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. Thanks for that plaxy.

   Might non-resident US persons have a potential ally in Rettig? Seems to acknowledge the emotional break Americans living outside the US have with their US tax filing obligations. Will this “first attempt by the government” lead to greater concessions under his leadership at the IRS?

   “For eligible U.S. taxpayers residing outside the United States, all penalties will be waived under the streamlined procedures. Non-resident taxpayers might be better positioned than resident taxpayers to achieve their goal of a non-willful, no penalty resolution under the Streamlined Procedures. The “foreign” account of the non-resident is actually in their own neighborhood; it is only “foreign” in the sense that it is located outside the territorial boundaries of the United States. The existence of the account does not, by itself, somehow represent an acknowledgment of tax non-compliance by the non-resident taxpayer. The Streamlined Procedures seem to represent the first attempt by the government to acknowledge that at some point, non-resident taxpayers become residents of their home state, emotionally even if perhaps not technically.”

   https://www.forbes.com/sites/irswatch/2015/08/02/irs-fbar-streamlined-procedures-revisited-am-i-non-willful/

2. BB – I wondered about what his attitude might be. What you quote sounds as though he at least understands the difference between foreign and local.

   Time will tell.

3. More from Rettig. From his paper “Why the Ongoing Problem with FBAR Compliance?”:

   “Over 1 million filed FBARs sound impressive, until you look beyond the filings and attempt to determine the pool of those who may potentially have an FBAR reporting obligation of some sort. An estimated 8.7 million U.S. persons (excluding American military personnel) live in 160-plus countries outside the United States, a figure that exceeds the populations of 37 States! In 2015, the IRS received 1,529,591 tax returns from individuals located outside the United States.”

4. Oops, here’s the link to Rettig’s abstract.

   https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2948756

5. Interesting paper. In parts.

   Outside the United States, it can be di cult for Ameri- cans to function as well as to receive competent advice. Foreign professionals are uncertain and/or mistrustful of the actual intentions of the U.S. government and often decline an otherwise meaningful engagement. Compliance by nonresidents and their advisors with U.S. reporting rules and information to be generated by FATCA has an impact. For U.S. persons with no intent to return to the United States, their citizenship may seem less important than living with the threat to impose severe civil penalties and criminal sanctions as a result of a nancial account maintained in their country of residence. More nonresi- dents could likely identify FATCA than could likely name the Vice-President of the United States.

   Now please take the next step, Mr R. and get rid of the damned mess.

6. He clearly “gets it”, but like NTA Nina Olsen may be committed to making CBT work. Hard to tell, but he’s a huge improvement over his predecessors.

7. Charles Rettigs credentials:
   http://www.taxlitigator.com/our-firm/our-attorneys/charles-p-rettig/

   On two separate occasions, Chuck Rettig headed a group of approximately 150+ private tax practitioners in discussions and negotiations with the IRS resulting in the announcement of IRS settlement initiatives bringing thousands of U.S. taxpayers into compliance and literally billions of dollars of revenue into the government. More recently, he has actively participated in numerous similar discussions regarding the offshore voluntary disclosure programs of the IRS and certain States as well as coordinating a venue for the dissemination of information to numerous taxpayer representatives and others around the world.

   I don’t have any opinion about this man. By his future deeds we will know him.

8. Looks like the Titanic may be getting a new Captain. Ho-hum….. Not really of much interest unless you are a person who pays US taxes.

   Now what would impress me would be if they implemented $25 online CLNs.

9. From Twitter discussion Group/ Greg Swanson

   Did anyone hear about this bill in Congress?

   H.R.1393 – Mobile Workforce State Income Tax Simplification Act of 2017
   (Sec. 2) This bill prohibits the wages or other remuneration earned by an employee who performs employment duties in more than one state from being subject to income tax in any state other than: (1) the state of the employee’s residence, and (2) the state within which the employee is present and performing employment duties for more than 30 days during the calendar year in which the wages or other remuneration is earned.

   The bill exempts employers from state income tax withholding and information reporting requirements for employees not subject to income tax in the state under this bill. For the purposes of determining penalties related to an employer’s state income tax withholding or reporting requirements, an employer may rely on an employee’s annual determination of the time expected to be spent working in a state in the absence of fraud or collusion by such employee.

   For the purposes of this bill, the term “employee” excludes: professional athletes; professional entertainers; production employees who perform services in connection with certain film, television, or other commercial video productions; and public figures who are persons of prominence who perform services for wages or other remuneration on a per-event basis.

   If it applies to “States” shouldn’t it also apply to us?

   https://www.congress.gov/bill/115th-congress/house-bill/1393

   Sponsor: Rep. Bishop, Mike [R-MI-8] (Introduced 03/07/2017)
   Committees: House – Judiciary | Senate – Finance
   Committee Reports: H. Rept. 115-180
   Latest Action: Senate – 06/21/2017 Received in the Senate and Read twice and referred to the Committee on Finance. (All Actions)

10. @BB, other publications by him and the firm’s partners as well, on FBAR, OVDI/P, Streamlined, etc.
    http://www.taxlitigator.com/publications/

    Usual caveat;
    I’m not providing that link as an endorsement of the firm, the practitioners, or endorsing/advising compliance with US extraterritorial CBT.

11. @JC,
    re;
    “…..if it applies to “States” shouldn’t it also apply to us?…….”
    https://www.congress.gov/bill/115th-congress/house-bill/1393”

    I had similar thoughts when I read this;
    https://www.congress.gov/bill/114th-congress/house-bill/4962/text
    and,
    “Press Release April 15, 2016
    WASHINGTON, DC – Today, Representatives Jim Himes (CT-04) and Scott Garrett (NJ-05), Chairman of the Committee on Financial Services’ Subcommittee on Capital Markets and Government Sponsored Enterprises, introduced the Multistate Worker Tax Fairness Act. This bill will prevent the over-taxation of individuals who telework in one state for companies located in another. Connecticut Senators Richard Blumenthal and Chris Murphy are introducing companion legislation in the Senate.”
    ……….“If you wake up every morning in Connecticut, and walk downstairs to your home office in Connecticut, it only makes sense that you should be paying taxes to Connecticut, not to New York or whatever state your company’s headquarters happens to be in.” said Himes. “It’s the fairest, simplest way to avoid over-taxation and ensure tax revenue goes to the logical jurisdiction.”

    ……… “It doesn’t make sense to pay taxes in a state that you never set foot in, and our legislation will bring the tax law into the modern age to protect New Jerseyans from being over-taxed.”

    The Multistate Worker Tax Fairness Act establishes a uniform standard based on physical presence in a state. In doing so, the bill prohibits a state from taxing a nonresident’s income earned when the individual was not physically in that state. …..”
    https://himes.house.gov/media-center/press-releases/himes-garrett-introduce-multistate-worker-tax-fairness-act

    H.R. 4085 (113th): Multi-State Worker Tax Fairness Act of 2014
    https://www.govtrack.us/congress/bills/113/hr4085

    Ironically, Himes chose not to use that logic and sense of fairness to assist those he supposedly also ‘represents’ who the US defines as ‘US taxable persons /citizens ‘abroad’ who live (and like him, many of whom were born) outside the US.

    Ex. see quote from above; objecting to “….taxing a nonresident’s income earned when the individual was not physically in that state. ” in the case of US residents. But Himes voted for FATCA, and stays silent when the US asserts the right to demand taxes and information reporting and penalties for non-compliance from people who don’t actually live in the US – whose only US connection is parentage or birthplace – with no US economic or true residence connection at all.

    Which is ironic because Himes himself was born outside the US – in Peru, and has lived and studied and worked outside the US. His father also worked outside the US. https://en.wikipedia.org/wiki/Jim_Himes .

    So he knows firsthand that those outside the US need ordinary local banking just like US residents who bank in the US do, and that it is absurd to define ALL accounts and banking outside the US to be ‘foreign’ and ‘offshore’ and equate them with the banking of US homelanders with Cayman Island trusts (like some of his fellows – including recent Democrats acting as Treasury Secretary and Commerce Secretary).

    Despite that, he voted for FATCA.

    Also ironic is this argument by a US tax law professor Edward A. Zelinsky ;
    “….The United States’ worldwide taxation of its citizens is less different from international, residence-based norms than is widely believed and is sensible as a matter of tax policy. An individual’s citizenship is an administrable, if sometimes overly-broad, proxy for his domicile, his permanent home. Both citizenship and domicile measure an individual’s permanent allegiance rather than his immediate physical presence. Because citizenship and domicile resemble each other and because other nations often define residence for tax purposes as domicile, the U.S. system of citizenship-based taxation typically reaches the same results as the residence-based systems of these other nations, but reaches these results more efficiently by avoiding factually complex inquiries about domicile. ………………”
    (Zelinsky, Edward A., Citizenship and Worldwide Taxation: Citizenship as an Administrable Proxy for Domicile (October 13, 2010). Iowa Law Review, Forthcoming; Cardozo Legal Studies Research Paper No. 314. Available at SSRN: https://ssrn.com/abstract=1691753 ).

    Zelinsky went to court to protest double taxation by NY state on his own income derived from work (for a NY employer) performed while physically located in his state of residence – Connecticut (“…The taxpayer, a professor at Cardozo School of Law in New York City, contends that New York State may not constitutionally tax the entirety of his income because he performed some of his work at his home in Connecticut. …” ) and lost. See;
    3 No. 129 In the Matter of Edward A. Zelinsky et al.,
    Appellants,
    v.
    Tax Appeals Tribunal of the State of New York et al.,
    Respondents.
    2003 NY Int. 138
    November 24, 2003
    https://www.law.cornell.edu/nyctap/I03_0138.htm

    “…In 2003, he challenged the State of New York on its so-called “convenience of the employer” doctrine which enabled New York to engage in what Zelinsky and others have alleged is unconstitutional double taxation of telecommuters.[6] The case, Zelinsky v. Tax Appeals Tribunal, was denied certiorari by the U.S. Supreme Court after the New York Court of Appeals decided against Zelinsky.[6][7] Connecticut Senator Chris Dodd subsequently attempted to introduce federal legislation that would prevent New York and other states from engaging in such taxation.[8] ………”
    https://en.wikipedia.org/wiki/Edward_Zelinsky

12. Why would HR1393 have anything to do with us? It has nothing to do with US federal income taxes, only state income taxes. More specifically, it applies to itinerant workers. So the Californian actor who films on location in Minnesota for two months then owes taxes for those two months’ income to Minnesota but not to California. Either way, the poor schmuck is still paying full federal income tax. So there is no connection, except vaguely metaphorically, to double taxation of US persons resident outside the US.

13. BB – “He clearly “gets it”, but like NTA Nina Olsen may be committed to making CBT work. ”

    Yes I think you hit the nail on the head.

    For a period of time …, the IRS gave attention to its service mission. While it may have gone too far in referring to taxpayers as “customers,” genuine efforts to improve communi- cation, for example through such simple initiatives as more clearly drafted and more consistent taxpayer notification of IRS actions, were surely a welcome change. And most certainly, the creation of the Taxpayer Advocate Service has been one of the most meaningful changes to emerge from the period of reform. From assisting individual taxpayers to resolve the complications that result from IRS bureacracy, to serving as a watch dog for the citizenry at large, the Taxpayer Advocate has become an invaluable and indispensable part of the effort of the IRS to meet its mission.

    (http://www.taxlitigator.com/wp-content/uploads/2016/02/IRS_Enforcement_Pendulum.pdf – found by following badger’s link to the firm’s publications, see above)

    Rettig’s appointment may signal a shift away from the current carnivorous IRS mindset. Let’s hope so. That could do a lot to calm people’s fears and let them focus on considering what to do about their citizenship instead of trying to escape from the damned IRS.

    Could it lead to some form of global same-country FATCA exemption, I wonder. If the US could be brought to accept that local accounts should not be treated as if they were foreign accounts, then proving residence, rather than proving renunciation, might become the key to being allowed to open a bank account. That would be so much fairer.

    Just have to wait and see.

14. badger – I think Zelinsky is just wrong. The US doesn’t “use citizenship as a proxy for domicile.” The US uses citizenship instead of domicile – denying USCs the right to be treated as not domiciled in the US.

    Zelinsky is also wrong in claiming that citizenship and domicile both measure allegiance. Neither citizenship nor domicile can possibly measure allegiance to a State – especially when the State in question makes it difficult for (any) citizen to disavow allegiance, and difficult for (many) residents to vow allegiance.

    He is a nitwit. (IMO)

15. Also – international taxation is not based on allegiance, it’s based on source / tapayer residence / consumption. US CBT is based on lying about taxpayer residence.

16. What the hell does allegiance have to do with bloody taxation?! Citizenship does not mean people are faithful to the USA, particularly those who live their lives elsewhere and even if they are, that is no base for taxation. Citizenship is a proxy for domicile? Utter clap trap.

    If it were, fifty million (at least!) US resident citizens would be having their lives blighted by foreign tax policies and the US would be screaming from the roof tops if not mobilising the bloody military!

    “He is a nitwit. (IMO)”

    Seconded.

    Just another one that thinks citizenship justifies taxation and he’s grabbing at straws to justify it.

    He also seems to suggest that citizenship based taxation workable, “administrable” when it clearly is not because these people do not live in the USA. The fact that so few make the slightest effort to comply gives a clue.

    The USA taxing the residents and citizens of this nation, ruining their lives and stealing from our tax base can NEVER be justified by the bizarre notion that citizenship justifies taxation.

17. Rettig certainly has a lot on his plate if he’s confirmed. His depth of knowledge of our issues however could be an improvement over scaremongers like Shulman when he stated OVDI “is the last, best chance for people to get back into the system” and Koskinen suggesting that Streamlined may end soon – “At some point, we will have assumed that people have had enough notice that they should have become voluntarily com- pliant. At that point—after some period of time and you’re not compliant—it will be assumed that logically you are purposely not compliant.”

    He is aware of the issues facing Americans abroad and even if he does nothing to improve them, he may not make things worse.

    Did I really say that?

    The investment industry suggests it should strike a balance between their and their client’s profits:

    “This should be matched with reasonable fee levels that reflect the additional reporting and administrative requirements of managing money for a US taxpayer, but do not detract substantially from long term returns.”

    https://international-adviser.com/advisers-must-aware-complexities-us-clients-face/

18. Unfortunately Zelinsky’s claim that CBT is “sensible as a matter of tax policy” is harder to refute in the age of AOIE. Many countries, including mine, find it useful to go along with the premise that USCs are always tax-resident in the US and therefore subject to the exchange of information articles found in all US double-taxation treaties.

19. Mike: Amen! Great comment!

20. @Mike
    “grabbing at straws to justify it”
    Isnt this what they have all been doing forever?
    Taxes are paid for services provided by the government. Expats do not benefit from those services- so are asked to pay up for nothing, and that just cannot be right under ANY viewpoint.

21. As badger pointed out, Zelinsky subsequently learned the hard way that it’s not who gets taxed that matters in court – it’s who has the right to tax what.

22. https://www.pymnts.com/mobile/2018/kyc-mobile-identity-verification-trulioo-globalgateway/

    The future of KYC (Know Your Customer) is here. Earlier this week, Trulioo launched the first international KYC solution that provides access to 24 of the world’s largest Mobile Network Operators (MNOs). Trulioo clients now have the ability to verify 1.8 billion mobile users worldwide through a single service.Twenty-four MNOs from US, Canada, UK, China, India, Spain, France, and Switzerland will provide mobile identity verification to help meet KYC compliance requirements.

    Combining mobile network carrier data with existing KYC sources is a real game-changer. MNOs offer enhanced coverage and convenience for identity matching, fraud prevention, proximity location, device information and call forwarding statuses.

    I don’t know if I am just tired, perhaps not reading this correctly. But since when does a mobile carrier have the right to exchange information with anyone regarding customers?

23. Mobile banking would seem to require exchange of mobile customer information between mobile carriers. Don’t touch it myself.

24. “But since when does a mobile carrier have the right to exchange information with anyone regarding customers?”

    More than likely you agree to it in the fine print of the T&Cs you accept for both mobile banking apps and cell carriers.

25. Another Globe and Mail (Canada) article about a spike in US citizenship renunciation interest by tainted business owners following tax reforms in that other country.

    https://www.theglobeandmail.com/report-on-business/small-business/sb-money/trump-tax-reform-leads-us-entrepreneurs-in-canada-to-consider-give-up-american-citizenship/article37762472/

    It IS paywalled. Maybe some of you know how to get around this, or are subscribers…

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