Category Archives: Issues regarding US persons abroad

Interesting question, of course Secretary Geithner is required by the IRC to publish the list BEFORE Nov 1st however, he may very well violate the IRC once again. Of course the more interesting question is whether not if late the list is still published prior to election day. The last abnormally small list was published on July 27th within the 30 day window. Of course as we have many accounts of people recieving their CLN’s since then we should have a much better idea of the accuracy of the list to begin with.

UPDATE: An even more interesting thing has just occured. The IRS is asking for public comments regarding the burden of filing out Form 8854(The “Exit Tax” Form) as required by the Paperwork Reduction Act. According to notice ONLY 100 people per year fill out Form 8854. What?? Comments are due prior to the December 12th 2012.

https://www.federalregister.gov/articles/2012/10/11/2012-24938/proposed-collection-comment-request-for-information-collection-tools#h-7

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Badger found and suggested a Brock post on this article.   It’s very interesting in light of IRS’ punitive approach to US persons abroad who did not know of their filing obligations.   Seems to me that if IRS would publicise — and apply —  common sense remedies, like other countries do, they’d actually get people complying instead of getting sick with fear.

“IRS Never Told Taxpayers They Could Get Penalty Relief” Washington, D.C. (October 17, 2012) By Michael Cohn.  “Approximately 1.45 million taxpayers who qualified for relief from tax penalties totaling close to $181 million never heard from the Internal Revenue Service that they were entitled to it and never received it, according to a new government report.”….. .”The report, from the Treasury Inspector General for Tax Administration, noted that the Tax Code imposes penalties on taxpayers with a filing requirement who fail to file a tax return or fail to timely pay the full tax shown on any tax return. The IRS waives those penalties for taxpayers who have demonstrated full compliance over the prior three years, but only if the taxpayers request penalty relief. The IRS does not widely publicize the opportunity to request this waiver, known as a First-Time Abate.”……

Robert Wood has an interesting article on how the IRS has won a fight with a native American tribe. It shares two aspects that expats and “foreign” banks face due to FATCA.

Background: American Indian tribes are sovereign nations and cannot be taxed. However, individual members of a tribe are USCs and they can be taxed. A recent court battle in Florida brings to mind the 2009 situation with Swiss banks. The IRS was investigating gambling profits ( tribes can conduct gaming on Native American lands independently of state regulation in states that allow gaming). The IRS wants to see if federal tax withholding/reporting requirements were met for profits distributed to 600 members of the tribe. The tribe claimed immunity. A court of appeals ruled that the bank records could be subpoenaed.  Here is where the situation becomes interesting (emphasis mine):

1)The tribe refused to hand over the records so the IRS subpoenaed the documents from four banks. In addition to arguing sovereign immunity, the tribe argued that the records would reveal confidential financial information and force them to change their banking practices to keep money on the reservation. … According to the court, the records became the property of the banks, not the tribe.

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http://www.consumeraffairs.com/news04/2012/10/why-many-americans-are-simply-clueless-about-global-events.html

I came across this article while looking for expat news to tweet. I know we’ve discussed American exceptionalism quite a bit and could easily blame most of  this lack of knowledge on indifference (“Hey, who cares, everybody knows America is the greatest place on earth, why should I care or bother about anybody/anyplace else?”) but the author gives perplexing statistics that really surprised me.

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