Liberty and justice for all United States persons abroad

The Isaac Brock Society

Posted on by Posted in Law & Morality 55 Comments

TODAY (DECEMBER 1, 2017) REPUBLICANS OVERSEAS SAID:

“RO Update on TTFI and FATCA:

The JCT (Joint Committee on Taxation) finally released the Senate tax bill score with the indication that the Senate Tax Cuts and Jobs Act would add more than $1 trillion to federal deficits over the next 10 years: http://www.washingtonexaminer.com/senate-tax-bill…/…/2642198

Unfortunately, the TTFI score was not included. Without JCT’s TTFI score, Sen. Heller’s two place-holder amendments cannot be moved to the Senate floor for debate and vote. Because Congress intends to pass tax reform using budget reconciliation (which imposes a limit on any increase in the budget deficit), no amendments without a JCT score can be included in the bill, and this, unfortunately, includes TTFI.

Republicans Overseas is very disappointed that TTFI will not be included in the current Tax Cuts and Jobs Act.

We will not stop fighting, however, and we still have a chance to make one major change in this bill process: repeal FATCA.

Senator Rand Paul’s FATCA amendment has been submitted to the Senate, and the amendment will be debated and voted on as early as Friday. FATCA has already been scored by the JCT in a previous process, so it can be included in the bill.

Please contact your senators!

The Senate vote on the tax bill was delayed while Senate Republican leaders made changes to the bill to win over several hold-outs. This delay gives us more time to contact senators and ask them to support Sen. Paul’s FATCA repeal amendment.”

The above posted in: https://www.facebook.com/republicansoverseas/

55 thoughts on “REPUBLICANS OVERSEAS SAYS (12/1/2017): “Republicans Overseas is very disappointed that TTFI will not be included in the current Tax Cuts and Jobs Act.””

  1. Consider calling Rep. Holding’s office (202-225-3032) and leaving a brief one sentence message of encouragement to continue his fight to kill citizenship-based taxation NOW (not years later) in the PRESENT legislation. Leave the name of the city and country that you are calling from.

    — Consider also emailing his legislative assistant (Matt.stross@mail.house.gov), also with encouragement and a specific recommendation for what you want.

  3. On the contrary, Andrew. I applaud this effort. Thank you for suggesting it, Stephen! We are continuing to collect new signatures for the UN Complaint but we are delaying sending the list and the annual letter and Support Document until mid-December when the results of this and Rep. Holding’s and Sen. Heller’s efforts are known.

  4. @Stephen

    When people call what exactly should they propose? There are more proposals out their to repeal CBT than you can shake a stick at.

  5. As an aside I have come to the conclusion that the GOP Tax Bill is really about eliminating the deduction for State and Local Taxes. This has nothing to with expats either positive or negative but it is a dicey move politically which is why the GOP seems to be acting in such a cloak and dagger manner.

  6. Tim,

    I suggest as one possibility that people propose in the phone message “repealing citizenship-based taxation” — the simple words that you used above.

    I kept the e-mailed (longer) message simple: Thanks for work done so far in trying to end citizenship-based taxation, but please do more to make this happen NOW — rather than years later and, by the way, there is this problem in the present tax bill aimed at small businesses that I hope you can fix (see link I provide).

  7. Is Matt Stross really still his legislative assistant? I had several back-and-forth e-mails with him in January of this year regarding CBT and FATCA, and he seemed genuinely well-informed and motivated to do something. Then all of a sudden my messages to him started to bounce back, with a message that he was no longer with Holding’s office. I’ll try writing to him again.

  8. @Andrew

    Boy, you sure are in the wrong place. Here you are again suggesting there is no point in doing anything.

    Do tell how your consultation with Alex Marino went. Do you think he matches up to what you heard as “the go to guy?” How much is he going to charge you for the renunciation appointment and how much for the filing?

  9. November 28, 2017
    Republicans Overseas wrote:

    SAD: American Citizens Abroad issued a negative press release on November 27, 2017 slamming any form of Territorial Taxation for Individuals when they stated: “Trying to modify the participation exemption in H.R. 1 [‘Tax Cuts and Jobs Act’] so as to provide benefits to individuals not only would muddy the water for these corporate provisions, which no one wants, but it would also be a revenue loser and extraordinarily complicated.’ In this convoluted sentence, ACA is actually saying that extending territorial taxation to individuals would harm territorial taxation for corporations. This is clearly nonsense. The proposed mishmash of tax systems inadvertently harms individual overseas Americans who own small businesses and are caught up in the provisions transitioning corporations to territorial taxation while leaving citizenship-based taxation in place.

    The ACA further makes the mistake of stating that RBT (residency based taxation) is the individual form of territorial taxation for corporations. It isn’t. The US currently operates a corporate-based version of RBT and is seeking to transition to a territorial taxation basis. The equivalent tax regime for individuals is Territorial Taxation for Individuals.

    When the ACA could not get its version of RBT into the House version of the Tax Cuts and Jobs Act, it attacked Congress over a non-existent proposal to eliminate the cap on ‘911’–the Foreign Earned Income Exemption. Now, the ACA attacks TTFI before the Senate version of the bill reaches the floor for debate. Senator Heller’s amendments #9 and #10 could be voted on as early as Wednesday, November 29. Senator Heller is not the only Senator who may offer amendments for Republicans Overseas.

    The ACA claims to seek less complexity and to not ‘muddy the waters’ of the tax bill, yet their version of RBT includes years of living abroad before being declared a non-US resident for US tax purposes, imposes exit taxes, and provides for the continuance of FATCA. Implementation of TTFI would remove the need for FATCA as a citizenship-based taxation reinforcement regime. ACA’s proposal would prop up the US tax compliance industry which often charges $2000 – $4000 to complete a single US tax return for overseas Americans rather than offering real relief from double taxation and onerous, intrusive compliance regulations. TTFI would grant relief from both.

    AMERICAN CITIZENS ABROAD URGES SENATE TO INCLUDE RESIDENCY-BASED TAXATION (RBT) IN SENATE BILL
    Washington, D.C.
    
November 27, 2017

    ACA’s advocacy on Residency-based taxation (RBT) continues with a communication sent to the Senate prior to the Thanksgiving recess. (https://www.americansabroad.org/…/ACA_message_to_the_Senate…) “ACA informed the Senate that it is now their duty to include RBT in the Senate tax reform bill. There is still time for floor debate and the issue is very much alive,” said Marylouise Serrato, Executive Director.

    ACA’s statement to the Senate cited the fact that both the House and the Senate tax bills contain versions of territorial taxation for U.S. corporations whereby foreign income is not taxed. These take the form of a participation exemption, but this benefit runs only to U.S. corporations. Individuals, and Americans abroad in particular, are not benefited at all. They remain taxable on their worldwide income including foreign income. Americans overseas are especially disadvantaged because living overseas, their income is overwhelmingly foreign source.

    “If Congress is bringing the U.S. into the global norm with territorial taxation for corporations, it should not leave Americans overseas outside of that equation,” said Charles Bruce, ACA Legal Counsel and Chairman of ACA Global Foundation. “ACA proposes a straightforward, potentially revenue neutral approach to correct this situation. Residency-based taxation rules, which would not tax the foreign income of Americans truly resident in a foreign country, can be adopted. U.S. income would remain taxable. This arrives at the same benefit given to U.S. corporations under the territorial approach, residency-based taxation for individuals being the equivalent of territorial taxation for corporations,” added Bruce.

    The details of a revenue-neutral RBT approach are set forth in a side-by-side comparison with current law. https://www.americansabroad.org/…/Residency-Based_Taxation_…. This approach was revised several times in response to comments from individuals on Capitol Hill, Treasury and members of the public.

    An analysis of the basic RBT approach was conducted and it was determined to be revenue neutral within the 10-year Congressional budget window of 2018-2027. https://www.americansabroad.org/…/DEG_short_memo_on_RBT_pro….

    ACA’s communication reinforced that drafting of RBT is greatly helped by the fact that most of the legislative language already exists in the Code and need only be modified to apply to U.S. citizens qualifying for RBT. RBT is the only realistic way to change the tax rules to help Americans abroad. Other suggested fixes, such as doing away with the cap on the foreign earned income exclusion, lose a significant amount of revenue and tilt heavily in favor of high earners in low tax countries. Trying to modify the participation exemption in H.R. 1 so as to provide benefits to individuals, not only would muddy the water for these corporate provisions, which no one wants, but it would also be a revenue loser and extraordinarily complicated.

    “We are confident that the Senate has heard us and that offices up on the Hill are seriously considering RBT for tax reform. JCT as the official revenue estimators of Congress will play a key role in this, and they are aware of ACA’s work on the subject,” said Charles Bruce.

    Marylouise Serrato
    
Executive Director ACA


  10. @Embee

    This post from Republicans Overseas is shocking and pointless. Every organization is or should be concentrating on one and only thing. That one thing is to get changes in U.S. law so that:

    The United States stops imposing worldwide taxation on the income of nonresidents.

    It is important to recognize that there is NO GROUP that has actually proposed pure RBT. Both groups are proposing odds and ends of things that (at best) fall far short of a solution.

    BOTH RO and ACA maintain citizenship-based taxation!!!!!

    RO by proposing territorial for individuals does NOT change citizenship as a basis for tax residence. It maintains citizenship as a basis for tax residence. It proposes ONLY that individuals not be taxed on income earned outside the USA. It does nothing about a generalized filing requirement, FBAR, etc. I am NOT saying that the RO proposal is not helpful (I think it is). I am just saying that it is NOT RBT and does not solve as many problems as you might thing.

    (By the way the USA is NOT proposing pure territorial for its corporations either. It is ONLY available for income earned by corporations who are the owners of foreign subsidiares. Again, I am not saying that it isn’t helpful. It’s just that it is a far cry from pure territorial.

    ACA not proposing RBT in the way that it is understood by the rest of the world. It is proposing CBT with a “carve out” for certain groups.

    I don’t see the purpose of the RO post reproduced by Embee above. As well as being pointless, it significantly distorts the meaning of the ACA press release.

    Relief for Americans abroad is possible only with a united from on the basic principle that the USA must cease imposing worldwide taxation on nonresidents. Why RO is publicly attacking ACA is simply beyond me.

  12. Perhaps there’s a behind-the-scenes struggle over which proposal (RO’s or ACA’s) goes into Heller’s placeholder amendments.

  13. I don’t think counties decide who they will claim the right to tax on the basis of principle; they decide who they wil claim the right to tax on the basis of who they can enforce taxation on, which usually means their residents.

    As has been seen, CBT can’t actually be enforced without the co-operation of the taxee. What America actually operates is a version of RBT which treats USCs not resident in the US as resident in the US. No proposal seems to involve getting rid of that pernicious lying bit of deeming.

  14. The Budget Committee has passed the Senate bill. Today, according to the NYT (https://www.nytimes.com/2017/11/28/us/politics/republican-tax-bill.html),

    1. “the full Senate will vote on whether to proceed with consideration of the bill.”. And if the full Senate votes to consider it, I suppose

    2. the full Senate will consider it, and vote on it. And if passed, then

    3. the two bills have to be reconciled and conglomerated into one.

    At what point will there be no further amendments?

  15. I just posted this request on Republicans Overseas FB site:

    “Can you please provide here the text of Senator Heller’s two amendments — because it is difficult for us to support Senator Heller or his amendments without knowing what is in it. I have asked his legislative assistant for the info but no response yet.

    You say: “Sen Heller’s amendment #9 & #10 could be voted on as early as Wednesday when the Senate tax reform bill reaches the floor 4 debate. Sen Heller is not the only Senator who may offer amendments 4 Republicans Overseas. We push both #TTFI & #FATCA at the same time. Never give up hope.””

  16. Barbara,

    Re your concern that Stross is no longer the LA, I just called Rep Holding’s office which confirmed that Matt Stross is in fact one of the legislative assistants presently working for Rep Holding.

    Andrew, Tricia, et al.,

    I think that it is reasonable for a reader to suggest that my request in this post might be a complete waste of time.

    Tricia raises the separate point of the cost charged to Andrew by presumably someone in the tax compliance industry for the citizenship renunciation process. Since, if Andrew is right and “everything we do” turns out to be a waste of time, citizenship renunciation will be a lot more important for the minority of “overseas people deemed U.S. persons” who are IRS tax compliant. Andrew, it might be helpful then for you to post on the Brock “Relinquishment…” site what you would be actually charged for this citizenship renunciation service which (from my own experience) you can easily do on your own.

  17. @Plaxy, “What America actually operates is a version of RBT which treats USCs not resident in the US as resident in the US. No proposal seems to involve getting rid of that pernicious lying bit of deeming.”

    You hit an important point something I have been chewing on for awhile. The problem rests with this poor expression; “You are either pregnant or you are not pregnant.”

    The United States treats USC abroad as RESIDENT solely for tax purposes but then also treats them as NON-RESIDENT for all other purposes! That is a significant problem and it may be the final path to get this all resolved.

    Logically….it is possible to defend CBT but only IF the Nation is providing benefits to the taxation. IF my European earnings are being taxed by the United States then it is logical that some effort should be expended to provide benefits to me in a non-discriminatory manner.

    My attitude on CBT could change if for example I could enroll in Obamacare in the 51st State the Non-Resident State.

    Medicare benefits up to what would be paid in the USA should be available to all who have earned the benefit.

    VA loans should be available worldwide to those that earned them.

    Let me go another step based on the EU and a lesson learned from Brexit. The UK is discussing that the NHS by way of example will provide benefits to the health care system in Spain.

    Based on that logic…..under Obamacare and/orMedicaid/care the United States should be billed by the UK NHS for the cost of providing health care to Americans hiding in England.

    Where am I going with this?

    An American resident must be either Rersident for everything or they must be non-resident for everything. The Congress decided to make USC Abroad resident for the bad things and non-resident for the good things.

    The same thing applies for the Selective Service obligation. Why should a young man abroad register with selective service? What benefit flows from that if you live abroad? IF you are going to ask a young man to register with selective service even though they live abroad and remember asking to register is asking a young man to sign up for the draft and die for his country, should that young man be entitled to get Obamacare?

    So, either repeal CBT or open up the benefit floodgates.

  20. Interesting comment about the value of her engagement ring. I wonder if she’s ever heard of a 3520?

    Yup, UK money already coming under the scrutiny of the IRS simply because he bought her an engagement ring.(Presuming it’s worth $100,000).

    Look out Meghan, you could be on your way to your first $10,000 penalty! Isn’t it great to be American?

  23. Some readers don’t like the fact that Republicans Overseas and ACA won’t join hands.

    — But neither of them will be making any decision on U.S. tax reform. Then why not bypass these organizations and contact directly the Congresspersons who will be making the decisions, and ask those few (one person?) who are advocating on our behalf to do more and quickly.

  24. Republicans Overseas has says this today about the text of Heller’s SFC amendments (my question above):

    “Stephen Kish, Sen. Heller has 2 amendments on TTFI and Sen. Paul has 1 amendment on FATCA. Both men’s strategy is to get TTFI and FATCA into the Senate version of the Tax Cuts and Jobs Act first. That give us a chance to fight for both at the conference.”

  25. “The United States treats USC abroad as RESIDENT solely for tax purposes but then also treats them as NON-RESIDENT for all other purposes!”

    No, the US consistently treats USC abroad as NON-RESIDENT tax evading traitorous drug dealing money launderers. Income tax law starts by treating USC abroad as USC (in which resident or non-resident doesn’t matter) and then piles on a ton of crap for being non-resident.

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