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. Last from Solomon Yue:

   Making #TTFI progress big time by resolving some of outstanding issues: accidental Americans, foreign retirement funds & investments, ending #CBT/#FATCA. No final bill, but final draft outline was well received. Due to travel can’t discuss all this in details.

   https://twitter.com/SolomonYue/status/988824827929812997

2. JC: That’s fantastic news! Can’t wait to see the final result!

3. Has this been posted yet?

   FATCA: Citizenship-Based Taxation, Foreign Asset Reporting Requirements and American Citizens Abroad

4. @Barbara

   Looking to get it posted here permanently; outstanding resource by a brilliant person.

5. Interesting observation in that report:

   U.S. citizens abroad: without any conviction or particular evidence, the U.S. Department of State now estimates the number of its citizens abroad as 9 million. In 2004 its estimate was 3.2 million, in 2008 4 million , in 2012 6.3 million and in 2013 6.8 million. As these numbers are generated to justify consular assets and budget they may be self-serving; no basis for their calculation is offered.

   That does seem a very likely explanation for the escalating estimate. And perhaps a factor in the sudden extortionate price rise as renunciations began to rise. I guess we’ve been paying for the hole in the budget.

   The IRS year-by-year statistics on numbers of returns filed from outside the US are very poor, but there seems to be no obvious spike following the advent of FATCA; which seems consistent with the supposition that FATCA drove some to renounce and some to comply, but most USCs (whatever number “most” represents) weren’t filing before FATCA and still aren’t filing now.

   FATCA may be “working”, in the sense of providing the IRS with data with which to penalize filers and/or track their retirement savings with a view to future confiscation (as described in the recent GAO report); but it doesn’t seem to be very effective at turning non-filers into filers. Much more effective at turning USCs into NRAs.

6. “Unequal Exchange: How poor countries are blindfolded in the
   global fight against banking secrecy”
   https://financialtransparency.org/unequal-exchange/

   Interactive maps – very informative. Before FATCA/CRS: lots of automatic information exchange between EU Member States, but not much elsewhere. Nowadays, in the wake of FATCA/CRS: poor countries are sending everywhere but not getting much back.

7. “As US expat groups lobby, Washington lawmakers debate Trump tax bill”

   http://www.internationalinvestment.net/products/as-us-expat-groups-lobby-washington-lawmakers-debate-trump-tax-bill/

8. Speaking of renunciations, Q1 2018’s numbers are due in a couple of days. This is the first quarter to report since the failed attempt to include TTFI or RBT in tax reform.

   Those compliance rates are not expected to increase with the knowledge that currently compliant citizens are getting slammed with the Repatriation Tax.

9. @Barbara

   Have just made a post for it to point out it is on the sidebar permanently. Having trouble with that link.

   I should know better than to try these things from my phone. Will come back later and put both links here.

10. “Congressional staff aims to finish technical corrections to tax reform bill”

    https://www.accountingtoday.com/news/congressional-staff-aims-to-finish-technical-corrections-to-tax-reform-bill

    Confusing. Is this a different set of “corrections” from whatever it is the Senate is considering today?

11. Plaxy: I sure hope it’s something different. According to the article whatever *this* is could take “years”. I don’t have “years”. I was 56 when all this hit the fan and I’m 63 now. I still have my parents’ ashes languishing in my linen closet awaiting the day when it’s safe for me to take them to the location (unfortunately in the United States) where they wished to spend eternity. That’s a sacred trust I cannot perform until this nonsense is over. So far I’m healthy but I don’t know what lies ahead. Like the rest of us, I need relief “yesterday”.

12. MuzzledNoMore –

    It seems to be a real mess. No one seems to know what’s going on.

    It’s got to be the world’s strangest tax system. Not only do they not have to explain what the law requires of taxpayers, before requiring them to comply; they apparently don’t even have to have decided what the law requires of taxpayers, before requiring them to comply.

    Sorry to hear about your parents’ ashes.

13. MNM. I can’t for the life of me figure why you are afraid to travel to the USA. We travelled there several times a year for the past 30 years on a Canadian passport with no problems. Unless you need a visa.

14. Hear, here, MNM!

15. How long will Solomon still be traveling?
    I am dying to read more details.

16. If I understand correctly, the TTFI draft is being slowly turned into a proposal which will then be written up as a bill. Representatives will then be sought to sponsor the bill, which may or may not ever get sent to Committee. If I’ve got that wrong could someone please correct me?

    Meanwhile Kevin Brady’s office is working on a draft residence/territorial proposal which may include elements of the ACA proposal; if this gets as far as being turned into a bill, it probably will get introduced and sent to Committee, as it would be coming from Brady’s office; but no one seems to know what it will look like or whether it will get to the floor of the House before November, after November, or never.

    If that’s wrong, could someone please correct me? I’ll be very pleased if I’ve misunderstood and the situation is actually much more promising.

17. With regard to relief from the transition tax: the International Investment article I linked to above says:

    As reported earlier this month, the US Treasury Department granted those with overseas assets affected by the new so-called Transition Tax contained in the TCJA a two-month extension for the payment of their first instalment of the one-off levy – in an apparent acknowledgement of the difficulties it is presenting those affected by it.

    Question: if the difficulties are indeed acknowledged, is it an acknowledgement of the unfairness of imposing a “transition” tax on those who cannot transition? Or are they just allowing more time to make the calculations of tax “due”?

18. This Bloomberg journalist acknowledges the transition tax injustice:

    “Making Sense of the New, Modernized International Tax Regime”
    http://www.cpapracticeadvisor.com/news/12407291/making-sense-of-the-new-modernized-international-tax-regime

    … While the combined total of the individual and business tax changes are expected to add almost $1.8 trillion to the deficit over a decade, according to a Dec. 18 estimate by the Joint Committee on Taxation, the international reforms are projected to raise about $324.4 billion over that span (although most of that revenue is due to the one-time repatriation tax, as discussed below).
    …
    What about the locked-out profits? Can corporations bring back their $2 trillion of offshore funds tax free under the participation exemption? No. Those funds that were in limbo under the previous system are all now subject to tax, but not at a top rate of 35%, as under prior law, or even 21%, the new corporate rate. This new tax is informally referred to as a “repatriation” or “transition” tax and is set at rates of 15.5% for cash and cash equivalents and 8% for other investments. It can be offset by any applicable foreign tax credits (which are scaled down to reflect the lower tax rates).

    Taxpayers hit by the repatriation tax do not have to pay it all at once but can elect to pay it over eight years. According to the Joint Committee on Taxation, this tax alone is expected to bring in about $338.8 billion of revenue.

    Burdens without benefits. The transition tax is imposed on “United States shareholders” of “specified foreign corporations,” both of which are defined terms, but “United States shareholders” is not limited to corporations. It also includes pass-through entities and even individuals. This is broader in scope than the participation exemption, which is available only to U.S. C corporations. In other words, many taxpayers that are subject to the transition tax will not receive the corresponding benefit of the participation exemption.

    This illustrates two themes of the 2017 reforms: Many of the new rules apply only to certain types of business entities, not to others, and many of the new rules overlay old rules, rather than replacing them, resulting in a very complicated hodgepodge …

19. Hatch okays Rettig.

    http://thehill.com/policy/finance/385083-key-gop-chairman-praises-trumps-irs-nominee-following-meeting

20. Plaxy and BB: Thanks for your concern. Means a lot!

    Portland: Unfortunately, over 20 years ago, when I had no clue that the US deemed me to be a US taxpayer, I made the mistake of “officially admitting” my US citizenship.The US expects me to cross the border with a US passport, now expired and which I refuse to renew under the present circumstances. Likewise, I also refuse to pay the $2,350 ransom to negate my prior stupidity. At the moment, I console myself in the knowledge that my late parents would be enormously proud of the political stand I’ve taken, albeit in the shadows. My heart still aches though.

21. MuzzledNoMore – can I ask, what could change that would solve your problem?
    Do you have a specific solution in mind?

22. @MnM

    Not sure what country you’re in but if it’s Canada, crossing with a Canadian passport showing US birthplace works just fine 99 percent of the time. And the 1 percent it doesn’t they just give you a (sometimes polite, sometimes not) lecture.

23. As MuzzledNoMore has taken a political stand against paying the outrageous renunciation fee, I gather that s/he does not view the situation purely in pragmatic terms.

24. @ MuzzledNoMore
    I admire your stand, as I’m sure your parents would have too. It’s pretty obvious that true RBT (i.e. the international norm), with no retroactive fees, penalties or filings required, would solve your problem … and everyone else’s too. Meanwhile limbo sucks big time. BTW, even though I have no US birth taint I have not been there since the 90s and I will not got there unless I see a significant amount of sanity return to what was once a freedom respecting nation, at least in the spirit of its people.

25. @ plaxy
    I would say MuzzledNoMore’s stand is as much ethical as it is political. She is simply not bending to the will of the bully.

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