Liberty and justice for all United States persons abroad

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Tag Archives: Americans abroad

Morales-Santana: SCOTUS Makes it Harder for People Born Abroad to U.S. Citizens to Become U.S. Citizens

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cross-posted from the citizenshipsolutions blog

by John Richardson

**********

Prologue:U.S. citizenship is not as attractive as it was

One benefit of U.S. citizenship: If one is a U.S. citizen then one cannot be deported from the USA

Some Green Card holders become U.S. citizens. Some do NOT become U.S.
citizens. Many of those Green Card holders become U.S. citizens in order to avoid the possibility of deportation. Deportation results in expatriation and can (among other things) subject the unfortunate Green Card holder to the S. 877A Expatriation Tax, which can result in significant confiscation of assets. In fact, the S. 877A Expatriation Tax discourages people from seeking Green Cards in the first place. That said, it is only Green Card Holders who are “long term residents” who are subject to the Exit Tax.

The plight of Mr. Morales-Santana: No U.S. citizenship = the possibility of deportation

The facts as described by the court:

In 2000, the Government sought to remove Morales-Santana based on several criminal convictions, ranking him as alien because, at his time of birth, his father did not satisfy the requirement of five years’ physical presence after age 14. An immigration judge rejected Morales-Santana’s citizenship claim and ordered his removal. Morales­ Santana later moved to reopen the proceedings, asserting that the Government’s refusal to recognize that he derived citizenship from his U. S.-citizen father violated the Constitution’s equal protection guarantee.

To be deported or not to be deported – it depends on Mr.Morales-Santana’s claim to U.S. citizenship

In order to avoid deportation, Mr. Morales-Santana needed to establish that he was a U.S. citizen.

In order for the U.S. Government to deport Mr. Morales-Santana, it needs to establish that he was NOT a U.S. citizen.

If you wanted to argue that Mr. Morales-Santana was a U.S. citizen, then how would you make the argument?

Facts: Mr. Morales-Santana was born (1) outside the USA and (2) out of wedlock. He was NOT born to a U.S. citizen parent who met the U.S. “physical presence requirements” to transmit U.S. citizenship! How could he then be a U.S. citizen?

Hmmmmmm ….
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The “Exit Tax”: Dual US/Canada citizen from birth, no Canada citizenship today = no exemption to US “Exit Tax”

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cross posted from citizenshipsolutions.ca

The above tweet references a “guest post” written by Dominic Ferszt of Cape Town South Africa. The post demonstrates how the “dual citizen from birth” exemption to the S. 877A “Exit Tax” relies on the citizenship laws of other nations. In some cases those laws of other nations are arbitrary and unjust. If these laws were U.S. laws, they might violate the equal protection and/or due process guarantees found in the United States constitution. For example, Mr. Ferszt describes how the “dual citizenship exemption” to the “Ext Tax” is dependent on South African “Apartheid Laws”. He describes a situation where a “black” U.S. citizen from birth is denied the benefits of the dual citizen exemption to the Exit Tax, which are available to a “white” dual citizen from birth.
(During the “Apartheid Era” Blacks were not entitled to South African citizenship.)

So, what’s the S. 877A “Exit Tax” dual citizen exemption and how does it work?

The dual citizen exemption, which I have discussed in previous posts, is found in Internal Revenue Code S. 877A(g)(1)(B) and reads:

(B) Exceptions An individual shall not be treated as meeting the requirements of subparagraph (A) or (B) of section 877(a)(2) if—
(i) the individual—
(I) became at birth a citizen of the United States and a citizen of another country and, as of the expatriation date, continues to be a citizen of, and is taxed as a resident of, such other country, and
(II) has been a resident of the United States (as defined in section
7701(b)(1)(A)(ii)) for not more than 10 taxable years during the 15-taxable year period ending with the taxable year during which the expatriation date occurs, or

Entitlement to the “dual citizen exemption” depends entirely on the citizenship laws of other countries …


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The Internal Revenue Code does NOT explicitly define “citizenship” or require “citizenship-based taxation”

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reposted from citizenshipsolutions dot ca
 
UPDATED July 6 afternoon. Some text additions and I have clarified that the author of this post is John Richardson, B.A., LL.B., J.D. (Of the bars of Ontario, New York and Massachusetts), Toronto citizenship lawyer and Co-chair of the Alliance for the Defence of Canadian Sovereignty and the Alliance for the Defeat of Citizenship Taxation.
 

It is widely understood that the United States Internal Revenue Code requires that “U.S. citizens” are subject to U.S. taxation wherever they may live in the world. Although this is true, Subtitle A (Income Taxes) of the Internal Revenue Code:

  1. Does NOT explicitly say that U.S. citizens are subject to
    U.S. taxation on their world income wherever they reside;
    and
  2. Does NOT explicitly define the term “citizen” or “U.S.
    citizen”. (This contrasts with the the terms: “U.S. Person”,
    “Permanent Resident”, “Substantial presence”, etc. that ARE
    explicitly defined in the Internal Revenue Code here and
    here. This means that the starting point for
    the definition of “U.S. citizen” is in the 14th Amendment of the
    Constitution and the United States Immigration and Nationality
    Act.

(Interestingly it appears that only the “Estate Tax” provisions in Subtitle B of the Internal Revenue Code (Internal Revenue Code S. 2001) specifically impose tax liability on the “taxable estate of every decedent who is a citizen or resident of the United States”.)

Some thoughts on each of these points …
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Tax Haven or Tax Heaven: Introduction – Were the “Panama Papers” about #offshore “tax evasion” or “tax avoidance”?

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cross-posted from citizenshipsolutions dot ca


The above tweet references an article written by Tony Burman, which appeared in the Toronto Star (and other papers) on April 9, 2016.

The article included:

The global aftershocks of the so-called Panama Papers are only beginning to be felt. More revelations are expected in the weeks ahead, and this will only add to the uproar.

The prime minister of Iceland has already been dumped. Other government leaders have been embarrassed. Several countries have announced inquiries into the secretive world of offshore tax evasion. And public anxiety about the corrupt coddling of the world’s superwealthy “1%” is showing signs of turning into red-hot anger.
But we shouldn’t be surprised. It’s not as if we didn’t already know that the world’s political and business elites frequently cheat and steal, that our governments are swindled out of trillions of dollars of revenue and, as a consequence of this greed, the vast majority of people suffer from a painful culture of austerity so these freeloaders can get richer. We already knew that.

However, it is the disgusting detail contained in this week’s revelation of leaked documents that is so revolting — and, of course, the appalling fact that so much of this is technically “legal.”
With their own interests in mind, politicians and business leaders in many countries have worked quietly in the dead of night to make this so. The result is that, more than ever, taxes now appear to be primarily for the little people.
The documents come from an influential Panama-based law firm. They include 11.5 million internal records disclosing the financial secrets of heads of state, billionaires, drug lords, celebrities and others.

While expressing outrage at the part of the “Panama Papers” that represents tax evasion, Mr. Burman identifies that much of the revelations of the “Panama Papers” was the result of clear and deliberate government policies and laws. In other words, the story of the “Panama Papers” is mostly about “legal tax avoidance” and ” NOT illegal “tax evasion”. Therefore, it is entirely unreasonable and counterproductive to focus on “tax evasion” and exclude “tax avoidance” from the discussion.
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Linking of passport to taxation confirms “taxation-based citizenship” undermining #CookvTait

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This post ends with the following question:

Are Americans really “so beaten down, so subservient, so fearful of authority that it complies with the most horrific and undemocratic “laws” and is unable to unite and simply say NO, collectively.”

I invite you to express your answer in this poll:

Perhaps you could consider this question while reading the following post.

_____________________________________________________________________________________________

The above tweet references the following  comment from @Homelander_NOT on Robert Wood’s blog.

Yet another punitive measure that will further the creation of a US Berlin wall plus make life more complicated for Americans/”U.S. Persons” abroad. Other recent moves which demonstrate the tendency of the U.S. government to repeatedly “do the wrong thing:” ” Is US considering not publishing #USExpatriation list anymore? If yes, efficiency or embarrassment?” https://www.federalregister.gov/articles/2015/12/01/2015-30366/proposed-collection-comment-request-for-information-collection … (not at all sure that is what implied by this tweet I received) and Executor liability for U.S. income tax and penalties, interest, etc., may extend to you if you were aware that the decedent owed the U.S. treasury for say tax from unfiled tax returns.http://www.taxconnections.com/taxblog/good-to-know-part-3-from-larry-stolberg-cpa-ca/#.Vl79_PmrTIV . For such an “ advanced” nation, the U.S. seems not to understand basic psychology. The more one tries to restrict somebody, the more they are likely to be resisted. If it is true the Name & Shame List’s days are numbered, it won’t be of any consequence. Who reads the Federal Register anyway? Personally, I could care less if they kept an ongoing list published in the NYT and like many, consider it a badge of honor. Proof of being a ‘real’ American if you will. And more nonsense/confusion for an executor (really? even an “alien one? Just how would they enforce that?). Or is it more along the lines that no one can even imagine someone having the gall to not obey the exceptionalistic conditioning that can only be dumped by experiencing the rest of the world? It is a well-documented problem that the IRS does not have records for expats; even with FATCA there are likely to be many pieces of undeliverable mail. Yes the IRS cares not and will continue to follow their own procedures. I expect thousands upon thousands to simply ignore those letters. People are developing resistance and figuring out there is not much the U.S. can do. Other than count on the fact that such folks will surely want to come to the U.S. so “we’ll get them at the border.” Lots of people are figuring out the better choice is simply to go elsewhere for vacations and have family visits where the expat families are. All of this is pathetically sad. All this grief for insistence on filing forms to show there is likely no tax owed-when everyone KNOWS its the big fish living in the U.S.that all this effort should be expended toward. Again, such a very basic, basic thing that eludes those running the most dominant, most fortunate country on earth. I remain puzzled that this is what has happened to the country I grew up in and in spite of awareness of its many flaws, still loved until FBAR.

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Is an American a Piece of U.S. Property?

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Recent discussions with a friend have me wondering whether Americans abroad are indeed the “property” of the US government. At first I considered this a bit exaggerated but am coming to appreciate that there is a great deal of truth in it. Perhaps reflecting a bit on the past might provide valuable insight on how we might approach this ongoing, changing situation. The idea that a human being could be considered “property” is initially strange to me. The only obvious parallel would be that of being a slave. In spite of growing up in a somewhat racially-tense city, I was largely unaware that the very foundation of the U.S. included slavery. I was 10 years old in 1965 when the riots in Watts occurred. Two years later, there were 159 riots during the “Long Hot Summer of 1967. The next year, following the assassination of Dr Martin Luther King Jr, more riots. By then I was 13 and able to understand some of the reasons: poor schools, lack of employment, overcrowding in filthy ghettos, pollution, discrimination by police, etc. MLK described it as “humiliation for decades, for centuries.” Along with the other assassinations, Vietnam, etc, it did not yet occur to me that the problem was rooted in a very underlying hypocrisy. In spite of the U.S. being the “Land of the Free and the “American Dream” supposedly available to all, the fact was the U.S. was a place where gross abuse of human “rights” was visible in daily life as long as I had been alive.

There are some interesting CBC Radio “Massey Lectures” given by Dr. Martin Luther King Jr that John Richardson wrote about recently on the ADCS wordpress site. As I listened, I was struck by the fact that intellectually, it was obvious enough that “rights” had been violated in a perverse way for so long. But I was more horrified by the immorality of it. I was much too young to really appreciate what he was and am overwhelmed by his intelligence, clarity and devotion to non-violence. The issue of race in America is clearly an ethical issue, no doubt about it. One could go on and on about social, economic and other mitigating factors but at its root, the problem truly is that one group of human beings is denied the basic respect, dignity and consideration others receive due to discrimination of what they are from birth. The recent incidents in Ferguson, Cleveland and other cities show not much has changed in the last 50 years.

I was taught that America was born due to the brave actions of those who left England because of persecution due to religious beliefs; later attempts to tax the colonists who had no representation in the parliament etc. In recent years, having learned my ancestral roots, I have been proud of the fact that my family has played an integral role in that beginning. Yet at the same time, for the last three years, experience of the treatment at the hands of the US government definitely casts a different light on it. Americans abroad (and even people who are not truly “American”) are not given the same respect as those who live in the Homeland. What’s at the root of this? Does the U.S. view us as if they “own” us? Are we their property and are we not free to leave the country? We may be able to buy our way out but fundamentally, what difference is there between that and a slave from the past doing the same? In the modern world there is a tendency to minimalize emotional or mental suffering as if it is not valid since it is not as severe as say, physical torture. That may be true to a certain degree yet I fail to see how that removes the immoral forces that can be responsible for both. In fact, the only way to see it may be to draw parallels between them.
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Does the U.S. really want to lose @JTepper2 as a citizen? Renunciation of U.S. citizenship – Jan. 2015

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This post appeared on the RenounceUScitizenship blog.

The above tweet references an op-ed that appeared in the December 7, New York Times. The “Op-Ed” was interesting, well written and didn’t add any new insights or information. I then researched who this person is. He is a highly accomplished author, fund manager in London. In fact I intend to read at least one of his books.

Q. Does the U.S. really want to lose citizens of this calibre?

A. They don’t care and they don’t care that they don’t care.

“Stupid is as stupid does.”

This sentiment is confirmed in:

In the words of this Homelander:

I think the real question is what makes you an American. If you don’t live here and feel no responsibility for supporting the country, why would anyone care if you decide to renounce your citizenship? There are plenty of people in the world who WANT to be Americans. Many of them come here, contribute to the country and want to become citizens. Those are the real Americans, not the folks who inherited the moniker but seem to think they have no responsibility for the contributing anything to the country.

The “op-ed” by Mr. Tepper includes:

more

More from Robert Morris @Robbolaw on #FATCA and #Americansabroad

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FATCA 2014 – Year of FATCA Progress:

 

FATCA 2013 – Twas the year before FATCA:

You may recall about a year ago, Robert Morris launched the “FATCA Video heard  round the world” and published a “FATCA and the new Birth of The American Empire“.

FATCAandthebirthofthenewamericanempire

Enjoy!

 

#Americansabroad do NOT renounce U.S. citizenship because of taxes

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This superb guest post from @TaxGirl is one of the best I have seen.

As you read this consider this question:

Would you be less likely to renounce U.S. citizenship if the U.S. had tax rules for its citizens abroad that were more like those of Eritrea? A straight 2% of income?

Coming into U.S. tax compliance – To “amnesty” or “not to amnesty” – that is the question

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Updated on September 19 with an interesting comment by JC to the Robert Wood article:

 

The above tweet references an interesting article by Robert Wood. Many people consider the question of which vacation destination to go to. As any “Homelander” will tell you, all Americans abroad are probably  “offshore tax cheats” who simply “don’t pay their fair share”.

Therefore, it’s reasonable that while the whole wide world (less Americans abroad) wonder about their next vacation destination, Americans abroad worry about:

“Which IRS Offshore Amnesty Program Is Right For You?”

It’s 11:00 p.m. – Have you worried about your amnesty program today?

Readers of this post are encouraged to post some comments on Mr. Wood’s blog. I don’t believe that he differentiated between Homeland tax cheats using offshore accounts to evade taxes and Americans abroad who need offshore accounts to pay their bills.

One commenter filled the void left by the failure to acknowledge Americans abroad by writing:

“Amnesty is often used to express “freedom” and the time when prisoners can go free.”

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