Category Archives: Issues regarding US persons abroad

Please submit to Ways Means. One line. One paragraph. One page. One dissertation. Whatever.

ADDTIONAL NOTE: THE HEARING IS BASED UPON REDUCING IRS PAPERWORK and gives 2 means to potentially achieve that end. FOCUS YOUR COMMENTS UPON REDUCTION OF COMPLEXITY and cost savings in eliminating paperwork. Also, payment for services rendered such as the consumption tax they mention.

EXPRESS SUPPORT FOR CONSUMPTION TAXES and disgust for flat taxes which would devastate us.

Quantity of Responses should overwhelm the discussion. There should be no excuses for Ways Means to not address it.

http://waysandmeans.house.gov/boustany-announces-hearing-on-fundamental-tax-reform-proposals/

Public Submissions For Record
Please click here to submit a statement or letter for the record

WASHINGTON, D.C. – House Ways and Means Tax Policy Subcommittee Chairman Charles Boustany (R-LA) announced that the Subcommittee will hold a hearing entitled “Fundamental Tax Reform Proposals” on Tuesday, March 22nd at 2:30 PM in room 1100 of the Longworth House Office Building. This will be the first in a series of hearings where members of both parties will have the opportunity to share, discuss, and promote their proposals for tax reform. The particular focus of this hearing will be legislative proposals presenting cash-flow and consumption-based approaches to taxation.

Upon announcing the hearing, Chairman Boustany said:

“Chairman Brady has laid out a strong vision and set of policy goals for making our broken tax code simpler, flatter, and fairer. Tax reform represents a crucial part of our party’s pro-growth agenda, and I am committed to accomplishing these goals by considering bold, new ideas and building consensus among our members. Next week’s discussion will give my Ways and Means colleagues and me the opportunity to take a closer look at the forward-thinking proposals for tax reform that our members have developed.”

Let’s recognize in advance that there are many on this site who are not willful U.S. citizens, but let’s hope that the repeal segment of readers can step up to the plate.

remember FOLLOW INSTRUCTIONS: All submissions must include a list of all clients, persons and/or organizations on whose behalf the witness appears. The name, company, address, telephone, and fax numbers of each witness must be included in the body of the email. Please exclude any personal identifiable information in the attached submission.
If not, submission is dismissed.

Revenue minister could have to face committee on record sharing with IRS

…
NDP Revenue Critic Pierre-Luc Dusseault is asking Parliament’s Access to Information, Privacy and Ethics committee to hold hearings on the transfer and its impact for the privacy of Canadians. Among the people he wants the committee to call to testify are Lebouthillier and Canada’s Privacy Commissioner Daniel Therrien.
…
A second transfer of records to the IRS is scheduled for September 30, 2016.

Wednesday, Lebouthillier defended the transfer of Canadian banking records to the IRS.

“Minister Lebouthillier wants to reassure Canadians that all exchanges of information are subject to strict confidentiality rules,” reads the e-mail sent by Lebouthillier’s office.

“The CRA ensures that tax cooperation with its foreign partners is done in a manner fully consistent with privacy rights in Canada. It is important to note that Canada and the United States have a long history of exchanging tax information in a fair and responsible manner, going back to 1942.”

Some of us will disagree — see the first comment from John Richardson.

Badger
Submitted on 2016/03/17 at 1:07 pm
IRS commissioner Koskinen: Congress approval needed for CRS
By: Helen Burggraf | 16 Mar 2016

http://www.internationalinvestment.net/regions/irs-commissioner-koskinen-congress-approval-needed-for-crs/

..”.Koskinen was quoted by various tax industry journals as saying that the reason the US hasn’t signed up to the CRS was because “we [the IRS] don’t have the legal authority to provide – on a reciprocal basis – the range of information the other countries are prepared to share with each other and with us..”…..
…
“…….According to LexisNexis.com, one of the publications to cover Koskinen’s remarks, there are “questions…about how much data the IRS can share about individual taxpayers under the existing statutory framework”.

But Koskinen insisted that the IRS was engaging in the OECD’s efforts to establish the reporting system, in spite of the fact that for now, it is not a signatory, nor likely to be for the foreseeable future…..”…….

..”.Some observers have suggested that the US, by remaining outside the CRS, would become a de facto tax haven, by virtue of the fact that its bilateral FATCA agreements don’t cover as many areas of information as the CRS will…”…..

…..”…the legislation that eventually became FATCA failed several times to make it through Congress, and, some critics say, might not have in 2010, had it not been buried inside a domestic jobs bill, the HIRE Act, and thus received little attention.”

AND, following this advice to post…

Deckard1138
Submitted on 2016/03/17 at 1:48 pm

This is a stunning admission by IRS commissioner Koskinen which has huge legal and diplomatic implications:

“…Koskinen was quoted by various tax industry journals as saying that the reason the US hasn’t signed up to the CRS was because “we [the IRS] don’t have the legal authority to provide – on a reciprocal basis – the range of information the other countries are prepared to share with each other and with us”…

I can’t wait to see the reaction from various IGA signatories, especially countries like India, which bet the farm – and their government’s entire reputations – on false FATCA reciprocity with the intent to recover “black money”. As we knew all along, they’ve been duped – and the IRS emperor has no clothes.

CRA is rotten to the core-Time to Clean House Another great article at ipolitics https://t.co/NqtQczJZQo #cdnpoli #cra Pls RT

— Patricia Moon (@nobledreamer16) March 17, 2016

The CRA is rotten to the core. Time to Clean House. by Alan Freeman Posted on March 16, 2016

A section just on us:

This week, we learned that the CRA turned over 155,000 banking records to the U.S. Internal Revenue Service in the middle of last year’s federal election — without waiting for the outcome of a court challenge to this unprecedented sharing of taxpayer data, without hearing an opinion from the Privacy Commissioner. And the individuals involved have never been informed by the CRA of its action.

CRA and IRS hand-in-hand

John Richardson, with the Alliance for The Defence of Canadian Sovereignty, discusses the impact of the controversial 2014 FATCA IGA tax deal on U.S. citizens living in Canada. John is interviewed by CBC’s Dianne Buckner.

Video (CBC The Exchange site)

Video (IBS YouTube site)

Hillary prevented IRS from gaining access to more than 91% of illicit, tax-evading UBS offshore accounts. https://t.co/0yH91u4Hly

— Patricia Moon (@nobledreamer16) March 12, 2016

This story appeared in The Hill on Friday, March 10, 2016. I simply cannot believe I have not heard anyone in the expat world speak of it, and/or the American presidential arena has failed to emphasize it. Perhaps it is just buried along with the general theme of Ms. Clinton, her Wall St. speeches and “her damn emails.”

Everyone would agree that it is the fault of the Homelanders with Swiss bank accounts who caused the disruption in the way of life as we know it, wouldn’t we? We all went about our lives, blissfully unaware of the creeping edge of unenforced CBT until 2008 when the IRS and DOJ found a way to go after the real tax evaders. First came the unending threats of then-Commissioner Douglas Shulman regarding “our last best chance,” endless media blithering about “coming clean” and the very real life-threatening FBAR penalties…OVDP/OVDI and well, you know the rest of the story.

And we all have heard the justification that the laws have to be applied as they are because as unfortunate as it is that we are affected, (unintentionally, ja right) no party can come out and endorse such changes because they would be seen as supporting tax evasion, right?

Well Madame Secretary Clinton has bested that by a long shot. It is so outrageous you simply cannot make this kind of stuff up.

In March 2009, after meeting with Swiss Foreign Minister Micheline Calmy-Rey, then Secretary of State Hillary Clinton intervened with the U.S. Internal Revenue Service (IRS) on behalf of Switzerland’s most powerful banking institution, UBS. The IRS, which at that time was seeking the identity of wealthy Americans who had stashed some $20 billion in 52,000 tax evading UBS accounts, then agreed that the Swiss bank need only turn over information on 4,450 accounts. Afterwards, UBS increased its previous $60,000 in donations to the Clinton Foundation ten-fold. By the end of 2014, UBS donations to the Clinton Foundation totaled $600,000. UBS also “paid former President Bill Clinton $1.5 million to participate in a series of question-and-answer sessions with UBS Wealth Management Chief Executive Bob McCann, making UBS his biggest single corporate source of speech income disclosed since he left the White House.” ……
***
When UBS, which could have lost its ability to conduct business in the U.S. if successfully prosecuted, balked at the IRS demand that it turn over information for all 52,000 accounts, the IRS filed a legal action seeking to compel disclosure. That is when, at the behest of the Swiss government, Hillary Clinton stepped in to negotiate a deal that prevented the IRS from gaining access to more than 91 percent of the illicit, tax-evading offshore accounts.

The Hill article is rather short with few links and nothing much to back up these claims. So I spent the afternoon researching this and it has been in the news all along and is not even remotely mysterious. And it forms part of the longer narrative which demonstrates so clearly that the Clintons are most certainly not the candidates for everyday people. Watching these Town Hall Meetings where regular folks get up and are all starry-eyed about actually getting to ask a question reminds me of the looks on the Trudeau cabinet last week in DC. And it would truly be in the best interests of the entirety of the American people to realize just how much the tax debt remains an affair of the wealthy-that they, the banks and their candidates are taking every dime they can away from the little guys.
Continue reading →

If America truly wanted to tax “rich” expats–expats would simply be taxed upon any income over $x00,000 yearly income at some rate, whilst others would imply not file. Although this method would still be taxation without providing government services, it would at least be honest about only ripping off expats who are “rich”.  That method would have been recommendable by any lousy government official after reading my last entries.

After analyzing 86.7% of the expat/emigrant population in those articles, it shows that only maximum 0.293% would owe tax to US according to the principle of “taxing-up” to the higher of residential tax or homeland USA tax, using the existing method of exclusions and credits. But even this level of unexcellence is unachievable to that Washington leadership that doesn’t represent us.

The preceding calculations are made under an assumption that the exclusion/credit process is clean. But it isn’t. We’ve long discussed all the form complexity manufactured by the compliance mafia which rotates in and out of Treasury employment. The mafia has made the paperwork of an expat to be more than double that of a homeland tax return. And, whereas homelanders can have their taxes done by low/moderately priced bookeepers, expats must have their taxes done by $200 / hr accountants.

The compliance mafia has also written in an infinite number of reverse loopholes—where, at every turn, the IRS has an opportunity to screw a taxpayer using the complexity of the rule system.  We’ve discussed many of these reverse loopholes at this site in these years. Please feel free to throw in your own.

-PFIC’s–the nightmare–any fund product not purchased in America will be taxed enough to rid the person of any profits

– Double taxation of foreign social taxes. For example, in Norway, the social tax is listed separately from other taxes. Social taxes are not creditable or deductible, hence America double-taxes it.

– Double taxation of renunciants: The exit tax (reichfluchtsteuer) was supposedly designed to capture the capital gains of a human being over its life as an American. If that American had always lived in America, the exit tax might represent a clean (bad) tax. But, a human being living out its life outside of America is already due those capital gains taxes to the country of his residence. The reichfluchtsteuer taxes the gains due to his existence as an American, and the American is later taxed honestly by his country of residence, too. ……… and the list goes on….

These reverse loopholes were left out of the analysis, because their effect upon America’s tax revenue is negligible. The issue to note especially in this article, is that these reverse-loophole taxes are destructive upon the individuals they land upon. These stupid reverse loopholes are what make it impossible for Americans to have financial planning if not living in the homeland.

The IRS and the compliance mafia have been happy to force non-rich expats to file mounds of paper, to punish particular persons with obscure rules, to force Americans to exclude or credit things for which they never should have been charged, and then to create ethnic discrimination tools such as FATCA to enforce bad rules. All of this effort has been made by the IRS and compliance condors to grab money they never deserved, with with even lesser significant revenue than the tax revenue I have been showing in previous calculations.

With that clarification, it should be possible to continue with the calculations.

New Zealand’s financial industry invested 100 million NZD, whilst its government invest 20 million NZD to prevent Americans from sending their money to New Zealand to avoid taxation. Also, eligible Kiwis can be identified to pay tax to USA–to help USA tax Kiwis whom USA declares “United States Persons for Tax Purposes“. Such identified Kiwis can be forced to pay U.S. taxes while living in Kiwiland.

So far, by investigating the highest two US tax categories, we’ve seen that the only 0.274% of the first 81.1% of the expat population’s tax returns yield tax revenue to USA. Now, we investigate expats who may be exposed to USA’s 33% to 35% tax bracket—which comprises 1.9% of the US expat population. If a United States person lives in a country in this range, he could be exposed to USA taxation ranging from 0% all the way up to 6.9% (average 3.45%). These countries are identified to have taxes in this range (with percentages of the US expat population).

Total                1.9%
Colombia          0.7%
Guyana             0.0%
New Zealand   0.8%
Swaziland        0.0%
Venezuela        0.4%

New Zealand is the most significant in this group, and has a top marginal tax rate of 33%. Let’s compare that to America’s tax tables.

U.S. tax rates for single filers

America has a policy to require its citizens to pay additional tax to U.S.A. if the residence country of a U.S. citizen is not as high as the U.S. tax rate. It has about a $100,000 income exemption. Hence, a US person in New Zealand making  511,501 USD to 513,200 USD per year will be taxed by USA an additional 2% (a very narrow band worth considering insignificant).  For any income above $513,201 USD, USA will tax that person 6.9%. This means, that USA can only tax dual citizen Kiwis with incomes over $513,201 (763,000  NZD).

So, how many Kiwis have incomes over 763,000NZD? A: Far less than 1% of the Kiwi population, or less than 1% of the dual-citizen population.

New Zealand has 0.7658% of the US expat population. And therefore, less than 0.07658% of the U.S. expat population can be taxed 6.9% of their marginal income above $513,200. This is beginning to sound ridiculous–Just BEGINNING to sound ridiculous. The story can be no better than U.S. citizens living in Colombia (0.7%), Guyana (0.0%), Swaziland (0.0%), or Venezuela (0.4%). Less than 0.019% of the US expat population can be taxed maximum 6.9% for their incomes above $513,200.

In New Zealand—how many people is this really? Various estimates yield the quantity of U.S. citizens in New Zealand to be between 21,462 Kiwis BORN in USA, to 38,207 to 66,600 Kiwis with known and unknown US citizenship. USA could tax less than 1% of them.

USA could potentially tax less than 666 Kiwis 6.9% of their marginal income above $513,200.

The ridiculousness of America’s extra-territorial taxation glares in New Zealand.

New Zealand has self-paid more than 120 million NZD to help America collect taxes from less than 666 rich dual-citizen Kiwis.