Media and Blog Articles Open for Comments – Part 5 of 11 (Year 2018)

1,714 thoughts on “Media and Blog Articles Open for Comments – Part 5 of 11 (Year 2018)”

1. JC – ACA seems to imply that there could be special “streamlined” arrangements for “accidental Americans” wishing to “transition” to “RBT/TTFI”:

   Details on taxation of US-source capital gains, estate and gift taxation, an aging rule – that is, how long does an individual need to “age in status” as a foreign resident, a streamlined approach to accidental Americans wishing to transition into the new system and other points will be determined once boilerplate legislation is drafted.

   Whether that transpires, or indeed what it means – who knows. (The use of the word “streamlined” may imply that those who qualify will be allowed to enter the existing streamlined compliance programme? Or something along those lines.)

2. @plaxy ACA has for some time appeared to be aligned with the compliance industry.

   “a streamlined approach to accidental Americans wishing to transition into the new system.”

   Perhaps that is an improvement for ACA which has not previously acknowledged accidentals. They are also backing territorial taxation and that is a first.

   They also want a solution to be the combination of what different groups bring to the table. That means they want some of their previous RBT.

   In regards to accidentals. I am hoping that will include an opt in solution – meaning if they want to get back into compliance under TTFI that they could opt in, otherwise they would not be considered.

   IMO, any type of certification that one has opted out is not friendly to accidentals. They have to file and come forward and give details to the USG. No doubt many many will not hear of such offer, and many will be too afraid to self identify themselves.

3. “They are also backing territorial taxation and that is a first.”

   It’s just a name. ACA are backing the same plan they’ve been backing for years. All lobby groups have got an axe to grind, be it political or financial or both. All are hoping to claim credit if anything actually gets changed to the benefit of USCs outside the US.

   What actually gets introduced in the House, if anything, will depend on Brady and Holding. Chances are it will reflect what suits the US administration’s intentions, which are fat from clear. Or it will all disappear in a puff of smoke in November, and get resurrected when the campaigning for the next general election gets going.

   “In regards to accidentals. I am hoping that will include an opt in solution – meaning if they want to get back into compliance under TTFI that they could opt in, otherwise they would not be considered.”

   That’s the status quo. Fine if you’ve no problem with bank access. If you’re having bank troubles, you need some kind of proof to show the banks. And if you’re hoping for special dispensation for those with a US birthplace who left the US as children, you’ll need some kind of certification to prove eligibility. It would be nice to think they’ll hand out the certificate free of charge and with no compliance requirement. Not the US government I know. Which does not have a track record of benevolence towards its citizens, be they captive or beyond the borders.

4. It puzzles me why a person who was born in the US but left as a child, would want to identify as an “accidental” American, or indeed any kind of American.

   I’m not in that category, but if I were, I’d rather have the label used by the EC Vice-President in response to Sophie in’t Veld’s most recent question: “EU [or Australian, or Canadian, etc] residents who are considered “US Persons by the US authorities.”

5. The EC answer is here: http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=E-2018-000298&language=EN

   and the question is here: http://www.europarl.europa.eu/sides/getDoc.do?type=WQ&reference=E-2018-000298&language=EN

6. http://www.internationalinvestment.net/products/french-lawmakers-looking-meet-irs-accidentals-april-report/

7. Neill – thanks for that link. Good to see.

8. How acceptable is this to Accidentals?

   Solomon Yue:

   I proposed 2 allow Accidental Americans 2 use 3-yr tax returns of their respective countries instead of US tax returns in order 2 make 3-yr tax compliance requirement more friendly 2 them under #TTFI & get around US tax returns, not a full amnesty, Hope this idea will be accepted.

   https://twitter.com/SolomonYue/status/978423504709197825

9. The important thing is that it provides accidentals with a way to mitigate banking problems caused by FATCA plus US birthplace, in countries where that’s a concern. The tax amnesty part of it is meaningless, in my view, because those accidentals shouldn’t be filing and can’t be collected from. Bank access is the problem, not US tax compliance.

   For a Canadian accidental I don’t see much practical advantage to this, honestly. I guess it would be nice to have a letter from the IRS saying I never have to file, but it’s not like I would have anyway, so no big change in my life.

10. JC: My answer to Solomon would be this: why should these people have to submit ANYTHING to the US? Can the US not just adopt a non-CBT tax system “from this day forward” and let everybody get back to their lives? No US address, no tax. Simple as that.

11. Also if the IRS doesn’t have the ability to read 100 different languages, you’re mostly just waving some random piece of paper at them that says “see, I pay taxes” even if it’s made-up nonsense. And what about those who earn so little that they are not required to file?

12. @MuzzledNoMore – the commentary on twitter is going that way.

    @Gary Clueit says:
    Actually, using DHS/CBP entry/departure information is far more reliable than self-declaration because they have irrefutable evidence of whether you are resident or not.

    @FTTT says on the entry form may indicate if plan to live in U.S. the next 12 months.

    If we can get rid of annual certification – so that once you’re non-resident you file nothing with the US until you move back – then we’re much closer to RBT and it becomes much harder for Congress to reverse course.

    That just the choir, that is not from Solomon Yue.

13. @FTTT says

    Agree that end of double taxation is essential. But what is the purpose of annual certification of nonresidence? What problem do they think it solves?

14. The obstacle is Cook v. Tait, isn’t it? Overthrowing it would require a constitutional amendment, it seems.

15. Nononymous: “The important thing is that it provides accidentals with a way to mitigate banking problems caused by FATCA plus US birthplace, in countries where that’s a concern. The tax amnesty part of it is meaningless ”

    I agree the tax amnesty is meaningless but the banking problems caused by FATCA + US birthplace don’t just affect those whose parents removed them while they were children. (Or, in the American terminology, dual citizens from birth)

16. A free CLN for those who were removed as children would be more logical. IMO

17. Nono: “Bank access is the problem, not US tax compliance”
    Exactly.

18. Their justification for charging $2350 for signing off on a US-born person’s renunciation of US citizenship is that under their law they have to carry out extensive research, though it’s not clear what they’re researching.

    There can’t be a need to carry out extensive research on a US-born person who was removed from the US while still a child. A CLN – free or for a reasonable admin charge in line with practice elsewhere – would solve the problem neatly.

19. But the most rational solution would be for residence countries to simply refuse to allow their resident citizens to be deemed by the US as resident in the US for tax purposes.

20. @ plaxy
    I agree. Our true countries of residence should have done that from the beginning or actually long before FATCA could be conceived. They should have said, “Whoa, you can’t deem our citizen/residents who we keep for our own tax purposes to be your “residents” for your tax purposes … it’s not logical.” But they didn’t and now we have to hope Canada’s lawsuit and other efforts will nudge the USA into a more realistic position … into the realm of the international norm of RBT.

21. Embee – I guess I should’ve said, for me that would be the logical solution, as I’ve renounced and now am just hoping to see the birthplace discrimination issue resolved – which only my residence country can do for me.

    And I’m optimistic, now that the EC has expressed concern about bank access problems of “EU citizens and residents who are considered by the US to be ‘US Persons’. ” 🙂

22. “The United States is seen as a tax haven for high net worth foreign individuals, even as U.S. corporations invert to lower-tax destinations. The U.S. resistance to additional banking disclosure rules is reinforcing America’s image as the ultimate destination for many wealthy immigrants. This creates an opportunity for tax counsel and advisers to provide critical income and transfer tax planning to minimize the U.S. tax impact of preexisting foreign assets and to help design an immigration strategy through investment in the U.S.”

    https://www.taxconnections.com/taxblog/pre-immigration-tax-and-u-s-investment-planning-for-high-net-worth-individuals/

23. A petition to end birth tourism in Canada:

    https://petitions.ourcommons.ca/en/Petition/Details?Petition=e-1527

24. https://www.forbes.com/sites/robertwood/2018/03/27/skipped-fatca-disclosures-can-be-criminal/#4231b996e5b4

25. Nowhere in the Forbes article does it state that the defendants are based in London. I had to read the legal document to discover that.

    But anyway, yeah, if you’re setting up accounts to basically run some sort of stock scam and help US citizens hide money offshore, you might find yourself in trouble with the IRS, or worse.

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