Today (11/16/2017) the floor of the House passed the House tax reform bill. The earlier version is here .
Today also the Senate Finance committee passed the Senate tax reform bill. See link
Do not yet have the final versions of either bill but suspect that we are not helped in the bills. Will post here final versions when they become available.
Listen to the C-span clip found by BB in which Residence-based taxation is mentioned by Golding and Brady in the House tax bill debate — none of this however, appears to have been incorporated into the House or Senate bills passed on 11/16/2017
Republicans Overseas (RO) continues to press on, to make changes in the final tax package that will help us. The fight is not yet over, but it continues, right from the beginning, to be an uphill battle — and the odds don’t seem very good right now. RO says: “Again we need to focus on the Senate side since this fight is far from over.”
Personally, it makes no sense to me to blame Solomon and the handful of people at Republicans Overseas for trying to make a change and, so far, failing. Yesterday a friend reminded me that there was this Ismene, who kept telling her sister Antigone that it was pointless to even “try”: “…but you’re bound to fail…No sense in starting a hopeless task…Go then, if you are determined, to your folly, etc. etc.” Antigone responded: “When I have tried and failed, [then] I shall have failed.”
@Marie: Yes, it is an eye-opening thought, to consider that even our alleged sympathizers and defenders in Congress don’t differentiate between those hoarding assets abroad and those actually living and conducting legitimate business and banking abroad.
They all suffer from Homelander Color Blindness. They can’t see the difference even when it is waved in their faces. I’ll bet Brady and the rest actually believe they’ve addressed our concerns in the current proposal.
@ Barbara
Republicans will have a rude awakening when the Dems take back both houses in 2018.
“I think the worries about the 12% tax can be forgotten….”
This time maybe. Something similar may be along shortly, or in the next year or three.
The US wants those corporation profits. They’ll try again, and non-US-resident US citizens will again be caught up in the crossfire. IRS compliance seems to me likely to become increasingly expensive, for expats.
I don’t know if an individual would ever have a 10% share in a Credit Union but if a non-res US person did would that be affected by this 12% thing? Sorry for asking what is probably a stupid question but I’ve no experience with incorporating or share holding.
@Marie – The odds for the Senate are a longshot, because the class of senators up for election next year is already almost as Democrat as it’s likely to get (this class was last up in 2012 when Obama won re-election). 2020 is a different story though.
Alexander von Pinoci at American Expatriates FB has this suggestion:
@Petlover: Controversially, it will also add an excise tax for corporations involved in cross-border payments that has drawn the ire of the US business community and its army of lobbyists.
The excise tax only applies to corporations which make at least $100 million in cross-border payments. Nothing for Brockers to worry about, compared to the transition tax and the foreign high returns Subpart F garbage and of course the fate of TTFI.
http://www.latimes.com/business/la-na-pol-gop-tax-border-20171106-story.html
@Eric
The main issue with the cross border excise tax is some people like Allison Christians believe it may be a NAFTA and WTO violation.
instead of thinking that US govt will erase CBT and FATCA , concentrate on getting a second citizenship and get out of this menace. All work is fruitless as you have seen already from ACA and RO efforts. Now with Paradise paper and Panama leaks they would get more crazy on individuals. It’s a nightmare already for banks to open up an account for US citizens or permanent residents. The quicker you drop it the quicker you will relive and enjoy your life like countless others are doing.
@Japan T, you don’t have to convert or do treason to loose your US citizenship. There are other ways to get a second citizenship. I suggest you try those. Get out before they go more crazy. It’s already a nightmare as suggested to me by a tax attorney friend who told me to get out of USA asap as it’s not worth it anymore. At the time the fee was only 400 dollars instead of 2350. The tax attorney also bought a second citizenship just in case. He was getting alarmed by the crazy laws.
All roads lead to renounciation. ! We are not getting anywhere by writing letters and renounciations are on the rise as news are already posted all over the internet and on here too. The average expat has given up. I am paying cpa 2000 usd every year to do my taxes and compliances for no tax owed. Isn’t that stupid and archaic law to make your citizens pay so much for no taxes and then make banks and brokerages not take you as a client as you are risk for compliance nightmares for them.
I agree, Harrison. Anyone not hurting now likely will be at some point in the future. Whether it says it or not, the USA clearly takes the view that those living outside of US borders are ungrateful tax dodgers and they must be punished.
The chances of the US government telling the good home landers that they are going to exempt Americans overseas from paying their taxes has got to be nil, particularly as yet another story of rich folk “hiding” their money offshore has broken with the paradise papers leak.
There is a global witch hunt going on right now where the very word “offshore” has become a dirty word and any of us with international connections need to tread very carefully indeed, even if our business is entirely legit and legal.
Of course, American tax slaves are the most vulnerable to this kind of government abuse, though it’s not only the US government playing this game.
Make a mistake with the tax declaration on your UK holiday home? Slap on the wrist.
Make a mistake with your Spanish holiday home? Criminal charges, huge fines, jail time.
“If you have a tax liability that’s related to offshore income or capital gains it will automatically be deemed to be a criminal offence under rules planned for next year and confirmed in this week’s Autumn Statement. Previously, only “deliberate” non-disclosures could be deemed a criminal act.”
Utterly disgraceful.
http://www.telegraph.co.uk/finance/personalfinance/tax/12020346/HMRC-declares-an-end-to-hiding-money-in-another-country-from-January.html
Tim Smyth – do you have a link to Allison Christians commenting on this (the excise tax)?
Thanks.
“Make a mistake with the tax declaration on your UK holiday home? Slap on the wrist.
Make a mistake with your Spanish holiday home? Criminal charges, huge fines, jail time.”
One is cross-border, the other is not. This initiative seems to be the fruit of CRS, which only reports cross-border accounts.
“Automatic information-sharing between banks across the world means HM Revenue & Customs will soon be able to catch evaders almost anywhere.
More than 90 jurisdictions will begin to share the financial details of British residents, including bank accounts, property and trusts, which the Revenue can use to impose criminal sanctions and penalties on tax evaders.”
Interesting.
“One is cross-border, the other is not. This initiative seems to be the fruit of CRS, which only reports cross-border accounts.”
Indeed, yet both are within the so called EU and the crime is identical.
Only the punishment differs.
And of course, the chances of an honest error increase with the complexity of cross border accounting, yet the mistake will automatically be considered a criminal action.
In what world could anyone consider that to be fair and reasonable?
But yet again, who’s going to rush to the aid of somebody putting his money overseas and avoiding tax? So, they can just do what they like to people like me, basically.
I’m seriously considering getting out of the EU completely, I’m starting to feel strangled and threatened. This is why I have so much sympathy with Americans overseas, because I think some of us are not far behind.
The message now is keep your money in the country or risk losing it to penalties.
“…both are within the so called EU and the crime is identical.
Only the punishment differs.”
More likely, the difference is that domestic tax procedures are in place for taxing domestic income, whereas foreign income may not be reported. The fact that both countries may be EU member states doesn’t have a bearing.
“…the chances of an honest error increase with the complexity of cross border accounting, yet the mistake will automatically be considered a criminal action.
In what world could anyone consider that to be fair and reasonable?”
This doesn’t sound like a IRS-type presumption of guilt injustice. UK-EU residents have a right to contest tax rulings, and no doubt will do so if mistakes have occurred. The UK does tax residents on worldwide income, so the HMRC appears to be on solid ground in chasing up unreported foreign income.
“I’m seriously considering getting out of the EU completely, I’m starting to feel strangled and threatened. This is why I have so much sympathy with Americans overseas, because I think some of us are not far behind.”
Some of whom? You’ve lost me.
Pinsent Mason says:
https://www.out-law.com/en/articles/2017/october/strict-liability-offence-for-offshore-tax-evaders-to-apply-from-201718-tax-year/
Pinsent Masons piece also mentions this:
“In June HMRC announced it had updated its worldwide disclosure facility to allow taxpayers with particularly complex tax affairs to apply for up to 90 additional days in which to make their disclosure. They also introduced a special route to apply for clearances in relation to complex issues connected with a potential disclosure.”
UK Worldwide Disclosure Facility:
https://www.gov.uk/guidance/worldwide-disclosure-facility-make-a-disclosure
“The UK does tax residents on worldwide income, so the HMRC appears to be on solid ground in chasing up unreported foreign income. ”
Of course, but why the automatic criminalisation of an error or omission if that error or omission just happens to be overseas? The same does not apply if exactly the same omission or error occurs within the UK.
This is my point, the never ending and ever increasing pressure for a resident to keep his money in the country, and now the automatic criminalisation of any error or omission if you don’t yield to that pressure.
“This is why I have so much sympathy with Americans overseas, because I think some of us are not far behind.
Some of whom? You’ve lost me.”
Some of us who have international financial lives.
@Mike
It reminds me of the threats & penalties from the IRS..
The IRS have their hands full with the volume of data piling up on their undermanned desks
HMRC have Brexit and dealing who is legally in the country and who isn’t to sort out.
It’s ‘full of sound and fury, signifying nothing’
CRS is a pretty weak tool without the US in the bag.
What is wrong with diversifying anyway? I guess it’s not for the likes of us little people.
” …why the automatic criminalisation of an error or omission if that error or omission just happens to be overseas? The same does not apply if exactly the same omission or error occurs within the UK.”
Domestic income is easily tracked; until AEOI transpired, tracking unreported foreign income was much moe difficult.
“This is my point, the never ending and ever increasing pressure for a resident to keep his money in the country, and now the automatic criminalisation of any error or omission if you don’t yield to that pressure.”
Unrelenting pressure for a resident to report and pay tax on foreign as well as domestic income, as per the UK’s tax laws.
“Some of us who have international financial lives.”
It sounds as if you’re assuming that US citizens abroad all have international financial lives. Many don’t, yet still get threatened by the US with life-destroying fines for having domestic (not international, not cross-border) bank accounts.
Now there’s injustice. Not being required by your country of residence to report and pay tax on your worldwide income. Please.
“What is wrong with diversifying anyway?”
Well, the way the media is going this very day, mentioning you have assets off shore to the general public might just have them calling the police. The media fury over this “paradise papers” leak has to be seen to be believed.
The issue here is the same really, the public cannot differentiate between perfectly legitimate foreign finances, legitimate tax avoidance and tax evasion. It’s all one big mess of rich people living in the sun while dodging their taxes as far as the UK public is concerned, and they would vote for any law that hurts these people.
Sound familiar?
“It sounds as if you’re assuming that US citizens abroad all have international financial lives.”
As far as the USA is concerned, they do.
“Now there’s injustice. Not being required by your country of residence to report and pay tax on your worldwide income. Please.”
Plaxy – You seem to be suggesting that I am complaining about being required to report my income and pay my taxes. Where did I suggest that, or suggest that there is something unfair about it?
Are you confusing me with another post I haven’t seen?
My issue with fairness regards the automatic criminalisation of an offence that would be treated much more leniently if the offence occurred with the UK.
Exactly the same unfairness imposed on US citizens with foreign (to the US) financial lives.
“My issue with fairness regards the automatic criminalisation of an offence that would be treated much more leniently if the offence occurred with the UK.
Exactly the same unfairness imposed on US citizens with foreign (to the US) financial lives.”
So you’re talking about income which is earned in Spain by a UK resident, taxed by Spain, and not reported to the UK because the UK resident didn’t understand that they were required to report it to the UK?
If that’s the case, check the UK-Spain treaty to see which country has taxing rights. It’ll be one or the other – not both, as it tends to be for US citizens.
I’m not talking about any specific tax issue, Plaxy. I don’t know why you are.
I also don’t know where you got the idea that I was complaining about having to report my income and pay taxes.
I was merely pointing out that it’s not only the USA that is guilty of persecuting those with foreign finances. There is zero moral justification for automatic criminalisation of an error or omission simply because the taxable event was outside of the UK, and where if it happened locally, the guilty gets a slap on the wrist.
In fact, I’m going to write to my MP about it. Not that this will get me far as I happen to know that she’s a committed Corbyn fan who would vote for the death sentence on those with money overseas who “might” be evading taxes.
I don’t agree that CBT is morally equivalent to a country requiring a resident to report foreign income.
“I don’t agree that CBT is morally equivalent to a country requiring a resident to report foreign income.”
Neither do I, so I’m not sure who you’re not agreeing with.
But then I’m not sure how you came to the conclusion that I am complaining about paying my taxes, complaining about having to report my income and that I have claimed reporting my income is the same as CBT.
It’s all a bit of a mystery really.