Liberty and justice for all United States persons abroad

The Isaac Brock Society

The IRS Has Ended The “Delinquent FBAR Submissions Program”

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Introduction and purpose

As important as this post is, it will be of interest to only a limited number of people.

 

The statement from Bloomberg that “IRS Retains Relief for Late FBAR Reports” is misleading. It makes it sound as they the removal of the “Delinquent FBAR Submission Procedures” doesn’t matter. It matters hugely! Many individuals must now rely on defending FBAR penalties on the basis of “reasonable cause” arguments. This is very difficult and very expensive.

Here is the Bloomberg article:

IRS Retains Relief for Late FBAR

About the “Delinquent FBAR Submission Procedures” progam

For many years the IRS has had informal programs that have allowed individuals with “foreign asset reporting and foreign income” issues to come into compliance in a “penalty free way”. The “Streamlined Program” and the “Relief Procedures For Former Citizens” programs are examples. Unsurprisingly, until June 30, 2026 the IRS also had an “Delinequent FBAR Submission Procedure” which (in limited but common circumstances) allowed individuals to file “delinquent” FBARs in a penalty free way.

The bottom line is this:

Effect July 1, 2026 the “Delinquent FBAR Submission Procedures” program was removed from the IRS site. This means that the IRS no longer has a program that comes with an advance offering of no penalty for late filed FBARs. This means that individuals no longer have assurance in advance that they will not be assessed FBAR penalties. Delinquent FBARs may or may not result in penalties (likely not). But, whether penalties can be assessed cannot be known in advance.

Does that matter? If so, how much? Are people likely to be assessed FBAR penalties?

For the moment I suspect that it doesn’t matter a great deal. It will likely be “business as usual” where FBARs can be filed without penalty. I am NOT “sounding a penalty alarm”. That said, the removal of the program has made it more difficult to understand how to approach the problem of “unfiled FBARs”.

What has happened is that:

  1. Late FBARs (unless they are filed under the “Streamlined Program”) will be treated under normal IRS procedures. This means that FBAR penalties may or may not be  levied.
  2. The world has reverted to what it was before the “Delinquent FBAR Submission” proecures.

The whole purpose of the “Delinquent FBAR Submission Procedures” was to provide an assurance that penalties would not be imposed provided that the conditions to use the procedures were satisfied.

Bottom line: It is unlikely that people will be penalized. But, the guarantee of a late “penalty free FBAR submission” is over.

 

For a more detailed discussion of the end of the “Delinquent FBAR Submission Procedures“:

IRS Ends “Delinquent FBAR Submission Procedures” Leaving No “Guaranteed Penalty Free Option”

In addition, here is a podcast I did with U.S. tax lawyer Virginia La Torre Jeker:

 

In Conclusion …

At a bare minimum, after July 1, 2026 one must be more thoughtful in terms of managing FBAR non-compliance.

John Richardson – Follow me on X.com/Expatriationlaw

 

 

 

 

 

 

The Saga Continues – What To Hold And What NOT To Hold In A TFSA Or ISA

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Purpose and summary

This post is motivated by another incredibly frustrating discussion I had with someone this morning. The problem is aggravated by the reliance on a financial planner selecting the composition of a TFSA portfolio aggravated by what (in my opinion) is unnecessary churning of the account.

While it is important that U.S. citizens in Canada DO have TFSAs, it is important that they keep track of the income earned in the TFSA. It is also important that they do NOT invest in mutual funds or ETFs inside the TFSA or ISA*. People should invest in individual stocks which pay dividends. I will now explain why.

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“Subject to the jurisdiction thereof”: SCOTUS Decision (6-3)

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“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.” 14th Amendment

The SCOTUS decision places the onus of citizenship on the person born in the USA: It must meet two criteria: (1) Birth on USA soil; (2) being subject to the jurisdiction of USA at the time of birth. The decision maintains that only two groups of persons born in the USA would have been excluded at the passing of the 14th Amendment: children of foreign nationals with diplomatic immunity and Indians (who were only made citizens in 1924). Everyone else born in the USA is a citizen because they are subject to the jurisdiction of the USA because the birth happened within the territorial control (jurisdiction) of the USA. The immigration status of the parents is irrelevant.

The anti-immigration zealots would like to strip a lot of people of their USA citizenship only because their parents did not have legal status when they were born in the USA. This would lead to extreme injustice in many cases. The zealots mischaracterize the decision, typically as follows: “SCOTUS just ruled that a foreigner can invade our country 9 months pregnant and pop out a child that is an American citizen. This might be the worst modern ruling from SCOTUS.” Others are lamenting that such people are taking advantage of the welfare state, and that may be true in part. But that is problem with the welfare state that needs to be fixed–and should not be confused with citizenship rights.

On January 20, 2025, President Trump issued Executive Order No. 14160, titled Protecting the Meaning and Value of American Citizenship. The Order provides that children born in the United States of parents who are unlawfully or temporarily present here are not “subject to the jurisdiction” of the United States—and thus do not qualify for citizenship under the Fourteenth Amendment or the Immigration and Nationality Act (INA), which uses the same language.

Given what Trump was trying to do, I think the USA dodged a bullet with this SCOTUS decision. If you thought Minneapolis was bad, and I did, then the chaos that would take place when ICE implemented Executive Order No. 14160 could have led to war. Because they were NOT aiming only at 9 month pregnant women who cross the border and have so-called “anchor babies”, they were aiming at anyone whose parents weren’t citizens when they were born in the USA.

The SCOTUS decision means this: A person whose parents immigration status was undocumented can be born in the USA, grow up there, serve in the military, be honorably discharged, start a business, employ hundreds of Americans, and that that person shouldn’t have to worry about ICE arresting, detaining and deporting him or her because of Trump’s executive order. Furthermore, how many generations back would Trump and ICE go? If my parents weren’t citizens when I was born, then is it possible that my grandchildren wouldn’t be citizens either. Like Trump, in the late 19th century, the USA government wanted to exclude some people’s children born (namely those of chinese ethnicity), but that attempt was also rightly overturned by United States v. Wong Kim Ark. So Trump’s executive order is deja vu.

The history of the USA is replete with examples of the USA denying citizenship to people who want it and have a right to it, and forcing citizenship on people who don’t want it. An example is a Canadian border baby whose only connexion to the USA was a hospital on the south side of the Canadian border where he was born. He went back to Canada, was somehow drafted by the USA during the Viet Nam period, but was already a member of the Canadian military–he had to get his draft-dodger status in the USA sorted out when he was involved in joint USA/Canada military operations–so he told me. Many people here north of the USA are dismayed because the IRS wants us to report our income and our private bank accounts. Now, they force our banks through FATCA rules to disclose this information to the IRS. I’ve not heard Trump say, “We want to free the tax slaves in Canada of their ‘birthright’ tax obligations to the IRS.” Nope. His interest and that of his supporters is to expulse some native-born citizens from the country who actually want to stay and work and pay their taxes there.

Institute for Justice takes FBAR Excessive Fines Case

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My excessive fines post of February 22, 2012, suggested that the IRS would not risk an excessive fines lawsuit against money legitimately gained:

It seems unlikely, if the money is legitimate, that the IRS would charge a penalty at all.  If taxes are owed, perhaps a small FBAR penalty.  But in case the penalty is confiscatory, the IRS is well aware that the Eighth Amendment protects the taxpayer.  … it is sufficient at this point to say that fines must be proportionate to the crime and to the damage done to the government, and if the tax code already applies fines and interest against unpaid taxes, it seems unlikely to me that the IRS would risk applying any FBAR fine to foreign accounts because the Supreme Court could possibly strike down the entire FBAR law as unconstitutional under the Eighth Amendment.

But I soon retracted that view because of the penalties the IRS was actually handing out. Now, 14 years later (!), the Institute for Justice has take up the case of US citizen and resident whose bank account in Switzerland contained money he had earned through legitimate consulting. The fine of US $437K seems excessive when the damage to the IRS on the undisclosed income was a mere $29K and there was already $12K late payment tacked on to that. There is no penalty for money laundering in this case. It is innocent money. However, it seems extremely unlikely to me now that the whole FBAR law would be struck down merely because the fine structure is excessive.

 

Help Needed: Time For The Canadian TFSA To Be Treated As A Pension Under The Canada U.S. Tax Treaty

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Introduction

Help Needed: Time For The Canadian TFSA To Be Treated As A Pension Under The Canada U.S. Tax TreatyIntroduction In my last post about the TFSA, I suggested that the time had come to pressure Canada's Competent Authority to engage with U.S. Treasury to agreement that Canadian TFSA should be…

— Isaac Brock Society (@isaacbrocksociety.bsky.social) 2026-06-11T00:56:15Z

 

In my last post about the TFSA, I suggested that  Canada’s Competent Authority should engage with U.S. Treasury to seek an agreement that the Canadian TFSA should be treated as a “pension” under Article XVIII of the Canada U.S. tax treaty.

Here is what the Canada/U.S. tax treaty says in Article XVIII:

(b) The term “pensions” also includes a Roth IRA, within the meaning of section 408A of the Internal Revenue Code, or a plan or arrangement created pursuant to legislation enacted by a Contracting State after September 21, 2007 that the competent authorities have agreed is similar thereto. Notwithstanding the provisions of the preceding sentence, from such time that contributions have been made to the Roth IRA or similar plan or arrangement, by or for the benefit of a resident of the other Contracting State (other than rollover contributions from a Roth IRA or similar plan or arrangement described in the previous sentence that is a pension within the meaning of this subparagraph), to the extent of accretions from such time, such Roth IRA or similar plan or arrangement shall cease to be considered a pension for purposes of the provisions of this Article.

The Canadian TFSA is a plan that is similar to the ROTH IRA and was created after September 21, 2007. This provides the factual predicate to make this request. Here is a link to the consolidation of the Canada U.S. Tax Treaty. See Article XVIII.

https://www.canada.ca/en/department-finance/programs/tax-policy/tax-treaties/country/united-states-america-convention-consolidated-1980-1983-1984-1995-1997-2007.html

 

What is needed

An application must be made to Canada’s “Competent Authority”. I will do the legal work.

Who is needed

U.S. citizens who are residents of Canada who have a Canadian TFSA and include the income earned inside the TFSA on their U.S. tax returns as taxable income. Bonus points for those who file a Form 3520 and From 3520A as well.

The type of stuff is never fun. It will likely take a long time. But it is part of the process of achieving a less unfair tax system for U.S. citizens living in Canada. Certainly the Government of Canada has an interest in its tax residents not being burdened by U.S. taxation of income earned inside a Canadian TFSA.

I see no danger to any person(s) who is willing to step up for the purpose of helping to get this change.

If you are willing to participate, please contact me at: TFSAfairness at citizenshipsolutions dot com.

 

John Richardson

 

 

 

 

Tracking Income In Your TFSA, ISA Or Other Account That Is Not Taxable In Your Country Of Residence

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Introduction and purpose

 

This is a quick “public service” post. Please think carefully about the general message.

Spoiler alert:

U.S. citizens living in Canada should take the initiative to track the income earned in their TFSAs every year.

U.S. citizens living in the U.K. should take the initiative to track the income earned in their ISAs every year.

U.S. citizens living in other countries with tax advantaged accounts should track the income earned in them every year.

As explained below, I suggest that you do this without regard to whether you are currently in the U.S. tax system.

In addition (see below) the time has come to pressure Canada’s “Competent Authority” to agree with U.S. Treasury that a Canadian TFSA should be given the same treatment as the U.S. ROTH IRA gets under the treaty. 

The difficulty of U.S. tax compliance for U.S. citizens living in Canada

U.S. tax compliance for Americans abroad is somewhere between difficult and impossible. There are many reasons. The reasons include (but are not limited to):

  • U.S. taxation of income sourced in your country of residence that is NOT taxable in your country of residence. Some well known examples include the tax free capital gain on the sale of a principal residence and income earned inside an TFSA, UK ISA or financial account that is not taxable in your country of residence
  • The difficulty of characterizing various investment products for U.S. tax purposes. Is your foreign mutual fund a PFIC? Is your TFSA a trust? How is a trust defined for U.S. tax purposes? What about your company pension plan, etc. In some cases these issues are dealt with through treaties and others not. For example there is a huge difference beween how a U.S. citizen living in Australia (“All Roads Lead To Renunciation”) is treated by the U.S. tax system and a U.S. citizen living in Canada (very difficult but not as difficult as Australia).
  • The “saving clause” in all U.S. tax treaties which presume to deny individual U.S. citizens the benefits of the tax treaties. I believe that with the “saving clause” the correct position is that tax treaties guarantee the double taxation (or at least the potential) of U.S. citizens abroad.
  • The problem of having to report all of your transactions is U.S. dollars and how this can create “phantom” (fake) capital gains
  • The problem of mismatches in timing when it comes to the receipt of income (examples include: Subpart F, GILTI, transition tax, etc.)
  • The complexity and cost of filing the numerous IRS forms required of Americans abroad

All things considered, the United States imposes a more punitive form of taxation on its citizens living outside the United States than on its residents inside the United States! For what this means in the life of an American abroad, and how to live outside the United States In an FBAR and FATCA world see …

“How To Live Outside The United States In An FBAR And FATCA World”

 

Four principles for how to think about the Canadian TFSA (and similar accounts in your country of residence):

Principle 1: TFSAs (gains taxed never) are a better investment (I think by far) than an RRSP (gains taxed later). This is worth a separate post. But, I believe the thinking is valid.

Principle 2: Yes, U.S. citizens living in Canada SHOULD have a TFSA. What follows is a post a wrote a few years ago explaining why you should have one and why this will likely NOT generate any additional U.S. taxes  for you. If your tax preparer says that you should not have a TFSA, just get another tax preparer.

Principle 3: The U.S. ROTH IRA is the functional equivalent of the Canadian TFSA. Interestingly the U.S. Canada tax treaty carves out favourable tax treatment by the Canada Revenue Agency for the income earned inside the ROTH IRA for Canadian tax residents. (There are conditions. Read the treaty carefully.) The Treaty also contemplates that a similar Canadian product should get favourable U.S. tax treatment by the IRS.

I would be willing to work with somebody to incentivize Canada’s “Competent Authority” to get this deal done!!

Here is what the Canada/U.S. tax treaty says in Article XVIII:

(b) The term “pensions” also includes a Roth IRA, within the meaning of section 408A of the Internal Revenue Code, or a plan or arrangement created pursuant to legislation enacted by a Contracting State after September 21, 2007 that the competent authorities have agreed is similar thereto. Notwithstanding the provisions of the preceding sentence, from such time that contributions have been made to the Roth IRA or similar plan or arrangement, by or for the benefit of a resident of the other Contracting State (other than rollover contributions from a Roth IRA or similar plan or arrangement described in the previous sentence that is a pension within the meaning of this subparagraph), to the extent of accretions from such time, such Roth IRA or similar plan or arrangement shall cease to be considered a pension for purposes of the provisions of this Article.

Note that the treaty says that a plan created after September 21, 2007, that Canada and the United States have agreed is similar to a ROTH IRA (notice it says “similar” and NOT “identical”) should be treated as a pension under the treaty. This would create the opportunity for favourable tax treatment for the TFSA (and presumably FHSA) for U.S. citizens in Canada.

Principle 4 (and the real purpose of this post): At present income inside the TFSA is considered to be reportable on your U.S. tax return. Financial institutions do NOT usually provide annual information returns detailing the income earned. Or at least most don’t. Note also that you should (as a general principle) avoid holding non-U.S. mutual finds inside your TFSA. This will avoid the PFIC problem (double taxation, Form 8621, etc.).

Therefore, it is very important that you keep track, on an annual basis, of income earned (interest, dividends or capital gains) inside your TFSA each year. This is true whether you file U.S. tax returns for not.

Those who are required to file U.S. tax returns will need to report the income earned inside the TFSA on their U.S. returns.

Those who are not currently filing U.S. tax returns may want to file down the road (example “Streamlined” or “Relief Procedures For Former Citizens“)  to renounce U.S. citizenship, etc.). It would be very helpful to have this information organized and available. I cannot overstate how difficult it is for some people to go back in time and retrieve this information!

I am writing this post because in the last month I have spoken with three separate people who are having difficulty filing U.S. tax returns because of the difficulty of tracking and identifying income earned inside the TFSA. Seriously, this can be a BIG problem. It occurs to me that there may be some financial institutions that may provide an annual income summary. This is a good reason to use that financial institution for your TFSA.

Again, this is a public service post. By tracking the income in your TFSA you will make your life a lot easier.

As a side benefit you will pay more attention to how your TFSA is performing!

Closing suggestion:

Beware of the financial advisor who wants to “churn” the contents of your TFSA!

Here is my post explaining why you should have a TFSA.

The primary purpose of this post is to encourage you to keep track of the income in your TFSA or ISA without regard to whether you are required to file a U.S. tax return.

To TFSA Or To Not TFSA, Whether Tis Better For A US Citizen Living In Canada To Open A TFSA Or Not

 

John Richardson

 

 

 

 

Why Treasury Should Exempt U.S. Citizens Resident Outside The United States From FBAR Filing

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Introduction

On April 26, 2024 I submitted a comment to the OMB arguing that the time had come for Treasury to exempt Americans abroad from the FBAR filing requirement. I published the comment in the form of a post at my citizenship solutions site.

All of the comments may be read here. The government’s “supporting statement” includes:

 

 

Most of the comments were submitted by or on behalf of U.S. persons living abroad. A few comments were received from financial and legal associations. The consistent theme in these comments was that the FBAR requirement for U.S. persons living abroad is unnecessary and burdensome. Some of these comments also suggested certain revisions to, or exemptions from, the regulations. The comments are summarized in the following five categories.

• Unnecessary for U.S. Persons Living Abroad:
• The FBAR requirements are duplicative of the FATCA requirements.
• Almost all U.S. persons living abroad, even those with modest incomes, must file the FBAR because the $10,000 threshold is too low.
• U.S. persons living abroad need financial accounts in their country of residence for practical purposes. Maintaining these accounts is not suspicious.

• Burdensome for U.S. Persons Living Abroad:
• There is confusion regarding the filing requirements for the FBAR, because the FBAR and FATCA requirements are different as they relate to the thresholds and types of accounts to be reported. This can lead to misinterpretation and filer errors.
• The FBAR penalty for filing errors is excessive.
• Foreign spouses are required to report their financial information along with the U.S. spouse living abroad.
• U.S. persons living abroad are not afforded certain professional and charitable opportunities because of FBAR requirements. For example, a company or a non-profit may not want to hire a U.S. person living abroad for certain financial roles, particularly those that involve granting the U.S. person signature or similar authority, because the U.S. person would be obligated to report on the company or non-profit’s financial accounts.
• It can be challenging to determine the highest account value for certain accounts, because the statements do not always provide that information.
• It is costly to hire a tax professional to assist with FBAR and FATCA filing requirements.

• Recommendations for Modification to FBAR Regulations:
• Remove FBAR requirements, and permit U.S. Government sharing of FATCA information.
• Adjust the FBAR dollar threshold for inflation. The initial threshold of $10,000 has not been changed in over 40 years.
• Exempt employees from reporting signature authority over, but no financial interest in, their employers’ foreign financial accounts.
• Maintain special rules for reporting limited account information on 25 or more foreign financial accounts for entities that are highly regulated.
• Eliminate duplicative reporting of foreign accounts held by global custodians.
• Revise the FBAR instructions to account for the ruling in Bittner vs. United States.
• Change the maximum account value to the account balance as of December 31 of the calendar year to eliminate burden.
• Articulate how FBAR reporting is highly useful to the U.S. government.

• Exemptions for U.S. Persons Living Abroad:
• Exempt U.S. persons living abroad from reporting the financial accounts in their country of residence.
• Exempt U.S. persons that have lived abroad for a long period of time.

• Estimate of Time to Complete the FBAR for U.S. Persons Living Abroad:
• Determining the maximum value of an account can be time consuming because the information is not always readily available on account statements.
• U.S. persons living abroad may have 15 to 20 accounts for practical reasons. For example, many U.S. persons living abroad have a checking account, a savings account, lines of credit, investment accounts, retirement accounts, and business accounts. With this many accounts, it may take such a filer well over an hour to complete the FBAR.

And concluding with:

These comments will be considered as part of FinCEN’s review of regulations and guidance required by section 6216 of the AML Act. As part of this review, FinCEN will evaluate ways to clarify FBAR reporting requirements and minimize burden to the public, while retaining reports or records that are highly useful in countering financial crime. FinCEN also intends to conduct, pursuant to the Paperwork Reduction Act of 1995 (PRA), additional assessments of the burden associated with BSA requirements, including FBAR requirements.

Note that there is no consideration of these comments in the March report on the status of the implementation of the AML Act. https://www.congress.gov/crs-product/R47255

Seeking your help!!

I am in the process of preparing a presentation called “The Life And Times Of Mr. FBAR” for a professional conference at the end of June. As part of the process of organizing my presentation I have been looking at things I have previously written. I found my comment/argument and created an AI generated podcast and slide show out of it. The podcast is linked to in the tweet below.

A slide summary of the podcast and article is here.

 

What follows is the April 26, 2024 submission …

 

Any thoughts/comments would be appreciated.

 

 

Why Treasury Should Exempt U.S. Citizens Resident Outside The United States From FBAR Filing

John Richardson

 

To Renounce Or Not To Renounce – How (If At All) Does The Lower Renunciation Fee Impact The Decision?

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On March 12, 2026 the State Department announced that the fee to issue a Certificate of Loss of Nationality would be lowered from $2350 USD to $450 USD. This was extremely newsworthy and was widely discussed in the blogosphere. There has been some speculation that lowering the fee would incentivize people to renounce. One person reported that, at least one consular officer expected an increase in the number of renunciations. It is too early to tell whether this will be true.

On March 26, 2026 I hosted a podcast with U.S. tax lawyer Virginia La Torre Jeker for the purpose of discussing what the lower renunciation fee might mean. The podcast ended up becoming a discussion of the pros and cons of renouncing U.S. citizenship. It also became a discussion of the “IRS Relief Procedures For Former Citizens” (discussed here) actually worked (and why that program is so beneficial to those seeking to be in U.S. tax compliance.

Listening to the podcast today, I realized that the most valuable part of the podcast was the discussion about whether or not to renounce.

That discussion included:

– a recognition that U.S. citizenship is a depreciating asset

– the issue of renouncing citizenship and ability to access the United States

– the problem of how the U.S. estate tax applies to U.S. situs assets owned by those who are neither U.S. citizens nor domiciled in the USA

– the U.S. 877A and 2801 Exit Taxes

 

For those considering renouncing U.S. citizenship, I think the podcast will be helpful.

 

John Richardson

 

The Clash Between The U.S. Citizen’s Constitutional Right To Enter The USA And The Requirement Of A U.S. Passport To Enter

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Introduction

Today Petros commenting here asked the following question:

 

“At the end of the day, nobody has a statutory right (with the possible exception of U.S. citizens) to enter the United States.”

I know border guards have asked me questions about my intention for returning to my own country when I was still an American, even asking where I was staying. These question imply that as US passport holder, I didn’t have a right to enter the country. Still I was never refused. Are there cases where someone who presents a valid US passport is refused entry? How about if they present a valid US birth certificate as proof of citizenship?

I suggest the following answers to Petro’s two questions:

1. Those presenting a valid (meaning unexpired) U.S. passport should not be refused entry to the United States; and

2. Assuming the right of a U.S. citizen to enter the USA, a U.S birth certificate should prove U.S. citizenship (absent renunciation) and therefore allow for entry to the USA. For that matter (as described in the post below) an expired U.S. passport should also be proof of U.S. citizenship. However, without an unexpired U.S. passport entry to the USA will not be “friction free”.

The complicating factor is INA 1185 -a law for the express purpose of controlling the travel of U.S. citizens – U.S. citizens are required to leave or enter the USA on an unexpired U.S. passport. The specific language of the law includes:

8 U.S. Code § 1185 – Travel control of citizens and aliens

(b) Citizens

Except as otherwise provided by the President and subject to such limitations and exceptions as the President may authorize and prescribe, it shall be unlawful for any citizen of the United States to depart from or enter, or attempt to depart from or enter, the United States unless he bears a valid United States passport.

In 2013 Eric wrote a brilliant post explaining the history of the the rule requiring that U.S. citizens enter and leave the United States on a valid U.S. passport.

Bottom Line:

Although U.S. citizens may have a constitutional right to enter the United States, the lack of a unexpired U.S. passport may make it difficult.

Consider the following thought experiment:

Two Canadian citizens live in Canada and have Canadian passports. One of the two citizens is also a U.S. citizen without a current U.S. passport or with no U.S. passport. Incredibly the person who is ONLY Canadian can enter the United States with only his Canadian passport. But, the other person is in violation of U.S.C. 1185 which requires the U.S. citizen to enter the United States with a valid U.S. passport. Sound incredible? Yes it is.

I discuss this in the following podcast:

The podcast is based on this recent post on my blog at citizenshipsolutions.ca

 

About The Expired U.S. Passport – Is It Proof Of U.S. Citizenship (Yes)? Can It Be Used As A Travel Document (No)?

John Richardson

 

Badger Comments On Dr. Laura Snyder’s Paper: “Can Extraterritorial Taxation Be Rationalized?”

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Badger Comments On Dr. Laura Snyder’s Paper: “Can Extraterritorial Taxation Be Rationalized?”SEAT "Stop American Extraterritorial Taxation" is an organization created under French law to provide education and advocacy about the reality and problems of U.S. citizenship taxation. It was founded in…

— Isaac Brock Society (@isaacbrocksociety.bsky.social) 2026-05-25T18:39:37Z

 

SEAT “Stop American Extraterritorial Taxation” is an organization created under French law to provide education and advocacy about the reality and problems of U.S. citizenship taxation. It was founded in 2020. Since that time SEAT has done excellent research, writing and advocacy.

In 2023 SEAT President Dr. Laura Snyder published a paper called “Can Extraterritorial Taxation Be Rationalized?”

Strongly recommend reading Laura Snyder’s paper. Here is the abstract:

Abstract

There exist multiple rationales for the U.S. extraterritorial tax system. The rationales seek to explain why overseas Americans should be subject to worldwide taxation by the United States.

This paper challenges those rationales: The allegiance rationale is outmoded and rejected by the U.S. Supreme Court; the benefits rationale has been discredited; the membership in U.S. society rationale is belied by the exclusion of overseas Americans from critical beneficial aspects of the U.S. economy, the U.S. tax system, and federal assistance; the “worth the tax cost” rationale disregards human rights and the realities of renunciation of U.S. citizenship; and the administrability rationale ignores that the administration of an extraterritorial tax system requires resources beyond those required to determine domicile – resources the IRS does not have.

Ultimately, all the rationales are theoretical. They do not confront the reality of the actual extraterritorial tax system in place today. They do not contend with the full scope and complexity of the actual system, or the system’s multitude of intractable problems and injustices.

 

Note: “This is an article published by the American Bar Association Section of Taxation in The Tax Lawyer journal in the Spring 2023 issue.”

Keywords: Extraterritorial Taxation, Citizenship-Based Taxation, Residence-Based Taxation, Citizenship, Expatriation, Exit Tax, FATCA, IRS, Human Rights, Equal Protection

On May 24, 2026 long time Brock commentator and contributor, Badger published the following insightful comment about Dr. Snyder’s paper:

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