMPOSSIBLE to own a business outside of the USA if you have USA taint.

   A.) Banks tend to reject you.

   B.) It is impossible to stay in compliance with USA laws in running a business outside the USA. It does not work. People that claim they are compliant running their small business outside the USA are most likely non-compliant.

   Conclusion? You can be a US Citizen or you can be a small business owner, you can not do both.

   Sorry to bear the bad news.

4. @JC
   The choice of Kirchler as the keynote speaker is a good sign. From everything I have read of Kirchler, he would be horrified that the IRS strategy for FATCA was to pitch it as being about tax evaders hiding money overseas who needed to report their accounts to Financial Crimes Enforcement or face devastating fines.

5. @ calgary411 found this http://intltax.typepad.com/intltax_blog/2015/11/the-escalation-of-offshore-penalties-over-the-last-20-years.html ‘November 02, 2015
   The Escalation of Offshore Penalties Over the Last 20 Years’ and posted it on another IBS thread. It deserves a thread of its own, but I am also placing it here, because I expect that the discussion of ‘taxpayer rights’ will fail to show how heavy the compliance burden is for those living outside the US and fail to convey the unbearable size of the jeopardy.

   What ‘rights’ could those ‘abroad’ possibly be seen to have when the penalties are layered and increase exponentially to such a draconian extent – even in the complete absence of actual US tax owed? Looking at the trend on the graph at the link above, it is obvious that only more complexity and punishment lies ahead for those claimed by the US as ‘taxable persons’ living outside the US – and that graph showed only the layers for one type of scenario.

   The US Treasury is busy creating penalty harvesting opportunities in order to invent revenue where no US tax is even owed.

6. oops, typo changed my icon

7. Meanwhile at another conference, Accounting Today, November 4, 2015: “IRS Commissioner Sees Budget Cuts Hurting Practitioners, Warns of Delayed Tax Season”

   Among those other IRS-involved problems, including how to better attack identity theft (which certainly could affect so adversely *US Persons* Abroad who send their financial information across borders), Nina Olson identifies…

   Taxpayer Advocate Service Problems
   National Taxpayer Advocate Nina Olson spoke at the conference earlier in the morning Tuesday and highlighted some of the same trends, including the IRS’s struggle to help taxpayers facing identity theft. She described one case in which her office had tried to help a taxpayer get a refund released by the IRS.

    

   

   Nina Olson

   “We sent it over because the taxpayer was experiencing significant hardship, which was an economic hardship,” said Olson. “The response that she got back from an official receiving that order was ‘We have thousands of these cases. Get in line.’ Now, I have never heard that response and I have been there for 15 years.”

    

   Olson’s office had to take the additional step of issuing a Taxpayer Assistance Order. “The IRS is going to have to do this work,” she said. “It’s just a question of whether they’re going to make us do more work to make them do the work. This is what we are seeing in the environment right now, this feeling that because Congress hasn’t funded you, it works its way down to the employees so that they feel, ‘Well, I’m going to do just this, and I’ve got so much work, I’m only going to be able to get this done. What’s seeping down into the front-line employees is a demoralization that it doesn’t matter if they get their work done spectacularly well or not, or that they go the extra mile.”

   Olson is also seeing resistance from the IRS to the Taxpayer Advocate Service’s intervention on cases.

   “The cases that come up to my level are often very complex,” she said. “People have staked out positions through the various levels of appeals, and I understand that. However, when it gets up to my level, we’re trying to figure out what’s gone on in the case before, and I am trying to take an independent look at the case and understand all perspectives so that I can formulate my position that I will then advocate to the deputy commissioner and the commissioner. We are finding instances where the IRS is refusing to let me or my staff have access to the administrative files of the taxpayers unless I sign a document agreeing in writing not to share any information that I find or see in that file with the taxpayer him or herself. I find that deeply offensive. I am subject to the same laws as any other IRS employee about disclosure of tax information. I am also by law entitled to any tax return or any tax return information that I need to conduct my tax administration duties. My tax administration duties are in the code and number one is help taxpayers resolve their problems with the IRS, and I need to be able to see the administrative files in order to determine how they go about doing that. My position is that the IRS in those instances has violated the law by not providing me access to those files, and I do not say that lightly.”

   Olson said there are other instances where the taxpayer has asked her or a member of her staff to attend a conference between the taxpayer’s representative and the IRS, and she has encountered resistance there as well. “The IRS has refused to let us meet, and there is no legal basis for that,” she said. “However, it may take a statute directing the IRS to allow that to happen, or to order the IRS that it can’t stop it. It’s that kind of action, and that kind of activity that actually leads Congress to micromanage the IRS. It’s completely unnecessary and it’s completely avoidable.”

   How does all of this affect those Taxpayer Rights?

8. “including the IRS’s struggle to help taxpayers facing identity theft.”

   Oh yeah? What about cases where IRS employees are the ones committing identity theft, as described by the Treasury Inspector General for Tax Administration?

   “She described one case in which her office had tried to help a taxpayer get a refund released by the IRS.”

   What about cases where the Taxpayer Advocate Office conspires together with the IRS’s identity thieves to keep the victims in the dark, instead of trying to help?

   Just how does the Taxpayer Advocate decide which victims they’ll try to help and which they won’t?

   “We are finding instances where the IRS is refusing to let me or my staff have access to the administrative files of the taxpayers unless I sign a document agreeing in writing not to share any information that I find or see in that file with the taxpayer him or herself.”

   Well of course. The reason the IRS does that is the same as the reason why the IRS refuses to audit, refuses to communicate with payers, and refuses to carry out criminal prosecution that it threatened. The reason is that the IRS has something to hide.

   “I am subject to the same laws as any other IRS employee about disclosure of tax information.”

   Right, the same zero. The US Department of Justice even told a court that the IRS and DOJ are SUPPOSED to disclose taxpayeer information publicly, and at least one court has agreed so far.

9. @badger
   Keep the typo. That icon looks way more like a badger (in plan view, of course)..

10. @Calgary411 did a nice job hyperlinking the different rights. “The Right to a Fair and Just Tax System” while one may consider this right to fair and just tax laws and requirements, the explanation appears to assume that the laws are fair and just, and seems to focus on the fair and just administration of those laws. Disappointing.

11. The administration isn’t fair or just either. The laws get violated all the time.

12. just submitted an anonymous complaint to Ali Noroozi, Inspector General for Taxation of Australia (http://igt.gov.au/making-a-complaint/lodge-a-complaint-form/), in regards to tax treaty gaps. Mr. Noroozi appears to be the Australian equivalent to Nina Olson and he will be at this conference.

    Does Canada have an equivalent to Nina Olson?

13. JC, that’s a great idea. Had our lawmakers been doing their job, I might not have ended paying the IRS tax on the sale of my house in Canada (MAJOR treaty gap). I think I’ll be dropping our ombudsman a line:

    http://www.oto-boc.gc.ca/nws/mssg-eng.html

14. @JC

    I made my complaint to our ombudsman with the CRA. I also included a question about the unfair treatment of Canadian taxpayer’s when the CRA has routine access to account balances collected by FATCA, information that the CRA will use for its own purposes.

    I’ll let you know if I get a response.

15. The IRS Tax Payer Bill of Rights is missing substantial areas.

    These two should be added:

    11) The Right to a Simple and Easily Understood Tax System
    12) The Right to Reasonable Compliance Costs

    The IRS Tax Payer “Advocate” should pursue these additions and lobby Congress on these regards.

    As we may see with FATCA the US Treasury and Congress had arguably no regard for compliance costs of banks of the world and US persons living overseas. This is wrong.

    Every year there are more taxes and forms and compliance costs go up. For US persons living overseas expected to sort through the overlay of the 74,000+ tax code on top of the tax codes of their countries of residence, the regulations and compliance becomes unfathomable. This is wrong.

    Reading through the explanation for tax payer bill of rights #10 – The Right to a Fair and Just Tax System – that it is only about the fair and just administration of the tax laws, and with apparent assumption that the tax laws themselves are fair and just. This is wrong. Anyone reading the list of rights would, IMO, tend to think that the Right to a Fair and Just Tax System is about the taxes and compliance required themselves. Thus it may be said that #10 is substantially misleading and may even be labeled a “faux” right or Orwellian “doublespeak.” Explanation should be amended so that the right means what it says: Right to a Fair and Just Tax System.

    The Tax Payer Advocate should take Congress/Senate Finance to task on the application of tax treaties for US persons overseas. Instead of comparing the overall tax liability of one nation one is resident in and comparing it to the entire US tax liability, the application of the treaty is to do it tax by tax without any credit flowing from one type of tax to another. For example if the income tax rate is way higher than the US rate (Australia, Canada, UK, etc.), no credits for those taxes paid way higher than US rates may be rolled over to US taxes that one’s country of residence does not have. Plus the US may just call the same tax by a different name, or add a new one such as Obamacare NIIT, and then it flows on top as double taxation. It is wrong.

    The Tax Treaties/US tax laws treat US persons living overseas as living in the US. It is wrong. Overseas pensions on money earned overseas should not be double taxed by the US with designation of “unqualified pension fund” as if the person lives in the US and has a choice between qualified and unqualified options. It is wrong. The US tax code penalizes and proscribes extra tax for “foreign income and assets” with viewpoint of US resident having an overseas account, it is all wrong when US persons live overseas and all their income, assets and local bank accounts in their country of residence get the US “foreign” tax and compliance penalty treatment.

    The justification of tax is services in exchange for oneself or those in one’s community. Americans living overseas do not get any US government services as US residents do. Therefore, for US persons overseas the US tax and compliance laws are neither fair nor just, and out of step with all other OECD countries. It is wrong.

    “Representation” is ineffective as these 8.7 million US persons living overseas would never have approved of it all. Double Taxation Without Representation = unAmerican. IMO, America has forgotten its founding principles in regards to the tax and compliance laws required of US persons living overseas. IMO the IRS Tax Payer Advocate should point these inequities and injustices out to Congress.

16. I am hoping something *positive* comes out of this conference this week.

17. Allison Christians publishes her presentation to International Conference on Taxpayer Rights
    Focuses on story of accidental American.

    https://twitter.com/taxpolblog/status/674466984545808384