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. Before the Meadow’s hearings, Mark Crawford said (on IRS Medic) that there would be an accidental american as a witness. Never happened,only those who had complied were present. So Mr Solomon wanted/wants accidentals that are eager to comply ,now let me count the number of camels that will pass through Solomon’s needle before you’ll find one.

2. One would likely have to pay the Repatriation tax in order to qualify. Compliance as a prerequisite for exemption. People have to pay tax to relieve them of tax. It’s absurd.

3. If the Repatriation tax proves anything, it proves that the USG can never be trusted again. How can they be trusted after that? The money spent on renouncing could very well be the best money one has ever spent and remember past compliance is not necessary to renounce.

4. Sorry Plaxy (and Nononymous) for getting that quote mixed up. And thanks for your wishes!

5. So I don’t particularly enjoy going to the US but once in a while it can’t be avoided. My version of principled behaviour in this case is to use my Canadian passport in violation of US law. Not because I particularly wish to find myself in legal trouble, but because I want to prove to others that these laws are toothless and generally unenforced. (Yes, exactly like FBAR, FATCA and CBT, for accidentals in Canada.) As I said, I continued using the “wrong” passport after being warned not to, with no ill consequences.

6. So to me the interesting and depressing bit from Solomon Yue’s tweets is: “This #TTFI bill is 2 save citizenships” – in other words, anything that made it easier for non-compliant accidentals to escape – simple, cheap renunciation with tax amnesty – will never gain support.

   Speaking only for dual citizens now, looking at RBT proposals (the details of which I don’t particularly concern myself with) I don’t see any real incentive for a non-compliant accidental to jump through a bunch of hoops and put themselves on the IRS radar just to get to a point where they are declared non-resident and no longer need to file US returns. Non-compliant accidentals will simply continue being non-compliant. Much easier and, given US inability to penalize, no risk either.

   Some form of RBT that would be great for single-citizenship expats or those who want to regularize their situation so that they can move to the US, but for the rest of us regular accidentals, it’s neither here nor there – why would we bother?

   The real problem is still banking restrictions due to FATCA in those countries where banks actually care about finding US persons. (Canada is not currently one of those countries.) I suppose the best outcome, given the tweet cited above, is that the worst excesses of FATCA are one day beaten back by court challenges in various “victim” countries, and we return to status quo ante on the tax and FBAR front – laws on the books but never enforced, not that they ever were.

7. Another problem here is that if Yue’s preamble ” This #TTFI bill is 2 save citizenships. Reducing fees 2 make renunciation easier will not only kill the bill but also lose support & sympathy 4 Accidental Americans. No lawmakers would do anything 4 someone who isn’t interested in being an American.”
   had been been stated at the outset , most accidentals would have packed and left a long time ago.

8. Hope that Solomon Yue will help accidentals iis misplaced. By default they have little or no interest in being American. Mr Yue isn’t about to do anything to help people ditch their US citizenship. He rightly points out that that would kill any reform. He quotes Ms. Beem who stated people only renounce to avoid paying their fair share.

9. Hope that Solomon Yue will help accidentals iis misplaced. By definition they have little or no interest in being American. Mr Yue isn’t about to do anything to help people ditch their US citizenship. He rightly points out that that would kill any reform. He quotes Ms. Beem who stated people only renounce to avoid paying their fair share.

10. Furthermore, people who renounce don’t vote (not that they ever did) so neither RO nor DA would ultimately have any interest in facilitating less painful renunciation for accidentals. Nobody in the US does, actually. Ergo the overall strategy for accidentals (as opposed to US-only expats) should be to fight against restrictions due to FATCA in their own countries and encourage continued non-compliance – ignore tax and FBAR, though be vigilant against any attempts to expand US collection via tax treaties.

11. Nononymous:

    “My version of principled behaviour in this case is to use my Canadian passport in violation of US law. Not because I particularly wish to find myself in legal trouble, but because I want to prove to others that these laws are toothless and generally unenforced. (Yes, exactly like FBAR, FATCA and CBT, for accidentals in Canada.”

    It’s not like CBT though is it.

    The law requiring US citizens to show a US passport when entering the US is not like CBT. It’s a reasonable law, and is the law of the land, and many countries have similar laws. There’s no point in breaking the law to prove the law can be broken. It would be more logical, and constructive, for a dual USC to obey the law: to insist on their right as a US citizen to enter the US. Engaging in deception just reinforces the expectation that any US-born individual entering with a non-US passport is probably breaking the law.

    CBT, on the other hand, is not the law of the land. People who don’t live in the US are not breaking the law by not filing US tax forms. It’s important to make that distinction.

    A USC has a legal right to enter the US on a US passport, if they choose to exercise that right. A USC has a legal right not to be double-taxed, if they choose to exercise that right.

12. Nononymous:

    “The real problem is still banking restrictions due to FATCA in those countries where banks actually care about finding US persons. (Canada is not currently one of those countries.) I suppose the best outcome, given the tweet cited above, is that the worst excesses of FATCA are one day beaten back by court challenges in various “victim” countries, and we return to status quo ante on the tax and FBAR front – laws on the books but never enforced, not that they ever were.”

    What would happen if a court challenge succeeds, is hard to predict. In European countries, the local law implementing FATCA/IGA would have to be changed – not just left on the books unenforced. And new laws might be needed, to prevent the banks from continuing to indulge in birthplace discrimination in order to protect their “FATCA-compliant” status. And fresh negotiations with the Americans would certainly be needed.

13. Not that recent (dates from Feb 2018) but seems very relevant: the experienced tax guy who was going to be largely responsible for TCJA was dumped for expressing doubts about implementation of certain aspects of the law.

    “Treasury’s Tax Law Work Will Continue, Departed Official Says”
    The former top Treasury official charged with overseeing the department’s work on the new tax code predicts that his abrupt departure won’t derail the regulatory process.

    Dana Trier’s Feb. 23 exit comes as Treasury staff members wrestle with issuing regulations for the 2017 tax act, raising concerns that his absence will hamper the department’s ability to quickly release guidance on the new law.

    The former top Treasury official charged with overseeing the department’s work on the new tax code predicts that his abrupt departure won’t derail the regulatory process.

    Dana Trier’s Feb. 23 exit comes as Treasury staff members wrestle with issuing regulations for the 2017 tax act, raising concerns that his absence will hamper the department’s ability to quickly release guidance on the new law.

    As deputy assistant secretary for tax policy, Trier was the “key hub” in getting Internal Revenue Service guidance and regulations clarifying the tax law out the door, said Gregory F. Jenner, a former Treasury acting assistant secretary for tax policy and former deputy assistant secretary for tax policy.

    His departure “can do nothing other than slow things down,” Jenner, a partner at Stoel Rives LLP in Washington, told Bloomberg Tax Feb. 26. “The question is: How much?”

    ABA Speech
    Trier made controversial comments at the American Bar Association Section of Taxation meeting in San Diego on Feb. 9, which he said were the impetus for his departure. During a speech, Trier said certain provisions in the new law would be a “feast” for tax planning, and suggested Congress didn’t intend many of the unintended consequences in the final law, which Republicans consider to be their top legislative achievement in 2017.

    Those remarks, Trier told Bloomberg Tax Feb. 26, made him “too much of the story” at Treasury, and “once the momentum developed, it was sad but it was just very clear that I had to go.”

    Trier said his comments were geared toward specific provisions that he felt were underdeveloped in the new law, such as a provision limiting the carried interest tax break.

    “It is true—in my honest moments and unfortunately that day, I was honest—that I think the carried interest provision for some reason is much less developed,” he said. However, Trier said most of the law, including many of the most significant domestic measures, is sophisticated and administrable.
    ..
    Trier also said it’s likely practitioners won’t see regulations on the law’s new international provisions—including a requirement that U.S. shareholders of controlled foreign corporations pay tax on their global intangible low-taxed income (GILTI), the base erosion anti-abuse tax (BEAT), and the new provision on foreign-derived intangible income (FDII)—until fall at the earliest. Those concepts are novel, and much of the effort in the international area thus far has been focused on repatriation issues, he said.
    ..
    Looking for a Replacement
    Trier said it may be difficult for Treasury to immediately find his replacement given his experience implementing the Tax Reform Act of 1986 and his substantive knowledge on several aspects of the tax code—including corporate and pass-through taxation and international issues.

    “I think I had my fingers in so many pots that it’s going to be a little tricky to completely replace me,” he said. However, “I think that the guidance process for tax reform will go on at a considerable pace” and that others in the department will rise to the task, he said.

    https://www.bna.com/treasurys-tax-law-n57982089243/

14. Timeline.

    23 Feb: Trier gets dumped
    22 Mar: Expats request transition tax extension
    2 Apr: Notice 2018-26 issued

    Eleven days would be barely time enough to type it. The extension surely must have been already in the works as a result of Trier’s departure. Not an acknowledgment of expat owner/shareholders’ predicament. And certainly not evidence of an intention to try to eventually pass legislation to remedy the mess they’ve created.

    Once the election is over, it will be business as usual, except that some expat owner/shareholders may have agreed to pay the money and will have paid the first instalment.

15. @plaxy

    As ever, too glib for my own good with the analogy between the US passport law and CBT etc. You are correct, the passport rule is a US law (not) enforced on US soil. Whereas CBT etc. is a US law with no standing beyond US borders.

    I actually have two reasons for deliberately violating the passport law on my occasional visits to the US. The first is purely personal, an assertion that I in no way identify as American. The second is to demonstrate for others that the law can be ignored without fear of consequence. As we have seen upthread, some individuals are unwilling to enter the US, even at personal cost, because they fear that either obtaining a US passport will lead the IRS to their door, or that US customs will confront them over use of the wrong passport.

16. Nononymous – yes, I agree those are both good reasons.

17. Apparently Trier’s indiscreet comments did include mention of the transition tax:

    “Dana Trier dishes on the TCJA. Trier, who resigned last week as Treasury’s deputy assistant secretary for tax policy, told Politico’s Brian Faler that writing the regulations to accompany the TCJA will be “a bitch of a job.” Trier added the law is “not nearly as bad as people are characterizing it, but still not as good as it should have been.” He identified as especially problematic the law’s international provisions, including its transition tax on past foreign earnings, and its new tax treatment of pass-through businesses.”

    https://detaxify.nyc/2018/03/01/tax-refunds-and-windfalls-growth-and-plans/amp/

18. AARO reports;
    A FATCA Complaint Filed Against BNP Paribas Bank in France

    Published: 27 April 2018

    https://www.aaro.org/advocacy/fatca/657-a-fatca-complaint-filed-against-bnp-paribas-bank

19. The situation with BNP Paribas (for which Badger has posted a link) would seem to support the recent US Supreme Court decision that it is the foreign banks that are doing the harm, not the United States. Hmmm. I’m particularly interested in the assertion by the plaintiff that “These institutions must understand that the US FATCA law does not issue a hunting license against expatriates for banking relationships that have often been in place for decades.” If it’s not a hunting license then why is a US birthplace included in the list of indicia that banks are to look for when searching for their supposed American clients?

20. The BNP Paribas case seems to involve accountholders residing in the US and holding BNP Paribas accounts. They might get flagged by the BNP Paribas FATCA due diligence because of their US address, rather than because of a US birthplace.

    Not a lot of info, so perhaps they’re not seeking publicity for the case.

21. And just now, our friends at CBC give us this. Is this related to tonight’s CBC interview on the National??

    http://www.cbc.ca/news/politics/transition-tax-trump-corporations-1.4639020

22. Yes, it is.

    The comments are not very encouraging.

    Rich people who want to get out of paying their fair share.

23. Where is the Brock Swat Team on that CBC article ?

    Connect via Facebook, Google+, or direct.

    We need to overwhelm the ney sayers. There are a lot of them.

    If you are not commenting directly, uptick the ones you like, down tick the ones you don’t.

24. “Large U.S. banks scramble to meet EU data privacy rules”

    “Many large internationally active U.S. banks are already grappling with the General Data Protection Regulation, which takes effect May 25, including spending significant sums in updating their systems. Of the U.S. companies that completed their compliance work, 40% spent more than $10 million, according to a PwC survey conducted last year. One incentive to devote resources to compliance is the fine for violations, which is potentially 4% of global revenues.”

    https://www.americanbanker.com/news/large-us-banks-scramble-to-meet-eu-data-privacy-rules

    I sincerely hope it costs them a lot.

25. “I sincerely hope it costs them a lot.”

    As do I.

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