Category Archives: Issues regarding US persons abroad

Global News, April 22: Unwilling dual citizens face 10-month wait to shed US citizenship in Toronto, to be read in conjunction with, as addressed in Isaac Brock Society post: Canadian Budget introduces the Common Reporting Standard (CRS),

http://www.budget.gc.ca/2015/docs/plan/anx5-1-eng.html#wb-cont

… and, in the new Canadian *budget* (quite deliberate obfuscation, to me) — no clear distinction in this Canadian Conservative government information for some Canadian citizens and residents about the difference for *US Citizens / Persons* in Canada, so more confusion for some readers of:

“Under the new standard, foreign tax authorities will provide information to the Canada Revenue Agency relating to financial accounts in their jurisdictions held by Canadian residents. The Canada Revenue Agency will, on a reciprocal basis, provide corresponding information to the foreign tax authorities on accounts in Canada held by residents of their jurisdictions. In order for the Canada Revenue Agency to obtain the information to be exchanged, the common reporting standard will require financial institutions in Canada to implement due diligence procedures to identify accounts held by non-residents and report certain information relating to these accounts to the Agency. It will not require reporting on accounts held by residents of Canada with foreign citizenship. The standard includes important safeguards to protect taxpayer confidentiality and ensure that the exchanged information is used only by tax authorities and only for tax purposes.

“Canada proposes to implement the common reporting standard starting on July 1, 2017, allowing a first exchange of information in 2018. As of the implementation date, financial institutions will be expected to have procedures in place to identify accounts held by residents of any country other than Canada and to report the required information to the Canada Revenue Agency. As the Canada Revenue Agency formalizes exchange arrangements with other jurisdictions, having been satisfied that each jurisdiction has appropriate capacity and safeguards in place, the information will begin to be exchanged on a reciprocal, bilateral basis. Draft legislative proposals will be released for comments in the coming months.”

Thanks once again, Patrick Cain, for paying attention and writing information necessary for *US Persons / Citizens* in Canada.

We delivered! Monumental effort 2 demonstrate harm 2 #Americansabroad submitted 2 Senate Finance Committee http://t.co/carqgGs6lj #FightCBT

— Patricia Moon (@nobledreamer16) April 15, 2015

 
UPDATE April 16 2015

 
We did it! Just as promised by John Richardson our submission to the Senate Finance Committee is signed, sealed and delivered….Remember this? :

I also made it clear that Dr. Kish and I would be taking the initiative to “educate” the Committee about:

– what “citizenship taxation” really is; and

– the true effects that it has on “Americans” (recognizing that many of you do NOT consider yourselves to be U.S. citizens) in Canada and elsewhere.

I am happy to report to you that on February 14, 2015 the videos were made as planned.

I am happy to report that on April 9, 2014 Dr. Kish and I met with representatives of the Senate Finance Committee and had a “productive discussion”.

I am happy to report that, today, April 15, 2015 our submission to the Senate Finance Committee (consisting of a total of 7 separate submissions on various topics) has been delivered. One of the submissions was the text of the “Human Rights complaint to the United Nations“. We acknowledge the tremendous work that went into the creation and submission of the complaint.

We encourage you to look at our complete “Folder of Submissions” as follows:

https://app.box.com/s/yn25x1gketbzrkqp2ghu5sbce7mqoynu

I want to remind you that this is going to be a “slow process”. Be patient. Keep yourselves focused on the “long term” goal. The key is to remain patient and focused.

For all who submitted comments to be included, please see here.

Thank you so much for all who took the time to send in your letters & comments in support of this project. Please spend time and explore all seven of the submissions as each is a very important component of demonstrating to the US government how perverse and discriminatory U.S. Tax policy is, not only against U.S. Persons, but to every country and person who is connected to one. We need residence-based taxation. We want the ability to make use of our tax-deferred savings vehicles in our countries of choice. We deserve the right to have our bank accounts free from the prying eyes of FinCen. We demand the recognition that we are not tax cheats and traitors. We insist that the privacy rights of our “alien” spouses and children be respected. For those who cannot act on their own behalf, we must have the ability to make choices free of imposed US citizenship be it from immigration or tax status.

It is time. The U.S.must start living up to its claim of being the land of freedom and opportunity. It must address its own areas of human rights violations and act in the best interests of all. We will not be satisfied nor stop until we receive exactly that.

Summary:  https://americansabroad.org/issues/fatca/same-country-exemption-fatca-reporting/

“The “Same Country” Exemption, sometimes referred to as “Safe Harbor” Rule, is the product of collaborative work among several groups representing Americans abroad. A detailed description was prepared by ACA and draws upon ideas and work of the other groups – which ACA greatly acknowledges. ACA is solely responsible for its content. This paper (attached) was drafted by Charles M. Bruce, Legal Counsel, ACA. Questions and comments are invited”

Description: https://americansabroad.org/files/4314/2900/7077/same-country-exemption-2015-04-06.pdf

An individual residing in a foreign country could elect, but would not have to elect, to have an account treated as a “Same Country” Account by providing an election to the relevant FFI (such as, the individual’s bank) and attaching a copy to his or her regular Form 1040 or Form 1040NR. The FFI would then be relieved from the requirement to treat the account in question as a US account and to process and report information with respect to it.9

The “same country” exemption would not affect in any way the requirement to file a Form 1040 or 1040NR.   Nor would the “same country” exemption affect in any way negate the requirement to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR).

An American taxpayer subject to the Form 8938 filing requirements, who had elected to have one or more accounts treated as a same country account by filing the above-mentioned election, could omit the account(s) from his or her Form 8938.  The account would not count for purposes of determining whether or not one of the reporting thresholds, set forth in the Instructions to the Form, are met.  IF AN INDIVIDUAL ONLY OWNED ACCOUNTS AS TO WHICH HE OR SHE HAD MADE A “SAME COUNTRY” ELECTION, THERE WOULD BE NO REQUIREMENT TO FILE THE FORM 8938

Michael DeSombre, Worldwide President of Republicans Overseas just submitted Overseas Americans’ Input on Individual Income Tax to the U.S. Senate Finance Committee, especially how FATCA and CBT impact Americans residing abroad negatively.

April 14, 2015

The State Department has estimated that there are 7.6 million Americans living outside of the United States. If Americans overseas comprised a separate state of the Union we would be the 13th largest state by population. Our purpose at Republicans Overseas is to represent those millions of Americans living outside of the United States. It is in this capacity that we write today to highlight two specific issues that significantly harm Americans residing overseas and can be easily remedied. The examples and problems detailed in this submission have been provided by Americans living overseas who have been negatively impacted by the Foreign Account Tax Compliance Act (FATCA) and citizen based taxation (CBT).

Summary

1. Reporting of foreign bank accounts and financial assets as implemented by the Foreign Account Tax Compliance Act (FATCA) and the Report of Foreign Bank and Financial Accounts (FBAR or FINCEN form 114) violates the constitutional rights of 7.6 million law-abiding Americans overseas and results in the denial of financial services and professional opportunities to the detriment of the individual Americans. The ability of American enterprises to export goods and services is restricted or denied because foreign financial institutions are denying or revoking financial services preventing American enterprises to engage in business outside of the United States. FATCA and FBAR should be repealed.

2. The United States is the only developed country that taxes the global income of its citizens based on citizenship (Citizen based taxation or CBT) when they reside outside of the country. This means that American citizens residing outside of the United States pay taxes both to their country of residence and, additionally, pay further taxes to the IRS. Double taxation treaties do not prevent Americans from being subject to punitive double taxation because many countries tax their residents through mechanisms other than income tax (which are not creditable against U.S. income tax obligations) and America imposes additional taxes (such as capital gains tax and the 3.5% tax for the Affordable Care Act) for which no foreign taxes may be creditable.

3. The United States implementation of CBT results in lower employment for Americans, fails to raise significant revenue and deters successful businesspersons and entrepreneurs from becoming American citizens. It is far more cost effective for any business enterprise (both U.S. and non-U.S.) operating overseas to hire any person other than an American. The extra cost of hiring an American worker hurts not just the employment of U.S. citizens but prevents U.S. enterprises from competing globally and limits any U.S. enterprise’s ability to expand its operations outside of the United States. CBT should be repealed and replaced with RBT.

4. The Senate Finance Committee should investigate the true costs and benefits of FATCA and CBT so that the maintenance or repeal of these provision would be based on accurate information rather than faulty assumptions as to the intentions of Americans residing overseas.

continued on facebook

Looks like Exemption #2 is the Winner.

BDO CANADA, April 15, 2015: Tax Alert – FATCA and Canadian Credit Unions

A Must Read from Shadow Raider’s IssacBrockSociety.ca comment:

I just sent my suggestion for tax reform to the Senate Finance Committee. You can read it here.

We have a Vimeo site, Citizenship Taxation, to post this portion of the submission. I am not sure if it is necessary to be a member of Vimeo to view them; I do know I signed up for free access.

Having sat through the entire filming portion of each of these, I am impressed at how well each excerpt captures the essence of each individual’s point of view/situation. On the day these were filmed, it was very powerful to hear each of these people relate their stories; one person’s was done spontaneously, without any prior preparation. Generally, none used scripts and I was surprised at how incredibly capable they were, at describing their dilemmas in a focused way. Some were as short as 10 minutes and the longest was 30 minutes. Each has been edited to approximately 5 minutes each.
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