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. Embee – how did you come to have PR status?

2. @ plaxy
   My story is below. I frankly don’t like to think about it anymore. Basically, with no explanations given to me (40 years ago) I thought a “Resident Alien” card was merely permission to live and work in the USA. So it’s stupid, non-accidental, me I suppose.

3. If you chose to acquire PR status of your own free will, then it wasn’t accidental.

   If you came by it in some other way, then it was.

   Whereas, the term “Accidental American” has come to be understood as referring to people who were removed from the US by their parents while still minors. But in reality everyone who didn’t choose to be a US citizen or PR, got the status by accident.

4. “with no explanations given to me (40 years ago) I thought a “Resident Alien” card was merely permission to live and work in the USA”

   There you are – accidental.

5. @ plaxy
   I am Canadian, period, but I’ll accept the label of stupid and continue to ignore any other attempts to label me by those I do not deem acceptable to do so, most specifically a foreign government.

6. I don’t think the US even recognises the term “Accidental American”.

   Journalists and non-US politicians seem to like it. They’re probably hoping to fend off any accusations of sympathising with tax evaders.

7. Karen Alpert: Excellent comment! Hope it gets out of moderation ASAP.

8. I like the injustice part of Karen’s comment combined with insightful knowledge of the law.

9. Thanks MNM and JC. I made sure to refer to the “foreign” jurisdiction as HOME. One of the stumbling blocks we face is that everyone refers to expats as “Americans” living in X country, rather than Australians, Canadians, etc. I think the injustice shines through when we make it clear that the US is not home anymore. Excessively clinging tax residence is incompatible with a globally mobile workforce. While the US is the worst in this regard, it can be hard to lose tax residence in other countries as well. The difference is that other countries will eventually let go without forcing you to renounce your citizenship.

10. My comment on that article now in moderation. I believe it is in the category “fake news.” If not then I am open to enlightenment. I shared my comment:

    I believe this article is incorrect.

    1) For U.S. based residents to take advantage of the recent tax changes for U.S. companies with overseas operations, such investments need to be in a corporate structure. The U.S. applies punitive reporting and taxation for passive structures “foreign” to the U.S.; meaning passive as in just containing investments and no real business operations. The dreaded U.S. treatment for passive foreign companies is called PFIC.

    2) The premise of the article does not appear informed about U.S. FATCA requirement to report US person accounts in other countries.

    3) The premise of the article presumes that there are no other better structures to hide investments and income from U.S. taxation. I introduce Delaware. Companies for passive or real purposes may be set up in Delaware without disclosure of the beneficiaries of such companies. One may think such structures better to hide international and U.S. based investments with anonymity protected by state law, and free from FATCA and CRS regulations and reporting imposed in other countries. Because of states such as Delaware the U.S. is now recognised internationally among the top three tax haven countries in the world.

    While the word “unintended consequences” is used in the article there is no mention of the very consequential consequences for the 6-9 million U.S. persons resident overseas. The tax reform was supposed to also not just be about companies overseas but to include “Territorial Taxation for Individuals,” which would be a version of the Residence Based Taxation as practiced by all other nations in the world except for the U.S. and Eritrea.

    The U.S. claim of tax jurisdiction over the residents of other counties completely fails accepted norms around the justification of taxation. Simply, taxation may be justified if services are provided in exchange. In the case of the U.S. claim of tax jurisdiction over residents of other countries there are zero resident services provided in exchange such as for roads, health, unemployment, and for the protection of local property and local rights. These services are provided by the countries in which these individuals live and in exchange for taxes paid to these countries, with an estimated 92.5% of the 6-9 million U.S. persons overseas living in higher taxing countries than the U.S.

    A similar comparison: If one lives in California and they move to New York, as a tax resident of New York State they pay state taxes there for the state services they receive there. They then are no longer required to report accounts and pay tax to California with justification that they no longer receive resident services of the State of California. If they move back to California then as California residents then they would be required to pay California state taxes once again. This should be the way for U.S. persons living overseas,

    Thus the U.S. double tax claim is not justified. It is one-way in that zero resident services are provided in exchange. An egregious aspect is the punitive treatment of the U.S. tax code for accounts, assets, pensions, and companies that are “foreign” to the U.S., a tax code filled with catch-22 gotchas in the overlay of the U.S. code on top of the code of the country one is resident in; even though these people may have lived for decades in an other countries (think U.K., Canada, Australia), and all their finances are local to them and they may have very tenuous ties to the U.S.

    The U.S. double tax claim has been called Tributary Slavery. This term was used by Samuel Adams writing about the imposition of taxation by England on the American Colonies. Actually today the situation is far worse for the reasons stated above, and that in the times of King George III the Colonies were part of England and there were services provided in exchange most notably for local protection of property.

11. http://taxprof.typepad.com/taxprof_blog/2018/07/long-ignored-962-could-let-wealthy-tap-21-corporate-rate-under-new-tax-law.html
    Karen’s comment has been posted finally. Hope to see JC’s comment soon. The Tax Prof readers need information beyond what the article provides.

12. Ryan expects bill on tax fixes to come after midterms
    July 12, 2018 – 05:16 PM EDT
    http://thehill.com/policy/finance/396780-ryan-expects-bill-on-tax-fixes-to-come-out-at-the-end-of-the-year?amp

13. JC’s comment is up now too.

14. If the territorial taxation bill comes after the mid-terms that is extra risk that it will not pass.

    Historically, the party of a new president loses numbers in Congress in the midterms. One risk is that at least one of the houses is won by The Democrats creating legislative gridlock.

    Could it be different this time? Maybe. If there is a gain in numbers by the Republicans then they may then wait until after 3 January for the new Congress to be sworn in.

15. “If the territorial taxation bill comes after the mid-terms that is extra risk that it will not pass.”

    Indeedy. And the Republicans can then blame it on the Democrats.

    Whereas, if a bill to fix the (as-yet-unspecified) unintended consequences of the TCJA was promised by the Republicans, built by the Republicans, and voted on by Congress while the Republicans still control both houses, blaming the Democrats for its failure might be less plausible.

16. I wouldn’t get your hopes up. This snippet comes from the TaxLaw360 e-mail on Monday, 16 July. I just get the free e-mails, but this doesn’t look good.
    “The new tax overhaul legislation that the House Committee on Ways and Means is drafting will not address international tax provisions such as global intangible low-taxed income, a Republican congressman on the committee told Law360 Friday.”

    If the Republicans really wanted to address this problem, they could do so most easily after the election when nobody is paying attention, but where is the necessary pressure going to come from? We seem to have problems finding committed allies. Jatras’s Campaign to Repeal FATCA has been terminated. Maybe DeVere figured it was time to cut their losses. https://lobbyingdisclosure.house.gov/ To make matters worse, Jatras has now become an America Firster of the highest order: https://www.strategic-culture.org/news/2018/06/16/its-time-for-america-cut-loose-our-useless-so-called-allies.html . This piece is highly insulting given the role that NATO partners played in the wars in Afghanistan and Iraq.

17. “If the Republicans really wanted to address this problem, they could do so most easily after the election when nobody is paying attention,”

    Only if they’ve got the numbers. Which they might, if they stick to domestic issues and avoid getting tangled up in SubPart F complexities.

    As for DeVere, it looks like Nigel Green is switching his bets to cryptocurrency.

    http://www.internationalinvestment.net/cryptocurrencies/cryptocurrencies-are-undeniably-mainstream-as-watchdog-backs-bitcoin/

    Wasn’t DeVere paying Jatras? If DeVere has stopped paying, that would explain why Jatras has stopped lobbying.

18. “DeVere USA pays $8m penalty over expat DB transfer – Qrops advice”
    http://citywire.co.uk/new-model-adviser/news/devere-usa-pays-8m-penalty-over-expat-db-transfer-qrops-advice/a1125810

    The SEC, the US regulator, said deVere USA did not disclose arrangements with overseas product providers which led to undisclosed compensation of 7% of the transfer value. This ‘created an incentive for deVere USA to recommend a pension transfer and particular product or service providers that were obligated to make payments’.
    …
    deVere USA advisers were also alleged to have ‘misled’ clients about the tax treatment of Qrops compared to UK pensions, as they talked up the tax benefits of a Qrops while failing to inform clients ‘the risk that a transfer by a US resident from a UK pension to a Malta-based Qrops would be treated by the IRS as a distribution subject to US income taxes’.

    ‘In some instances, defendants told prospective clients that the transfer to a Qrops was definitively a non-taxable event,’ the SEC filing said.
    </bdeVere USA advisers were also alleged to have ‘misled’ clients about the tax treatment of Qrops compared to UK pensions, as they talked up the tax benefits of a Qrops while failing to inform clients ‘the risk that a transfer by a US resident from a UK pension to a Malta-based Qrops would be treated by the IRS as a distribution subject to US income taxes’.

    ‘In some instances, defendants told prospective clients that the transfer to a Qrops was definitively a non-taxable event,’ the SEC filing said.

19. @publius

    Monte Silver, a Canadian born, US-Israeli citizen is lead the charge against the Repatriation Tax and GILTI. He was majorly responsible for getting the Repatriation Tax payment delayed until next June. If I put money on any horse, it would be him:

    http://www.americansabroadfortaxfairness.org/

    He says the fix will come in the lame duck session after the election.

    http://thehill.com/policy/finance/396780-ryan-expects-bill-on-tax-fixes-to-come-out-at-the-end-of-the-year

20. What ever came of the FATCA hearings held by the freedom caucus?
    Story of Cambridge Grandmother is horrible. Condors can be despicable.

21. “Why filing taxes isn’t easy”
    https://www.politico.com/agenda/story/2018/07/18/tax-filing-congress-irs-000683

    Fascinating article about, among other things, the “Taxpayer First Act,” which, as one would suspect coming from Congress (and, unfortunately, regardless of party) is actually a move to put the Tax Preparation Industry first, and passed in April without a single dissenting vote. Both the industry (HR Block et al) and Grover Norquist oppose making filing easy.

    Big, successful effort to keep people from filing for free, to keep the IRS from offering free filing and pre-filled forms.

    Just one more illustration of how tragically corrupt the US is, with of course, corruption being made legal, just as the US lectures other countries on their corruption issues.

    Even in a world of FATCA and CBT, the IRS could, were it permitted to do so, offer us residents abroad, free and easy filing too (not that makes CBT any more palatable of course).

22. OVDI is not recommended for non-resident US persons, but this article emphasizes how the IRS lacks the manpower to even end an amnesty program properly:

    http://www.mondaq.com/unitedstates/x/719418/tax+authorities/As+End+Looms+IRS+Offshore+Voluntary+Disclosure+Program+Processing+Delays+Create+Additional+Risk+For+Participants

23. Videos from the Taxpayer Rights Conference that was held in Amsterdam in May are now up on You Tube. The session on Taxpayer Protections in Cross-Border Taxation is here: https://youtu.be/06CSYliCKaY

    Interesting discussion on FATCA/CRS and data protection at 28:35

24. Squeezing blood from a rock. The NTA strikes back against an attack from private debt collection agencies. A resource strained and disorganized IRS is unleashing collection agencies on taxpayers who are suffering hardship. Unfortunately it has been left to the taxpayer to defend him/herself and know that what they owe is uncollectible.

    https://www.taxconnections.com/taxblog/the-national-taxpayer-advocate-responds-to-private-debt-collectors-contentions/

25. Interesting article in the Washington Post discussing the 14th amendment. It’s behind a paywall but I could read it on news.google.com. I had never heard this angle before but interesting indeed.

    https://www.washingtonpost.com/amphtml/opinions/citizenship-shouldnt-be-a-birthright/2018/07/18/7d0e2998-8912-11e8-85ae-511bc1146b0b_story.html

    “That definition is the amendment’s very first sentence: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside.”

    Second, the amendment specifies two criteria for American citizenship: birth or naturalization (i.e., lawful immigration), and being subject to U.S. jurisdiction. We know what the framers of the amendment meant by the latter because they told us. Sen. Lyman Trumbull of Illinois, a principal figure in drafting the amendment, defined “subject to the jurisdiction” as “not owing allegiance to anybody else” — that is, to no other country or tribe. Sen. Jacob Howard of Michigan, a sponsor of the clause, further clarified that the amendment explicitly excludes from citizenship “persons born in the United States who are foreigners, aliens, [or] who belong to the families of ambassadors or foreign ministers.”

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