Once again James Jatras of RepealFatca.com offers-up another succinct and pithy interview, this time to iExpats.
As Blaze over at Maple Sandbox commented, here’s the article’s takeaway quote about FATCA:
“There’s no way anyone can put enough lipstick on this pig to make it kissable.”
Make sure your US social security number isn’t in the wind.
The IRS suggest care with this key number. Show your Social Security card to your employer when you start a job, the IRS says. Also show it to your financial institution for tax reporting purposes.
But in general, the IRS says you shouldn’t carry your Social Security card with you. For that matter, don’t carry other documents that display your number either. If your Social Security number is stolen, the IRS warns that someone else may use it to get a job. The unwitting employer may report the income to the IRS under your purloined Social Security number.
The IRS will assume when it sees that income reported to your number that you failed to report all your income on your tax return. Trouble will ensue. If you end up in this pickle, you can explain the fraud to the IRS and get our record updated. But you don’t want to go through this if you can help it. Be careful out there.
It has been my observation when in the US, people generally write a check more readily than using a debit card for such mundane purchases as groceries, etc., and it is common practice that their US social security number is inlcuded on their check. Boggles the mind.
ACA has written to Treasury and IRS officials recommending a proposal for a Comprehensive Compliance Program (actually an interim streamlined program) to Enable Tax Compliance by Americans Resident Overseas. You can read the letter here. This is part of the ongoing attempt by ACA to get attention in Congress, and it follows their harsh criticism of FBAR and OVDP abuse.
The key to the ACA proposal is that Americans resident overseas entering CCP will know exactly the amount due to the IRS, including the tax due, interest and penalty, if any. They will not fear that their life savings are at risk. They will not be treated as criminals and will come into compliance.
I hope I haven’t missed this letter being published somewhere else on IBS, but in light of these recent posts on IBS I have been ‘skimming’ this morning before I head out on the Pacific Crest Trail, I thought I would post it for greater visibility and discussion.
Tax lawyer Virginia La Torre Jecker interviews former #IRS attorney Bill Yate
Taxpayer advocate continues criticism of IRS execution of voluntary disclosure programs
#IRS abuse of Americans Abroad – The greater the effort! The greater the punishment!
and the recent article in Tax Notes…
The Personal Impact of Offshore Enforcement
Below are the ACA Conclusions
If you have not seen these two interviews, I encourage you to read them. They provide interesting insight into the “Mind of the IRS” – the institution that “represents the American Taxpayer”.
Who is Bill Yates?
Willard (Bill) Yates, recently retired from the Office of Associate Chief Counsel (International), Internal Revenue Service after 31 years of service. During his tenure as a Chief Counsel Attorney, Bill was the recipient of 10 awards, including the Albert Gallatin Award, Treasury’s highest career service award. The Gallatin is awarded only to select federal employees who served twenty or more years in the Department and whose record reflects fidelity to duty. Bill received the Gallatin award for his work throughout his IRS career, including his work on implementation of some of the compliance requirements of the Foreign Account Tax Compliance Act (FATCA).
Most of Bill’s career at IRS focused on offshore compliance, including his participation in a massive overhaul of outdated foreign trust reporting requirements Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts and Form 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner). Bill was the principal drafter of the regulations under section 679, Foreign trusts having one or more United States beneficiaries, Notice 2003-75, RRSP and RRIF Information Reporting and Notice 2009-85, Guidance for Expatriates Under Section 877A.
AARO (Association of Americans Resident Overseas) and FAWCO (Federation of American Women’s Clubs Overseas) have an idea for how we can make the most of our summer vacations.
For those of you who are U.S. voters why not stop by and see your local Congresspersons while you’re in town? Think about it – haven’t we all dreamed of letting them know how we feel? Here’s your chance.
AARO has some suggestions for how to set up the meeting and topics for discussion (though I’m positive that folks here already have that covered, right?) They also include a link to the Overseas Vote Foundation’s fact sheets for each state.
I’m giving it a try. Asking for a meeting was easy since my reps have an automatic meeting request system on their sites. Thus far I have received one answer saying they will try to set up a meeting with my rep in person.
Some other ideas while you happen to be strolling around town:
1. Talk to local media. Ask them to reprint Colleen Graffy’s article so it gets the widest possible distribution. Point them to whatever site or organization you belong to that’s fighting FATCA/CBT.
2. Offer to provide more information to a reporter and accept any and all interview requests. Say that you can attest personally to the accuracy of Graffy’s article and give them a local angle.
3. Write up your experience and see if the local paper will print it.
Love to hear other ideas as well.
Will this do any good? No idea but I think it’s worth trying. My feeling is that it’s a win-win for us. If our reps are willing to talk to us then we win a chance to let them know how we feel up front and in person. If they won’t talk to us, then we have more ammunition for our argument that we are poorly represented AND we have a story for the local media.
But what I like the most about it is that it gives each and everyone one of us an opportunity to advocate and lobby for ourselves. Be persistent mosquitos, folks, and perhaps together we can unleash the perfect swarm.
By Patrick A Heller on July 19, 2013 9:10 AM
Commentary on Precious Metals Prepared for CoinWeek.com …..
A number of financial advisors who are concerned about the coming financial crises in America have recommended transferring some assets beyond the borders of the United States. For prudent wealth management, it is an option worth consideration.
In the past, one used to seek to win friends and influence people. Such was even updated for the digital age. Yet, now times are changing, as explained in this excellently written article:
How to Lose Friends, Citizens and Influence
The U.S. Foreign Account Tax Compliance Act seeks to co-opt foreign banks as long-arm enforcement agencies of the IRS.
How fluctuating exchange rates, generate phantom gains + losses for #americansabroad – http://t.co/jyyFvrr4t3 – Real estate considerations
— U.S. Citizen Abroad (@USCitizenAbroad) July 16, 2013
Introductory thought 1:
Based on current tax law, for Americans living abroad, currency fluctuations create U.S. dollar capital gains or losses even on daily transactions as well as on movements of short and long term investments done in local currencies. The exchange rate on the purchase date and the exchange rate on the sale date determine the capital gain for the U.S. Treasury.
Introductory thought 2:
We all know that US tax liability is computed in US dollars. We also know that exchange rates can play in rule in creating profits and losses. It would be interesting for people to comment on their experiences with how changes in exchange rates have created “phantom gains” for them. I think this could be very helpful evidence in working on how to get this whole thing (citizenship-based taxation) reversed. So, if anybody is reading this, please comment on your experiences.
In addition, the issue of exchange rates and a falling US dollar is extremely important on this issue of expatriation? Why?
As the US dollar falls, almost everybody will become a “covered expatriate”. That two million dollars will seem like nothing.
Obviously this is one more reason why you need to get on with the job, painful as it is, of expatriation and freeing yourself from this nightmare!
Since the election of Barack Obama the world has been introduced to two new sports/games.
I am going to follow the lead of Blaze from Maple Sandbox.
Blaze has congratulated Finance Minister Flaherty, by email, with copies to Kevin Shoom and others:
Congratulations on continuing as Canada’s Finance Minister.
I hope Canadian citizens and residents who were born in the United States can continue to count on you to ensure our rights under Canada’s banking, privacy and human rights laws are protected. I hope we can continue to count on you to ensure we have the same rights as all other Canadian citizens and residents to manage our finances with confidence and in privacy with our financial institutions without interference from a foreign government. I hope we can count on you to ensure we are not second class citizens in our country of choice. I hope we can continue to count on you to ensure Canadian Charter of Rights and Freedoms applies to all Canadians, regardless of their national origin or place of birth.
Please tell US they can’t FATCA Canada or Canadian citizens and residents. Please do it now.
Every Canadian here at Isaac Brock should think about doing the same. Can we even imagine educating a new Canadian Finance Minister on FATCA?
This post appeared on the RenounceUScitizenship blog.
5 strategies for weight reduction and a better life 4 #americansabroad http://t.co/gwxjjB6Zmm – Lose your #coveredexpat status
— U.S. Citizen Abroad (@USCitizenAbroad) July 14, 2013
My recent post discussed the importance of renouncing U.S. citizenship before becoming a covered expat. For those who need a reminder (and this is not a substitute for careful legal advice) a “covered expatriate” is one who meets any of the following tests:
1. The Income Test – Has the composition of income hat has resulted in a U.S. tax bill of approximately 140,000 for each of the last three years (this is a paraphrase, look it up yourself);
2. The Asset Test – Has a net worth of two million dollars or more
3. The Compliance Test – Is unable to certify compliance with U.S. tax laws for each of the five years prior to expatriation. Note that this is intended to include having filed all relevant information returns. (I would argue that since FBAR is a Title 31 requirement it is irrelevant to Title 26 compliance). Interestingly, if you do not meet either the asset test or the income test, you have a huge incentive to ensure that you have five years of tax compliance.
When it comes to U.S. tax compliance:
The only thing worse than the fear of non-compliance is the certainty of compliance. Why?
