Liberty and justice for all United States persons abroad

The Isaac Brock Society

Author Archives: Patricia Moon

Moderation at Brock

Posted on by Posted in Issues regarding US persons abroad 49 Comments

In order to keep the comments on Stephen’s post on topic, please direct your comments regarding Barbara’s comment, to this post.

Barbara says
December 18, 2018 at 12:18 am (Edit)
@BB: “We need to get people coming back to Brock.”

First step: how lovely it would be if someone actually moderated the forums and simply culled the repetitive and incessant chatter on some of the (formerly) useful threads. Many of the most essential threads have turned into a free-for-all which veer way off topic, raking over the same-old-same-old coals that have been raked over in every one of the other popular threads. It’s become so that I don’t even come to IBS much anymore. I check for new top-level posts and anything new on the “Current Media and Articles” thread and skip the rest of the bla-bla-bla because I’ve read it all so many times before.

Sorry to be so negative. When I first joined IBS a couple years ago, it was a clean, mean source of wisdom. I wonder how I’d feel if I joined now, with so much of the useful discussion buried under so much steamy hot air. I wish there were a separate thread called “The IBS Pub” where all the windy conversations can cheerfully continue, while those who simply need clarity about renunciation, etc., don’t have to comb through page after page of blather to find the few nuggets.

I still very strongly support the principles here, and the actions of the brave souls who put their time, money and lives on the line for the rest of us, and therefore I am happy to offer financial support.

**************

Thanks.

Part 27 – While addressing some Sec. 965 @USTransitionTax concerns, there is NO EVIDENT CONCERN from @WaysandMeansGOP ‏for the injustice inflicted on Americans abroad

Posted on by Posted in G.I.L.T.I., House Ways & Means Committee, Transition Tax 70 Comments

cross-posted from citizenshipsolutions

Introduction – “Indifference being the worst form of abuse”

A quick summary of this post:

On November 26, 2018 the House Ways and Means Committee under the leadership of Chairman Brady announced a bi-partisan bill which contains a number of “Technical Fixes” to the December 22, 2017 Tax Cuts and Jobs Act. While specifically addressing the Sec. 965 transition tax, the bill contains neither mention nor relief for Americans Abroad who are at risk of having their retirement pensions confiscated by the U.S. Government. (While the transition tax may actually be beneficial for Homeland Americans, it is simply devastating for Americans abroad.)

In other words: The proposed legislation is NOT neutral. By specifically addressing the Sec. 965 transition tax and NOT providing relief for Americans abroad, it has exacerbated a difficult situation. My understanding is that many Americans abroad have requested filing extensions to December 15, 2018. The failure of this proposed bill to provide relief means that many Americans abroad with small businesses are in an impossible situation where compliance may well be impossible.

My analysis and discussion follows …
Continue reading →

Part 25 – Reflections on the “S Corporation” exemption to the Sec. 965 @USTransitionTax – Hat Tip to @SCorpAssn (Part C)

Posted on by Posted in Transition Tax 4 Comments

1120S
 
 
 
 
 
 
 
 
 
 
 
 

cross-posted from citizenshipsolutions

Part A is here

Part B is here

continued from Part B:

5. Why most Americans abroad are like most small business owners in America (and presumably should have similar tax treatment from a U.S. perspective)

It’s simple. The vast majority of Americans abroad who carry on business through Canadian Controlled Private Corporations (and similarly situated Americans living in other countries) are small business people. They are people who are simply trying to make a living. As described in a recent article from American Citizens Abroad:

“Treasury is not truly in touch with the reality of Americans abroad. Foreign corporations owned by Americans abroad exist in abundance. They are an everyday fact of life,” added Serrato.

ACA believes that it is fundamentally wrong for the Treasury Department to write regulations without knowing who is affected, and to what extent, as this goes against the fundamental requirements of the RFA.

The point is that small business people are the same inside the United States and outside the United States. The single most important characteristic is that from an economic perspective the corporation is a structure that is generally created to achieve limited liability or some other local benefit.
Continue reading →

Part 25 – Reflections on the “S Corporation” exemption to the Sec. 965 @USTransitionTax – Hat Tip to @SCorpAssn (Part B)

Posted on by Posted in Non Resident Taxation, Transition Tax Leave a comment

 

cross-posted from citizenshipsolutions

Part A is here .

1. What exactly is an S Corporation?

An “S corporation” is a corporation which elects a specific kind of tax treatment under the Internal Revenue Code. It is NOT a type of corporation. Rather it is the “tax treatment” used by a corporation. (A corporation can be incorporated in any state.)

The following tweet referencing an excellent article from Wolters Kluwer explain this point.

The first thing to remember is that an S corporation is simply a for-profit corporation that elected to be taxed under Subchapter S of the Internal Revenue Code, making it a “pass-through” entity for tax purposes. It is incorporated under and governed by the same state corporation laws as a corporation that was not eligible for S corporation tax status or whose shareholders chose not to elect that status. Therefore, an S corporation has the same non-tax advantages as a regular corporation. (A regular corporation is also referred to as a C corporation when discussing its tax status because it is taxed under Subchapter C of the Internal Revenue Code).

Because an S Corporation is a corporation with a specific kind of tax treatment (the profits are passed through to the shareholders), one can say that an S Corporation is really a creation of the Internal Revenue Code (On The Third Day Congress Created The S Corporation).

2. How the requirements of an S Corporation reflect that that S Corps are the “small business corps” of America
Continue reading →

What if Meghan Markle’s child is born a U.S. citizen? Would the child have any immediate tax and information reporting requirements to the IRS?

Posted on by Posted in Citizenship Issues, Non Resident Taxation, reductio ad absurdum 147 Comments

interesting court comment

cross-posted from Quora

J-bnnJohn Richardson
Toronto lawyer: FATCA U.S. tax + renunciation of citizenship
CitizenshipSolutions

John Richardson, Lawyer (1982-present)
Answered Mon
 

 
What if Meghan Markle’s child is born a U.S. citizen? Would the child have any immediate tax and information reporting requirements to the IRS?

I note that the question (1) assumes that Ms. Markle’s child is a U.S. citizen and (2) the question focuses on BOTH tax and reporting requirements.

Would Meghan Markle’s children be U.S. citizens?

The majority view is “YES” her children would automatically be U.S. citizens. My minority view is “NO” – they would have the right to be U.S. citizens but not the obligation to be U.S. citizens. I have previously explained my reasoning on Quora here:

John Richardson’s answer to Could Meghan Markle’s children apply for US citizenship?

But, assuming that her child will be born a U.S. citizen, then

To be perfectly clear:

With the exception of gifts/bequests received from a “covered expatriate” the recipient of a gift is NOT required to pay tax on the value of the gift.

The recipient of a gift or bequest may be subject to penalty laden reporting requirements. These reporting requirements apply even though the value of the gift is NOT subject to tax.

Furthermore, this answer is really a “thought experiment” which explores the absurdity of certain aspects of the Internal Revenue Code apply to the lives of Americans abroad.

Here we go …
Continue reading →

Part 25 – Reflections on the “S Corporation” exemption to the Sec. 965 @USTransitionTax – Hat Tip to @SCorpAssn (Part A)

Posted on by Posted in Transition Tax 1 Comment

cross-posted from citizenshipsolutions

This post is in 3 parts, published over 3 days.

Beginnings …

A recent comment at the Isaac Brock Society includes:

It’s too bad I didn’t put my Canadian corporation in an S Corp before I knew I was a US taxpayer. I must have misplaced my crystal ball at the time. As I had when I sold my house in Canada.

What a clusterfu@k!

On November 15, 2018 I did a second interview (first interview October 16, 2018 here) with Monte Silver and his Sec. 965 advocacy. The video was featured on a post at CitizenshipTaxation.ca.

If you have not watched the November 15 interview, I suggest that you begin by watching the video (click on the above tweet). The most significant part of the interview is where Sec. 965(I) is discussed. Interestingly Sec. 965(I) provides a transition tax exemption to individuals who are the shareholders of an “S Corp”. To understand the mechanism for the exemption, click on the link in the following tweet:

This interesting exemption is available only to individuals who are shareholders of S corporations and not to other individuals. The interview also included some discussion of the fact that “S Corp” shareholders have the benefit of lobbying from a powerful lobbying association – S-Corp. The interview ended with Monte Silver describing the probability that the Sec. 965 transition tax issue is headed to the courts.

But, in the “Pay To Play Casino” that America has become:

Why are individuals who are the shareholders of an S corporation, which owns the shares of a CFC, more equal than those individual shareholders who own the shares of a CFC directly?

Let’s see …
Continue reading →

Passport Revocation: The new weapon in the US war on Americans abroad

Posted on by Posted in Issues regarding US persons abroad 270 Comments

passport revoke
 
 
 
 
 
 
 

cross posted from Citizenship Solutions

by John Richardson

Circa 2015:

The logical progression continues …

I just got off the phone with someone who has just received a letter from the IRS stating that:

1. He had a “seriously delinquent” tax debt; and

2. That notice of the “seriously delinquent” tax debt was being forwarded to the State Department.

(In 2016 I did a presentation on this topic just a few months after the law came into force. You may view the presentation here.)

It is clear that the letters from the IRS have started to go out. The purpose of this post is to explain in simple terms what this means for Americans abroad.

To put it simply:

1. If you have received the notice and you do NOT have a current U.S. passport then:

The State Department cannot issue you a passport.

2. If you have received the notice and you DO have a current U.S. passport then:

The State Department may revoke your passport but is not required to revoke your passport. Continue reading →