Congressman Holding has introduced the “Fair Taxation for Americans Abroad Act” in the United States House of Representatives.
“In 2019, Republicans Overseas will focus on getting the Tax Fairness for Americans Abroad Act passed….The TFFAAA will amend the Internal Revenue Code by offering overseas Americans a status similar to that enjoyed by corporations where foreign-sourced income is taxed in the country where it is earned. ” says Solomon Yue, of Republicans Overseas, who spearheaded this effort.
The direct link to the video (found in Embee’s comment) is HERE:
Here is John Richardson’s description of the Bill:
“Tax Fairness for Americans Abroad
The proposal outlined below would effectively end the current citizenship-based taxation system and instead transition to a system that provides territoriality for individuals – often referred to as residence-based taxation. By taking this first step toward ending the onerous burdens of citizenship-based taxation, Americans will become more competitive in the international job market and free to pursue opportunities around the world.
Under this new system, qualified nonresident citizens will no longer be taxed on their foreign source income while they are resident abroad; however, they will remain subject to tax on their U.S. source income.
Eligibility
In order to qualify for qualified nonresident citizen status, an individual must be a nonresident citizen and make an election to be taxed as such. Individuals will make an annual election to certify they remain in compliance with the eligibility requirements.
Under this proposal, a nonresident citizen is defined as in individual that:
•Is a citizen of the United States,
•Has a tax home in a foreign country,
•Is in full compliance with U.S. income tax laws for the previous 3 years, and
•Either:
a)establishes that he has been a bona fide resident of a foreign country or countries for an uninterrupted period which includes an entire taxable year, or
b)is present in a foreign country or countries during at least 330 full days during such taxable yearTax Treatment
Once an individual meets the qualifications to become a nonresident citizen, he may elect to be taxed as a qualified nonresident citizen.
Those electing to be taxed as qualified nonresident citizens will be exempt from taxation on, and shall exclude from gross income, their foreign source income. This includes both foreign earned income (as defined in section 911(b)) and foreign unearned income (defined as income other than foreign earned income that is sourced outside the U.S).
Under this proposal a qualified nonresident citizen will remain subject to tax on any U.S. source income.
While individuals will not be taxed on gain from the sale of foreign personal property attributable to their time as a qualified nonresident citizen, they will still be taxed on any gain attributable to their time as a resident of the U.S. In other words, if an individual holds a foreign asset prior to their election of qualified nonresident citizen status and then sells said asset while they are a qualified nonresident citizen, the individual will only owe U.S. tax on the portion of gain attributable to the period prior to their change in status.”
The above description and the Bill itself is at this link
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Here we go again. Same two people, Plaxy and Japan T, turning this thread into a long-long-long pointless dual off-topic rant of little relation to the topic. This isn’t about CLNs or Socialism. It’s about a bill to revise the taxation of expats. Let’s not turn it into another 20-page chat about semantics or anything other than the topic of the post. Sue me for saying it, but: Can you guys just cool it for once??????? Find somewhere else to jabber.
“My parents were once denied a loan from a bank they had been with for many years.”
I’m so sorry. However I’m talking about legally required IGA1 discrimination by non-US banks against US-born individuals with no CLN. The fact that it’s legally required is why the banks can do it without running the risk of being sued.
“don’t fool yourself into thinking that it would be smooth sailing after this law passes.”
If, not after, unfortunately. If it does pass, IMO it will definitely put the cat among the pigeons, in IGA1 countries.
“It’s about a bill to revise the taxation of expats.”
By ceasing to require non-US-resident US citizens to report their non-US income as “foreign.”
Which would create the possibility of challenging the current legal discrimination against all US-born individuals not possessing a CLN or diplomatic parents.
Interesting piece in Taxnotes by Robert Goulder, commenting on RBT in October 2018 – a couple of months before Holden’s bill was revealed. This casts some backward light on some of the most punishing features of CBT, such as the top-up tax that makes tax-favoured retirement savings a sitting duck for US taxation:
Goulder says (of RBT):
Robert Goulder (“Residence-Based Taxation: The Other Territoriality”, https://www.americansabroad.org/media/files/files/952b7ca8/goulder-10-29-2018-.pdf)
Jurisdictional restraint! Exactly!
American Citizens Abroad (ACA) chimes in on 7358:
https://www.americansabroad.org/tax-fairness-act-rbt/?platform=hootsuite
“We believe that hearings on the bill will be held before the House Ways & Means Committee so as to “air” all the issues and give Members the opportunity to ask all the relevant questions and examine all the data – the revenue implications of the bill, the mechanics of the bill, the profile, including demography, of the Americans overseas community.”
Additional details will need to be ironed out as the current bill language only provides an outline and basic understanding of the new regime. It is intended, we understand, to “put down a marker” and establish a basic, but very important, approach. As legislators review the bill, there will be areas and topics, we believe, that will be spelled out in greater detail. Clarifications, for example, with respect to the treatment of certain income will probably be added.
@plaxy a list of such “tax havens” and separate treatment for them could spare the rest of us from treatment of everything “foreign” as a tax haven. And, it could be a useful deflection from Homelander knee-jerk perception that we are living tax free.
@Barbara
“Here we go again. Same two people, Plaxy and Japan T, turning this thread into a long-long-long pointless dual off-topic rant of little relation to the topic. This isn’t about CLNs or Socialism. It’s about a bill to revise the taxation of expats. Let’s not turn it into another 20-page chat about semantics or anything other than the topic of the post. Sue me for saying it, but: Can you guys just cool it for once??????? Find somewhere else to jabber.”
There are, through out Brock threads many pointless, off topic comments that do not raise your nor anyone else’s ire.
Comments against Capitalism, silence. Comments against Socialism are followed by complaints.
Repeated references to the canard of over half the US budget spent on the military collects responses in support of this believe. Detailing how this is factually wrong is criticized.
Comments against the US for not having what everyone wrongly calls “Universal Health Care” brings out the cheer leaders for this scam. Pointing out the obvious failings of it and all hell breaks lose.
Comments about gun crime in the US certainly does not cause any complaints about being off topic but pointing out the nongun related violent crime in other countries is off topic.
On Topic.
Comments on Trump’s hair.
Comments on Trump’s statement about his treatment of certain women.
Criticism of US health insurance.
Criticism of US Gun crime.
Off Topic.
Comments on the size of Obama’s ears.
Comments on Bill Clinton’s physical abuse of women.
Comments of the failings of Obamacare. Comments on the failings of “Universal Healthcare” in other countries.
Comments on gun crime in countries with strict gun control. Comments on non gun related violence in countries with strict gun comtrol.
Shut down ALL off topic comments, which will shut down about 80% of the posters here as so many can not make a comment without stating their political beliefs, just read through it. Otherwise you display your bias.
@JC
“a list of such “tax havens” and separate treatment for them could spare the rest of us from treatment of everything “foreign” as a tax haven. And, it could be a useful deflection from Homelander knee-jerk perception that we are living tax free.”
Agree it would help against these. But we still need something against those who do not care that we pay taxes where we live believing that we are avoiding our responsibility to the US by using these offsets to reduce our US tax burden.
Tax Fairness for Americans Abroad Act implies that there is something unfair about the way non-resident Americans are being taxed.
It’s beautiful in its simplicity. Let’s build on that.
“Tax Fairness for Americans Abroad Act implies that there is something unfair about the way non-resident Americans are being taxed.
It’s beautiful in its simplicity. Let’s build on that.”
Yes, carries the point nicely.
JC:
.
If the US opts to acknowledge reality and stop pretending it has jurisdiction over the whole world, there will not be anything to be spared from.
(And actually, there’s nothing to be spared from even now, given that the US in reality doesn’t have jurisdiction over the whole world and can’t impose US taxation of non-US income on non-US-resident American expats unless said non-US-resident American expats choose to file US tax returns.)
Renounce, ignore, or comply.
Renouncing is the best option if you can pay the fee and don’t want US citizenship.
Ignoring is the cheapest option and works just fine except (for some) bank access problems caused by the IGAs. (Clue: IGAs are a residence-country problem.)
If Holding’s bill gets passed, yet another option may become available, and may help those who want to renounce but can’t afford to.
The fact that a member of the tax policy committee of the House Ways and Means Committee has put forward a bill proposing to “allow” US-born citizens of other countries to file US tax returns exempting non-US income, tells the world as clear as daylight that non-US-resident Americans needn’t bother filing US tax returns if they don’t want to.
The US does not have jurisdiction over the world but, they threaten other countries to allow them to have the jurisdiction. This is a violation of international law and human rights. If I ran a country and the US bullied my country to get us to allow their jurisdiction, I would kick the US embassy out and break off all relations. The world is better off without the US empire.
Where AEOI is concerned, yes, residence countries are breaching their USC residents’ rights by implementing FATCA requirements in local law.
Residence countries don’t help the US tax their USC citizens’ non-US income though.
So our countries of residence only cut off one arm instead of two. Yeah.
@shawn rodgers
Unfortunately until the world frees itself from dependence on the US dollar as the reserve currency and finds another for its international transactions, we will forever be dependent on the whims of the US governments dictates. I think Jefferson once said something like “ you don’t need an army if you control the finances”
@plaxy
” The fact that a member of the tax policy committee of the House Ways and Means Committee has put forward a bill proposing to “allow” US-born citizens of other countries to file US tax returns exempting non-US income, tells the world as clear as daylight that non-US-resident Americans needn’t bother filing US tax returns if they don’t want to.”
It seems to be a leaning towards an implication but far from a given ,and what about those famous FATCA requirements and FBARS etc. The bill is /was from the outset mainly intended to lessen the reporting /filing pains for US homelanders overseas .
There are two lines here . One for the homelander and another for the non homelander. Those who have the resources or pain killers in hand and those waiting so the pain will decrease , being in one line ; or those who have gotten rid of the source of the pain ,being in tbe other line.
What I mean is that proposing a registration scheme which would allow non-US-resident USCs to exclude non-US-source income, is an acknowledgement that non-US-resident USCs are not “hiding” taxable income from the IRS.
Because US tax on US-source income should be withheld by the payer before the expat USC receives the payment.
Therefore – no need to file.
Tend to agree with you . The SS pension is tax based on treaty .Accidently bought bonds linked to a canadian american holding and was US taxed at source. So if you disregard my local income , they already have what they need .
One point that I believe you have nailed down well is that most of this IRS pain/paranoia has been self-inflicted by many with a major assist from IRS registered agents and cross border accountants and lawyers.
Not so much self-inflicted; just sheer confusion, really, springing from a whole bunch of factors. It really is extremely confusing.
I’m thankful I left long ago, in the days when we knew nothing and consequently never thought about it – until FATCA came along.
Congresswoman Ilhan Omar’s ex-husband moved back to England and probably had a permanent resident card; and possibly did not follow U.S. Government procedures for renouncing it. I mentioned this on my website at http://meetilhanomar.com