Category Archives: Issues regarding US persons abroad

Tax reform is now at the top of the Congressional agenda. It’s success could well be in the hands of six men who have taken up the task of developing a tax reform bill that can actually pass both houses of government. With the month of August upon us we need to remind ourselves that we still have a chance to influence the content of the bill by sending letters, emails and tweets to the “Big Six”.

Please see this link to my earlier post which will lead you, in turn, to the list of contact addresses.

Another person we should be adding to our contacts list is Shahira Knight of the National Economic Council who is working closely with the “Big Six”. In an article by Nancy Cook and Josh Dawsey, Shahira Knight is said to have been acting as “the face of the administration’s tax push”.

UPDATE: In fact, Shahira Knight has a title. She is “Special Advisor to the President for Tax and Retirement Policy”. You bet she needs to hear from us!

You can address letters to her at:

Shahira Knight, National Economic Council, The White House, 1600 Pennsylvania Ave., NW, Washington, D.C. 2050

UPDATE

We are looking for particular ways that U.S. tax law/citizenship law affect the citizens and residents of the various countries represented here (on Brock, Facebook etc.)

For example in Canada, the primary problems are the government-registered savings plans(primarily deemed as foreign trusts) which suffer from mis-matched timing and loss of full tax-deferral; the inability to invest in Canadian Mutual Funds due to PFICs; capital gains tax triggered by the sale of principal residence; pensions being treated as foreign trusts, etc. Is it the same in UK, France, Germany, Switzerland, Singapore, Hong Kong, Israel, Japan etc? What other unique situations occur due to the incompatibility of U.S. tax law and your country’s tax laws? What is the interplay produced by the citizenship laws of your country ? Does your country allow for dual citizenship?

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Cross-posted from citizenshipsolutions

by John Richardson

This is post is “based on” (not identical to) one of two submissions that I submitted in response to Senator Hatch’s request for submissions regarding tax reform.

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Why is the United States imposing full U.S. taxation on the Canadian incomes of Canadian citizens living in Canada?

The Internal Revenue Code mandates that ALL “individuals” , EXCEPT “non-resident aliens”, are subject to full taxation, on their WORLDWIDE income, under the Internal Revenue Code. The word “individuals” includes U.S. citizens regardless of where they live and regardless of whether they are citizens and residents of other countries where they also pay tax. This means that, by its plain terms, the United States imposes full taxation on the citizens and residents of other nations, because they are also (according to U.S. definitions) U.S. citizens. The United States is the only country in the world that has a definition of “tax residency that mandates full taxation based ONLY on citizenship.

How “U.S. citizenship” and U.S. “taxation” interact

Principle 1: The United States is one of the few countries in the world that confers citizenship based SOLELY on birth on its soil.

Principle 2: The United States is the ONLY country in the world that imposes full taxation ON THE WORLD INCOME of its citizens, REGARDLESS OF WHERE THE U.S. CITIZEN LIVES IN THE WORLD.

Bottom line: The United States is the ONLY country in the world that imposes full taxation, on WORLDWIDE income, based ONLY on the “place of birth”!

A practical example: A person whose only connection to the United States is that he was born in the United States, who lives in Canada (and may have never lived in the United States and whose only income is earned in Canada), is required to pay U.S. tax on that income.
This resident of Canada is treated AS THOUGH HE WAS A U.S. RESIDENT.
NOTE ALSO THAT THIS INDIVIDUAL IS REQUIRED TO PAY TAX TO CANADA! He is subject to “double taxation”.
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We have another important opportunity to make our voices heard. My post on this from a week ago might need a reminder. Please click on the link to bring up the earlier post and get those letters, tweets and emails flooding in to the “Big Six”. As somebody recently commented, “We have to be in it to win it.”

“Republican hopes for revamping the tax code rest, for now, in the hands of six men.” So says author Richard Rubin in a recent Wall Street Journal article (“GOP Tax Overhaul’s Fate Rests on ‘Big Six’ Talks“, July 7, 2017). These six men, all prominent, influential players in the upper echelons of the US government, have shouldered the task of producing a tax reform plan capable of passage through both houses and subsequently becoming law. The group meets regularly and plans to complete its work in September.

As members of this influential group, these men need to hear from us. What?! “Again”, you ask? Yes, again. We have never been so close to achieving the goal of ending FATCA and/or CBT as we are right now. Recycle an old letter, write a new one, email, Tweet, whatever, but … please … contact these people! (See link to addresses below.)

On Monday afternoon, July 17, 2017 Donald Trump provided some relevant fodder for our communications. In his remarks at the opening of “Made in America” week he said 1) he wants to create a “level playing field” for all Americans and their businesses; and 2) “reciprocity is my favourite word”!

We can inform the “Big Six” that the playing field with the steepest slope of all is the one created by the US tax system (now enforced by FATCA) as applied to Americans who live and work abroad. The alternative, and our request, is the abandonment of CBT in favour of the RBT/TBT of the rest of the civilized world.

And we can inform them also that if Donald Trump loves “reciprocity” it can’t just be the “tit-for-tat” border tax against nations who impose tariffs on US imports (to which he was referring in his speech). He must also be prepared to order US banks to turn over the banking data that foreign nations are demanding as reciprocity under the terms of the FATCA IGAs. His alternative, and our request, is the repeal of FATCA altogether.

For contact addresses please see this link. My thanks to Pacifica!

reposted from citizenshipsolutions dot ca

posted by John Richardson

Introduction: It’s tax reform season and Senator Orrin Hatch wants to hear from you (again)

As reported on the Isaac Brock Society and other digital resources for those impacted by U.S. taxes, you have until July 17, 2017 to tell Senator Hatch what you think needs to be changed in the Internal Revenue Code. After great deliberation, it occurred to me that people who either are (or are accused of being) U.S. citizens or Green Card holders living outside the United States, might want the USA to stop taxing them. After all, they already pay taxes to the countries where they reside. This is your opportunity to “Let your voices be heard” (well maybe).

The Senate Finance Committee is yet again asking the general public to send comments on tax reform. The deadline is July 17, and the email address is taxreform2017@finance.senate.gov.

https://www.finance.senate.gov/chairmans-news/hatch-calls-for-feedback-on-tax-reform

(July 17, 2017 is coming quickly. Please take a few moments to send your thoughts to Senator Hatch. Tell him you feel about FATCA, citizenship-based taxation, FBAR, etc.)

Speaking of “tax reform”: Introducing Jackie Bugion

Jackie Bugnion is a U.S. citizen who has lived in Switzerland for many many years. She has been a tireless advocate for “residence based taxation”. She worked with “American Citizens Abroad” for many years and has recently retired. She was recently honored with the Eugene Abrams Award by ACA- an event that was the subject of a post at the Isaac Brock Society – that described her many achievements (over a long career).

She was the principal organizer of the “Conference on Citizenship Taxation”
which took place in Toronto, Canada in May of 2014. The Conference was widely discussed on the Isaac Brock Society here and here. The live video of the “Kirsch Schneider debate” is here.

I have reproduced a number of her written submissions and posts on this blog, specifically:

• Even in “retirement” Jackie Bugnion writes the best arguments against citizenship taxation
  ever
• A Proposal for Fair U.S. Tax Treatment of Foreign Pensions
• Excellent @JackieBugnion and Roland Crim article on Boris Johnson @MayorOfLondon and plight
  of #Americansabroad

Jackie Bugnion – 2013 Submission to the House Ways and Means Committee – Explains the upcoming New American Revolution

2013 submission from @JackieBugnion to the House Ways and Means Committee – explains the "New American Revolution" https://t.co/csUxqFeqUn pic.twitter.com/azfw4jyCQz

— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) July 14, 2017

The submission referenced in the above tweet describes the history of the construction of the U.S. “fiscal prison” brick by legislative brick!
(Forward it to anybody and everybody with a interest in this.)
 
Jackie has returned with her 2017 submission to Senator Hatch.
 
Jackie Bugnion 2017 submission to Chairman Hatch – reproduced with permission of Jackie Bugnion

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Thanks to JC for finding this information and for the text of this post, which he posted as a comment on the Media thread this evening:

Hatch Calls for Feedback on Tax Reform

The Senate Finance Committee is yet again asking the general public to send comments on tax reform. The deadline is July 17, and the email address is taxreform2017@finance.senate.gov.

https://www.finance.senate.gov/chairmans-news/hatch-calls-for-feedback-on-tax-reform

Maybe I’ll just dust off my previous submissions to the Senate Finance Committee and House Ways and Means Committee. Maybe ADCS should send them the fine multipart/multimedia submission sent previously to the Senate Finance Committee international work group on tax reform.

They claim that these submissions will be private. I don’t mind to have a submission placed on a website somewhere.

They don’t have a specific category that fits our case. #4 talks about international and competitiveness yet also has the words “preserve our tax base.”

I don’t see a “simplification” category, or a “fairer” category.

If we send submissions in perhaps they will be categorized under the 4 categories provided. Instead of getting drowned out in the individual person tax category, as I imagine there will be a vast majority from Homelanders in this category, maybe best to angle it as international, category #4.

Already a month has passed since this request. The 17th is this coming Monday.

Perhaps this call for submissions has not been broadcast widely. That would mean something less than a mountain of submissions, so more opportunity to impact.