112 thoughts on “John Richardson Interviewed by IRS Medic”
@BB good for you. Try your best at least. I have a sole corporation too that I am having issues with and CPA advised me to renounce or get axed. As for me no more letter writing anymore to anyone as it accomplished nothing for us before. You might get lucky with a powerful Ways and Means committee congressman.
@Harrison
I’m sorry you’re also living this nightmare, which is really a corporate version of OVDP. I’d be interested to know how renouncing your US Citizenship would prevent you from being axed at this point. The compliance industry at large says it won’t make a difference to the Transition Tax’s application.
It took at least fifteen letters and about half as many phone calls to my Congressman to get anyone’s attention there, but then I always believed I might be only one letter away.
Four Congressman are now on record as supporting the changes necessary to improve the lives of American citizens living outside the US, Brady-R, Holding-R, Titus-D and Raskin-D. That’s four time as as many as there were just a year ago!
@BB
I really commend you for your perseverance and I live in hope that ADCS get the justice they deserve.
@Harrison
Yes, the Swiss are a very pragmatic people, a little know fact was that their neutrality saved the lives of thousands of sick and injured WW1, German, French, British soldiers, whom they placed as internees in Swiss hospitals and hotels , thus making themselves useful and helped avoiding a German invasion.
They also have perhaps the best form of democratic government, a direct democracy where citizens can ask for a referendum if enough signatures are gathered (approx. 1.2% of the population). It gives the people a maximum of political determination. Referendums seem to be held every few months but the Swiss take their responsibility seriously,people show up and vote in the important ones. It’s a pity the US thinks itself so exceptional without taking a look elsewhere.
BB. Why would you believe the compliance industry. Hodgen has a new post on how complex the new law really is and what they think of you. The only way to deal with this new law is to ignore it.
@Portland
Would you mind providing me with a link? I’d like to read what that member of the compliance industry has to say about it.
Wouldn’t the problem be finding the right accountant willing to ignore it?
Is it possible to renounce without FATCA/tax compliance? I don’t have a TIN/SSN, nor do I wish generating one.
@Barley
“Is it possible to renounce without FATCA/tax compliance? I don’t have a TIN/SSN, nor do I wish generating one.”
Yup, it sure is. Renunciation and exiting the US tax system are two totally different things. The State Department will notify the IRS about your renunciation but without a tax number the information is of no use to them. There is little point in filing (i.e. entering the US tax system) only to exit the system a short time later.
@ Barley,
Yes, you can renounce if you have not filed taxes. Dept of State, which handles citizenship matters, basically doesn’t care if you’ve filed or not. IRS is a separate matter, but although IRS does receive a copy of each CLN issued, you’re not even in their system and I’d assume you don’t have any assets in the US — so I’d tend to agree with Maz57, not worth the hassle of getting into the system just to get out of it. Whether one files taxes or not, the citizenship remains terminated and the CLN remains valid.
This page contains information regarding this and the relation between DoS and IRS in the context of renunciation, with links to source documents.
I know of at least one, Heidi.
Thanks, Portland.
We’ll see what shakes out over the next few months.
John: Finally had time to listen to this fabulous three-way conversation. It cut straight to the core of our issue; if only the legislators would listen to your voices of sanity and reason.
@Portland, he must be rubbing his hands! All those even more expensive tax returns his firm will get to work on. 😛
From Hodgen:
“What This Means for the American Minimultinational
For the American minimultinational business enterprise (a U.S. citizen who owns a foreign corporation), everything has changed. There are three possible countermeasures that I know of:
Disregarded Entity. Make the foreign corporation a flow-through entity for U.S. tax purposes. Make an election using Form 8832 to have the corporation be a disregarded entity.
Be like Apple. Form a U.S. corporation that will own your foreign corporation. Your U.S. parent corporation gets the tax breaks that Apple gets.
Human Taxed Like a Corporation. There is a funny little rule (IRC § 962) that allows a human being to be taxed like a corporation on income from controlled foreign corporations. It’s not perfect. But it may offer interesting solutions for you.
There is no easy answer to the question “What should I do?” The decision is going to depend on the facts for your foreign corporation. Math will tell you which method will offer the lowest tax cost.
However, all of this means significantly higher professional fees. This new complexity will add to the cost of determining your tax strategy and preparing your U.S. tax returns.”
OR, one could say this can’t possibly apply to me, file as though the tax doesn’t apply (find an accountant who takes your instructions, send it slow boat (no e-file) and only doing so after every available extension), assume that the IRS won’t come after you even though you filed a 5471 – ultimately testing the theory many hold that the IRS won’t come after non-resident tax filers, EVER.
@BB look into election of your corporation as disregarded entity as Phil Hodgen pointed out in that email link. The same was suggested by my CPA and then ask your CPA methods to renounce. Don’t look more into years of remaining in the system. Renounce asap with the correct advice. Be done and enjoy your life that’s what I was suggested too. Wish I had taken this advice as I saw people in 2010 renouncing and waiting in long queues in HK to give up their toxic blue passport. It is worth nothing but more trouble thanks the the century old law. Homelanders will never understand our plight and they will accuse of being traitors as they want everyone to pay a membership fee for club USA. Some congressman even if they realized are scared of sympthasizing with traitors outside USA and loosing our jobs. We have people with a different mindset in USA as compared to the rest of the world as they know that US is the greatest country in the world and deserves a membership fee to be part of US. This is the point I am trying to emphasize here as Patricia Moon who realised it too and put up this blog here. I commend her for her dedication. I might not be contributing anymore after I give up my membership card as I want to enjoy my life and move on. Club USA is getting much worst as my attorney friend had pointed out to me years to get out asap as things are going to go worst soon even for him living in USA. He was also applying for a Canadian passport as his wife was Canadian the last I spoke to him.
@BB as I writing this post you already posted about disregarded entity. Good you caught on to it.
@BB making your corporation a disregarded entity would require a form 8832 and let your corp income flow through your normal 1040. As always consult your CPA.
@Barley
“Is it possible to renounce without FATCA/tax compliance? I don’t have a TIN/SSN, nor do I wish generating one.”
Just to echo Paciffica777 and Maz57 and to put your mind at rest that you will not be asked anything related to tax at the renunciation process at the consulate or on the renunciation forms that you have to fill out. The tax forms are due later and you won’t be the first to ignore them. Ignoring the tax forms will by definition make you a covered expatriate which may have consequences if you have any US person heirs. I say this just so you are in full control of the facts.
@all. We now have kiddie tax on kids for unearned income on Virginia’s blog today https://www.angloinfo.com/blogs/global/us-tax/your-children-and-us-tax-reform-tax-tax-tax-the-kiddies/.
Just a new information as our new furor put up another headache for our children which the last furor also did. Nothing ever changes as more problems and all doom and gloom. Regretting not renouncing years ago when attorney friend advised me to renounce asap.
“ultimately testing the theory many hold that the IRS won’t come after non-resident tax filers”
We already know that theory is false. I thought the only remaining test is the theory that the IRS won’t come after non-resident NON-FILERS.
Thanks Paciffica777, Maz57 and heidi.
@heidi
“Ignoring the tax forms will by definition make you a covered expatriate which may have consequences if you have any US person heirs”
I don’t have any, but could it come to bite me in other ways? ie. could the USA demand my government to freeze my accounts, penalize me, etc?
I should clarify my situation. I’m an “accidental american”, born in the states, leaving with my parents as an infant. Never had anything to do with the USA, except a short visit a few years back.
I don’t want my “citizenship”, and will gladly relinquish (read dump) it, if it can be done safely.
@Barley talk to a good lawyer like Phil Hodges. He is expensive but worth consulting as you left USA a long time ago and are a dual citizen. I think you can get away with it fairly easy without the covered expatriate label. If you don’t have US heirs you have nothing to worry about.
@Barley. Phil Hodges on his blogs and newsletters had mentioned about several mideastern families who gave birth to their children decades ago and their children are now facing problems or faced problems similar to yours. He helped them out to get out of this mess as he wrote it from staying in Riyadh, Saudi Arabia about his meetings with several families from that area and the gulf countries. I remember reading about it 5-6 ago from an email or maybe from his blogs.
@BB good for you. Try your best at least. I have a sole corporation too that I am having issues with and CPA advised me to renounce or get axed. As for me no more letter writing anymore to anyone as it accomplished nothing for us before. You might get lucky with a powerful Ways and Means committee congressman.
@Harrison
I’m sorry you’re also living this nightmare, which is really a corporate version of OVDP. I’d be interested to know how renouncing your US Citizenship would prevent you from being axed at this point. The compliance industry at large says it won’t make a difference to the Transition Tax’s application.
It took at least fifteen letters and about half as many phone calls to my Congressman to get anyone’s attention there, but then I always believed I might be only one letter away.
Four Congressman are now on record as supporting the changes necessary to improve the lives of American citizens living outside the US, Brady-R, Holding-R, Titus-D and Raskin-D. That’s four time as as many as there were just a year ago!
@BB
I really commend you for your perseverance and I live in hope that ADCS get the justice they deserve.
@Harrison
Yes, the Swiss are a very pragmatic people, a little know fact was that their neutrality saved the lives of thousands of sick and injured WW1, German, French, British soldiers, whom they placed as internees in Swiss hospitals and hotels , thus making themselves useful and helped avoiding a German invasion.
They also have perhaps the best form of democratic government, a direct democracy where citizens can ask for a referendum if enough signatures are gathered (approx. 1.2% of the population). It gives the people a maximum of political determination. Referendums seem to be held every few months but the Swiss take their responsibility seriously,people show up and vote in the important ones. It’s a pity the US thinks itself so exceptional without taking a look elsewhere.
BB. Why would you believe the compliance industry. Hodgen has a new post on how complex the new law really is and what they think of you. The only way to deal with this new law is to ignore it.
@Portland
Would you mind providing me with a link? I’d like to read what that member of the compliance industry has to say about it.
Wouldn’t the problem be finding the right accountant willing to ignore it?
BB
https://hodgen.com/accounting-complexity-section-951a/
Is it possible to renounce without FATCA/tax compliance? I don’t have a TIN/SSN, nor do I wish generating one.
@Barley
“Is it possible to renounce without FATCA/tax compliance? I don’t have a TIN/SSN, nor do I wish generating one.”
Yup, it sure is. Renunciation and exiting the US tax system are two totally different things. The State Department will notify the IRS about your renunciation but without a tax number the information is of no use to them. There is little point in filing (i.e. entering the US tax system) only to exit the system a short time later.
@ Barley,
Yes, you can renounce if you have not filed taxes. Dept of State, which handles citizenship matters, basically doesn’t care if you’ve filed or not. IRS is a separate matter, but although IRS does receive a copy of each CLN issued, you’re not even in their system and I’d assume you don’t have any assets in the US — so I’d tend to agree with Maz57, not worth the hassle of getting into the system just to get out of it. Whether one files taxes or not, the citizenship remains terminated and the CLN remains valid.
This page contains information regarding this and the relation between DoS and IRS in the context of renunciation, with links to source documents.
I know of at least one, Heidi.
Thanks, Portland.
We’ll see what shakes out over the next few months.
John: Finally had time to listen to this fabulous three-way conversation. It cut straight to the core of our issue; if only the legislators would listen to your voices of sanity and reason.
BB This post came in my e-mail from Hodgen and then I couldn’t find it. This is the one I was referring to at 2:19
https://mailchi.mp/hodgen/friday-edition-in-which-foreign-corporation-income-is-made-taxable-and-we-discover-what-they-really-think-of-us?e=62942debda
I’m not sure why it doesn’t appear on his website
@Portland, he must be rubbing his hands! All those even more expensive tax returns his firm will get to work on. 😛
From Hodgen:
“What This Means for the American Minimultinational
For the American minimultinational business enterprise (a U.S. citizen who owns a foreign corporation), everything has changed. There are three possible countermeasures that I know of:
Disregarded Entity. Make the foreign corporation a flow-through entity for U.S. tax purposes. Make an election using Form 8832 to have the corporation be a disregarded entity.
Be like Apple. Form a U.S. corporation that will own your foreign corporation. Your U.S. parent corporation gets the tax breaks that Apple gets.
Human Taxed Like a Corporation. There is a funny little rule (IRC § 962) that allows a human being to be taxed like a corporation on income from controlled foreign corporations. It’s not perfect. But it may offer interesting solutions for you.
There is no easy answer to the question “What should I do?” The decision is going to depend on the facts for your foreign corporation. Math will tell you which method will offer the lowest tax cost.
However, all of this means significantly higher professional fees. This new complexity will add to the cost of determining your tax strategy and preparing your U.S. tax returns.”
OR, one could say this can’t possibly apply to me, file as though the tax doesn’t apply (find an accountant who takes your instructions, send it slow boat (no e-file) and only doing so after every available extension), assume that the IRS won’t come after you even though you filed a 5471 – ultimately testing the theory many hold that the IRS won’t come after non-resident tax filers, EVER.
@BB look into election of your corporation as disregarded entity as Phil Hodgen pointed out in that email link. The same was suggested by my CPA and then ask your CPA methods to renounce. Don’t look more into years of remaining in the system. Renounce asap with the correct advice. Be done and enjoy your life that’s what I was suggested too. Wish I had taken this advice as I saw people in 2010 renouncing and waiting in long queues in HK to give up their toxic blue passport. It is worth nothing but more trouble thanks the the century old law. Homelanders will never understand our plight and they will accuse of being traitors as they want everyone to pay a membership fee for club USA. Some congressman even if they realized are scared of sympthasizing with traitors outside USA and loosing our jobs. We have people with a different mindset in USA as compared to the rest of the world as they know that US is the greatest country in the world and deserves a membership fee to be part of US. This is the point I am trying to emphasize here as Patricia Moon who realised it too and put up this blog here. I commend her for her dedication. I might not be contributing anymore after I give up my membership card as I want to enjoy my life and move on. Club USA is getting much worst as my attorney friend had pointed out to me years to get out asap as things are going to go worst soon even for him living in USA. He was also applying for a Canadian passport as his wife was Canadian the last I spoke to him.
@BB as I writing this post you already posted about disregarded entity. Good you caught on to it.
@BB making your corporation a disregarded entity would require a form 8832 and let your corp income flow through your normal 1040. As always consult your CPA.
@Barley
“Is it possible to renounce without FATCA/tax compliance? I don’t have a TIN/SSN, nor do I wish generating one.”
Just to echo Paciffica777 and Maz57 and to put your mind at rest that you will not be asked anything related to tax at the renunciation process at the consulate or on the renunciation forms that you have to fill out. The tax forms are due later and you won’t be the first to ignore them. Ignoring the tax forms will by definition make you a covered expatriate which may have consequences if you have any US person heirs. I say this just so you are in full control of the facts.
@all. We now have kiddie tax on kids for unearned income on Virginia’s blog today https://www.angloinfo.com/blogs/global/us-tax/your-children-and-us-tax-reform-tax-tax-tax-the-kiddies/.
Just a new information as our new furor put up another headache for our children which the last furor also did. Nothing ever changes as more problems and all doom and gloom. Regretting not renouncing years ago when attorney friend advised me to renounce asap.
“ultimately testing the theory many hold that the IRS won’t come after non-resident tax filers”
We already know that theory is false. I thought the only remaining test is the theory that the IRS won’t come after non-resident NON-FILERS.
Thanks Paciffica777, Maz57 and heidi.
@heidi
“Ignoring the tax forms will by definition make you a covered expatriate which may have consequences if you have any US person heirs”
I don’t have any, but could it come to bite me in other ways? ie. could the USA demand my government to freeze my accounts, penalize me, etc?
I should clarify my situation. I’m an “accidental american”, born in the states, leaving with my parents as an infant. Never had anything to do with the USA, except a short visit a few years back.
I don’t want my “citizenship”, and will gladly relinquish (read dump) it, if it can be done safely.
@Barley talk to a good lawyer like Phil Hodges. He is expensive but worth consulting as you left USA a long time ago and are a dual citizen. I think you can get away with it fairly easy without the covered expatriate label. If you don’t have US heirs you have nothing to worry about.
@Barley. Phil Hodges on his blogs and newsletters had mentioned about several mideastern families who gave birth to their children decades ago and their children are now facing problems or faced problems similar to yours. He helped them out to get out of this mess as he wrote it from staying in Riyadh, Saudi Arabia about his meetings with several families from that area and the gulf countries. I remember reading about it 5-6 ago from an email or maybe from his blogs.