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.”
600 comments! Woo hoo!
As Orin Hatch is the one who got the passport revocation privision passed into law, I am not optimistic.
Again, why should I support Marxism?
Has anyone been following the Senate Markup meeting? I only saw a tiny bit yesterday and a small portion today. Wyden is just screaming his head off about the scope of the amendments – something about suddenly adding the ACA and the Dems cannot add amendments………???? Mr. Hatch seems to be prompted constantly by a young man as if he does not understand what is going on about 90% of the time.
Everytime I have seen Wyden he is going off on a tangent and screaming, always screaming…………
I did not hear anything about Heller’s Amendment…….
“Going back to my earlier point if courts deciding what this means, you said that the court gave two different definitions of one thing in the same decision. Did either of those definitions help you?”
WhyTF do you think they gave two contradictory decisions on the same issue in the same decision? Either decision by itself would have helped me in the other place where the issue arose. They couldn’t allow that. They have embezzlers to protect.
What you’ve described sounds like an asylum, Trish.
“One of the plans’ most radical changes is a shift from a worldwide system, under which profits are taxed no matter where they are earned, to a territorial system, which exempts profits earned outside the United States. That would bring the American tax system in line with those of most other nations.”
Well no surprise here, right? The New York Times is a US newspaper so they can’t be expected to understand RBT, right?
This is from THE NEW YORK TIMES INTERNATIONAL EDITION.
Homelanders abroad can’t be expected to understand RBT, right?
With people like this on your side, it’s hopeless.
@ Patricia and BB
If Wyden is screaming I don’t think I’ll even be able to read the transcript because his bits will all be in caps.
That might be a bit painful, but it could prevent your eyes from glazing over, EmBee.
I would like to read about what Hatch had to say about ACA’s Amendment though…
If he’s that out of it, he might think it’s the Affordable Care Act
@BB and EmBee
ACA’s amendment? How can ACA submit an amendment?
They WERE talking about ACA-the Affordable Care Act in fact ALL of the last part was about that and why Wyden was carrying on.
@ Patricia Moon
With respect to the discussion of whether there is a tax on the retained earnings of Canadian Controlled Private Corporations:
First, pick this discussion of the changes to the territorial tax system for corporations at the 35 minute mark here:
There is NO evidence of any intention to apply the “transition tax” to anything other than large corporations and certainly not to small business corporations owned by Americans abroad.
Second, an interesting summary was published by the Toronto law firm Oslers which talks about U.S. tax reform and makes NO reference to a possible tax on the retained earnings of CCPCs.
Note no mention that this could affect CCPCs owned by Canadians:
My feeling is that regardless of the language that this was not intended to apply to Americans abroad.
What should be done:
The danger is that the compliance community will make the law by interpreting this to apply beyond its obvious intention. The obvious solution is to NOT use the services of any tax firm who interprets the law as applying to CCPCs. After all, it was the compliance firms who created the notion that Canadian mutual funds are PFICs.
Even with FBAR and FATCA, non-compliance still prevails. How exactly are they going to get so-called ‘US Persons’ to comply with this?
“”Going back to my earlier point if courts deciding what this means, you said that the court gave two different definitions of one thing in the same decision. Did either of those definitions help you?”
WhyTF do you think they gave two contradictory decisions on the same issue in the same decision? Either decision by itself would have helped me in the other place where the issue arose. They couldn’t allow that. They have embezzlers to protect.”
Then you have an operationg definition. The court will decide what something means in a way that will NOT help you.
“Even with FBAR and FATCA, non-compliance still prevails. How exactly are they going to get so-called ‘US Persons’ to comply with this?”
If your FI is reporting your accounts to the IRS as required by FATCA, the IRS can see if you have filed FBARs as required and fine you if you have not. Not an issue for dual citizens without assets or family in the States but a problem for others.
I’m glad you’ve made good use of the article with I sent you if only to keep me off a ledge with your interpretation, as my husband and I simply CANNOT comply with such demands. Is there the possibility that the author didn’t factor USP’s living in Canada in the mix? Perhaps a letter to the author is in order (for clarification).
Not sure how useful this is, as it is not from from the horse’s mouth, but got this from Accounting Today
Senate is said to avoid offshore tax that ran aground in House
* By Lynnley Browning Bloomberg News
“The Senate tax bill that’s due to be released Thursday won’t include an excise tax on certain payments U.S. multinationals make to overseas affiliates, according to a person familiar with the legislation.”
No, you should not contact the author of the article for clarification. The last thing you want is one more compliance firm considering the issue from the perspective of individual Americans abroad.
What’s interesting is that if didn’t occur to them in the first place.
Sorry this news is about a month old.
Tillerson said: “We will not be able to compete with the kind of terms that China offers, but countries have to decide what are they willing to pay to secure their sovereignty and their future control of their economies.”
Well guess what Tillerson. Countries decided they aren’t willing to pay withholding of 30% of their divestments of US property to secure their sovereignty and their future control of their economies. Maybe you can ask Congress to give them more incentives to divest of all US investments.
“Maybe you can ask Congress to give them more incentives to divest of all US investments.”
As if they don’t have enough already. I got out of all US investments some time back, and it looks like there’s nothing wrong with my crystal ball. Get everything out, have nothing to do with the place. What will they do next? Nothing seems to be off limits to the IRS, not even Canadian disabled children and Dutch unemployed.
People need to continue to stay under the radar, don’t file fbars. and don’t file tax returns, Can someone name one case where the IRS found someone first abroad and that person did not go to them?
This is why this is so unjust. innocent unsuspecting people wanting to do the right thing are going to the IRS like lambs to the slaughter then being punished for being honest. the system makes honest people dishonest.
Deal with the facts as they are now. there is a mountain of data coming from Fatca and the information just can’t be used constructively yet. Those that can renounce that are already in compliance, should do so at once if your only tie is waiting for change. do not stay a citizen because of any change that might happen today. one thing we can be sure of is that there will always be change, it just might not be good change.
This one’s not a money maker for the compliance firm when their clients cannot or will not comply.
Canadian corporations aren’t Canadian citizens. Can the IRS collect on this one?
Here is the Chair’s 11/14/2017 modification to the mark-up of the Senate Tax reform bill.
Anything in it of relevance to us?
Chair’s comment on the modified mark:
“…The modified mark will effectively repeal the individual mandate tax to help provide additional relief to low- and middle-income families, create more certainty for American job creators by ensuring business provisions – like the globally-competitive corporate tax rate and international tax system [for ?] – are permanent, and work to address the so-called Byrd Rule to ensure the legislation complies with the Senate budgetary rules for reconciliation…”
“…I look forward to another lively discussion here today. But before I turn to Senator Wyden for his opening remarks, I want to make clear that I plan to keep things orderly today. I will make sure that members are recognized so we all get a chance to speak and ask questions, but I won’t abide the disorder and hostility we witnessed yesterday afternoon….”
@Stephen Kish: I see only one maybe-good thing: “Simplified filing requirements for individuals over 65 years of age” (though I seriously doubt it will simplify any issues for US persons abroad). Plus the modification doesn’t seem to make CFC stuff any worse than it already was, save for the tax hike on income from foreign intangibles (though it’s hard to say for sure because we still don’t have actual bill text).
I see two particularly bad things:
1. The individual tax cuts are now only for eight years. (Maybe we can get TTFI for eight years, long enough to accumulate five years of compliance and then renounce before CBT kicks back in again.)
2. Chained CPI-U understates inflation, and they want to use it for brackets, i.e. permanent bracket creep.
TTFI is of course absent. No indication SFC will ever get around to considering Heller’s higher-numbered amendments. Meanwhile real lobbyists are getting their amendments in just fine https://twitter.com/i/web/status/930784588502315009
No, under NO circumstances, could the “transition tax” or the “going forward addition to subpart F income inclusion”, give the IRS and any jurisdiction to imposes taxes on any Canadian Corporation.
If this tax were interpreted to apply to the shareholders of Canadian Controlled Private Corporations (and I have doubts as to whether or not it does), the tax would be imposed (via the subpart F rules) on the individual shareholder and NOT on the corporation.
Subpart F is income that is earned by the corporation (but because the USA can’t tax the foreign corporation directly) is ATTRIBUTED to the U.S. citizen shareholder EVEN THOUGH THERE WAS NO ACTUAL RECEIPT OF INCOME!
As long as the individual shareholder is a Canadian citizen, the CRA “shall not” (as per the CAnada U.S. tax treaty) assist the IRS with any collection. That said, I suppose that the IRS could try some other mechanism which would be difficult without any U.S. assets.
Finally, as you can see from my comments over the last while, I have very serious doubts about whether this is intended to apply to Canadians (in your situation) and as a result I don’t see it as being a priority.
On the other hand, if your accountant takes the position that it does apply (because of the plain wording of the statute) then I guess you need to decide how to deal with the situation.
But, to be clear:
Regardless of your interpretation, this is NOT a direct tax on the corporation.