Watch it on C-Span. This is a classic struggle
http://www.c-span.org/Live-Video/C-SPAN2/
Category Archives: Issues regarding US persons abroad
“US citizenship is a problem to be solved”, but how to do it in this case?
I wanted to post this fact situation and generate some thoughts on how this problem can be solved.
Facts – Altered slightly to protect their identities:
Financial Assets: Last week I met with a couple in their 50s. They have been married about 25 years. They have lived in Canada all of their married lives. They have two children. The older is graduating from University this year. The younger is in her third year of high school (expectation that she will go on to University). It is not clear to me what is the citizenship status of the children. But, I think (since the US born mother lived in the US until the age of 18 and then moved to Canada) that they are both US citizens. If the children are US citizens I don’t think the US has ever been notified that they exist. The couple own (free and clear) a home (in both their names) with an approximate value of 1.4 million. They paid $245,000 for the home when purchased. They each have an RRSP. The husband’s value $450,000 and the wife value $200,000. They also have a brokerage account consisting primarily of Canadian mutual funds. The account is in the husband’s name (but both parties acknowledge that the account is jointly owned). The wife claims that she had some kind of signing authority (power of attorney perhaps) over the brokerage account (not sure whether she still does in view of the husband’s reaction to Mr. FBAR). Continue reading
Michael Miller paper on the Exit Tax – Applies prospectively
Expats Live in Fear of Malevolent Time Machine
Of relevance is the following:
It should be self-evident, however, that such a result is absurd, and cannot have been intended.
Congress cannot possibly have meant to treat individuals who had long since relinquished their U.S. citizenship, and whose expatriations had always been respected for federal tax purposes, as if they had been citizens all along.
Undoubtedly, Code Sec. 877A was meant to apply solely to individuals that, on (or after) the date of enactment, were otherwise treated as citizens (or long-term residents) for federal tax purposes.
Any individual who took all steps required to successfully terminate citizenship for federal tax purposes, under the tax laws as in effect immediately prior to enactment of the 2008 Act, would not again need to relinquish U.S. citizenship and thus could not be within the intended scope of Code Sec 877A(g)(4).
Possible Canadian tax relief for US persons in Canada
This post was on the RenounceUSCitizenship blog.
@Moodystax Might the 2013 Canadian Federal budget lay the groundwork for a #FATCA IGA?
— U.S. Citizen Abroad (@USCitizenAbroad) March 5, 2013
Will the 2013 Canadian Federal Budget include some references to Canadians who the IRS defines as U.S. persons? As we all know the US is currently trying to get Canada to surrender part of its sovereignty by signing a FATCA IGA.
In its prognostications on the 2013 Budget, Moodys Tax Advisors considers:
Former Greek minister gets eight years and €500,000 fine for failing to declare an aggregate of €100,000 in assets
From ekathmerini.com:
Former Defense Minister Akis Tsochatzopoulos was sentenced to eight years in jail and fined 520,000 euros on Monday. …
The ex-minister failed to declare 47,000 euros of assets in 2006, 33,000 in 2007 and 20,000 in 2008.
Also, he did not notify tax authorities that his wife Viki Stamati, also in custody, bought in 2009 the couple’s luxury home close to the Acropolis.
The court ordered that the property be seized. Judges also ruled that he cannot appeal his sentence.
This has scary parallels with FATCA and FBAR requirements. The United States debt situation is Greece on steroids. It is only a matter of time before the world rejects the US dollar as the intermediary of trade and the world’s reserve currency. When that takes place, the value of the dollar will collapse violently and the US public will start rioting in the streets in Greek style. Then, they will seek vengeance upon all those who failed to disclose financial accounts. If you want to know where the US is going, Greece is a precursor.
FBI statistics say 478 renounced U.S. citizenship in February 2013
The FBI has released the latest monthly report on the number of records in NICS, the National Instant Criminal Background Check System. Alongside hundreds of thousands of records of convicted criminals and the mentally ill, NICS now contains 21,308 records of people who have formally renounced U.S. citizenship, up from 20,830 last month.
China rejects America’s treasured National Origin Discrimination
US Unlikely To Crack China FATCA Agreement
by Lisa Smith : March 4, 2013 – iExpats.com
No FATCA benefit for China
FATCA has been created to track down the offshore financial assets of US taxpayers and make the institution concerned reveal details so that tax can be collected.
The failure by the institution to register with US tax authorities will see a 30% withholding charge being levied on all financial transactions between it and the USA.
Now China is telling the US that there will be so few US citizens holding Chinese bank accounts that the cost of implementing FATCA outweighs the benefit to the nation’s financial institutions.
The Chinese have also pointed out that even the opportunity of signing an IGA which would allow them to get details of Chinese taxpayers in the US would also serve minimal benefit to the government.
RAKBank is warning US persons and Citibank declined to comment
UAE bank customers caught in crossfire over US sanctions
Gregor Stuart Hunter – Mar 2, 2013 – TheNational
…RAKBank, for example, warned its US customers in a letter in September that it was reviewing all of its compliance procedures.
The letter states that one option under review might require RAKBank “to cease banking for individuals who fall under Fatca regulations”…
…Even US banks are hesitant to reveal where they stand.
“We’re an American bank, so we’re fully compliant with Fatca and are ensuring we are compliant,” said Dinesh Sharma, the managing director and head of consumer banking at Citibank.
“By definition as a US bank, we ensure 100 per cent compliance to any sanctions … without diluting our customer proposition.”
The bank declined to comment on whether any accounts had been closed or transferred as a result of either Fatca or sanctions exposure.
Americans renouncing citizenship to become British thanks to tax rise
The number of people giving up their US citizenship to become British has surged thanks to complex tax rules introduced by the American tax authorities.
11:40AM GMT 02 Mar 2013
London-based American lawyers, who specialise in tax and immigration, report a threefold increase over the last five years in the number of American citizens who are giving up their citizenship – a process known as “renunciation”.
Also in the news today:
Fleeing Abroad May Not Cut Your Taxes
RESHMA KAPADIA – SATURDAY, MARCH 2, 2013
As anxiety rises about the increasing tax burden on the world’s richest, some boldface names have taken drastic steps. French actor Gérard Depardieu recently bid adieu to France and accepted Russian citizenship, and Tina Turner is giving up her U.S. citizenship for Switzerland. Golfer Phil Mickelson got an earful after publicly raising the prospects of making “drastic changes” due to California’s rising taxes.
Plenty of other Americans are considering similar moves.
Family planning for US citizens abroad and Green Card Holders resident in the US
Letter of a Canadian businessman to his dual US/Canada citizen son on the occasion of his high school graduation http://t.co/gagycaneyQ
— U.S. Citizen Abroad (@USCitizenAbroad) March 2, 2013
I just remembered a recent conversation with a U.S. based immigration attorney and thought I would post about it. Continue reading