Category Archives: Issues regarding US persons abroad

Switzerland’s largest political party, SVP, voted against FATCA.  The no vote was then followed by the Greens.  Together with the Social Democrats (SP), the three parties make up the political majority.  The SP, wanting reciprocity through model I, is selling its vote at a high cost, pushing the federal council to make compromises which lead to reciprocity.

Die SP treibt wieder das alte Spielchen

…Die SP versucht, ihre Zustimmung möglichst teuer zu verkaufen, in diesem Fall möglichst viele Zugeständnisse zu erreichen und den Bundesrat auf eine Linie zu zwingen, die zu einem automatischen Informationsaustausch führt. Dies kann sie tun, weil die SVP und die Grünen das Fatca-Abkommen kategorisch ablehnen. Denn die Fraktionen von SVP, SP und den Grünen kommen im Nationalrat zusammen auf 117 Stimmen, was eine komfortable Mehrheit ist…

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Sound crazy?  Not in America.

On Wednesday, the Tax Court held that a flight attendant who was a resident of Hong Kong and a U.S. citizen could not claim 100% of her wages were excludable under the Sec. 911 foreign earned income exclusion (Rogers, T.C. Memo. 2013-77)…

The Tax Court held, therefore, that only her wages earned while in or flying over foreign countries qualify as foreign earned income, and wages earned while in international airspace or over the United States do not qualify.

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In other words, a Chinese dual citizen living in Hong Kong, working for a Chinese employer and earning less than $10K per year, may be double-taxed on the same income by America simply because they work above the ground outside of America.

I’m failing to comprehend how one can determine when one worked in international airspace, or even US airspace, and for how long.  Will one also be fined $10’000 for not knowing that one flew over a section of American Samoa, thinking that it was Samoa?  Flight attendances have to carefully analyze the hours worked over the  jurisdictions covered by each flight path throughout the entire year to ensure that their meager incomes will be taxed twice, if they wish to avoid massive fines.  How much greater can tax insanity be more hell than that?

By DOUGLAS GOLDSTEIN 03/14/2013 23:19 – Jpost.com

The US government should also waive FATCA’s reporting requirements for foreign financial institutions.

With the enactment of the 2010 HIRE Act, Congress aimed to increase employment and increase its revenues by going after foreign accounts owned by Americans.

Unfortunately, the legislation doesn’t draw a distinction between honest Americans living and working abroad, and those citizens who are indeed hiding tax revenues from the American government. The legislation, Foreign Account Tax Compliance Act (FATCA), requires that individuals report their accounts held overseas and that foreign financial institutions report to the IRS about their American clients.

FATCA burdens American individuals and businesses overseas, as well as the foreign banks that wish to service them.

The billion dollar question is whether the burden of FATCA will outweigh its benefits.

The potential for losses are great on both the individual and institutional side.

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and US citizenship based taxation. This is NOT over. Not by a longshot.

http://samenaanhetwerk.be/media/uploads/john/facta.pdf

Can any of you who speak Dutch tell me more about who this guy is. He seems pretty left wing even for European standards.

FATCA Hits The Buffers In Russia

von iExpats von Lisa Smith – March 14, 2013

…Now Russia has stepped up to say implementing FATCA is illegal in the country as the rules are contrary to Russian and international laws.

The Russian Foreign Ministry has also declared that the country’s financial institutions would break local laws if they enter into any agreement with the IRS.

The Bank of Russia has backed up the Foreign Ministry’s stance and said that FATCA undermines the principle of equality among sovereign states…

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(Reuters) – The Obama administration is drawing up plans to give all U.S. spy agencies full access to a massive database that contains financial data on American citizens and others who bank in the country, according to a Treasury Department document seen by Reuters…

Once spy agencies get such data, German said, “it’s in a black hole. Time and again, we have evidence, unfortunately well after the fact, that somebody’s civil rights have been violated, that the intelligence community simply ignores the rules.”

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But a major obstacle to all this is Canada’s Charter of Rights and Freedoms, which prohibits (Section 15.1) discrimination based on several criteria, including “national or ethnic origin.” Constitutional expert Peter Hogg has pointed this out in a five-page letter to the Finance Department, which is co-ordinating the IGA negotiations with the US.

“In my opinion, the procedures mandate by the Model IGA are discriminatory in a way that would not withstand Charter scrutiny,” Hogg says in his letter. “These procedures effectively treat individuals differently, and adversely, based on an immutable personal characteristic, specifically citizenship. If Parliament were to enact legislation authorizing and permitting this type of differential and adverse treatment, the legislation would contravene the equality protections in section 15 of the Charter.”

Opinion: Creating tax misery for nearly seven million U.S. expatriates

By Don Whiteley, Special to The Vancouver Sun March 12, 2013

This really should not be a post by me but am so excited by this, had to at least share the link.  Tim mentioned over at MapleSandbox that something good would be coming in the next few days and to keep an eye on Vancouver Sun. I went over right away, and there it was!