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.”
@USCabroad
“Has a Japanese bank sent you a FATCA letter? “
Yes. Posted about it a couple of weeks ago. According to the FATCA letter given to me by a regional bank prepared by the Japanese Bankers Association n June 2014, the following will be sent to the IRS on all US persons; ‘name address, account number, tax identification number, account balance, interest income, transactions records, change in amounts, etc.’.
As we now have a new national ID number that links EACH, ALL AND EVERY activity, including to whom we are related and their nationalities, my children WILL BE reported to the US by their FIs if not mine and their mother’s before they are of age. Hell, my Japanese national ID number is now linked to my US SSN because I had to provide both to open a new account.
Everything is done automatically over here. They do not ask nationality, they ask for your “My Number” which accesses all data on you.
@Japan T
You have probably read the U.S. Japan Model 2 IGA which requires direct reporting to the IRS:
https://www.treasury.gov/resource-center/tax-policy/treaties/Documents/FATCA-Statement-Japan-6-11-2013.pdf
Commentary here:
http://www.bakermckenzie.co.jp/e/material/dl/supportingyourbusiness/newsletter/bankingfinance/ClientAlert_201306_FATCAUpdate_JapaneseIGAFinalized_E.pdf
A couple of thoughts:
1. Okay, so your account is being reported to the IRS. This does NOT mean necessarily mean that there will be any follow up. What if there is follow up? My impression is that you wouldn’t owe tax anyway. Can you keep your accounts under 10,000 USD to protect you from potential FBAR problems?
2. There is NOTHING in the U.S. FATCA IGA (based on a very quick read) that has anything to do with your children.
I agree that this is unpleasant. But, just live your life. Put yourself in a situation so that even if there were “follow up” you would owe them nothing. Surely, you can achieve that?
I am not suggesting that any of this is pleasant. But, in Canada there have been about 155,000 accounts identified and the “slips” sent on. Although it is early in the game there is no evidence of “follow through”.
Question:
What is your immigration status in Japan? Is it dependent on having a valid U.S. passport?
Leaving aside your situation, under NO circumstances should you or agree that your children are U.S. citizens.
“You have probably read the U.S. Japan Model 2 IGA which requires direct reporting to the IRS:”
No, I am quoting from the documents given to me from my local bank.
“1. Okay, so your account is being reported to the IRS. This does NOT mean necessarily mean that there will be any follow up. What if there is follow up? My impression is that you wouldn’t owe tax anyway. Can you keep your accounts under 10,000 USD to protect you from potential FBAR problems?”
How many times must I say this, I AM NOT concerned that they follow up. I AM concerned about the problems of being a victim of ID theft in the US, which I left behind (not the motivation for coming here) will now return much, much, much greater thsn before. The the US Gov. can not be trusted to keep this data safe. They are not even seriously trying to.
Second, I AM concerned over bank lock out which has been happening all over the world even in countries with histories different than Japan’s towards those who look and or are different.
“2. There is NOTHING in the U.S. FATCA IGA (based on a very quick read) that has anything to do with your children.”
You do not know Japan.
“Question:
What is your immigration status in Japan? Is it dependent on having a valid U.S. passport?”
For the answer to this, please look up Bobby Fischer. For the short answer, yes.
“Leaving aside your situation, under NO circumstances should you or agree that your children are U.S. citizens.”
I do not have the opportunity to agree or not agree. The Japanese national ID cards for all my family members arrived in the same envelope. We are NOT even asked. We must provide our ID number and all data including citizenship of parents is included.
My childred p, nor myself, look Japanese. Natural human curiosity alone makes it impossible to hide the fact that they are not 100% Japanese. Having all the info needed to find out where their parents are from in the form of the national ID number and one shoukd easily see that there is no hiding the fact.
When I pick up one child from daycare, one of his classmates always runs up to an shouts “Gaikokujin” which means “nonJapanese” and then call my child’s name and shouts “my child’s name no papa gakokujin desu!”=“My child’s name’s daddy is not Japanese!” How in the hell do I hide THAT?
Don’t give some wise ass answer about saying I’m German or some such either. Everyone there and their parents know that there is a child of a nonJapanese going to the school and the JNs are no less chatty and gossipy than anyone else. They know. They already mother fucking know. AND as one of the fathers works in city hall, they already fucking know. How do you keep secret what is already fucking common fucking knowledge?
Japan T
So, sorry for trying to have a conversation with you – quite happy to refrain from that in the future.
The issue of your children’s U.S. citizenship is NOT related to their appearance. It is based on a complex set of laws.
Best,
https://www.americansabroad.org/media/files/files/afcb36c8/GOP_Response_PR.pdf?platform=hootsuite
Just in case someone missed it (JC found it) I’m re-posting the link to the ACA’s response to the GOP bill. They, like us, will be watching for a positive mark-up this week. Please let’s not get too far off-track on this thread. We need to focus our thoughts on the consequences of this bill and our prayers on the mark-up since I assume after that there isn’t much that could happen for non-res-US-persons to get relief via the US congress.
EmBee,
Below from your link is the text of the ACA response to the first pass Republican tax bill.
The response is very optimistic. Soon (end of November?) we shall know all.
What I found interesting in it was that ACA appears to believe that the 12% tax (on corporations) would be paid by “foreign subsidiaries” (of U.S. domestic companies) whereas Max Reed (in my top post) on the other hand interprets the same bill as meaning (a disaster for us) that the 12% would be paid by ALL “corporations”, including tiny one person small businesses having no U.S. connection that happen to be incorporated. Republicans Overseas is trying to obtain clarification on this.
The other interesting point for me was the mention of ACA’s revenue estimate that it provided. Will it help?
I think that next few days while the bill is in mark-up might be critical. My preference is that during this time readers try to stay on topic, consider what has been written or not written in the bill, and if they find something that needs changing, post the specific suggestion here AND COPY IT TO THE REPUBLICANS OVERSEAS FB SITE: https://www.facebook.com/republicansoverseas/
ACA says:
@All, this is favorable news;
WASHINGTON (Reuters) – U.S. House speaker Paul Ryan said his colleagues might use the tax overhaul currently under consideration to repeal the Affordable Care Act provision that mandates individuals buy health insurance.
“We have an active conversation with our members and a whole host of ideas on things to add to this bill,” Ryan said in an interview on Fox News Sunday. “And that’s one of the things that’s being discussed.”
One provision in the bill that I believe no one here has mentioned is the phase out of the $250k exemption on the sale of a primary residence. In brief, section 1402 of the bill provides that the $250k exemption will be reduced if the average of modified AGI over the three years including year of sale exceeds $250k (double for a joint return). First, modified AGI is computed by adding several items to AGI, including salary excluded under FEIE. For the year of sale, modified AGI is to include the gain on sale from the primary residence reduced by the $250k exclusion (i.e. as if the phase out did not apply). If you make a large enough gain, then the exclusion will be phased out – for a single individual a gain in excess of $1m will lead to a reduced exclusion, even if they have no other income. The hardest hit will be those who live in high cost cities and those who have owned their primary residence for decades.
Note that this is not just an expat issue – but it hits expats because many live in countries where the gain on a primary residence is not taxed.
Karen, thanks,
Could you consider posting this thought on the RO FB site as well, and ask that it be passed on to the House W&M legislative team and dealt with in mark-up?
Maybe you could also mention where you reside…
“There is NO way for a “U.S. birthplace” to go away.”
Intetestingly, Japan and Korea are the two countries I know of that omit birthplace from their passports and national ID cards. Instead, you have a “home town” or “home region,” which you get to choose. (For Japanese it has to be somewhere now in Japan.) Of course their governments will know where you were born, and as Japan T points out, the Japanese government will demand lots of information on / documents for your whole family of origin.
@Stephen Kish – done
Karen, thanks!
Others can do this too.
I suggest that people making recommendations on the Republicans Overseas FB site be very directive — and explicitly direct/ask that their recommendation be sent on to the mark-up folks.
https://www.facebook.com/republicansoverseas/
Japan T: Just letting you know that I have been following your frustrations for some time and greatly sympathize with the plight of you and your family. So much so, that I’ve included some of it in my next communication with the UN should the current tax reform efforts fail us. Your national ID card system sounds like a disaster for US expats who are suffering discrimination already under FATCA/CBT.
I don’t think we should take up any more space on this thread but if you would like to converse about this one-to-one I will authorize the administrators to release my email address to you.
There are also several tax treaty overrides in the bill although I don’t believe they affect individuals. However, if the bill passes “as is” I personally will used the treaty overrides as a further sign of US government bad faith when discussing FATCA/CBT with non US governments.
https://www.lexology.com/library/detail.aspx?g=640e6d01-73b2-4456-96e7-846d2b802cbd
Limitation on Treaty Benefits. Under the bill, if a payment of fixed or determinable, annual or periodical (FDAP) income is deductible in the United States and the payment is made by an entity that is controlled by a foreign parent to another entity in a tax treaty jurisdiction that is controlled by the same foreign parent, then the statutory 30-percent withholding tax on such income would not be reduced by any treaty unless the withholding tax would be reduced by a treaty if the payment were made directly to the foreign parent. This provision would be effective for payments made after the date of enactment. Similar provisions have appeared in several older tax bills and have been criticized as overriding US tax treaties.
Wonder if the latest leak from 5 Nov. on tax havens and evasion are going to damper TTFI? Public opinion could prevent the change being made to the tax reform bill, no? The Democrats might find the Paradise Papers leak opportune.
https://www.theguardian.com/news/live/2017/nov/06/reaction-around-world-release-paradise-papers-live
https://www.irishtimes.com/business/appleby-the-offshore-law-firm-with-a-record-of-compliance-failures-1.3280860?mode=amp
“Japan T
So, sorry for trying to have a conversation with you – quite happy to refrain from that in the future.
The issue of your children’s U.S. citizenship is NOT related to their appearance. It is based on a complex set of laws.
Best,”
Not it does not. It depends on how individual human beings react to these supposed laws. Mr. Sato, the manager of the local bank does not now this complex set of laws. All he knows is that have a US person as a client causes him a whole hell of a lot more paperwork and risk than any of his other clients.
If “the law” was the defining factor, none of us have anything to worry about as ‘the law” says the US must obtain a warrant to get this information.
“What I found interesting in it was that ACA appears to believe that the 12% tax (on corporations) would be paid by “foreign subsidiaries” (of U.S. domestic companies)”
While this is better than this tax for all corporations, why is this money the US’s? At least in Japan, these “foreign subsidiaries” are Japanese companies. They pay their parent companies licensing fees to use the name, logos, trademarks and to sell the products and a percentage of sales to the parent company, which is then taxed in the US. Why should Apple Japan, a different company than Apple, have to pay 12% of its earning in Japan to the US?
To me it is similar to Illinois charging Mc Donalds in New York Illinois sales and other taxes because Mc Donalds is headquartered in Illinois (or was).
If Japanese companies which sell goods and services under the brand name of US parent companies must pay taxes to the US, will they then at some point have to comply with all other manner of US corporate, labor and finance law?
@Muzzled no More
That works for me. Thanks.
Please take this with the best of intentions. I completely sympathize with Japan T’s situation. He and I have quite a bit of overlap with our problems regarding the USA. However, lately, Japan T’s issues have come to dominate the conversations on nearly every new thread, and I have to scroll through page after page of dialogue before I find comments that are relevant to the original post.
May I suggest a new post be started under the topic of “Non-Dual Citizen issues”, where Japan T and I and the few others here in similar situations can voice our specific concerns, share ideas, and leave the rest of the posts here to concentrate on the issues at hand.
Things are looking down. The latest news is that even Canada’s Queen invested some funds outside of Canada. The reason it’s news is because one offshore destination was another Commonwealth country. Remember there’s another Commonwealth country, not quite as close as Canada is to the World’s Biggest Tax Haven, but people hate that country because it’s trying to compete with the Worlds Biggest Tax Haven? Well with even Canada’s Queen giving a bad name to people having money outside of the World’s Biggest Tax Haven, I don’t think those 9 million citizens of the World’s Biggest Tax Haven are going to have a chance.
“I’ve bought something on Ebay from someone in Iran. Once my credit card transactions get reported, guess I’ll be in big trouble.”
Once your credit card transaction gets reported, you’ll be free.