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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@plaxy
@plaxy
And yet you state, “Renouncing solves the bank access problems.” when you know different. Renouncing MAY solve bank access problems.
Snipets of information from Solomon Yue:
SY vows to lead lawsuit against FATCA/FBAR – the 8 counts.
Yes to 3-yr tax compliance part. Need to see how self certification instruction under #TFFAAA is written regarding how it impacts #FATCA & #FBAR. @ExpatriationLaw & I will be there to review those instructions to the IRS.
https://twitter.com/SolomonYue/status/1076825093483843584
I asked that Karen Alpert is also included in that.
Compliance is a nonstarter for me.
Sorry US, you MUST either provide something of equal value to the huge amount of hours required to comply or stop demanding something for nothing.
Regarding the SY twitter, there must be a Spirit of Christmas.
Merry Christmas to All and to All a good night.
“And yet you state, “Renouncing solves the bank access problems.” when you know different. Renouncing MAY solve bank access problems.”
Here’s what I said;
A registration scheme might help those who would like to renounce but can’t afford to pay the fee.
Those two groups (comprising individuals who don’t want to keep on being US citizens) are the ones who are simply being unfairly discriminated against by the Model 1 IGAs. Renunciation solves their bank access problems, if they can afford the fee. A registration scheme also might conceivably offer a solution; or it might not. Success in (non-US) courts could also result in a solution.
US citizens who do want or need to keep on being US citizens, have additional, citizenship-related problems. And they also have citizenship-related benefits, which they want or need to retain.
Renunciation is clearly not a useful solution for those who want or need to retain the benefits of the citizenship. The proposed registration scheme, or a variation thereof, may solve some bank access problems for some people (if enacted.) Or it may not.
“A registration scheme might help those who would like to renounce but can’t afford to pay the fee.”
Could but most likely won’t. Registering is also a bad idea for anyone who would like to have some privacy. Sounds too much like Jews registering under the Nazis or educated folk fegistering with khmer rouge. Better to keep silent me thinks.
“citizenship-related benefits, which they want or need to retain.” As a resident outside the US,
what, exactly are these? The first to be chosen for execution by hijackers and terrorists?
Oh, and my the quote in my post above is taken from your post, so it is what you said.
In short, those who are not rich enough to comply are SOL, as always. Gotta be rich to get a solution to anything.
“Could but most likely won’t. ”
Time will tell.
““citizenship-related benefits, which they want or need to retain.” As a resident outside the US,
what, exactly are these?”
You’d have to ask each individual why they want or need to retain the citizenship, if that’s what you want to find out. No doubt there would be a range of differing replies.
“Gotta be rich to get a solution to anything.”
You do realise America is about capitalism?
“”Could but most likely won’t. ”
Time will tell.”
Why would FIs change anything based upon this new bill if it becomes law?
““citizenship-related benefits, which they want or need to retain.” As a resident outside the US, what, exactly are these?”
You’d have to ask each individual why they want or need to retain the citizenship, if that’s what you want to find out. No doubt there would be a range of differing replies.”
What are some of the possibilities?
“”Gotta be rich to get a solution to anything.”
You do realise America is about capitalism?”
Prior to capitalism, the way people amassed great wealth was by looting, plundering and enslaving their fellow man. Capitalism made it possible to become wealthy by serving your fellow man. Dr. Walter E. Williams
Yeah, thems socialist keaders are some poor folk. How much is Bernie Sanders worth?
Nicolás Maduro’s worth is estimated to be around 2 million dollars. Yep, socialism is the way to go….if you are the leader of a socialist nation. Perhaps not if you are a subject of such a nation.
“Why would FIs change anything based upon this new bill if it becomes law?”
1. IGA1 due diligence might be modified to allow banks to accept proof of registration as a “cure” for having been born in America.
2. Since establishing a registration scheme would create a new type of person (a person born in the US, not to diplomatic parents, not possessing a CLN, yet not required to report non-US income to the IRS), the claimed justification for reporting the non-US assets of all US-born CLNless residents disappears. IGA1 governments might conceivably be required by courts (following succesful legal action) to draw up narrower, more rational criteria for their John Doe summons.
The fee for a CLN was raised, according to the DoS, to cover processing costs. With no consideration for the resulting injustice.
It’s useless hoping that the injustice will be addressed by the US, because consideration of consequences for the would-be renunciant (CLN-purchaser) is not among the various factors determining the price point.
There is unfortunately a risk that exactly the same factors would determine the price charged for proof of registration, should that become a high-value product by being accepted as a cure for US birth.
“1. IGA1 due diligence might be modified to allow banks to accept proof of registration as a “cure” for having been born in America.”
If not required to do so under pain of penalty, why bother. Just more work and hassle and zero benefit. Some may adopt new policies allowed under new laws, but if it does help the bottom line most are unlikely to change. They’ve been for ed to make a lot of changes lately that have little benefit for them. Doubt they’ll make changes that they do not have to make that do not help them.
“2. Since establishing a registration scheme would create a new type of person…..”
Yep, and just like our SSN, can and mostly will, given human history, be used for less wholesome purposes.
“The fee for a CLN was raised, according to the DoS, to cover processing costs. With no consideration for the resulting injustice.
It’s useless hoping that the injustice will be addressed by the US, because consideration of consequences for the would-be renunciant (CLN-purchaser) is not among the various factors determining the price point.
There is unfortunately a risk that exactly the same factors would determine the price charged for proof of registration, should that become a high-value product by being accepted as a cure for US birth.”
Exactly.
Japan T:
“Exactly.”
Which is why it’s pointless complaining about the fact that:
“those who are not rich enough to comply are SOL, as always. Gotta be rich to get a solution to anything.”
The significance of the creation of this new category of individual would be the destabilisation of the blithe assumption by the IECD and IGA1 governments that US-born individuals with no CLN are taxable by the US on their non-US income and consequently their domestic accounts can be treated by default as if they were cross-border accounts set up for the purpose of tax-cheating.
A major, major gain if it comes to pass.
OECD, not IECD
There would be no benefit for a bank in excluding all US-born applicants with no CLN, if the due diligence requirements were to be changed so as to define only US-born applicants with neither CLN nor proof of registration as risky for banks.
The banks can’t be required to offer a new account to a US-born, but existing accounts don’t get closed
“Japan T:
“Exactly.”
Which is why it’s pointless complaining about the fact that:
“those who are not rich enough to comply are SOL, as always. Gotta be rich to get a solution to anything.””
Wrong. That is precisely why we must complain about it, fight it. Otherwise it will not change.
Good luck to you, if you think you can get the US government to listen to your complaints and respond by lowering the price of a CLN. That would certainly be a welcome development, for those who want to renounce but can’t afford the fee.
“There would be no benefit for a bank in excluding all US-born applicants with no CLN, if the due diligence requirements were to be changed so as to define only US-born applicants with neither CLN nor proof of registration as risky for banks.”
Too late. Banks have already done just that. If they do not have to change their due diligence proceedures again, they won’t. If this could have been the case several years ago, that would have been great. Doubt this law would cause a lessening of any hardships from our FIs. Doubt that there is much that will come from the US that will allow for a return to preFATCA style banking in any form. The genie is out of the bottle.
“Good luck to you, if you think you can get the US government to listen to your complaints and respond by lowering the price of a CLN. That would certainly be a welcome development, for those who want to renounce but can’t afford the fee.”
The one and only thing that can be guaranteed is failure and that is guaranteed by not trying.
“If they do not have to change their due diligence proceedures again, they won’t.”
It’s not “their” due diligence requirements; it’s the IGA1 due diligence requirements.
That’s what the banks have to comply with, to retain FATCA-compliant status.
Of course banks also have criteria of their own to define who can open an account. If they want to keep out all US-born individuals, or all Africa-born individuals, or all Mexico-born individuals, they can. But since their actions would not have the protection of being required by law, that would be a risky row to hoe.
““If they do not have to change their due diligence proceedures again, they won’t.”
It’s not “their” due diligence requirements; it’s the IGA1 due diligence requirements”
Hence the use of “their due diligence PROCEEDURES”.
If the requirements do not force them to change their PROCEEDURES then most won’t.
“If the requirements do not force them to change their PROCEEDURES then most won’t.”
The banks only have cover for discrimination that’s required by law – and that itself is being challenged.
Discrimination that’s not required by law would be illegal, in most IGA1 countries.
And? My parents were once denied a loan from a bank they had been with for many years. The reason, they had recently filed for bankruptcy. Their store failed. It was then against the law to deny loans in that state based upon bankruptcy. When my parents reminded them of that fact, they replied that there are always legitimate reasons to deny a loan.
Yes, a loan and basic bank account are not the same, but, while antidiscrimination laws may prevent complete bank lock out, don’t fool yourself into thinking that it would be smooth sailing after this law passes. Banks will change what they must but are likely to leave alone what they are not forced to change. Changes cost money.