After having read Professor Christian’s presentation, I request that you respond to the following in as comments:
In a purely practical, “day to day” sense, how has U.S. citizenship-based taxation affected and/or changed your life?
Understanding the Accidental American: Tina's Story https://t.co/BzxDfmAjT4
— Allison Christians (@taxpolblog) December 9, 2015
"We can do better by this population of individuals abroad adversely and unfairly affected by U.S. tax law." https://t.co/6xN7RR7zKn
— U.S. Citizen Abroad (@USCitizenAbroad) December 9, 2015
On November 18, 2015 McGill Professor Allison Christians spoke at the Taxpayer Advocate Tax Conference in Washington, DC.* On November 20, 2015 a video of an interview with her was posted here at the Isaac Brock Society. It was an excellent interview which highlighted and demonstrated some of the injustices of U.S. ‘place of birth taxation”. The interview was also posted on the IBS YouTube channel.
Now, TaxNotes has made the text of her speech available for general reading.
Why Professor Christian’s speech is important
Tax legislation in general and the U.S. Internal Revenue Code in particular is an excellent place to hide legislative evil. (See a series of Charles Adams videos on this topic.) Tax laws are written in complicated convoluted language that cannot be understood by the general public and are understood by ONLY those tax professionals who make it their clear goal to understand the legislation. What this means (if you haven’t figured this out) that the vast majority of U.S. tax preparers (AKA “Form People“) do NOT understand the purpose, intent and effect of the rules they are applying. This is one of the many reasons that the tax prep people (possibly “bounty hunters” are so dangerous to you.
To put it simply:
In the age of computerized tax prep and form completion:
There is NO relationship between knowing what information to put on a form and knowing what that information means in the life (or rather what’s left of life for Americans abroad) of the taxpayer. None whatsoever.
Professor Christian’s speech begins with:
I would like to tell you a story about the taxpayer’s right to know what the law requires of her and to have the law administered fairly. This is just one story based on things happening now, but it is a common story. I’m telling this story instead of giving an exposition on the underlying legal texts because sometimes the rules are too complicated and too technical for anyone to really understand, even tax lawyers. Moreover, reading the law itself doesn’t explain what isn’t written on the books, which can matter more in how things play out in human terms. As you will see, the implementation of the law gives rise to a taxpayers’ rights issue — one that wouldn’t be clear from reciting the law alone.
*Abstact of her presentation
Across the globe, banks are flagging accounts with indicia indicating their owners may be “US Persons,” clearing the way for the United States to enforce citizenship-based taxation extraterritorially for the first time in history. For individuals who permanently reside outside of the United States, this is a “where there’s smoke” method of establishing tax jurisdiction because none of the indicia are themselves incontrovertible evidence of one’s status as a citizen and therefore a US Person for tax purposes. The indicia method guarantees that certain individuals will be presumed to be citizens and subjected to repercussions regardless of their actual legal status as such, while others will be overlooked even if they are in fact citizens. Establishing a tax jurisdiction in this manner is arbitrary and capricious, with significant practical and normative consequences. Moreover, it violates one of the most fundamental and universally- acknowledged tenets of taxpayer rights, namely, the right to be informed about what the law requires. Because of the extraordinary demands that the United States attaches to citizenship, indicia-searching and self-verification of nonresidents violate principles of both international law and human rights. Both should be universally rejected as an invalid exercise of state power.
I did sent my comment to the Tax Payer Advocate about the Tax Payer Bill of Rights.
I asked for two additions:
11) The Right to a Simple and Easily Understood Tax System
12) The Right to Reasonable Compliance Costs
I am still very confused as to whether a Canadian bank, in Canada, can withhold Canadian sourced interest and forward it to the IRS.( And how sad is it that I’m too afraid to ask my Canadian bank???)
Here is a day to day example from the UK (I also posted it on the UK specific thread here at IBS):
Looks to me as if parent volunteers acting as treasurers were sent FATCA forms by HSBC:
One asks the question;
‘Any PTA Treasurers filled in FATCA form’
“We’ve received a FATCA questionnaire form from HSBC for our piddling PTA account – I guess it’s just a technical requirement in the current climate. But as it’s all in US Tax-speak – and not in any way written with small charities in mind – I’m struggling to work out exactly what category we should tick. Equally I don’t want to tick the wrong one and end up causing ourselves headaches. HSBC state on the paperwork that you should consult a tax advisor with questions as they don’t give advice on this.
I suspect HSBC probably have sent these out to all their account holders so wondering if any of the other PTA’s out there have worked out what we are? Or any in financial services who could assist?”………………..
Marie. No they can’t.
What prevents TD Canada Trust from doing in 2015 what TD Waterhouse (in Canada not the US) did in 2002? The Canadian source of interest is the same.
I came upon this comment regarding oaths of citizenship. Sounds to me like some good old common sense. A contract that we take part in with full disclosure and then accountability. What a lot of problems it might solve — in any country.
And, Merry Merry – Happy New Year.