Media and Blog Articles Open for Comments – Part 3 of 11 (Year 2016)

2,818 thoughts on “Media and Blog Articles Open for Comments – Part 3 of 11 (Year 2016)”

1. @Publius You can’t be taken in by the ‘offsetting foreign credits’ will take care of it line.

   The US wishes to tax (and it is UK law by not saying otherwise in the tax treaty) any tax at a higher rate, in addition to or by a different name between the US and UK. Sounds like he would be up for NIIT. Pension contributions, or contributions to a nonqualified pension fund should be taxed on annual gain at his US marginal rate (treatment for “high” earners). (Of course as a government official he may not have a spefic account from which to determine annual gain – just defined benefit (might just have to get taxed on the way out).

   Also the compartmentalized way the tax treaty works is that he would not be able to use any credits say on the difference in the higher UK rate over the US rate on earnings, to cover other taxes, areas the US has but not the UK.

   Then there is the FBAR, 8938 and tax form compliance that in itself should be viewed as a tax. Lets say you buy something. On top of the price is freight. The actual price to you is not just the purchase price but what you actually pay. Similar to compliance cost involved with tax (anyone have a better analogy please provide). (The Tax Payer Advocate really should add the following to the tax payer bill of rights: Right to reasonable compliance costs and compliance designed in a way to minimise those costs; Right to simple easily understood tax system.

   Does he have any mutual funds, or beneficial interests in trust structures? Or, perhaps he has his eye on the rules and is limiting what he does on British soil because of them.

   “Outrageous!”

   Boris Johnson is a hero!

2. It would appear from the summary that he has zero investment income other than interest income. That’s very unusual.

   I don’t understand how the accountant can say that no US income tax liability arose if he is self-employed vis a vis the Daily Telegraph. If the accountant has gone to the trouble of listing National Insurance as part of tax paid, wouldn’t the Social Security contributions on self-employment income be relevant? Isn’t he obligated to pay full whack (ie both employer and employee contributions in the 13%+ range) on his self-employment income? Also, wouldn’t the self-employment income be through a company which would subject him to CFC rules? I don’t know enough about those rules but I find it staggering that he didn’t have any US tax payable.

3. @ JC
   I thought I read that Boris Johnson HAS now renounced his US citizenship. Yes? No?.

4. @LM

   It doesn’t appear that Boris Johnson followed through with his threat to renounce.

   http://www.forbes.com/sites/robertwood/2016/04/12/panama-dogs-cameron-brexit-looms-citizen-boris-seems-more-presidential-than-ted-cruz/#6ec685068072

   To be honest, it seems to me that he could’ve made a strong case that he relinquished US citizenship years ago by working for the UK government. Moreover, I don’t understand why the UK doesn’t insist on that since the IRS has access to every financial account he has signing authority over — as mayor of London, wouldn’t that mean the IRS has access to the city’s books? That seems unacceptable to me.

5. @LM

   Please pass my thanks along to your better half for compiling the tax info for us — that’s very useful indeed!

6. @JC,
   >Pension contributions, or contributions to a nonqualified pension fund should be taxed on annual gain at his US marginal rate (treatment for “high” earners).

   Tax treaty for the UK is very good on pensions. Pension contributions are deductible from US income. Pension growth is not taxed. Only withdraws are taxed.

7. @Edelweiss,
   >Isn’t he obligated to pay full whack (ie both employer and employee contributions in the 13%+ range) on his self-employment income?

   No. We have the SS totalization agreement that allows the UK to collect their equiv of SS and he is exempt from SS as a consequence.

8. @Westcoaster – – I will indeed pass on your thanks. Thanks back!!!

   During the 45 years that we have been in Canada he has always (until very recently) “enjoyed” (like an annual Sudoku puzzle) doing both Cdn and US taxes (juggling numbers and forms). Then, suddenly, it got more complicated, more forms, more uncertainty, more frustration. He was loathe to pay an accountant (we did, briefly a couple times for specific issues, and they made mistakes that, fortunately, we caught. Grrrrrrrrrrrrr). So now we both are solely Cdn and relieved of this US-IRS burden.
   But, academic that he is, he still likes to speak (at length) with others about these crazy rules and “obligations” – after all, it was like his hobby (certainly nothing I’d like to have as a hobby…..). The paper he did with MuzzledNoMore (http://isaacbrocksociety.ca/2016/03/30/a-paper-detailing-fatcas-costs-to-canada/) is also spot on and useful to send to one’s MP and journalists.

9. @Neil, I am not aware of the workings of the UK pensions. Taxed on way out does not sound good. Often there may be a mismatch in how countries tax compared to the US. In Australia, tax is on the way in and along the way but not on the way out. The US does not recognize the Australian tax on the way in and along the way. Double taxation inevitable.

   My tweet here to the tax payer advocate has gained some popularity:

   https://twitter.com/JCDoubleTaxed/status/719342683257315328

10. JC,

    If the UK had a pension taxed on the way in that was tax free on the way out then the tax treaty would honor that so long as you didn’t withdraw as a lump sum.
    The UK’s pensions are tax exempt for contributions, No tax on growth and taxed on the way out. The treaty keeps this the same.

11. No comment other than somewhere in the archives is previous application for this type of volunteer position (which was to no avail) — http://www.cpapracticeadvisor.com/news/12193736/irs-is-looking-for-a-few-good-volunteers.

12. @calgary, I haven’t read Professor William Byrnes paper http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2742383 – or at least I don’t remember it, thanks for the link – I will try to get through it. I do check SSRN from time to time, looking for useful FATCA /US extraterritorial CBT stuff, but don’t remember looking at the one by Byrnes. It is also interesting to see who else has cited the ones we have read, such as ones by Christians, and by Cockfield – though they might also cite them in opposition to their conclusions.

13. Article is about Hong Kong banks cancelling accounts and refusing to do business with student pro-democracy leaders, but also makes some choice statements:

    To boost business creation what they need is a simple bank, doing the simple stuff… It should be willing to open an account for anyone with a business registration certificate, an ID card, and a deposit. It should have no connection with New York, so the American authorities can be told what to do with their FATCA forms.

    It is one of life’s little paradoxes that the same bank which paid multi-million dollar fines for doing business with Mexican dope fiends is now threatening to close the accounts of harmless charities if they cannot prove they are not American.

    https://www.hongkongfp.com/2016/04/12/why-hong-kongs-banks-arent-interested-in-your-business/

14. @JC
    Lest you get too jealous about the better situation U.S. persons have in the U.K., I should point out that the U.K. government has recently floated the idea of taxing contributions and not outgoings on pensions in the future because they desperately need the money now. For many people in Britain this would be great news, but not, of course, U.S. persons in the U.K. Already changes in U.K. government policy have undermined the popularity of cash individual savings accounts, one of the non-reporting accounts.

    The newspapers have noted that Boris seems to have very little in the way of investment. He put about $15,000 each year into a pension, but that was it. Boris may not have that much to spare because he has two ex-families. Also, maybe his family have looked at the complications of being a U.S. person in Britain and decided that Boris’s money is for consuming and saving, while the wife does the investing. He can still give his wife around $146,000 a year.

15. The end of the 4th amendment?

    https://theintercept.com/2016/04/08/bill-that-would-ban-end-to-end-encryption-savaged-by-critics/

16. EU still working on “Safe Harbour”

    EU watchdogs demand revisions to Safe Harbour replacement
    http://www.bbc.co.uk/news/technology-36036531

17. Positive though error prone article:

    http://www.usatoday.com/story/money/personalfinance/2016/04/13/expats-tax-time-americans-overseas-irs-refund/82793968/

18. Daily Mail: “Swiss banking whistleblower claims the CIA are behind the Panama Papers leak as most of those named are ‘enemies’ of the United States”

    http://www.dailymail.co.uk/news/article-3537371/Swiss-banking-whistleblower-claims-CIA-Panama-Papers-leak-named-enemies-United-States.html

19. Compare the treatment of somebody who forgets to file information returns for foreign accounts with those that steal the identity of somebody else to get a job illegally:

    http://www.washingtonexaminer.com/agency-encourages-illegal-immigrant-theft-of-ssns-irs-chief/article/2588288

20. IRS Admits It Encourages Illegals To Steal Social Security Numbers For Taxes / Robert W. Wood

    http://www.forbes.com/sites/robertwood/2016/04/13/irs-admits-it-encourages-illegals-to-steal-social-security-numbers-for-taxes/#363268a0237a

21. https://twitter.com/bcfipa/status/715233812947423233
    Tweet from *BC FIPA (BC Freedom of Information and Privacy Association) re the Star news story but they added this heading to their tweet re FATCA “Fed Libs flip flop on FATCA, now support deal with Americans to send tax info to IRS. Lots of great quotes here.”

    Worth retweeting and liking their tweet.

22. The people who push for the complexity want to force the IRS to develop tax reporting s/w:

    http://www.startribune.com/sen-warren-irs-should-develop-free-online-tax-prep-service/375518091/

    Poor darlings have to spend $200 on tax prep. Funny I bet she doesn’t care about those who would have to spend thousands to comply with the crap.

23. https://www.hubbis.com/articles-content/5009/articles/Will+CRS+really+be+son+of+FATCA%3F

    Will CRS really be son of FATCA?

    When advisers look at the Common Reporting Standard (CRS) within the context of the regulatory changes and drive towards transparency globally, they need to bear in mind that it is an OECD-led initiative.

    This is important, says Angelo Venardos of Heritage Trust Group, because unlike FATCA, where the US authorities can enforce it, the OECD doesn’t have the same physical or legal ability to do so with CRS.

    Venardos believes there are also some other reasons why CRS might not move forward in its current form. First, Russia is not a Competent Authority signatory due to current US sanctions. Also, while China has signed an international agreement with the US with respect to FATCA, the US authorities are not respecting the reciprocality.

    “Going forward, the OECD therefore might not be able to implement FATCA-type legislation with regards to CRS,” he explains.

24. @Neill
    She doesn’t care when her constituents overseas have their bank accounts closed as long as FATCA brings in the money.

25. @Publius,

    That’s right. If you have $10k in the bank your rich in comparison to those she wants to help.
    If the UK switches to Roth like pensions the UK tax treaty will still protect them except if you take out lump sums and even then it’s a grey area.

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