This post appeared on the RenounceUScitizenship blog.
Should #americansabroad be taxed according to the same rules as homelanders? http://t.co/q93tsGRq
— U.S. Citizen Abroad (@USCitizenAbroad) January 11, 2013
Monthly Archives: January 2013
Cook v. Tait 6: Taxation of Green Card holders who reside outside the U.S.
US taxation of #greencard holders who reside outside the US http://t.co/EKwPBqo8 is nothing more than taxing residents of other countries.
— U.S. Citizen Abroad (@USCitizenAbroad) January 6, 2013
Giving up Your US Green Card – Make Sure It is Done Correctly or Pay the Price! | Let's Talk About: US Tax http://t.co/JS63iKvD
— V. La Torre Jeker JD (@VLJeker) January 9, 2013
This is a post from the RenounceUScitizenship blog that appeared about a week ago. It’s worth remembering that the U.S. claims the right to tax “U.S. persons”. The series of Cook v. Tait posts (1 to 5) strongly suggests that there is no justification whatsoever for citizenship-based taxation. But, remember that the U.S. is also claiming the right to tax “Green Card Holders” who no longer reside in the U.S. If the justification for taxing U.S. citizens abroad is weak, then the justification for taxing “Green Card Holders Abroad” is non-existent. To put it simply the taxation of Green Card Holders who:
1. Don’t reside in the U.S.; and
2. Do reside in other countries
is stealing from the Treasury of other nations. It’s high time that the world wakes up to what the U.S. is really doing! This doesn’t even consider the impact of FBAR, FATCA and any other F words!
Cook v. Tait 5: Citizenship-based taxation was NEVER justified – League of Nations reports
Fascinating 1923 report of League of Nations on citizenship-based taxation of interest to #americansabroad http://t.co/06uUZdAN
— U.S. Citizen Abroad (@USCitizenAbroad) January 11, 2013
What I found most interesting about the Isaac Brock Society is that the comments are usually every bit as interesting as the posts (in some cases better). Citizenship-based taxation is such an important issue and is the “root of the problem”. Thanks to Shadow Raider for a fascinating comment that needs to be elevated to a post of its own.
Cook v. Tait 4: Taxation of #americansabroad based on US culture 150 years ago! Time warp or what!
Justification for taxing #americansabroad based on 150 year old justification dating back to civil war. US time warp! http://t.co/tNdYwxcI
— U.S. Citizen Abroad (@USCitizenAbroad) January 11, 2013
Excellent paper discussing citizenship-based taxation by Professor Avi-Yonah:
The Case Against Taxing Citizens:
This short but well written paper completely dismantles both the Cook v. Tait rationale (Government benefits the citizen wherever the citizen is) and the Zelinsky rationale (that citizenship is a proxy for domicile). Should be read by all.
American colonists on Mars will remain subject to U.S. tax
There’s been a lot of news about moving to Mars lately. Netherlands non-profit Mars One is reported to be accepting applications for a colony to be settled as early as 2023. And Tesla founder Elon Musk, for his part, continues to work out the logistics for another Martian colony he’d like to fund: he points out that meat will probably not be available because of the difficulties of raising animals on an unfamiliar planet.
So, are you thinking that blasting off in a spaceship would be the perfect way to get the “Internal” Revenue Service off your back? Not so fast. The United States, unlike every other country on Earth besides Eritrea, taxes based on citizenship and not residency. No matter how long you spend on Mars, you’ll still be writing checks to Uncle Sam. In the mean time, all of your fellow colonists of other nationalities will be home free.
Cook v. Tait 3: Legal scholar agrees reasoning in Cook v. Tait weak, but offers new justification for citizenship-based taxation
Thanks very much to “Abused Expat” for finding an summarizing this article:
Legal scholar agrees taxation of US citizens abroad not justifiable on basis that #americansabroad receive benefits http://t.co/91751OmW
— U.S. Citizen Abroad (@USCitizenAbroad) January 10, 2013
and also:
Sundberg article on the history of taxing #americansabroad http://t.co/qFc23Osv
— U.S. Citizen Abroad (@USCitizenAbroad) January 10, 2013
Questions:
Birthism: Who is a “non-status” Indian
Who are the Métis and non-status Indians in Canada? http://t.co/1kQVjhfN – Status of birth issue much like US citizenship #americansabroad
— U.S. Citizen Abroad (@USCitizenAbroad) January 10, 2013
Those who are NOT Twitter literate will find the article here.
I came across this interesting article. Clearly this is an example of benefits and burdens that are based in part on “accident of birth”. In this sense there is an analogy to U.S. citizenship acquired by birth.This is a group that has been singled out for special tax treatment.
According to the article benefits include (notice tax benefits):
Ottawa keeps a list of aboriginals who qualify for Indian status. There were 840,300 people in the federal Indian registry as of 2009. Registered Indians can apply for postsecondary tuition support, as well as on-reserve social programs that mirror provincial programs, such as income assistance and assisted living. There is also the Non-Insured Health Benefits program, which covers some prescription medication and health services that are not covered provincially.
Registered Indians are also not taxed on income earned on a reserve and are exempt from paying the goods and services tax on items purchased on a reserve.
The article focuses on Metis – who are the Metis:
In its landmark Powley decision, the Supreme Court outlined three factors to recognize people claiming Métis rights. First, they must have long self-identified as Métis. They must have some ancestral connection to the Métis, though not necessarily a genetic link, since one could have been adopted, for example. Lastly, the claimants should be accepted by their Métis community or organization.
Nina Olson releases the 2012 National Tax Advocate Report to Congress.
From the Press Release:
National Taxpayer Advocate Delivers Annual Report to Congress; Focuses on Tax Reform, IRS Funding and Identity Theft
WASHINGTON — National Taxpayer Advocate Nina E. Olson today released her 2012 annual report to Congress, identifying the need for tax reform as the overriding priority in tax administration. The Advocate also expressed concern that the Internal Revenue Service is not adequately funded to serve taxpayers and collect tax, and identified ways in which this chronic under-funding harms taxpayers and the public fisc. She also found that the IRS is not doing enough to assist victims of tax-related identity theft and return preparer fraud.
NUMBER ONE Problem: The most serious problem facing taxpayers — and the IRS — is the COMPEXITY of the Internal Revenue Code (the “tax code”).
Yes, we all know that, but of special interest to many readers here is item number 8.
Update from @Lisa. Thank you.
Interesting comment on Victoria’s Franco American Flophouse
Below from a commenter on Victoria’s blog:
Reading this post reminds me of a few years back when the Western Hemisphere Travel Initiative was created by the United States requiring passports to cross the border. Many border babies, Canadians who were born in the United States because the nearest hospital was in a border states like Michigan, Maine, or North Dakota were in for a rude awakening. In some cases mom and dad were also border babies (there are whole towns in Canada that are physically on the border), and some found that they were not Canadian Citizens, even though they had lived in Canada, and even voted for decades.
I work at H&R Block in Canada and I suppose I am a bit like bankers will soon be. As soon as someone shows me a US passport, or a document that shows their birthplace in the United States I have to stop preparing their tax return and send it over to the US Tax Specialists, who charge an extra 2-3 hundred dollars, even when these people owe nothing in taxes. I have occasionally had people swear they will renounce before they will file, and I tell them they can’t renounce until after they have filled.
In Canada the conservative government recently changed our citizenship law so that the second generation born abroad are not Canadian Citizens, but this has problems too. Many Canadians were born elsewhere but grew up in Canada. There are examples of people who were born abroad to Canadian parents, came to live in Canada when they were a year old and happen to be living in Belgium when they have a child. In some cases these people’s children are now born stateless. These are the cases where some show of attachment should come into play. Its a nightmare for these parents. While the new law allows for easy naturalization of these babies, they first have to physically arrive in Canada which is difficult when the child is stateless and qualified for no national passport. Then these parents have to wait for their children’s files to be procsses. Currently there is an enormous backlog and it can take anywhere from 6 months to 2 years to process a citizenship request.
I responded back saying what H&R Block Canada is doing completely outrageous and the CEO and Senior Management of H&R Block Canada should be less worried about spending time in US Club Fed and instead be worried about spending hard time at the Kingston Ontario Penetentary for violations of the Canadian Foreign Extraterritorial Measures Act.
Havens Are Turning Hellish For Tax Avoiders, says NPR…
Don’t have time for much analysis or commentary on this article, but thought I would put it up quickly after Tim alerted me to it. Quick read tells me they sure have bought into the rhetoric of the FATCAnatics at Treasury. Have a read and make some educating comment as you wish to the NPR audience. A lot of misstatements of facts, like Switzerland, the world’s largest tax haven, Not a mention of who the real Tax Haven is, THE USA! Nothing about the unintended consequences or collateral damage.
Message: Congress Clamps Down, you better comply!
by SCOTT NEUMAN
January 08, 2013 1:26 PM
In 2010, Congress passed the Foreign Account Tax Compliance Act, or FATCA, that calls for overseas banks to begin full disclosure of U.S. account holders beginning next year. All along, Washington has been pursuing new bilateral treaties to share tax information.
“Countries are almost universally agreeing to exchange tax information,” says Shay, who like Brown is a former high-ranking Treasury official.
“The signal seems to be that it doesn’t matter where you move your money, we can still get you,” he says. “This signal is being heard not just in Switzerland, but in the Caribbean and the Far East.”