Politico announced Trump’s nomination Of Charles P. Rettig, including the following excerpts:
Rettig, who specializes in settling complex tax disputes between his taxpayer clients and authorities like the IRS, known as tax controversies, has for more than three decades represented clients before the IRS, the Justice Department, state tax authorities and other jurisdictions.
Rettig is no stranger to the Washington tax policy community. Many IRS officials would be familiar with him because of tax litigation in which he’s been involved.
Rettig’s nomination would break a nearly two-decade practice of naming commissioners from the general business world, a trend that began after the IRS Restructuring and Reform Act of 1998. Prior to that, commissioners generally had tax backgrounds.
Continuing with the conversation from Media & Blogs thread, I see many mentions of the fact that his firm represented some 100 UBS clients (which may be why some of his articles concern the OVDP). I am trying to locate some actual court cases but the site that keeps coming up in references seems to be down. He also clearly, is respected for his work representing clients by his peers:
Rettig would also oversee the implementation of tax reform. Rettig has been a friend and mentor to many of us in the tax controversy bar over the years, and we are encouraged by the selection of someone from the private bar to the post.
Given he is a tax litigator, I don’t expect he would support a change to RBT (hope I am wrong about that) but some of his comments certainly suggest he understands what has happened and that our situation is very different from that of U.S. residents with foreign accounts.
Forbes IRS FBAR Streamlined Procedures Revisited, Am I Non-Willful
If, as some believe, the Streamlined Procedures are being used to entice unsuspecting taxpayers into placing their head onto the FBAR chopping block, the government should be held accountable. However, if, as most believe and our experience seems to support, the Streamlined Procedures were designed to provide not quite willful taxpayers an opportunity back into compliance through a simplified and expedited process, the IRS should respect the vast majority of Streamlined submissions (and requests for transitional treatment) and move on.
Forbes IRS FBAR Voluntary Disclosure Program Taxpayer Interviews
It should be anticipated that the IRS will pursue examinations of the amended returns of taxpayers residing in the United States in some manner. It remains uncertain whether the IRS would or could effectively pursue those residing outside the United States in any realistic manner. It should also be acknowledged that there remain viable alternatives to the OVDP, including the voluntary disclosure practice of the IRS set forth in Internal Revenue Manual (IRM) 9.5.11.9 [see Example 6(A)], Section 4.01 of the Criminal Tax Manual for the U.S. Department of Justice, and Section 3, Policy Directives and Memoranda, Tax Division of the U.S. Department of Justice.
Certainly, given the complexities of the Internal Revenue Code, other relevant statutes and life in general, many of the indiscretions associated with an income tax return or FBAR are anything but willful or intentional and definitely not fraudulent or criminal in nature. In these situations, an interview of the taxpayer and/or their return preparer can lead to an extremely quick and reasonable resolution.
Many, many articles penned by Mr. Rettig are available via SSRN and listed here.
Bubblebustin asked for this post to be based upon this paper. Unfortunately the most we can offer is the link and a few excerpts. Strongly suggest everyone read this particular article- Why the Ongoing Problem with FBAR Compliance? from the Journal of Tax Practice & Procedure, August-September 2016, published by CCH, a part of Wolters Kluwer.
A major point in the article is when government is trusted, is seen as legitimate, compliance tends to be a result. It probably does not help that the IRS emphasizes submissions coming from OVDP and Streamlined will be examined “in an effort to uncover leads for criminal prosecutions.” Mr. Rettig is also aware that eighty percent of non-resident filers will have no U.S. Tax Liability. Though again, that is a reference to income tax and does not cover some of our worst grievances.
Potential government actions should consider the
impact on those six-plus million U.S. people (and their
advisors) sitting in the bleachers domestically or in various
foreign countries trying to determine how best to pursue
some form of voluntary compliance, expatriation or to
possibly just continue sitting in the bleachers … “History
repeats itself because no one was listening the first time.”
JusDeFruit and I have both written to him separately upon the news of being nominated for Commissioner, recognizing it’s probably our last chance of ever having any kind of direct contact with him.
Anyone else interested in contacting him can attempt to do so through his firm:
rettig@taxlitigator.com
Jack Townsend mentions Mr Rettig’s nomination on his Federal Tax Crimes blog here:
http://federaltaxcrimes.blogspot.com/2018/01/tax-controversy-attorney-rettig-to-be.html
As long as CBT is the law, he will have to use his expert abilities to comply.
IBS is not the only site trying to read the runes as to what can be expected as a result of Rettig’s appointment as Commissioner.
https://www.cnbc.com/2018/01/24/sp-500-nasdaq-set-for-records-as-earnings-season-continues.html
Good luck to Mr Rettig in getting 9 million non-resident US persons to file US tax! There’re not enough carrots in the world when compliance fees and obligations discourage it and the US government keeps moving the compliance goal posts.
I suspect CNBC suspects that his first task will be to protect Trump’s tax returns.
The 2016 FBAR article also says, near the end, “Properly encouraging millions of resident and nonresident Americans to come into compliance is critically important to the future of our system of tax administration.” While it is indeed refreshing that he is obviously completely aware of the situation and of its absurdity, he is now here to enforce the law. The law is CBT. I’m not sure what his powers are, but he possibly could bring a more rational approach to things, though I have no idea what that could be — how do you make absurdity rational? The only rational thing to do is change CBT to RBT. The only way the current absurdity can continue to work is de facto RBT, where the IRS ignores the mass of those living abroad, and they reciprocate. In other words the only way the system now continues to function is that it does not function. Imagining that the 8 million Americans abroad will “come into compliance” is absurd in itself. If they did, the system would explode; the IRS could not process it, taxpayers could not be compliant, the costs and consequences would make people renounce by the millions, the consulates could not handle it, etc.
It’s as if everybody in the US justice system refused plea bargains and demanded a jury trial. It’s well documented that the justice system would immediately implode.
It is truly getting very frustrating that the Republicans have so far done NOTHING on this issue, and we are speeding towards the Democrats regaining power in the midterms.
“In other words the only way the system now continues to function is that it does not function.”
Word.
Let me preface my above comment with “Even if the IRS were to announce a REAL amnesty forgiving all tax and associated penalties”, there’re not enough carrots in the world…
As long as US tax law treats the local savings, investments and businesses of expats as toxic “foreign” investments/businesses, compliance will not be possible for any but the most simple financial situations.
We can’t know whether Rettig might be aware of the points raised by Prof. William Byrnes, but reading and re-reading the piece below by Byrnes brings some refreshing informed skepticism and logic to the paranoid and deliberately fantastical claims of the IRS and US Treasury (as well as people like Norton, Bean, and even Maloney who have broadened FATCA’s supposed remit to include human trafficking http://isaacbrocksociety.ca/tag/eleanor-holmes-norton/ ) regarding those it deems UStaxablepersons ‘abroad’ and the so-called ‘tax gap’, FATCA, etc.
See:
http://kluwertaxblog.com/2017/04/18/15527/
‘Is FATCA ‘Much Ado About Nothing’? Is FATCA’s Tax Revenue Going to Offset Its IRS and Industry Costs?’
William Byrnes (Texas A&M University Law)/April 18, 2017
Byrnes starts by saying that he “was recently asked to analyze the often quoted figure of $150 billion lost by the U.S. Treasury to foreign non-tax compliance by U.S. taxpayers.”…..
and raises many salient points that skewer the bs the IRS likes to trot out without any evidence whatsoever. Ex.
“…
What Did the IRS Testify to Congress About Lost Tax Revenue from Foreign Tax Evasion? Has Congress Enacted Legislation Based on Bad Information?
The answer is to be found in a Congressional Research Service (CRS) Memorandum of July 23, 2001 referencing an inquiry made by the House Majority Leader as to the method used by attorney Jack Blum, an IRS contract consultant, to construct the then estimate of $70 billion of illegal tax evasion losses due to tax havens. This figure was contained in his affidavit submitted in support of the government’s request from the federal court for a John Doe summons for records from MasterCard and American Express. According to the CRS: “Mr. Blum’s estimate was contained in a declaration filed in connection with a petition the Internal Revenue Service filed with the U.S. District Court for the Southern District. In response to your request, we contacted Mr. Blum and discussed his estimate; he was not able to send us a written discussion of his estimating procedure … We did not discuss these particular aspects of the estimating process in our initial conversation with Mr. Blum and our attempts to contact Mr. Blum on a follow-up basis have not been successful.” On March 4, 2009 the IRS Commissioner Charles Shulman testified before the Subcommittee that there is no credible estimate of lost tax revenue from offshore tax abuse….”.
Among other welcome observations, Byrnes notes that FATCA was never subjected to a cost/benefit analysis, notes that the IRS includes FBAR penalties/Title 31 revenues in its (I think deliberately disingenuous) bragging about Title 26 ‘tax’ recovered, etc.
Read it for yourself, and then pass it on – to the new Commissioner and anyone else you think might benefit.
For more detail about the bs numbers used to justify FATCA by its FATCAnatics, see this further report by Byrnes;
“..This same statement of $70 billion was given by Jack Blum in testimony in
2002. When asked about that number he admitted it was imprecise stating, “You just have to take a guess at it.”…”
1-10,
Byrnes, William and Munro, Robert, Background and Current Status of FATCA (March 1, 2017). LexisNexis® Guide to FATCA & CRS Compliance (5th ed., 2017) ; Texas A&M University School of Law Legal Studies Research Paper No. 17-31. Available at SSRN: https://ssrn.com/abstract=2926119
fulltext available
@badger
There’s got to be a better word than “exceptional” which up many is a badge of honour. How about “outlier”, or is that even too kind?
Rettig wrote in the Forbes article, “. The Streamlined Procedures seem to represent the first attempt by the government to acknowledge that at some point, non-resident taxpayers become residents of their home state, emotionally even if perhaps not technically.”
Odd statement. Streamlined is an attempt to bridge the technical issue of non-compliance, but only RBT will address the emotional. Might this be useful for the human rights complaint?
I understood Rettig to be saying that at some point US emigrants become (emotionally) residents of the country they live in, rather than being “technically” (I assume he means “counter-factually”) non-resident US residents.
I agree it’s odd. US emigrants are physically resident in the country they live in. How they feel about living there does not seem to me to have any meaningful connection with taxation.
I think all he’s saying about Streamlined is that the IRS undertook not to seek $10,000 per year per account in FBAR penalties provided there was a sufficient level of grovelling and self-abasement and general creepiness shown. Compared with the implacable OVDI/P traps.
“There’s got to be a better word than “exceptional” which up many is a badge of honour. How about “outlier”, or is that even too kind?”
Perverse?
Stupid excuses to make money somehow for compliance etc and to rob money from non residents of homeland that have moved to other countries. I swear my compliance costs are more every year than tax paid. On top of that banks and brokerages continue to discourage US citizens living overseas from getting an account at their banks and brokerages. Simply frustrating extra judicial crap! Only due to compliance condors continuing to ponder donations to congress for this. That’s simple as that. This is how compliance condors make money.
Get on with RBT train US!
I remember someone referring to US CBT in a Canadian newspaper article some years back as “anomalous and larcenous”. Works for me.
In other news, Zimbabwe has a new dictator now. Hooray?
In other words Mr Rettig would be more beneficial for compliance condors as he is tax attorney himself. Great !
@BB, you’re right about the term ‘exceptional’. I’ve never liked it, because I’m sure the US sees itself that way – as you say, as a compliment. It might even revel in ‘outlier’ too. Hard to get around the deeply ego-centric US navel gazing we are the center of the universe belief system …
Perhaps ‘deviant’ outlier is more like it.
@BB, I think that Streamlined was an attempt to make extraterritorial CBT more comfy – so as to reel in more to the net of compliance – word had gotten out more widely about their barbaric and unwarranted treatment of the minnows and small fry living outside the US (see Taxpayer Advocate’s reports and her findings – having had to use FOI to extract stats about OVDI/P – regarding the disproportional punitive treatment of those with minimal tax owing, and those without professional representation ) and also fewer were “coming forward”.
I don’t think the IRS and Treasury gave diddly squat about ’emotional’ attachments and loyalties to our non-US home country. I think it was more about the way it was looking in public as they tormented people paying higher taxes in Canada with legal local accounts and RRSPs, etc. I think I remember that some US tax professional referred to the changes in OVDI re the final exemption of RRSPs from the penalty base (ex. https://taxblawg.files.wordpress.com/2013/02/sheppard_intertaxjrnl_2-4-13.pdf, ) the issuance of the December 2011 factsheet ( ex. http://www.advisor.ca/tax/tax-news/tax-cheats-beware-76562/2 ) and the inception of Streamlined as ‘the Canadian exception’ or something similar – because of Canadian political criticism expressed to the US behind the scenes – which apparently prompted then Ambassador Jacobson’s ‘we’re not after Canadian grannies’ speech http://web.archive.org/web/20111023200917/http://canada.usembassy.gov/ambassador/news-and-speeches/18-october-2011-ambassador-jacobsons-remarks-to-the-canadian-club.html .
@badger
“Deviant outlier” as you suggest, or plaxy’s simple “perverse” both work.
https://twitter.com/USCitizenAbroad/status/957805975603331072
Those #Americansabroad with small biz corps in their country of residence who (1) entered U.S. tax system under #streamlined or (2) discovered by #FATCA are now subject to @USTransitionTax which will confiscate part of their non-U.S. private pension plans. http://isaacbrocksociety.ca/2018/01/27/meet-the-proposed-commissioner-of-the-irs-a-welcome-change/comment-page-1/#comment-8121540
#NotPayingThis
Search in YouTube under the real reason why citizenship based taxation will never end by Nomad capitalist. You will find some insights why it will never end. If a congressman even tries it he would be sacked immediately by homelanders. Makes sense too. This monstrosity has been there for over a century now and only now it is getting worst day by day. I wish I had not sucked myself into it a long time ago but at the time it was the best country to live in. For the last 2 decades US has become extremely violent and extremely crazy on vigilance. I had my wallet scanned by scanner twice and my carry on was searched like crazy. Another friend was told that he is not able to carry more than 3000 usd for any travel out of the country. He was like 10,000 usd is allowed as per customs but he is not allowed as he goes on 2-3 trips a year. Now you are not allowed to carry electronic currencies too on your laptop. Another crazy regulation in the works after many US citizens left on bitcoin and other electronic currency explosive growth. How are they going to check electronic currency?
wallet was X-rayed twice by scanning machine which made me think the credit cards might have something in them.