[May 18 2017 update: I now include in this LINK the recommendations of Elise Bean, a long-time FATCA supporter and witness at the FATCA hearing.]
On April 26 2017 there was a Hearing at the U.S. House Subcommittee on Government Operations dealing with the harm caused by the U.S. FATCA law imposed on the world.
At the conclusion of the hearing, Chairman Meadows asked the Witnesses for “three recommendations on how to improve the legal framework set up by the Foreign Account Tax Compliance Act” (FATCA).
My personal-only interpretation of this request is that the Chair is saying something like: “If FATCA has to be replaced with something else, can you recommend three compromise laws/approaches that would achieve the “good” aims of FATCA but minimize the harm, and which would receive bipartisan support?”
— I enclose as a link the May 15, 2017 submitted personal recommendations of Jim Bopp, a witness and attorney for the U.S. FATCA/IGA/FBAR lawsuit currently pending in United States Court of Appeals for the Sixth Circuit (I am one of the plaintiffs).
From the Bopp text:
“This letter provides three recommendations on how to improve the legal framework set up by the Foreign Account Tax Compliance Act (“FATCA”).
First, we recommend that any taxation of overseas Americans comply with established United States constitutional principles and international legal norms.
Second, we recommend that the current laws be repealed in their entirety [Bopp goes on to include specifically FATCA, IGAs, FBAR, and citizenship-based taxation] and certain proposals rejected.
Third, we recommend that Congress enact a 1099 requirement on foreign banks, established by treaty, as long as this complies with established United States constitutional principles and international legal norms…”
—- Appended to the end of the Bopp recommendations are my personal thoughts as a separate submission: I support, as does Mr. Bopp, the repeal in entirety of FATCA, FBAR, IGAs, and citizenship-based taxation (the latter to be replaced with territorial/residence-based taxation), do not support any “watered-down” FATCA-replacement legislation whatsoever — which I believe will continue the harm, and offer suggestions on changing U.S. citizenship laws in the very limited context of FATCA harm. In hindsight, I now feel that I should have gone further in my recommendations for citizenship law changes.
—- When I receive the recommendations of strong FATCA supporter Elise Bean, a hearing witness, I will post.
— Ongoing developments: Republicans Overseas has initiated an intensive lobbying campaign with Congress to kill citizenship-based taxation and replace with territorial taxation. There can be no promise of success, but these people are trying. I am not aware of similar efforts on the Democrat side.
“Allowing the taxpayers a chance to try to comply with the laws they didn’t previously know about, is presented as amnesty, and it comes with additional traps and threats and gotchas.”
Yup. That’s why the IRS’s Taxpayer Advocate reported to Congress that thousands of honest taxpayers were forced to renounce because they got penalized for trying to comply, when FATCA hadn’t even taken effect yet.
“Like ratcatchers, the US counts success by those caught, not by those complying.”
Ouch. That’s going to look bad because it looks like the opposite of what you meant, it makes victims look like rats. We know that the rats are the ones doing the catching, but any homelanders who see this will just add it to their arsenal of abuse.
Maybe could that be edited to say something like “Like catchers of escaped slaves…”
“But the really interesting question, it seems to me, is how many renunciants get chased for US tax on non-US-source income.
The answer appears to be 0 – somebody correct me if I’m wrong.”
The number of non-compliers who get chased appears to be 0. It appears to be only honest people who get chased.
The number of renunciants who get chased for US penalties on $0.00 amounts of US tax accompanied by illegal honesty is at least 1.
The number of non resident aliens who never had any US income and never had any US citizenship or residence who get chased for US penalties on $0.00 amounts of US tax accompanied by their renunciant spouse’s illegal honesty is at least 1. After the IRS ignored around 4 demands for spousal relief, I finally learned that she can sue in US Tax Court for spousal relief even without an IRS determination. Though now Tax Court attacked her because she complied with a court rule that says she’s supposed to attach her election for relief when the IRS didn’t issue a determination.
By the way US Tax Court is NOT the worst. Other US courts are. You know how US trial courts and appeals courts are supposed to make up fake facts in order to accomplish their biased rulings, because the only court that has power to tell them to stop doesn’t tell them to stop because US Supreme Court doesn’t care about facts? Well that’s not all. When fake facts aren’t enough, trial courts and appeals courts make up fake laws. And when fake laws aren’t enough, US District Court for the Central District of California destroys a witness’s notarized declaration, and US Court of Appeals for the Ninth Circuit labels as meritless any idea of inspecting postal return receipts and mailing labels, comparing to what the court filed, and letting the server testify under oath about what the actual contents of the envelopes were.
Escaped slaves, and non resident aliens married to escaped slaves, beware that the Dred Scott decision lives on. Do not dare to try to comply.
Lol Embee, no it’s this one: http://talk.uk-yankee.com/index.php?board=11.0
I will say, the immigration sub-forum on that board is first-rate, and the tax sub-forum also is used by knowledgeable posters.
Entirely geared to compliance though. And the condor pops up at every opportunity to warn of the risks of failing to use a dual-qualified tax accountant to prepare one’s return.
“That’s going to look bad because it looks like the opposite of what you meant, it makes victims look like rats. We know that the rats are the ones doing the catching, but any homelanders who see this will just add it to their arsenal of abuse.”
I have nothing against rats. I also have nothing against people who live in America. My beef is with the USG.
“I also have nothing against people who live in America.”
In general, sure, but it would also be nice if they could be educated. If 75% of them could be taught why their friendship with Eritrea isn’t such a good thing, maybe it would stop.
Renunciation with /without compliance. In Europe, if you renounce , can you simply reopen your accounts without compliance .If yes, and if you have no reason to return to the greatest country in the world, then why comply ?Two, how many countries enforce tax regimes of a foreign country on their own citzens,albeit dual US citzens ? Can’t be many and besides there is always the issue of sovereignity .
The UK IGA doesn’t tell banks to close accounts, it specifically tells them not to – especially if they fail to respond to a FATCA letter. Got to keep the account open so the IRS can have time to build a case.
Some accounts aren’t available to USCs. A renunciant is no longer a USC and is no longer barred from opening such accounts.
But the most common nuisance is that a USC can’t open an account unless they sign a W9, thus confessing USness, or, if a former USC, obtain a very expensive CLN.
@iota
Very similar to Canada ,. also in Canada for pre-2004 expats ,the CRA(revenue agency) doesn’t require a CLN but a justification of some sort to the bank for not having one but I am not privy to how the banks are behaving when faced with that dilemma, since some banks ask for CLNs.
It seems not as catastrophic in the UK as in the rest of Europe.
Does the UK collect income taxes from UK citzens,albeit dual ,for any foreign country or permit any foreign country to collect it themselves or through agents forcefully on UK soil ? I haven’t heard of any such cases. Maybe somebody has ? Not to mention FATCA penalties forcefully collected overseas.
So why worry about the IRS ?
They really don’t need FATCA to know the Americans abroad and their finances. The NSA already has the toolbox to get that information with/without FATCA . We already know that the yanks are the world’s best eavesdroppers,if not the “greatest”,ask Merkel et al.
.
Nice to hear
Many supporters of FATCA reform also take exception to the U.S. policy of Citizenship Based Taxation. Democrats Abroad has launched a campaign to overturn Citizenship Based Taxation and replace it with a policy of Residency Based Taxation.
The United States is the only country aside from Eritrea that taxes its citizens on their worldwide income regardless of where it is generated, no matter where they live, no matter how long they’ve lived there and regardless of whether they face taxation on that same income in their country of residence.
Democrats Abroad supports Residency Based Taxation or RBT, a system of taxation in which a nation imposes tax on income generated within its border. Citizens of a nation with Residency Based Taxation pay tax on income in the place where the income was generated. If they live and generate income abroad then their offshore income is taxed abroad and not taxed by the nation of their citizenship. Only income generated within their nation of citizenship is taxed by their nation of citizenship.
For the first time since the 1980’s Congress has turned its attention to comprehensive tax reform. Democrats Abroad, in collaboration with the other organisations representing Americans abroad, believes we have an opportunity to influence the process by campaigning for Residency Based Taxation to be included in Congress’s package of tax reforms.
This week we launched the attached Residency Based Taxation – Campaign in a Box for use by Americans interested in adding their voices to the cry for Residency Based Taxation. It includes information about the campaign and advice about the multiple ways you can participate in it.
We draw your attention especially to the RBT Congressional Call Storm happening on Thursday June 15th – during which we hope that Americans across the world who support RBT will blitz Capitol Hill with calls demanding support for this important reform.
Thank you for your attention.
Please contact me with questions, comments or to be removed from the FATCA Reform Campaign Distribution List.
Many thanks again,
Carmelan Polce
on behalf of the Democrats Abroad Taxation Task Force
Ms Carmelan Polce
Chair, Taxation Task Force
Democrats Abroad
Singapore
M: +65 9380 1084
E: cpolce@tpg.com.au
Skype: carmelan.polce
________________________________________________________________________
Interview with CNBC
David McKeegan has informed
that he has discussed a lot about Taxation without representation/CBT, PFICs, FATCA bank account closures, etc.
We need to see what the interviewer writes/prints but it could be good.
Cheers
David Mckeegan, MBA, EA founder of Greenback Expat Tax Services
He REALLY seems to be trying to help
“It seems not as catastrophic in the UK as in the rest of Europe.”
I think FATCA due diligence requirements are similar in IGA Model 1 countries.
@JakDac
This is NOT helpful:
“Reports have shown that in the last quarter of 2016—the time period coinciding with the election of Donald Trump to the US Presidency—nearly double the amount of people renounced their citizenship as compared to the same period in 2015. Greenback survey data provides further evidence that expats aren’t, at large, enamored of Donald Trump.”
https://www.greenbacktaxservices.com/blog/survey-reveals-us-expat-dissatisfaction/?utm_campaign=Newsletter_May_2017&utm_source=hs_email&utm_medium=email&utm_content=52334143&_hsenc=p2ANqtz–YixooiGG8wMgr9KKavDZWzVvQjp5Hi175SMwZW0TB_WBsm4vkPJG5x6960gELqlvL0iGSJEf4eCIHyshY_2zQEvWDTw&_hsmi=52334143
Co-sign letter to Administration and Congress by groups supporting change from Citizenship-based to Residency-based taxation for Americans overseas http://www.prnewswire.com/news-releases/co-sign-letter-to-administration-and-congress-by-groups-supporting-change-from-citizenship-based-to-residency-based-taxation-for-americans-overseas-300460257.html?platform=hootsuite
Nice to hear
Many supporters of FATCA reform also take exception to the U.S. policy of Citizenship Based Taxation. Democrats Abroad has launched a campaign to overturn Citizenship Based Taxation and replace it with a policy of Residency Based Taxation.
The United States is the only country aside from Eritrea that taxes its citizens on their worldwide income regardless of where it is generated, no matter where they live, no matter how long they’ve lived there and regardless of whether they face taxation on that same income in their country of residence.
Democrats Abroad supports Residency Based Taxation or RBT, a system of taxation in which a nation imposes tax on income generated within its border. Citizens of a nation with Residency Based Taxation pay tax on income in the place where the income was generated. If they live and generate income abroad then their offshore income is taxed abroad and not taxed by the nation of their citizenship. Only income generated within their nation of citizenship is taxed by their nation of citizenship.
For the first time since the 1980′s Congress has turned its attention to comprehensive tax reform. Democrats Abroad, in collaboration with the other organisations representing Americans abroad, believes we have an opportunity to influence the process by campaigning for Residency Based Taxation to be included in Congress’s package of tax reforms.
This week we launched the attached Residency Based Taxation – Campaign in a Box for use by Americans interested in adding their voices to the cry for Residency Based Taxation. It includes information about the campaign and advice about the multiple ways you can participate in it.
We draw your attention especially to the RBT Congressional Call Storm happening on Thursday June 15th – during which we hope that Americans across the world who support RBT will blitz Capitol Hill with calls demanding support for this important reform.
Thank you for your attention.
Please contact me with questions, comments or to be removed from the FATCA Reform Campaign Distribution List.
Many thanks again,
Carmelan Polce
on behalf of the Democrats Abroad Taxation Task Force
Ms Carmelan Polce
Chair, Taxation Task Force
Democrats Abroad
Singapore
M: +65 9380 1084
E: cpolce@tpg.com.au
Skype: carmelan.polce
http://isaacbrocksociety.ca/wp-content/uploads/2017/05/Dem-Abroad-RBT-Campaign-In-A-Box.pdf
That letter from American Citizens Abroad and pals states:
“This conversion can be made revenue-neutral, will reduce the disturbing upward trend in US citizenship renunciations and will be simpler to administrate for the US government and taxpayers.”
Only support it if you agree that renunciation of US citizenship is disturbing.
“Revenue-neutral.”
What’s lost in CBT taxes will be recouped by charging people not to be taxed. Protection money, essentially.
“Simpler to administer.” Make them pay upfront, regardless of income.
I said (in reference to requirements that citizens of a country must enter only on that country’s passport):
I think I understand this better now, after reading some comments on another US-related forum.
If I now understand correctly, the US requires a dual citizen to enter only on a US passport because the US does not recognise dual citizenship. In the eyes of the USG, a dual US/UK citizen trying to enter the US is a person trying to enter the US with no valid passport and no visa.
Whereas Canada, and the UK, and doubtless other countries, do want a dual citizen or PR to enter on their Canadian, or UK etc passport, but if a dual US/Canada or dual US/UK tries to enter on a US passport, they recognise the US passport as valid and treat the person as not having a visa, and probably usually resolve the issue by stamping the US passport with a visitor’s visa.
Most countries have a rule: you either lose your citizenship if you become a citizen of another country, or you don’t.
The US says, if you become a citizen of another country, you may lose your US citizenship.
For years I thought they meant “may” as in “might”. Turns out they meant “may” as in “will be allowed to”. (For a price.)
Lot of “fighters” posting. Great to see a big newspaper reporting. Remember when we broke from England and refused to pay their tax most had that ol pioneer sprit . Remember Condolisa Rice condemned Eritrea for their TWO percent Citizen Based Tax. The US is the ONLY country to do this ( started during the Civil War when people were leaving) People who left the US decades ago have pensions /house bought overseas taxed by the US (some tax paid in pensions may not be credited for US tax and NO interest deducted re home) When one is playing baseball do they follow football rules. RBT like the rest of the world please. We are not the rich guys just the ones that by fate lived overseas for many reasons / marriage / job etc.
https://www.wsj.com/articles/are-you-hiding-money-from-the-irs-overseas-be-very-afraid-1496395802
“When one is playing baseball do they follow football rules. ”
Shouldn’t that be the other way round? Baseball is the American game. I prefer football. 🙂
Tax reform with Individuals / Tax reform by September, says Grover Norquist / https://www.youtube.com/watch?v=ua-w_TQk3JY
May be worth highlighting in regard to big RBT push/ CONGRESSIONAL CALL STORM – THURSDAY JUNE 15!
Write to your representatives (the easy way)
https://democracy.io/#!/
RBT Congressional Call Storm happening on Thursday June 15th – during which we hope that Americans across the world who support RBT will blitz Capitol Hill with calls demanding support for this important reform https://d3n8a8pro7vhmx.cloudfront.net/democratsabroad/pages/4683/attachments/original/1496739236/RBT_Campaign_In_A_Box.pdf?1496739236
A reminder of some debunking of the mythical rationale for FATCA, which apparently Bean and the other FATCAnatics need;
http://lawprofessors.typepad.com/intfinlaw/2017/05/tax-justice-network-finds-missing-70-billion-for-trump-to-build-his-great-southern-wall-.html
http://kluwertaxblog.com/2017/04/18/15527/
Let there be no doubt that $70 billion in tax money is blocked from the world’s treasuries by being hidden in the world’s largest tax haven.