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. If the Secretary of the Treasury is to be prevented from treating non-resident US citizens as resident in the US for tax purposes, how can that be accomplished, if overturning Cook v. Tait is not the way?

   Seriously, after all this time, has no one come up with a suggestion as to how the abolition of CBT might be accomplished?

2. “Do you have a view on what legislation would be necessary in order to abolish CBT? I’d be interested to hear.”

   Our Shadow Raider (Heitor David Pinto) actually did the work for them. He changed some of the wording in the tax code and voila, CBT became RBT. Well it probably wasn’t as easy as I just made it sound but it was a masterful presentation which unfortunately fell on deaf ears when he was doing his Washington visitations, way back when.

   http://isaacbrocksociety.ca/2012/07/23/shadow-raider-is-rewriting-the-united-state-internal-revenue-code/

3. Embee – thanks for that link. Very interesting. Same Heitor David Pintor as this one, yes?

   https://m.facebook.com/groups/334650186701060?view=permalink&id=933715786794494&refid=18&_ft_=qid.6538401464588269319%3Amf_story_key.933715786794494%3Atop_level_post_id.933715786794494%3Atl_objid.933715786794494%3Asrc.22&__tn__=%2As%2As-R

   “To define residence, I am using the current substantial presence test with all of its rules and exceptions. This is the definition that is currently used for foreigners without a green card, so I am just applying it to everyone.”

   As I recall, Holding mentioned something similar after the tax reform débacle. I wonder if he has seen HDP’s paper.

4. I wonder if anyone has taken up the lawsuit opportunity.

5. Interesting to read some of these comments from years ago. (http://isaacbrocksociety.ca/2012/07/23/shadow-raider-is-rewriting-the-united-state-internal-revenue-code/comment-page-2/#comment-64307)

   What I thought. (along with many others I’m sure)

6. @ plaxy
   Yes, LOL! Non other … Heitor David Pinto isn’t exactly a common name. Over at American Expatriates FB he has been trying to interest someone into becoming a plaintiff in that very interesting lawsuit he has in mind. I hope he finds a taker. He’s quite a brilliant man and his willingness to help overseas USCs even though he himself lives in Washington is so much appreciated.

7. “Over at American Expatriates FB he has been trying to interest someone into becoming a plaintiff in that very interesting lawsuit he has in mind. I hope he finds a taker.”

   So do I. Seems odd. You’d think USCs who don’t want to renounce would be lining up for the opportunity.

8. @ plaxy
   It might be the fear of a “fine-toothed comb” tax audit the defendant could envoke that holds people back. Remember how the complexity of US tax code makes it nearly impossible to file with perfect accuracy. I keep thinking about all the ridiculous and highly intrusive demands they placed on our plaintiffs in the ADCS lawsuit. Such, sadly, is the extent of government booga-booga power.

9. Yes I was thinking since I posted that it could be fear of the USG. I expect you have to file US taxes, sign a few dozen PoP jurats, and possibly hand over your worldly possessions, and then it’s winner takes all and the winner is the USG.

10. I’ve posted some thoughts on the principles that should inform any move towards Residence Based Taxation at http://fixthetaxtreaty.org/2018/03/30/residence-based-taxation-proposal/. This is a collaborative effort with Greg Swanson of https://purpleexpat.org/wp/ and John Richardson of http://www.citizenshipsolutions.ca/.

    Comments welcome (here or on the original post).

11. Has anyone heard the results of the decision on “standing” regarding the US court case? It was supposed to have been handed down yesterday. Has anything about this appeared on Facebook or Twitter?

12. Not the decision on standing – only the decision on whether the Court will consider the petition for certiorari.

    Results from the conference will be out Monday at 9:30, says Scotusblog:

    http://www.scotusblog.com/2018/03/petitions-to-watch-conference-of-march-29/

13. Thanks for the info, plaxy. I’ll look again on Monday.

14. Maybe I’m blind or illiterate, but I don’t see the FATCA case petition listed on the SCOTUS blog page. Was it actually considered by the court?

15. USCitizenAbroad says:

    Solutions” like SCE [“same-country exemption”, i.e. accepting that a local account held by a US-born individual is not an offshore account] (which are conditioned on U.S. tax compliance)
    are really examples of “Ugly Americanism” at it’s finest. To support same-country exemption is to support a “carve out” for people who are U.S. tax compliant – leaving the rest of the people to fend for themselves. It’s allowing Americans to move into a country and claim that a requirement should NOT apply to them (because they are U.S. tax compliant) but should somehow apply to (vast majority) others who are residents and are simply being trapped by these unjust laws.

    Same-country exemption is every bit as evil as FATCA and possibly more so. To support same-country exemption is to participate in the implementation of FATCA on innocent people in other countries.

    So let’s unpick this a little. Is treating USC local accounts as if they were local accounts (and therefore should not be reported to America) every bit as evil as FATCA, which treats USC local accounts as if they were off-shore accounts and therefore must be reported to America?

    FATCA hunts down everyone with a US birthplace and forces them to explain why they have a bank account that’s not in America. The only acceptable explanation is proof that they’ve paid America $2350.

    Same-country exemption (or in normal language, reporting only cross-border accounts) would allow those with a US birthplace to go back to being treated by banks as normal human beings once again. No questions about citizenship, no demands from a bank clerk as to when was the last time you paid tax to America. No more FATCA letters. You just prove residence, like everybody else has to do.

    So what’s wrong with that? Nothing that I can see. Why would you want FATCA to keep treating USC local accounts as off-shore accounts? Which is insane?

    To keep up the renunciation rates? Hoping that if enough USCs renounce, the US will see the error of its ways and stop treating its citizens as tax-resident in the US? Nicely, without hurting anybody in the process and respecting all those inalienable rights (like use of a little blue book) that white Americans were allegedly endowed by their alleged creator with?

    Or is “same-country exemption” being used as a dog-whistle word for enforced compliance with US tax laws?

    As I understand it, the Taxpayer Advocate’s recommendation (that the IRS should not treat local accounts as foreign accounts) is a straightforward recommendation that the IRS should treat local accounts as foreign accounts – i.e., only non-resident accounts should be subject to reporting.

    For me, that would be a good solution. Who would it hurt?

    As for the suggestion that same-country exemption might be conditional on compliance with US tax law – that’s possible, though it’s not (as far as I understand it) what the TA recommended.

    It wouldn’t be surprising. As long as a USC is a USC, if they live in another country they’re going to have to decide between losing the citizenship (and the little blue book), ignoring US laws (and keeping the little blue book), or complying with US laws, with all the uncertainty and vulnerability that implies, in order to keep hold of “good standing.”

    Comply, renounce, or ignore. As ever was. Bad-mouthing those who choose a different option is not helpful.

16. Barbara – they’ve had a conference to decide which cases to consider. The results of the conference will be out on Monday. If they’ve decided to consider the FATCA case, presumably it will then be scheduled. If they’ve decided not to consider it, then I think it’s dead but I’m not sure.

17. “that the IRS should treat local accounts as foreign accounts”

    should be

    “that the IRS should not treat local accounts as foreign accounts”

18. Heidi – “I just want US citizens who come to Brock to understand that SCE is not the best thing since sliced bread.
    That before signing petitions and lending their support , they should understand that it has its limitations. That they will still be regarded as Toxic to banks in any country other than their resident country.”

    An account in a country other than one’s country of residence is a cross-border account. Nowadays, cross-border accounts are likely to be flagged as reportable to the country of residence. If a US-born USC lives in one European country and has an account in another European country, the account will probably get reported to his country of residence and to the US. That is clearly an improvement on the present situation, in which even his local accounts get reported to the US.

    One solution is to renounce, and then the account would be reportable only to the country of residence.

    Though even after renouncing, the US birthplace will mean that he will need to prove he is no longer a US citizen in order to open a new account, regardless of whether the new account is a resident account or a cross-border account. The birthplace discrimination will never go away completely, as long as the US continues to demand it.

19. @Plaxy
    “If a US-born USC lives in one European country and has an account in another European country, the account will probably get reported to his country of residence and to the US. That is clearly an improvement on the present situation, in which even his local accounts get reported to the US.”
    I don’t want to labour this point anymore but…
    It is almost impossible for a US citizen to open an account in a country where he is not resident.
    The banks do not want his custom because of the threat of a 30% withhold. Under EU law his resident country must offer a basic bank account, but non resident country banks have no obligation.
    SCE carve out is OK for US citizens temporarily living abroad who are intending to return to the US but for accidentals and those with no intention of living in the US, it is no answer, they are limited to a financial life totally in their resident country.

20. “It is almost impossible for a US citizen to open an account in a country where he is not resident.”

    Very likely. That’s the idea, if I’m not mistaken. As things stand, FATCA also causes bank access problems for a USC wanting to open an account in the country where he is resident.

    “SCE carve out is OK for US citizens temporarily living abroad who are intending to return to the US but for accidentals and those with no intention of living in the US, it is no answer, they are limited to a financial life totally in their resident country.”

    If the IRS hadn’t decided to treat USC local accounts as foreign accounts, FATCA never would have caused a problems for USCs with no cross-border accounts and no intention of living in the US.

    Since the IRS did choose to treat USC local accounts as foreign accounts, those of us with a US birthplace are discriminated against, regardless of whether we want to open a local account or a cross-border account.

    If the US stopped treating USC local accounts as foreign accounts, those of us with a US birthplace would still face birthplace discrimination when seeking to open a cross-border account, but would no longer face birthplace discrimination when seeking to open a local account. And for most – even those who also want a cross-border account – the ability to open a local account is essential.

    “Under EU law his resident country must offer a basic bank account, but non resident country banks have no obligation.”

    PAD applies for EU residents in all Member States. But not Switzerland – is that the problem?

    Personally I don’t think a right to a basic bank account is a sufficient solution to FATCA, even within the same Member State.

21. @Plaxy
    PAD applies for EU residents in all Member States. But not Switzerland – is that the problem?
    No, I don’t think so, Switzerland is a member of the EEA and has to abide by EU laws of banking and free movement of people.
    A US friend of mine resident in Germany tried to buy a ski apartment in France , it was a cash sale, no mortgage involved but couldn’t find a French bank to take his money.

22. The PAD provision is indeed very limited. It doesn’t say that Member States have to require every to offer a bank account – only that the Member State has to make sure basic bank accounts are available. It may be that that lets individual banks off the hook. Or it may be that France is one if the countries that the EC is complaining about not transposing PAD or not enforcing it.

23. @plaxy
    I don’t think it can be interpreted to offer cross border accounts, just resident accounts.
    Whatever is on offer, from all reports that I hear, it’s bloody difficult to get any new cross border account for US tainted people. Existing accounts seem to be not so much of a problem.

24. Heidi – you may be right about PAD.

    It’s not much use anyway.

25. @Plaxy

    I am going to try again. You have quoted the following excerpt from my previous comment.

    Solutions” like SCE [“same-country exemption”, i.e. accepting that a local account held by a US-born individual is not an offshore account] (which are conditioned on U.S. tax compliance) are really examples of “Ugly Americanism” at it’s finest. To support same-country exemption is to support a “carve out” for people who are U.S. tax compliant – leaving the rest of the people to fend for themselves. It’s allowing Americans to move into a country and claim that a requirement should NOT apply to them (because they are U.S. tax compliant) but should somehow apply to (vast majority) others who are residents and are simply being trapped by these unjust laws.

    Same-country exemption is every bit as evil as FATCA and possibly more so. To support same-country exemption is to participate in the implementation of FATCA on innocent people in other countries.

    Note the words that have been bolded.

    FATCA SCE as developed by various groups including Democrats Abroad and ACA included a requirement that it was available ONLY to people who were able to demonstrate that they had been filing U.S. tax returns. I repeat: “available ONLY to people who were able to demonstrate that …”

    For your reference, read ACA’s description of SCE which is here:

    https://www.americansabroad.org/media/files/files/feffd7bf/same-country-exemption-2015-04-06.pdf

    I am now going to reexplain why SCE, (as it was commonly understood), developed by Democrats Abroad and ACA, specifically proposed to U.S. Treasury and specifically rejected by U.S. Treasury, is a “carve out” for certain Homelanders Abroad and is every bit as evil as FATCA (and likely more evil).

    I am going to go through this point by point.

    1. FATCA is a tool to identify “U.S. persons” as defined (and subject to redefinition by the USA) which is primarily people who are U.S. citizens because (this is the focus of the IGAs) of a U.S. birthplace. Therefore, FATCA is aimed primarily at people living outside the USA who were born in the USA.

    2. Although I don’t have the exact numbers (and neither do you or anybody else), it is clear that many countries have citizen/residents who because they were born in the USA are subject to being harassed by FATCA.

    3. Many countries including the U.K. (where you appear to live) also have residents who are either U.S. citizens ONLY or dual citizens who identify primarily as U.S. citizens.

    4. You can be sure that of the individuals identified in points 2 and 3 that the only ones who could be filing U.S. tax returns are the ones in category 3 – U.S. citizens only or those who identify as primarily U.S. citizens. (And as we all know a large number of them are NOT filing U.S. tax returns.)

    5. What SCE proposes is to allow those “tax compliant” U.S. persons (a subgroup of category 3) to escape FATCA problems by and only by filing U.S. tax returns. Therefore, SCE is a “carve out” for a very narrow subsection of the group of people impacted by FATCA.

    6. To advocate for SCE (which is commonly understood to include U.S. tax compliance) is to advocate for an “escape hatch” for a narrow group of people – specifically those and only those who are U.S. tax compliant. Because they are U.S. tax compliant, they will not face the horrendous and life altering consequences (not to mention the professional fees) of coming into U.S. tax compliance.

    7. By suggesting that SCE is a solution is to say: “Well, because I am U.S. tax complaint”, this SCE stuff works for ME” and therefore the problem is solved. It is advocating for an “escape hatch” for only a small group of people and ignoring the vast majority where the FATCA damage is really being done. Furthermore, all it means for those who are tax compliant is that their banking problems are solved and maybe they don’t have to file form 8938).

    8. By attempting to pass SCE off as a solution, and “walking away from the problem”, SCE proponents are accepting and therefore reinforcing the imposition of FATCA on the most innocent of the innocent – specifically those who are the “accidentals” and are being harrassed by virtue ONLY of their place of birth.

    9. Yes, for these reasons, I repeat, with NO APOLOGY, that to advocate for SCE is just as evil as to advocate for FATCA.

    Who are the advocates of SCE? Well, obviously that narrow group of Americans abroad who happen to be filing U.S. tax returns.

    So, why is SCE “Ugly Americanism” at its finest? It’s because to adopt SCE is to adopt a “solution” that would:

    – allow Homelanders abroad to move to a country

    – file U.S. tax returns

    – and allow them to escape the carnage that the most innocent people must deal with on a daily basis!

    After rereading your comments, I believe that you don’t have an understanding of what SCE (as proposed) actually is.

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