Media and Blog Articles – Part 1 of 11 (to 26 May 2015)

3,971 thoughts on “Media and Blog Articles – Part 1 of 11 (to 26 May 2015)”

1. @Calgary
   I am feeling very dense here. What will not be issued? A letter ruling? What is a letter ruling or determination letter?

2. My take…
   Yes, a letter ruling. It is a specific ruling given by the IRS for a specific issue / problem. ie, several recommended the answer to my family’s problem with an adult son who cannot renounce his automatically acquired US citizenship (born to US parents in Canada, never lived in the US, never had any benefit from the US, etc.) would be getting a letter ruling.

   I was against that since that issue is not about my son specifically (solved by a letter ruling for my son), it is about all such sons and daughters or any other person with some *mental incapacity* being able to renounce and be free from the incapacitating expense of cost of compliance of US taxes by their parent, guardian or trustee being able to act upon their behalf.

   Any other takes on the article put into the media blog as another article regarding FATCA?

3. Another interesting article….

   http://www.thenational.ae/business/banking/uae-signs-up-as-founding-member-of-asian-infrastructure-investment-bank

4. @Polly @Calgary411

   Does this now mean ‘no exceptions’?

5. Irony?

   http://www.telegraph.co.uk/news/politics/london-mayor-election/mayor-of-london/11516721/Michael-Bloomberg-considering-running-for-mayor-of-London.html

   https://www.facebook.com/borisjohnson/posts/10152856316491317

6. bubblebustin,

   Maybe there will be some exceptions from *the IRS will “not ordinarily” rule on FATCA issues unless the taxpayer can establish “unique and compelling” reasons*. If anyone wants to try for such:

   The procedures and user fees for obtaining a letter ruling are published annually in the first revenue procedure of each calendar year.

   • The current procedures are in Revenue Procedure 2015-1, which can be found in Internal Revenue Bulletin 2015-1.
   • Send a request for a letter ruling, including the applicable user fee pursuant to the instructions in Revenue Procedure 2015-1, section 7. See Revenue Procedure 2015-1, Appendix A, for a schedule of current user fees.

   http://www.irs.gov/pub/irs-irbs/irb15-01.pdf, with Schedule of User Fees starting on page 79, which are quite substantial and increased significantly from last year.

7. Keith Redmond on Twitter provided this link. It might have been posted somewhere on Brock before but I missed it. In case anyone else did too …
   TITLE: Why Are Americans Giving Up Citizenship? | CNBC International

8. It was posted, EmBee. But, a good one to re-visit.

9. Still comments going in here:

   FATCA: Five Years Later

   https://www.depositaccounts.com/blog/fatca-years.html

10. David Lesperance comments at a recent article:

    “Given that FATCA is only the latest in a series of pieces of legislation designed to enforce the US citizenship-based taxation (“CBT) regime, the real question is whether there is any realistic chance that the US will abandon its current CBT basis for a residence based tax (“RBT”) regime .

    There are several perspectives here to consider.

    Group 1) US politicians;
    Group 2) Americans who are not Golden Geese (1%ers) and will live in the US;
    Group 3) Non-Golden Geese “Accidental Americans” who do not (and may never have) lived in the US, but who live, work, and will die in another taxing jurisdiction;
    Group 4) Current or former US Golden Geese who may already be abroad or who could easily do so.

    Group 1 Perspective: The main goal of a US politician is to get and stay elected. They may do this because they are genuinely motivated to help society; are power hungry; or because they honestly believe that they are saving the country from “the other party”. Whatever the motivation, successful politicians quickly learn that they achieve election/re-election by having the American electorate PERCEIVE that they are doing everything possible to maximize the net (after IRS budget) tax revenue collected in a long-term manner. Being perceived to be maximizing tax revenue makes the voters believe that the politicians will pay for the entitlement programs that have been promised by prior generations of politicians.

    One thing to remember is that in the US political world “long-term” is considered the next election cycle (i.e. every 2 years!). Therefore real long-term planning falls victim to urgent attempts to get or remain in power.

    CBT (vs. RBT) is very attractive to American politicians because:

    A) CBT allows politicians to waive the flags of patriotism and to play to the populist underlying prejudices of the vast majority of American voters that the “unpatriotic, undeserving, opportunistic, ungrateful, parasitic rich” who were given the great gift of citizenship in the “greatest country in the history of man” are not paying their “fair share”.

    Politicians also want to keep the concept of “What is a fair share?” undefined and vague. That is why they will not stick with “legal tax liability” as the definition of “fair share” but rather will talk about additional undefined “moral tax liability”. By using imprecise and ambiguous language, they are able to allow the electorate to form their own opinions as to what they each feel is “fair” or “patriotic” or “moral”.

    It also allows for the electorate to place their own value on their country’s citizenship and its value to those Americans who live abroad. As an illustration, there are still a large number of American voters who take it as a given, that an American who is born and raised in Thailand (who is American through a parent) will be able to instantly call upon the US Marine Corp to stage a full-blown rescue should they get kidnapped in the remote jungle;

    B) CBT allows American politicians to continue to peddle the “offshore evasion treasure” myth. In short, “You the voters don’t have to take entitlement cuts or pay more taxes, because there is all this ‘offshore’ money that will pay for everything”. The politicians gloss over a) that much of that money that is offshore (read: “outside the US”) is not subject to US tax or is after US tax net profits and b) even if you recover that portion which is US tax evasion it is a one time cash injection, not an on-going stream of tax revenue.

    Since it is virtually impossible to determine the amount that could reasonably considered the proceeds of tax evasion, politicians fall over themselves with the wildness of their estimates (Did I say 1 trillion?…I meant 7 Page on trillion….no, No here’s a report that says 21 trillion!). With CBT, politicians are able to vastly increase the number of estimated tax evading “pirates” out there who are hiding treasure;

    C) In the late 1990’s, US politicians discovered that they had the financial leverage to impose the enforcement of US tax laws onto financial institutions abroad. This is a by-product of the US dollar being the current dominant world reserve currency and the fact that US equity markets have such a large market share. No financial institution wants to lose access to US dollar trade or the US markets for its entire client base. Denial of such access would be financial suicide. It was recognition of this power that prompted the US to create the Qualified Intermediary Regime (Qualified intermediary).

    When UBS was found to have criminally breached its QI agreement, US politicians were able to use the resulting outrage to pass even tougher legislation called ‘FATCA’ (Foreign Account Tax Compliance Act). The overwhelming nature of this fiscal power was most pointedly demonstrated when the US forced Vladimir Putin to sign on all Russian financial institutions to Page on fatca….in the middle of the Crimean crisis! Against such devastating financial retribution, one could not reasonably expect other governments, like Canada, to “resist US imperialism”;

    D) Since “long-term” means, until the next Presidential or mid-term election, these politicians do not have to worry about whether the US will damage itself on a longer time horizon by using CBT.

    They are able to engage in a “patriotism auction” by each claiming to be doing even more than the last, in making sure that the Golden Geese be hunted down; forced to pay up; and prevented from leaving the US tax regime by renouncing the world’s greatest citizenship.

    With all of the compliance cost being pushed onto the financial institutions or the individual taxpayers, it doesn’t matter that revenues collected may be relatively small. In fact, small collections allows the politicians to call for even more draconian legislation. It also provides a nice little cover story of ‘those tax dodging scoundrels’ being the reason behind why the US has an ongoing budget deficit (not the fact that we might just govern poorly);

    E) CBT allows the US to include non-residents who in any other jurisdiction would not be subject to that nation’s tax regime. If Russell B. Long (i.e. Kingfish Huey’s son) was alive today, he would modify his famous saying to “Don’t tax you; Don’t tax me; Tax the fellow behind the offshore tree!” In short, with CBT, US politicians are able to vastly extend the revenue and scapegoating net without upsetting the voters who affect them directly. Since there is not a “Senator for the rest of the World” or “Representative for Ex-pats”, there is little to no political cost to CBT.

    For all of these reasons, there is a great amount of political capital in maintaining CBT and only loss in going through the effort to implement RBT. There was some small pre-mid-term mention of considering such a change as part of one party’s platform. This was a blatant attempt to try an get some votes from Americans abroad. However, post-election all one hears is ‘crickets’ about change;

    Group 2 Perspective: During an election cycle, American voters are inundated with a wide variety of issues (Terrorism, Afghan war, ISIS, China, Economy, Unemployment, Ferguson, Who is Scarlett Johansson supporting?) that take up their attention span. Furthermore these are Americans who would also be taxpayers under a RBT system, so a CBT system has no additional impact on their own US tax liability.

    American politicians understand that for the most part voters will never take the time or effort to consider the viewpoint of Americans abroad who are impacted by CBT. If you doubt this, then I suggest you read the comments section on any article dealing with this topic. If they think about this at all, they are in support of CBT because they believe in the offshore treasure story, or that only ingrates or traitors would ever consider living outside of the greatest country in the world. As for those, who would renounce their US citizenship, most of this group would spit venom at them.

    If you look at voting behaviour, you will find a great deal of support for any effort perceived to be targeting tax evasion or making others pay more. Consistently voters feel that they pay too much tax and that others are not paying “their fair share”. Exploiting these underlying prejudices is what passes for political insight in the US on both sides of the aisle;

    Group 3 Perspective: This is the group that suffers under a CBT system. They are the collateral damage caused by the US politicians efforts to gain and maintain their positions. While some engaged in wilful blindness about their US citizenship and resulting tax liability, many were truly misinformed on both counts. They are rightly angry about the impact of CBT enforcement legislation like FATCA and the truly draconian cost of “making it right”.

    However, as a practical matter even when roused (as some are) they are too small in organized numbers to ever get the attention of, or change the minds of, significant enough numbers of Group 2 Americans. For this reason, US politicians have no incentive to do away with CBT and this group is left to dealing with its impact on their lives;

    Group 4 Perspective: Golden Geese tend to be much less bound to the US to make and maintain their wealth as a result of globalization’s ‘flattening effects’. There is also a greater chance that increasing numbers will have some experience of life outside of the US and many may form the opinion that while the US has many virtues it also has some significant problems. Likewise they may have also seen that they could live and thrive outside of the US.

    Finally, this group recognizes the reality that the US tax revenue model is extraordinarily reliant upon them for a huge portion of the total personal tax revenue. With an aging population meeting underfunded entitlement programs they recognize that no matter who occupies the White House or controls the houses of Congress, they will be required to contribute more and more of their income and wealth to all levels of the US government.

    For those who want to at least give themselves the option of being able to leave the US tax system behind, they recognize that overcoming CBT is a bigger hurdle for them than for Golden Geese of other countries who are leaving the tax regime of their birth. It is a hurdle, but with proper advice and execution it is a surmountable hurdle.

    As recognition of the inevitable increased future tax burden prompts them to recognize that they have options, it is pretty easy to predict that the number of Golden Geese bailing out of the US tax system, will continue to increase. It is also fairly certain that the first reaction of US politicians will be to increase the cost of departure. Of course, they have done this before and every time the numbers of departing Golden Geese has multiplied as a result (i.e. Get out before it becomes even worse!). There is no reason to doubt that this action and reaction will continue to occur in the future.

    Given all of these perspectives it is time to summarize my conclusions. First, I do not think there is any realistic chance that the US will abandon its current CBT basis for a residence based tax (“RBT”) regime. I applaud those Americans abroad who are lobbying for this change, but I just don’t see it happening.

    Second, the Americans abroad will continue to suffer under CBT until they take action or action is taken against them. Unfortunately, taking action that will help their situation means coming to terms with bringing themselves into compliance with their existing US tax and filing obligations. Once this is done, then they can chose to either sever their future liability or pay for the cost of on-going compliance. Not taking action, will inevitably result in the US finding them and applying the full force of tax, interest and penalties. For those who plan to die before the US finds them, they should realize that they are simply passing this problem to their executors and heirs.

    With regards to US Golden Geese, they will each need to decide whether they will continue to absorb the ever-increasing tax liability on them for the benefit of not having to change their current American life situation. Some will stay. Some will decide to give themselves the ability to leave but stay for now. Some will leave. While the Golden Geese are small in number relative to non-Golden Geese (i.e. the 99%), because the tax revenue system relies on them for over 1/3rd of the total revenue collected, any significant increase in the number of American Golden Geese who decide to leave will have a MAJOR long-term impact on US tax collections. However, since this impact will not become apparent within a 2 year election cycle, American voters will continue to listen to American politicians who dismiss this reality.

    In short. CBT is not going anywhere. Americans abroad will suffer the cost and impact of a CBT vs. RBT system. Golden Geese will continue to leave. The US will suffer as a result but because this has truly a long-term vs. election cycle horizon, American voters and politicians will ignore it.”

    http://www.wsj.com/articles/checking-the-irs-overseas-1427759818#livefyre-comment

11. @Dreamer
    All of this is true and most likely the most relevant. But still – there is always the issue of morality. Citizenship-based taxation amounts to double taxation without services and that is just plain immoral. One wonders who could make THAT an issue worth listening to and acting upon. But yeah – it does seem that the thirst for other people`s money wins out.

12. I actually see our saviour being (indirectly) the USA’s own arrogance. Try a couple more Switzerlands or BNP Paribas type actions, and at some point, and I suspect sooner than later (see AIIB discussions) there will be enough anger outside the USA that some institutions will consider “having access to US markets” about as desirable as having retail banking customers who are Americans. We will then be freed, and can watch and cheer as the house of cards collapses under it’s own stupidity.
    Dreamer’s point about “long term” meaning a 2 year election cycle will only accelerate this process.

13. @PierreD,

    Not Dreamer’s point, our friend, and compliance condor Lesperance’s point.

    BTW, despite writing an essay on the topic, he still manged to leave out a major group. He writes:
    “There are several perspectives here to consider.
    Group 1) US politicians;
    Group 2) Americans who are not Golden Geese (1%ers) and will live in the US;
    Group 3) Non-Golden Geese “Accidental Americans” who do not (and may never have) lived in the US, but who live, work, and will die in another taxing jurisdiction;
    Group 4) Current or former US Golden Geese who may already be abroad or who could easily do so.”

14. More Garbage for US Homelander Consumption.

    http://www.nytimes.com/2015/04/08/opinion/michael-bloomberg-mayor-of-london.html?emc=edit_th_20150408&nl=todaysheadlines&nlid=59346573&_r=0

    What irks me is the line :
    “As it happens, the current mayor, Boris Johnson, is also an American citizen. Or, at least, he was until January, when he finally paid the federal taxes he’d been dodging, and then announced that he planned to renounce his United States citizenship.”

    Dodging taxes……PFFFFFT!

15. Interesting article in Washington Post
    http://www.washingtonpost.com/politics/a-standard-dejection-in-the-irs-help-line/2015/04/07/333594d6-d7f0-11e4-8103-fa84725dbf9d_story.html

    “A standard dejection in the IRS help line”

    “Five years of budget cuts by Congress have left the IRS so cash-strapped that Commissioner John Koskinen doesn’t bother sugarcoating the state of customer service. “It’s abysmal,” he said. (AP)

    “Nationwide, only 4 in 10 callers to the agency’s toll-free help line are getting through to a real person. The number of “courtesy disconnects” — a euphemism for an overloaded system hanging up on the customer — has reached 5 million so far this year, the agency reported.

    “When callers do get a real person, they can forget about asking questions that require expertise. These are now considered “out of scope.” The customer-service agents have been instructed to only tell callers what tax forms they need, where to get them and where to look for online information. Staff can no longer offer line-by-line assistance, provide guidance on tax planning or tax law, or help make payment arrangements.

    “And with 5,000 fewer agents than four years ago to go after tax cheats, officials estimate that $2 billion in revenue will go uncollected.

    “At the Dallas tax assistance center, there’s an empty space where the office printer sat before it was yanked out. The maintenance contract was too expensive. “

16. A Bloomberg article mentions the small staff in Philadelphia that is taking over calls from international taxpayers following closure of the three European offices and the one in China:

    “Frank Spadea manages an IRS call center in Philadelphia, where employees sit in a cubicle farm and field questions from Americans in foreign countries. His group used to have 51 employees; it’s down to 17. Of those, he expects at least two to retire this year, and they won’t be replaced. “It’s been seven or eight years since I’ve been able to hire,” he says. Meanwhile, his staff has been overwhelmed with calls this year from Americans overseas who are confused about extra information they’re supposed to furnish under the 2010 law combating tax cheating abroad. “They are calling like crazy about that,” says Donna White, a customer service representative in the office. “You kind of get burnt out.” ”

    http://www.bloomberg.com/news/features/2015-04-08/an-emotional-audit-irs-workers-are-miserable-and-overwhelmed

17. Oh My, where to start? The Hill needs to be Brocked in its entirety.

    http://thehill.com/policy/finance/238157-obama-makes-gains-in-war-on-tax-cheats

18. @ Charl
    Your comments and the other Brocker comments are excellent but they are lost in the Rep vs Dem posturing and the overt prejudices which are so sadly predictable as (S)election Time USA approaches. If everyone reading here today would just take the time to up-arrow the obvious Brocker comments they would rise to the top of the BEST list and overpower the absolutely ridiculous and often revolting comments which demonstrate irrelevant fixations on things like Al Sharpton, little Timmy Geitner, etc.

    @ ALL BROCKERS
    All we need is for a few good Brocker comments to stay fixed at the top of the BEST list. Can we give some strategic up-arrowing a try a least?

    @ Blaze and Victoria
    This new Hill article would be an even better target than the Max Reed piece for a rebuttal … if you feel up to it. The “tax cheat” rhetoric is over the top in this atrocity.

19. Financial Times (ft.com) is running an article “US expatriates’ taxing questions”.

    It mentions: “Stephen Kish chairs the Alliance for the Defence of Canadian Sovereignty, an organisation that is mounting a legal challenge over Fatca: “Many are really scared. They are afraid their own banks will turn them in.” ”

    Article is behind a paywall. If you don’t have a subscription (or are not registered), you might be able to google on the title and then open it from Google.

20. RE: http://thehill.com/policy/finance/238157-obama-makes-gains-in-war-on-tax-cheats

    To make my up-arrowing suggestion as easy as 1-2-3:

    STEP 1 Make sure you have all 200 plus comments visible by pressing Load More Comments until you get to the end.

    STEP 2 Use Word Find (COMMAND F on Macs) to quickly find the BEST comments by Cvc, SomebodySmart, Pastbeyond60, ragamoffyn, American Overseas, Dreamer, Samuel Clemmons, calgary411, Jesse …
    NOTE: There may be more BEST comments come up later too.

    STEP 3 Let your up-arrows fly!

    REPEAT later in the day to catch newer BEST comments. Believe me, you don’t want to waste your time reading the BS comments in between.

21. The Hill comment section is a good case study on how internet forums can be steered off track. Brockers might be interested in this article about trolls:
    http://investmentwatchblog.com/how-to-beat-internet-trolls-in-order-to-beat-em-you-have-to-know-their-game/

22. Sorry everyone. I just have this bee in my bonnet today about getting a Brocker comment to the top of the BEST list. A comment by Pastbeyond60 has the best chance so far to make it. If you can’t get through the ever increasing number of comments PLEASE up-arrow this one at least:

    http://thehill.com/policy/finance/238157-obama-makes-gains-in-war-on-tax-cheats#comment-1953054979

    NOTE: stracy has just added a comment which links to our vimeo videos.

23. Hi EmBee, I was having a hella time trying to get all the Brocker comments to load with the “load more comments” as it kept crashing the website, until I got smrt and hit the “load newest” and VIOLA all the Brocker comments were the newest…heh! So I upped away on all of them!

24. The Hill is a propaganda mouthpiece of the Obama administration. However, in the comment area our familiar battleground. If you are not commenting, then it helps to uptick comments in support of “the cause.”

25. @ GwEvil
    Thanks for upping away.
    @ JC
    Yes, indeed … propaganda for Obama. And it sucks the anti-O’s in like flies. Some pretty ridiculous exchanges going on there.

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