Monthly Archives: September 2019

Support the UK legal challenge against #FATCA. Indiscriminate #data transfers are unlawful. #AccidentalAmericans #AmericansAbroad #GDPR #DataBreach #HumanRights @Jesse_Norman @ft @UKParliament @Jude_KD @PreetKGillMP @DougChapmanSNP @guardian @SophieintVeld https://t.co/CoCw5SE6BW

— Jenny

The link in the above tweet links to a post describing this upcoming litigation. There is (along with the presumed upcoming ADCS appeal in Canada) growing pushback against FATCA.

From ‘Accounting Today‘ September 6, 2019:

The Internal Revenue Service outlined new procedures Friday to allow some expatriates who have relinquished their U.S. citizenship the chance to comply with their U.S. tax and filing obligations and in turn qualify for relief from back taxes, penalties and interest.

The Relief Procedures for Certain Former Citizens will apply only to individuals who haven’t filed U.S. tax returns as U.S. citizens or residents, owe a limited amount of back taxes to the U.S. government ($25,000 in the past six years), and have net assets of less than $2 million. Only those taxpayers whose previous compliance failures were non-willful can take advantage of the new procedures, according to the IRS. Many in this group may have lived outside the U.S. most of their lives and not been aware that they had U.S. tax obligations.
…

A post for Brock readers to analyze and discuss.

As well, analysis / commentary here:

IRS provides limited tax relief for certain individuals renounced(ing) after March 18, 2010

Update – My thoughts the Morning After – September 7, 2019:

After having digested this for a day (it was announced the afternoon of September 6/19, I offer the following thoughts:

I think that this IRS announcement/program has value. It may be that those who have renounced would NOT want to come into compliance (although there are certainly some who would – just to bring closure). But, the IRS announcement makes clear that this procedure is available to those who have not yet renounced/relinquished and wish to do so in the future. The point is that these future relinquishers can:

1. Come into tax compliance and have up to $25,000 USD in tax forgiven; and

2. Come into tax compliance without getting a Social Security number. This has the potential to be enormously helpful to a lot of people (but this is a minority view). It’s a way to make the compliance/renunciation process easier and less expensive (tax forgiveness) than it has been to date.

Of course, this will anger the thousands who have previously come into compliance, paid taxes and gone to the trouble of getting a Social Security number.

But, I can so how this new program has value.

Now on to the post as originally written …

Breaking news – just released today – September 6, 2019

Introduction – your assignment if you choose to accept it …

After having read this post, please consider the following questions/thoughts and comment …

1. Do you see similarities between the proposed wealth tax and the tax regime that is imposed on Americans abroad?

2. Do you see how FATCA and citizenship-based taxation provide the support and foundation for a wealth tax?

3. Do you believe that a proposed wealth tax would make it more likely that the United States will retain citizenship-based taxation?

4. Note that the Holding bill is NOT a move away from citizenship-based taxation. While retaining citizenship-based taxation it removes foreign INCOME from the U.S. tax base.

On to the post …

The Isaac Brock Society has been a leader in providing education about the U.S. policy of citizenship-based taxation, FATCA (information exchange in general) and offshore accounts (to the extent that the United States regards the local day-to-day financial accounts of Americans abroad as offshore relative to the United States). The purpose of this post is to suggest how these three things have become relevant to U.S. tax policy in general and the U.S. election in particular. You may know that Massachusetts Senator Elizabeth Warren is proposing a wealth tax. As a result, it is likely that a wealth tax will receive significant discussion (at least among the Democrats). Interestingly, President Trump (before he became President) had flirted with the idea of a wealth tax (although I suspect that he would not support a wealth tax in his current role as President).

Why Americans abroad are uniquely positioned to contribute to the debate on a wealth tax

Individuals who are tax residents of other countries and are subject to U.S. worldwide taxation are living the confiscatory effects of U.S. tax policy. They are already subject to taxes that are not income taxes but are in reality wealth taxes. A few examples include: phantom capital gains taxes, Transition tax, GILTI, etc. The cost of filing returns and information reporting is also a wealth tax. In addition, they are already subject to the kind of information reporting that would be required to make a wealth tax work.

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