[OCTOBER 24, 2017 POSTMORTEM: MANY THANKS TO THE SIGNERS! — RO says: “We now have 3027 petitions …plus 535 letters… Fewer than we wanted, but still respectable.” ]
[Quote in title is from this link provided by Mike, below.]
TODAY IS THE LAST DAY TO SPEND JUST ONE MINUTE OF YOUR TIME TO SEND TTFI PETITION TO U.S. CONGRESS AND MAKE A CHANGE
AFTER 12:00 NOON TODAY, REPUBLICANS OVERSEAS BEGINS TO COMPILE THE SIGNATURES TO BE SENT TO CONGRESS.
Can you please set aside one minute of your time and sign the Republicans Overseas (RO) petition to end U.S.-style worldwide taxation and establish TTFI (territorial taxation for individuals) by signing their petition that will be sent to U.S. Congress.
Of course we know that this is an uphill battle, but RO is working hard to change the U.S. “Worldwide Taxation” system to “Territorial Taxation For Individuals”.
If RO is successful, do you accept that TTFI could be some modest “good news” even and especially for those persons and their families who have never wanted to have anything to do with the United States and just want “out”?
No one knows what will be in the final tax reform proposal, but I think that a fair question to consider is: If an RO TTFI-like proposal becomes law, is it likely that your life and your children’s lives will be at least “somewhat” better than it is now — irrespective of whether you want to be an American or not, or whether you are IRS compliant or not, or whether you like Republicans or Democrats or not?
If you believe that you and your family might be helped by TTFI, then sign the petition.
— And, if you, like me, have already renounced U.S. tax citizenship and would not personally be helped by TTFI, sign the petition anyway if you feel that your support could help others.
See below the 10/10/2017 letter on the TTFI petition emailed to me from RO’s Michael DeSombre.
— The key time sensitive point of this post is that although our letters and petitions (1744) from many of you have already been delivered and discussed with White House and some legislative staff, WE ASK FOR YOUR HELP IN OBTAINING EVEN MORE (at least 5000 total) PETITIONS — TO BE DELIVERED DIRECTLY TO CONGRESS BY OCTOBER 22, 2017.
Please take one minute to fill out the petition HERE.
The letter from RO:
“One of the most important items discussed [at the White House meeting] was Republican Overseas’ political strategy for having TTFI included in tax reform. These discussions provided significant positive feedback and insight. With this new information, RO will tailor its lobbying strategy going forward to maximize our chances of ending citizenship based taxation.
The three most important meetings with regards to ending CBT were with Samantha Zager, White House Associate Political Director, and with Matt Stross, Legislative Counsel to Congressman George Holding (North Carolina), and Congressman David Schweikert, a key member on the House Ways and Means Committee.
Ms. Zager was impressed with the letters and the volume of petitions. The White House supports our grassroot efforts to reach out to Congress and to lobby for the inclusion of TTFI. Ms. Zager will help to facilitate meetings with individual members in both the White House and Congress who can help with TTFI inclusion.
While we have White House support, only Congress makes law. We need to ensure that any tax reform bill sent to the President includes TTFI. Congress needs to hear from overseas Americans directly.
What you probably want to know now is: “Have we done it? Is CBT a thing of the past? Is this double taxation nightmare over?” Unfortunately, CBT is not gone yet, but we are definitely in the process of consigning CBT to history.
The next step is to take our fight to Congress.
We are setting up meetings with key members of the House Ways and Means Committee and the Senate Finance Committee on October 23-25, 2017. Republicans Overseas has three goals for this second phase:
— Deliver a petition requesting the inclusion of TTFI in the tax reform package with 6400 signatures from overseas Americans. Our petition campaign will continue until October 22, 2017 in order to gather the necessary signatures.
— Deliver 10-20 letters that will be included as testimony into the Congressional hearings on tax reform.
— Meet with key people who are drafting the tax reform package and ensure that they have heard your voices and understand that TTFI tax reform will benefit America as well as benefiting overseas Americans.
We need your help! Here is what you can do to support TTFI:
— Please sign the petition if you haven’t already done so. I assume all of you have already done so, but if not, please do so right away. The campaign will run until October 22, 2017, and we have a new landing page for the petition. We have your signature if you have already signed—no need to sign again.
— Please go out again to your mailing list or friends and ensure they have all signed the petition. -Ensure you hit both Democrats and Republicans.
— Become a paid member (e.g., Associate level) of Republicans Overseas HERE. RO is entirely self-funded, and your membership fees will be used to continue the legal and political battle against FATCA as well as to fund the political efforts to end citizenship based taxation.
Thank you for your ongoing support! We can’t do it without you. We will continue to fight for the end of citizenship based taxation.
Regards,
Michael DeSombre”
Keith nails all his interviews. He described the tax compliance industry as an enabler of CBT and I would extend that to US tax complexity in general. Anthony feigned incredulity but, of course, he and Claudine see TTFI or RBT as a win for their industry as well as the IRS and individuals burdened by the current system.
Keith: My deepest gratitude to you for everything you’re doing for all of us. Great conversation with IRS Medics!
I don’t really understand the import of the complaint below, but any useful ammunition here ?;
‘Re: Executive Order 13777 (Enforcing the Regulatory Reform Agenda) and Section 871(m)’
Interesting comments about “…jurisdictional concerns..”, and the potential for paying US tax but without being able to claim credit for it under existing tax treaty/ies with US.
http://iiac.ca/wp-content/uploads/IIAC-Letter-to-Treasury-and-IRS-re-Executive-Order-13777-Enforcing-the-Regulatory-Reform-Agenda-and-Section-871m.pdf
Ex.
“….United Kingdom, France, Spain, Italy and Germany have raised jurisdictional concerns as to whether or
not the U.S. has the authority to impose dividend withholding tax on dividend equivalent payments
between foreign counterparties outside of the U.S. The Canada Revenue Agency has not publicly
commented on this specific issue at this time. However, Canadian QIs could potentially be in the position
where they need to decide if they are going to be compliant with local tax laws or their QI Agreement. If
Canadian QIs withhold on payments of dividend equivalent amounts, but local authorities have
determined that these amounts are not subject to withholding at source, clients would be penalized as
they would be taxed according to U.S. laws and yet not able to receive any tax credits under the treaty.
This will result in contradictory treatment of similar payments across jurisdictions and will create an
unlevel playing field within the securities industry depending on how various countries respond to the
jurisdictional question. “…….
Page 5
“United Kingdom, France, Spain, Italy and Germany have raised jurisdictional concerns as to whether or not the U.S. has the authority to impose dividend withholding tax on dividend equivalent payments
between foreign counterparties outside of the U.S.”
2016 letter to the IRS from a UK bankers’ organization, making reference to a 2010 letter from the British Ambassador to the IRS (http://www.bsmlegal.com/PDFs/BritishEmbassy.pdf) expressing these concerns:
https://www.bba.org.uk/download-file/?f=eyJ1cmwiOiJodHRwczpcL1wvd3d3LmJiYS5vcmcudWtcL3dwLWNvbnRlbnRcL3VwbG9hZHNcLzIwMTZcLzA5XC9CQkEtQ29tbWVudHMtb24tTm90aWNlLTIwMTYtNDIucGRmIiwibmVlZGxvZ2luIjpmYWxzZSwidXNlciI6ZmFsc2V9
I was unable to connect to the link given for tge 2010 letter.
Try this
https://web.archive.org/web/20160330115245/www.bsmlegal.com/PDFs/BritishEmbassy.pdf
used the internet archive to look for an archived copy of the link
I try putting defunct link addresses into the search box at https://web.archive.org/
Thanks badger. The first page of the letter came up. Doesn’t mention “jurisdictional concerns” though.
@plaxy, perhaps it was by implication in the 2010 letter, ex.
“…..Furthermore, some financial institutions may not be able to apply the required
withholding tax on payments to recalcitrant account holders if they do not have the
ability to process such payments in the US. This is because UK financial institutions do not have any legal powers under UK law to collect tax in the UK on behalf of foreign jurisdictions.
In these cases, the financial institution would have no choice but to elect to be withheld upon, and waive the rights guaranteed by the Double Taxation Agreement……”….
or,
“…….In order to ensure that financial institutions are able to comply both with US and local laws, FATCA must be implemented in way that is proportionate and sensitive to the laws
of sovereign jurisdictions, especially those that are willing partners in the fight against tax evasion….”
from;
6 August, 2010
Sir Nigel Sheinwald KCMG
Ambassador
to
Timothy Geithner
Then, this letter from US SIFMA also raises “jurisdictional” concerns;
July 31, 2017
to The Honorable Steven Mnuchin
Secretary of the Treasury
RE: Executive Order 13777
……”……..Additionally, five foreign governments, including the United Kingdom, France, Spain, Italy, and Germany, have raised questions about whether the United States has jurisdiction to impose dividend withholding tax on dividend equivalent payments between foreign counterparties outside the United States, and have also said that the United States does not have the authority to modify tax treaties to treat dividend equivalent amounts as dividends under the relevant tax treaty. 5
Lack of agreement by the home governments of major investors in U.S. equity markets on the jurisdictional basis for withholding on foreign-to-foreign derivatives transactions places our members in a difficultposition. The lack of a level playing field in this area could cause competitive imbalances or lead to reciprocal countervailing measures by such foreign governments that could directly harm U.S. investors and U.S. equity markets……”……
https://www.sifma.org/wp-content/uploads/2017/07/SIFMA-Executive-Order-_13777_response.pdf
footnote 5;
“5
See supra note 2, “November 2016 Letter.”
SIFMA has requested that Treasury release under the Freedom of Information Act a letter from these governments to U.S. Treasury regarding the 2015 regulations and their implementation schedule”
and one of the documents links to this;
“..In addition, the implementation of Section 871(m) beyond “delta one” contracts may be the
source of political tension with a number of countries. We have learned that Germany, together
with France, Italy, Spain and the United Kingdom (hereinafter the G5 countries), wrote to the
U.S. Treasury Department in 2016 stating their position that dividend equivalent payments un-
der Section 871(m) IRC do not qualify as dividends under the applicable United States Double
Taxation Treaty when paid by non-U.S. entities. As far as we are aware, the United States has
not yet resolved this point with the G5 countries.
Moreover, we have received a letter from the German Ministry of Finance stating that our na-tional tax administration does not regard dividend equivalent payments under Section 871(m)
IRC as dividends according to Article 10 of the Double Taxation Treaty with the United States.
Instead, these payments would fall under the “Other income” Article 21 of the Double Taxation
Treaty. Thus, the U.S. would have no taxation right, and if German taxpayers were subject to
withholding tax on dividend equivalent payments in circumstances overriding the Double Taxa-
tion Treaty, Germany would not grant a credit against their German tax liability.
As such, we consider it unfair to put foreign custodial institutions in a position of having to
choose between their obligations under the QI agreements and the view of their local tax ad-
ministration. We believe the US government should discuss the implementation of Section
871(m) with these countries under their respective Double Taxation Treaties….”
from;
https://bankenverband.de/media/files/2017_07_31_DK_Brief_BdB_Schreiben_an_Treasury.pdf
Association of German Banks to U.S. Department of the Treasury
July 31, 2017
‘Review of Regulations Dividend Equivalent Payments and Qualified Derivatives Dealers ‘
Perhaps some of this may assist in these petitions, as well as lawsuits and inquiries to our respective home tax agencies about double taxation, lack of tax jurisdiction, and other conflicts of some parts of FATCA with our tax treaties with the US.
badger – I’m not getting the full Wayback Machine 2010 letter from the British Ambassador to Geithner – only the first page. Do you have a link to the letter in full? Thanks.
I am kind of curious why isn’t Justin Trudeau’s Canada raising similar concerns as Spain, France, Italy etc. Personally I place a lot of the blame for FATCA on France but I have to say this new French Government and new French Presidents is starting to show good signs of stepping up to the plate in the last few weeks on FATCA, CBT, and accidentals all the while Justin Trudeau is missing in action.
badger – got it – no problems with a non-apple device. Thanks.
From the second page:
“our legal advisers have noted the potential for conflict between the FATCA requirements and UK law. It is likely that the requirement for financial institutions to transfer customer data to the IRS could result in breaches of UK data protection laws, unless customer permission to relay the information is obtained (if such permission were required to open or maintain an account, we would expect that actual tax evaders would merely shift to other institutions, resulting in a burden on honest account holders and no net benefit to the US). Furthermore, some financial institutions may not be able to apply the required withholding tax on payments to recalcitrant account holders if they do not have the ability to process such payments in the US. This is because UK financial institutions do not have any legal powers under UK law to collect tax in the UK on behalf of foreign jurisdictions. In these cases, the financial institution would have no choice but to elect to be withheld upon, and waive the rights guaranteed by the Double Taxation Agreement. …
The worldwide system of taxation operated by the US requires cooperation from the international financial sector in order tackle tax evasion, especially given that the US taxes individuals primarily on the basis of their US citizenship rather than of US residence. Such cooperation should be achieved with minimal burdens to business, which brings valuable investment to the US. In order to ensure that financial institutions are able to comply both with US and local laws, FATCA must be implemented in way that is proportionate and sensitive to the laws of sovereign jurisdictions, especially those that are willing partners in the fight against tax evasion.”
Remarkable to see a reference to honest accountholders. And to see the UK bluntly pointing out to the IRS that they don’t have the power to impose FATCA on the world.
Pity they decided to help.
“FATCA must be implemented in way that is proportionate and sensitive to the laws of sovereign jurisdictions, especially those that are willing partners in the fight against tax evasion.”
I read that as signalling: “don’t treat us like a tax haven.”
And presently, the IGA solution is born: one model for the “willing partners”, with (token) US reciprocity, no withholding, and no direct reporting; and a very different model for countries not ranked as “willing partners in the fight against tax havens.”
badger:
“I don’t really understand the import of the complaint below, but any useful ammunition here ?;
‘Re: Executive Order 13777 (Enforcing the Regulatory Reform Agenda) and Section 871(m)’
Interesting comments about “…jurisdictional concerns..”, and the potential for paying US tax but without being able to claim credit for it under existing tax treaty/ies with US.
http://iiac.ca/wp-content/uploads/IIAC-Letter-to-Treasury-and-IRS-re-Executive-Order-13777-Enforcing-the-Regulatory-Reform-Agenda-and-Section-871m.pdf”
I think this IIAC letter, and the SIFMA letter, and the letter from the Association of German Banks, were all written in response to the Treasury’s Request For Comments on regulations that should be reviewed:
https://www.gpo.gov/fdsys/granule/FR-2017-06-14/2017-12319
These organizations all responded by nominating the FATCA-related Section 871(m), and in support of their complaint they cited the letters from G5 countries expressing “jurisdictional concerns” over US threats to force non-US banks to act as withholding agents for US tax.
Perhaps it was a co-ordinated response. It looks like the Treasury/IRS will agree to their request:
https://s3.amazonaws.com/pdfs.taxnotes.com/2017/2017-72131_TNTDocs_Treasury-Report.pdf
I’m sorry to say that in the light of the Federal Register RFC and the responses to the request, it now seems to me likely that the reference to FATCA in this Treasury Report was not triggered by the letter from Bill Posey asking Mnuchin to repeal FATCA; it’s just explaining what the 871(m) regulations are about.
Still, Treasury could yet decide to review other FATCA regulations, or better still, repeal the damned thing completely.
Keith Redmond shared a link.
We’ve received 566 signatures since this post. Including the 1,300 we already have, we need a bit over 4,500 more signatures by next Sunday!
IT’S TIME TO PETITION CONGRESS TO END CITIZENSHIP BASED TAXATION (CBT)!!!
Americans overseas supporting Territorial Taxation (TTFI) for Individuals: Keith Redmond, Americans Overseas Global Advocate who is the founder of the American Expatriates group on Facebook and Republicans Overseas….
See More
Territorial Taxation for Individuals: Sign the Petition
Please ask Congress to include Territorial Taxation for Individuals in the upcoming tax reform package. Sign the letter to Congress…
http://ttfi.info/
Thanks @plaxy. I was thinking that perhaps that recent written criticism re FATCA-related Section 871(m) sent to Treasury was evidence that even IGA signatories have their limits to capitulation, and might highlight holes in FATCA in terms of overreach and extra-jurisdictional enforcement, and similarly in the IGAs that might provide further ammunition as to why it should be repealed, and for any challenges to it and the IGAs – whether from within or without the US.
I am curious as to what the Canadian CRA said about the same issue, if anything – particularly as one of the letters raised that. Perhaps fodder for a FOIA.
badger: “might highlight holes in FATCA in terms of overreach and extra-jurisdictional enforcement”
My view now, after reading the British Embassy letter, is that the G5 did not capitulate to the IRS but instead negotiated the Model 1 IGA, under which the IRS gives up its withholding threats, and demands that banks close or withhold on “refractory” accounts, and accepts that accounts will be reported to the national tax agency rather than to the IRS, and also accepts that reportable accountholders must be informed that their accounts will be reported, and also accepts reciprocity (in principle).
In return, the G5 agree to implement FATCA under local law, thus allowing the banks to report the accounts (to the national tax agency) without violating DP law. Which as a by-product clears the decks for the governments to adopt their own automatic reporting laws, in the shape of CRS.
A satisfactory deal, from the “willing partners” point of view. Much less so, from the FIs’ point of view, but far better than being caught between the rock and hard place of the original IRS demands. US citizens – screwed. But a discrimination or data protection case may yet prevail.
As for the 871(m) problems being complained about, these affect QIs, I think. QIs aren’t covered by a Model 1 IGA. Not sure.
“I am curious as to what the Canadian CRA said about the same issue, if anything – particularly as one of the letters raised that. Perhaps fodder for a FOIA.”
Good idea.
“the IRS gives up its withholding threats, and demands that banks close or withhold on “refractory” accounts, and accepts that accounts will be reported to the national tax agency rather than to the IRS, and also accepts that reportable accountholders must be informed that their accounts will be reported, and also accepts reciprocity (in principle).”
Easy to see from this Lexology article from 2012, how nervous the IRS were about the reciprocity promise – piddling as it was.
https://www.lexology.com/library/detail.aspx?g=8b216a38-dd90-426b-b541-3d4d3cb87299
Love the part about the confidentiality safeguards. Wouldn’t want those foreigners misusing Americans’ tax data, would we? Only the IRS is allowed to do that.
Jak Dac: That’s great news! Here’s to getting the rest of those signatures by next Sunday! We can DO this!
http://jewishweek.timesofisrael.com/american-expats-lobbying-against-tax-burden/
I don’t understand why TTFI isn’t being automatically included in the tax reform package
Keith Redmond shared Republicans Overseas’s post.
FYI….
Republicans Overseas
7 hrs
Dear Republicans Overseas,
Although not a Republican, as an overseas American I very much appreciate your important work on this issue. However, I don’t understand why TTFI isn’t being automatically included in the tax reform package, given that it was part of the 2016 Republican platform and has also been endorsed by the RNC. Can you please explain?
Chris Dymkowski
Dear Chris,
Thank you for your question.
The National GOP is made up of four national committees:
• The Republican National Committee (RNC) is responsible for electing a Republican President.
• The National Republican Congressional Committee (NRCC) is responsible for electing GOP Congressmen and women.
• The National Republican Senatorial Committee (NRSC) is responsible for electing GOP Senators.
• The Republican Governors Association is responsible for electing GOP governors.
The RNC passed a resolution in support of territorial taxation in 2017, and the White House supports inclusion of TTFI in the tax reform bill.
But White House support does not mean that the House GOP leadership or the Senate GOP leadership will necessarily support Republicans Overseas’ initiatives as neither the House GOP nor the Senate GOP campaigned on repealing FATCA or replacing CBT with TTFI in 2016.
However, both the House and Senate GOP are open to discussions about including TTFI in the tax reform bill, and Republicans Overseas will return to Capitol Hill on October 23 to meet with members of the House Ways and Means Committee and the Senate Finance Committee to lobby Congress for TTFI.
Thank you,
Solomon
So the Republican Party’s 2016 Election Platform wasn’t actually the *party’s* platform at all. It was only the presidential candidates’ platform. Now that the election is over, forget about it. Is that really the gist of what Solomon said? Gawd, the whole bloody country needs to just start again and get it right this time.
I am glad to hear that the House and Senate are open to a discussion of this. But this has been going on for seven damned years (over a hundred if we’re talking CBT!). The discussion should have already taken place when both bodies began receiving our testimonials years ago. This is ACTION time. The discussion better be quick!
Let’s bury Washington with our petitions … Harry Potter’s mailbox multiplied!
Sorry Solomon but u have just lost my support. That set of distinctions is disgraceful and a con of the voters. You are as bad as the Dems.
@ Nervousinvestor
Why not support him? After all it’s not like there’s a long line of hitters willing to go to bat for us. Solomon Yue is someone who has stepped up to the plate to help. I’d sure hate to see the dugouts emptied one by one because we don’t support Rep and Dem team players who at least understand the CBT/FBAR/FATCA fubar and are doing what they can to beat it into the ground.
I’ll probably never fully understand this game called politics but I do understand that the only way we can nudge our very just cause forward is to grasp EVERY opportunity to play a supporting role to those who are working on our behalf. Right now they are asking a mere minute of our time to sign a petition. I hope we’ll put aside our disappointment and fear that things aren’t happening fast enough and SIGN the RO’s PETITION to demonstrate that we are serious about wanting real reform to the tax codes that torment Americans and even non-Americans living overseas or over the border.
It’s do or die. From RO:
“…If the House leadership and the Senate leadership don’t allow a vote on a proposed bill, the legislation is dead.”
Welcome to reality. For the sake of comparison, such platforms often include items that nobody thinks will actually happen, like recognizing Jerusalem as Israel’s capitol.