Liberty and justice for all United States persons abroad

The Isaac Brock Society

IRS Announces the end of #OVDP – Fascinating Reactions from the Tax Compliance Community

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OVDP Program

cross-posted from citizenshipsolutions

    by John Richardson

IRS announces the end of #OVDP: Fascinating tweets from the “OVDP Historians” who compose the tax compliance community

http://www.citizenshipsolutions.ca/2018/03/17/irs-announces-the-end-of-ovdp-fascinating-reactions-from-the-tax-compliance-community/

#OVDP: Reactions from the “tax compliance community” (and others who tweeted) to the termination of OVDP

(Note: For the purposes of this post I will use the terms “OVDP” and “OVDI” interchangeably. Each term describes a specific example of one of the “OVDP era” programs, as it existed at a specific point in time. A particularly good analysis of the evolution of the “OVDP era” programs is found here – of interest only to those who want to “OVDP Historians“!)
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Part IV-Sec 965 Transition Tax – Comparing Treatment of Homeland Americans to the Treatment of Non-Residents

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cross posted from citizenshipsolutions     by John Richardson
 

CLICK TO ENLARGE

 
 
 
 
 
 
 
 
 
 

Attorney Monte Silver has organized a worldwide petition to prevent the application of the “transition tax” and GILTI to “tax residents” of other countries. Please support him by participating. You will find his petition and further information here:

https://www.democratsabroad.org/remedy_repatriation_gilti_taxes

And now, back to our regularly scheduled programming.

Introduction

This is the fourth in my series of posts about the Sec. 965 Transition Tax and whether/how it applies to the small business corporations owned by tax paying residents of other countries (who may also have U.S. citizenship). These small business corporations are in no way “foreign”. They are certainly “local” to the resident of another country who just happens to have the misfortune of being a U.S. citizen.

The first three posts were:

Part 1: Responding to The Section 965 “transition tax”: “Resistance is futile” but “Compliance is impossible”

Part 2: Responding to The Section 965 “transition tax”: Is “resistance futile”? The possible use of the Canada U.S. tax treaty to defeat the “transition tax”

Part 3: Responding to the Sec. 965 “transition tax”: They hate you for (and want) your pensions!

Last night I was discussing the “transition tax” with an “individual” who is impacted by the tax AND is a Homeland American. He is a “tax resident” of ONLY the United States. For Homeland Americans who are subject to ONLY the U.S. tax system the “transition tax” is NOT a bad thing. For “non-residents” it is a terrible thing, which may destroy their retirements. The reason is that “nonresidents” are subject to both U.S. taxation and taxation in their countries of residence. The “transition tax” is an extremely egregious example of the terrible effects of the U.S. practice of imposing “worldwide taxation” on the residents of other countries. I hope that “the transition tax” will be the “straw that breaks the Camel’s back” and ends the U.S. practice of imposing taxation on people who don’t live in the United States.

After the discussion, I summarized our conversation in the following letter to him. Here is the letter.

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Part 3-Responding to the Sec 965 Transition Tax- They Hate you for Your Pensions!

Posted on by Posted in Transition Tax 17 Comments

cross posted from citizenshipsolutions

by John Richardson

Introduction

This is the third in my series of posts about the Sec. 965 Transition Tax and whether/how it applies to the small business corporations owned by tax paying residents of other countries (who may also have U.S. citizenship). These small business corporations are in no way “foreign”. They are certainly “local” to the resident of another country who just happens to have the misfortune of being a U.S. citizen.

The first two posts were:

Part 1: Responding to The Section 965 “transition tax”: “Resistance is futile” but “Compliance is impossible”

Part 2: Responding to The Section 965 “transition tax”: Is “resistance futile”? The possible use of the Canada U.S. tax treaty to defeat the “transition tax”

Immediately prior to the passing of President Obama’s “Affordable Care Act” (which was subsequently ruled to be constitutional BECAUSE it was a “tax”), legislators were faced with a comprehensive, complex and incomprehensible piece of legislation. Very few members of Congress understood the details and impact of what they were voting for.

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FOI CHALLENGE – Calling all MODEL 1 IGA COUNTRIES!

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Over at FixTheTaxTreaty! we wanted to know how much FATCA data was being sent from Australia to the IRS, so we submitted a Freedom of Information request to the Australian Tax Office. We found that the numbers were much higher than we had expected. As much as 6%(!) of the non-retirement financial assets of Australian households and businesses was reported to the IRS for 2016, along with A$ billions in interest and dividend income.
 

by Karen Alpert
 

FATCA requires Australian financial institutions (very broadly defined) to report account holder details as well as account balance, dividends, interest and other income paid, and gross proceeds from sale or redemption to the ATO for transmittal to the IRS. It is evident from the graphs below that the amount of data going to the IRS has exploded since the initial data transfer of 2014 data (transferred 30 Sept 2015).

Once we had the data, we wrote a blog post and sent out a media release . The story has been picked up by the Sydney Morning Herald .Increased visibility of the sheer volume of data and exposure of local assets to US taxation can only help gain sympathy and support in the countries where we live. With this visibility, we can start to move the conversation to the costs and benefits of FATCA, and a discussion of how to protect the sovereignty of our home countries.

Clearly the IRS must be drowning in data. We would like to get a better idea of the global scale of this data dump. So, we’re challenging the rest of the world to try the same thing. If you live in a country with a Model 1 IGA (where the data goes to your country’s tax authority for transmission to the IRS), submit your local equivalent of a FOI request. Let us know in the comments at Fix The Tax Treaty when you submit your request and when you receive a response. If the response is not easy to analyse, we can help, just email us admin at fixthetaxtreaty dot org.

Part 2: The Transition Tax: Is “Resistance Futile”? The Possible use of the Canada U.S. Tax Treaty to Defeat the “Transition Tax”

Posted on by Posted in Tax Treaties, Transition Tax 7 Comments

 

cross-posted from citizenshipsolutions blog

by John Richardson

Beginning with the conclusion (for those who don’t want to read the post) …

For the reasons given in this post, I believe that there are grounds to argue that the imposition of the Sec. 965 “transition tax” on Canadian resident/citizens DOES violate the Canada U.S. tax treaty. It is my hope that this post will generate some badly needed discussion on this issue.

If you are an individual who believes you may be impacted by the “transition tax”, you should consider raising this issue with the Competent Authority. I would be happy to explore this with you.

Need some background on the Sec. 965 “U.S. transition tax”?

The following tweet references a 7 part video series about the Internal Revenue Code Sec. 965 “Transition Tax” created by John Richardson and Dr. Karen Alpert.

(Video 6 gives examples of what various approaches to “Transition Tax Compliance” might look like.)

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FATCA, the Compliance Mafia, The Swamp & the Deep State in the League of Non- Aligned Nations

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klafighter

How does a country move from nobly declaring FATCA to be a breech of sovereignty — to signing a FATCA document with the Obama regime over the course of just a year? Well, the compliance-mafia / Deep State has either a Mustafa or a Slobo on call for whatever the Deep State needs in whatever country needed.

Perhaps you remember the days when we prayed for some FATCA IGA fightback? Country after country fell to the Nobel Peace Prize winner’s extra-territorial FATCA citizen-spy tool.  First, the big 5 fell. Then Norway got the Deep-State John Doe payoff, and shortly afterward the entire world caved to FATCA IGAs. Finally, the never-tiring JustMe threw in the resistance towel and disappeared into mountain bliss.

Then, while a few of the expected put up some symbolic resistance and disinterest, a tiny bit of valiant resistance popped up. A tiny country publicized a resistance. This is a country known for resistance–A country who had lost 1/5 of its population fighting off its occupiers in the first world war (the Ottomans and the Austro-Hungarians), A country who had resisted the Nazi occupation, with both its communists and royalists, whilst fighting its own civil war between themselves, whilst rescuing 500 forgotten Americans expatriated behind enemy lines.  It was also known as joining together others as non-aligned nations in resistance of both the east and the west.

Unfortunately this country known for its resistance, also takes pride in having lost its wars and sovereignty on a regular basis over the centuries. Beginning with things such as having its entire army defeated by the Ottomans while sleeping off a hangover, living centuries as slaves to the Ottoman occupiers,  delivered to communists by spies as loot for the defeat of the Nazis, and finally destroyed by a Deep State / Jihadi alliance. All of this, while still resisting invaders with spirit. And then, the Stepford Wives got well appreciated by them, when the witch Madeleine Albright got herself stoned in the area she had “liberated”.

So, as another day in history, Aug 11 of 2014, the valiant Serbs put up resistance to America, and announce that real Serbians would be protected from the wrath of the long arm of the IRS and its FATCA.  But actually, it was visible a year prior that non-submission would not be tolerated, that the Compliance Mafia deep state would be imported by an invading American McKinsey-firm accounting lackey to rule the Serbian Financial Sector as minister of Serbian finance.

Serbia has a history of resisting occupiers, like the 4-century occupying Turkish jihadists who maintained the right to break in and take pleasure of  any house, business, or marriage . But there were small bits of resistance, such as the famous businessman Pirot Hrista Jovanavic, who built his office with a low ceiling so as the tall Turkish invaders would have to bow when they broke into his office.

However, Prime Minister Vucic is actually a master at announcing resistance to the Deep State, to foreign powers, and to the influence of foreign cultures. He typically makes such announcements of resistance to parties such as the Arabic nations, all-the-while selling off the most valuable downtown property to oil-rich barrons. He is known for feigning resistance to the EU, Turkey, Hungary, and US, all the while awarding sweet deals to foreigners for his country’s previously state-owned properties.

Unfortunately again this time FATCA resistance was not to be, as the currently-reigning vassal Prime Minister Vucic arranged for the McKinsey mafia to arrive and do the work of the Obama Deep State, one year prior to the announcement of resistance. In just a short year, the Deep State Mole landed in Serbia and implemented the Obama Ottoman-invasion extra-territorial FATCA edict. He left, just days after signing the FATCA surrender and months prior (12 Jul 2014) to the country, its media, and Brock Society even realizing (11 Aug of 2014) what had happened.

Prime Minister Vucic feigned resistance, which we had cheered, but Vucic resistance was actually well after the fact. Oh well, Vucic has often feigned similar resistance—afterall, he had hired a humanitarian progressive American-plant, neocon wet dream—a lesbian Croatian (Deep State) USAid graduate to be Prime Minister.

There is no better display of Deep State Compliance Mafia FATCA implementation than at the Obama / Deep-State vassal Vucic implementation of FATCA with Serbia’s temporary employment of an American McKinsey accountant to a place as finance minister. As a result, US citizens residing in Serbia will remain under the control of Obama-dominated FATCA / FISA / FINCEN Deep-State surveillance. Any returned war refugee or NGO baby will forever be a slave to the Obama FATCA Ottoman tax regime.

Dear Candidate Trump, would you like to rescind the Obama Executive IGA orders for FATCA and eliminate layers of expensive FATCA regulations?

Some of us look forward to the potential for Trump leadership to eliminate Obama regulations and intrusions upon American citizen–but no one is holding their breath. How about you Make It Great for American Citizens Again and eliminate FATCA and FBAR and eliminate Citizenship-Based-extraterritorial taxation? A few Executive orders of your own could undo 8 years of Obama Ottoman-like tyranny and allow 9 million U.S. expat Americans to live in peace and freedom…and to once again look back to their home country. Dear Candidate Trump—what say you #MakeItGreatforAmericansAgain?

 

Part 1: Responding to The Section 965 “Transition Tax”: “Resistance is Futile” but “Compliance is Impossible”

Posted on by Posted in Non Resident Taxation 41 Comments

Cross-posted from the citizenshipsolutions blog

by John Richardson
 

 
Introduction and background …

“This legislation is being interpreted by a number of tax professionals to mean that individual U.S. citizens living outside the United States are required to simply “fork over” a percentage of the value of their small business corporations to the IRS. Although technically “CFCs” these companies are certainly NOT foreign to the people who use them to run businesses that are local to their country of residence. Furthermore, the “culture” of Canadian Controlled Private Corporations is that they are actually used as “private pension plans”. So, an unintended consequence of the Tax Cuts Jobs Act would be that individuals living in Canada are somehow required to collapse their pension plans and turn the proceeds over to the U.S. government” -John Richardson

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Canadians’ Confidential Tax Info to be Shared with Police in Other Countries

Posted on by Posted in Canadian Government 4 Comments

Well, to the rest of the Canadian people, “Welcome to Our World!” In the same manner as the Harper Government, the Trudeau Liberals are using budget bills to sneak in provisions the Canadian people are completely unaware of. I sincerely hope we see Canadians rise up and challenge this garbage. Now we can add “tax evasion” to “terrorism” as the means by which governments are destroying any rights ALL citizens have.

elizabeth thompson by Elizabeth Thompson
Senior Reporter, CBC Ottawa

elizabeth.thompson@cbc.ca

Article is here

(1100 Comments -Commenting is now closed for this story)
 

EXCERPTS

Confidential information from Canadian taxpayers could soon be shared with police and authorities in three dozen countries around the world, under measures included in Finance Minister Bill Morneau’s latest budget.

In an inconspicuous section tucked into a small 78-page annex to the budget, the government says it wants to give police and tax authorities new powers to fight tax evasion and advance international investigations into serious crimes, ranging from drug trafficking and money laundering to terrorism.
***

“If you can get something buried in the budget that nobody knows about, sometimes you can get something passed without getting the kind of heat it deserves,” said Michael Bryant, executive director of the Canadian Civil Liberties Association and a former Ontario attorney general.

“Well, this deserves a lot of heat from the opposition and scrutiny from media.”
Michael Bryant, Executive Director CCLA, former Attorney General for Ontario
***

Currently, the Canada Revenue Agency can share confidential tax information about Canadians with authorities in other countries that are investigating serious cases, such as tax evasion. However, under Canadian law, the CRA cannot share that information with officials in another country investigating a crime other than tax evasion.
***

The proposed new policy affects more than tax information.
***

While tax authorities in other countries can ask Canada for an individual’s tax information, that policy currently doesn’t extend to other information like bank account records. Under a second proposal, the government would allow the legal tools contained in the Mutual Legal Assistance in Criminal Matters Act — such as court orders — to be used to obtain information being sought by another tax authority.
***

While the proposal was included in the budget, it will require the approval of Parliament before it can become law and be implemented. Finance Department spokesman Jack Aubry said it has not yet been decided whether the policy will be part of the budget implementation bill or some other piece of legislation.

Comment #2 on “Think You Can Leave the U.S. – Think Again

Posted on by Posted in Non Resident Taxation 103 Comments

 

“There is something fundamentally wrong with a country where compliance with its laws
forces you to (eventually) renounce your citizenship.”


 
This post is based on a comment by John Richardson. The comment is a response to
a post by laurainparis on the Thom Hartmann blogsite.
*******

Laura, you conclude your last comment with:

“In asking his question Thom demonstrates the importance of how the United States treates it citizens when they leave the country. He demonstrates that this is an important question not just for Americans who live outside the US, but for ALL Americans, regardless of where they live. Because anyone who thinks they can leave the country, anyone who comforts themselves with this idea – anyone who asks the question “why don’t more Americans leave?” – they are deluding themselves. There is no freedom for Americans. Americans are not free to live normal lives outside the US, unless they are financially and emotionally prepared to STOP BEING AMERICANS (that is, renounce their citizenship). The word “ironic” doesn’t begin to describe the situation. The words “impossible” and “tragic” do.”

A tragic situation indeed.

What’s most interesting and tragic is that:

The ones who try the hardest to comply with the U.S. rules are the ones who ultimately are forced to renounce. I have assisted a very large number of people in renouncing their U.S. citizenship (and thereby ending U.S. jursidction over them). A high percentage of people I have assisted are people who:

1. Have tried for years to comply with the “alphabet soup” series of laws and reguations that govern the lives of Americans abroad; and

2. Realize that compliance is no longer possible.

The only remaining Americans abroad will be “noncompliant” Americans abroad

In the long run, the only Americans abroad who will be able to retain their U.S. citizenship are those who do NOT attempt compliance with these laws. There is something fundamentally wrong with a country where compliance with its laws forces you to (eventually) renounce your citizenship. This is a problem that has escalated over time.
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